7 Tactics for Open Innovation

The last decade has seen the rise of collaboration as a by-word for innovation success. This is now often referred to as ‘open innovation’ which we define as sharing the risks and rewards of innovation with others. This may sound simple enough and yet in our experience many large organisations struggle with implementing it as open innovation is it can be highly counter-cultural and disruptive. In this short article we present seven tactics and incentives that can really help to spark open innovation success.

1. Share both Risks and Rewards

Most people feel pretty comfortable with the idea of spreading the risks of innovation with others, however more interesting and difficult is how we collectively share the rewards. It is essential to recognise that open innovation inevitably means sacrificing some short term benefits in return for valuable longer terms relationships. You can no longer run away from your reputation as you once could and so all organisations, both large and small, ought to strive to be the partner of choice in your field, through being open, honest and approachable. A company who understands this really well is Procter and Gamble who seek to be the first port of call for any innovator with a product or service that fits one of their brands. This market positioning has significant commercial benefit and their primary competitors lose out by often only ever seeing opportunities that P&G have rejected.

2. Tap into Intrinsic Incentives

There are several good recent studies about what motives people to participate in collaborative projects (e.g. Lakhani & Wolf 2005, Oreg and Nov 2007, D. Pink 2010) and needless to say the incentives don’t always revolve around extrinsic incentives such as money. In addition there are always a mixture of intrinsic incentives which are at play which usually combine a mixture of the following: Love, Fame, Need, Reputation, Opportunism, Self Development, Autonomy, & Purpose. Whilst it is important to recompense people for any substantive contributions, it is more important to understand and create the intrinsic motivations for collaboration first, as this is ultimately what will drive people to participate. Only then should you construct the extrinsic incentives appropriately.

3. Don’t Expect Something for Nothing

Whilst open innovation is ultimately about creating new value better, cheaper and faster, don’t mistake this for getting something for nothing. As with all things, you get out what you put in. There is already some scepticism amongst consumers and small innovative companies about ‘just another open innovation/ crowd-sourcing/ co-creation website or initiative’ and it is essential to understand their motivations and plan accordingly. Don’t embark on open innovation unless you have the time, money and energy to be responsive to the opportunities that emerge.

4. Ask Engaging Questions

The best way to spark collaboration is to ask interesting and open questions that are specific enough to be solvable, but broad enough to allow a multiplicity of solutions. Too many attempts at collaboration begin with a problem that is either too broad or too specific. The ideal scenario is to find the sweet spot in between and to set a challenge so interesting and relevant that people just can’t help themselves but be drawn in by them. Two great examples are the X-Foundation who ran a challenge to ‘design a space-craft that can fly to space twice in a fortnight’ and Nesta who challenged communities to ‘lower their carbon emissions by 60% over 12 months’. In both cases the challenge questions themselves are powerful motivators in their own right.

5. Build Business Empathy

An open attitude seeks partnerships as a default position and it is very hard to do this without a good understanding of what your partners want and why. People ultimately only collaborate with people they like and trust, so it’s important or organisations allow their employees to behave like real people, and not simply not part of a bureaucracy. Tools such as social media allow a more honest and fundamentally more human approach to building networks and partnerships. For example, many call centres traditionally have targets for call completion which have the perverse outcome of reducing customer retention due to poor quality of service. A new approach was pioneered by, amongst others, Frank Elliason at Comcast, who has been described as the best customer service representative in the world. Though clever use of twitter and social media, he aimed to find and respond to peoples questions and frustrations personally and proactively.

6. Target Quantity before Quality

Too many open innovation processes shut down opportunities too quickly based on qualitative criteria. This can have a profound cultural impact that it sends out the wrong signal, namely that contributions aren’t welcome unless they are brilliant, which discourages participation. It’s far better to seek many contributions/perspectives first and then evolve those that spark debate. For instance we worked with Cancer Research UK recently on an innovation project where a social entrepreneur came up with the idea for Cancer Research UK branded cigarettes which obviously isn’t a good brand fit to put it mildly. However, the idea wasn’t killed immediately and this concept was essentially inverted following further exploration to become branded smoking cessation patches which was much more promising and ended up being implemented. Ideally have a clear and quick process agreed up front, with criteria and decision making timescales publicised as widely as possible – and stick to it!

7. Find Your Top 1%

For every 100 readers of a Wikipedia article, there approximately 10 synthesisers who will edit and amend it, and just 1% who create or produce new articles. This ratio of 100:10:1 pattern has been bourne out in many different settings (D. Watts, 2009) and Eric Von Hippel calls these top 1% your ‘lead users’. He gives the example of the self injection of insulin as a classic lead-user driven innovation. Diabetics used to have to go to a doctor every day to be injected with insulin. This situation was so in convenient to one ‘lead user’ who lived in a rural area, that he trained to become a medical doctor for seven years so that he could inject himself. Hence, self injection of insulin was borne. Similarly we worded with Virgin Atlantic and a group of the frequent fliers to create new social media applications such as a taxi sharing scheme and a flight tracker application at a tenth of the cost of had these been developed in-house. Do you know who is your top 1%?

Summary

Open innovation is ultimately about finding great ideas outside of your organisation and turning them into investable propositions inside. It is usually great at the beginning when you are coming up with ideas, and great again at the end when you are making money (or creating other value) but generally fairly awful in between, as new propositions are very fragile and collaborators often have conflicting objectives, stragegies and cultures. In other words, all open innovation is highly U-shaped, and so it is crucial to plan carefully, and in our experience the simple tactics and incentives described above can really help to bridge the gap.

Comments

  1. Hi Ricardo and Alan,

    Many thanks for your comments. I am very pleased to hear you found it useful and even inspiring nad fits with your experience.

    Thanks again and all the best,
    Roland

  2. […] 7 Tactics for Open Innovation Publicado en Noticias Sin Comentar 13 Sep Una de las razones del éxito de la innovación ha sido y sigue siendo la innovación abierta entendida como compartir los riesgos, costes, y beneficios de la innovación con otros. Este concepto aparentemente simple alberga numerosas dificultades en lo que a la ejecución y puesta en marcha de los programas correspondientes se refiere … leer más […]

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