Organizations are increasingly turning to open innovation platforms as their source of innovation.

Open innovation platforms (or crowdsourcing platforms) are a way to involve consumers in the process of innovation. Here at IC, we have built examples pretty amazing open innovation platforms – the Aviva Community fund and the MIT Ideas Challenge that are helping prove the case. You can also check out Open Innovators for dozens of other examples of programs that work. As our fearless leader Idris Mootee recently wrote in his article What you don’t know about Crowdsourcing and why they often fail, it’s not a silver bullet for innovation. But when used in a defined way as part of the research and development process, they can be quite successful.

Solving the worlds problems one 2×2 at a time

A lot of organizations struggle to wrap their heads around open innovation platforms because they toil with their purpose in the innovation cycle – what is the role of the platform within the innovation pipeline. With that in mind, I’ve spent a bit of time sketching an organizational principal for open innovation platforms. Obviously an organization can choose to involve external parties at any point in the innovation process – but the emphasis of this thinking is focused on what would be classically viewed as research through development (as opposed to the commercialization).

Do you have a problem? X AXIS
The first decision criteria is “Is there a defined problem”.

On one side of the equation, many organizations are submitting or asking explicit questions to the audience for solving – they have a defined problem to be solved. For example, Innovation Exchange solicits “Challenges” (specific problems to solve) from major corporations. I call this “innovation inspired by the business” – the key driver of creativity is based off of a fundamental business-side need or problem.

On the other side, some organizations just want good ideas that align with their brands – they have undefined problems and look to the crowd to both explicitly state challenges and opportunities. In short, they hope the crowd both provides both self identifies the problem and articulates a solution to the problem. An example of this would be the over-mentioned “my Starbucks ideas”. I call this “inspired by invention”, as it often manifests itself through the creative ingenuity of the crowd. It could just as easily be called “Innovation inspired by needs”.

When can the crowd play? Y AXIS
The second decision criteria is “When do you involve the crowd”?

On one side of the equation, organizations involve external participants early in the innovation process. Involving customers early results in raw, often messy ideas that may or not reflect any possible reality. I think of this as a platform for actively soliciting feedback for “opportunity collection” because there tend to be a lot of undefined directions that can be pursued or that can inspire lateral thinking.

On the other side, organizations can involve participants late in the innovation process. At this point, organizations are often looking for full concepts, designs, or solutions that represent a full solution to a problem. Examples of this would be Google’s Lunar Prize, where the criteria for winning is to “successfully land a privately funded craft on the lunar surface and survive long enough to complete the mission goals of roaming about the lunar surface for at least 500 meters and sending a defined data package, called a “Mooncast”, back to Earth.”. This is an example of “solution collection” – getting many external participants to come up with multiple, well articulated solutions.

The quadrants of organization-led open innovation platforms

Based on this model for understanding open innovation platforms, there are four primary opportunities for organizations to use open innovation platforms to drive the innovation process internally.

Defined Problem + Early Involvement = Crowdstorming. Articulating a specific problem to consumers and asking for many raw responses. This is pretty much like a massive brainstorm, and works as a way to stock the innovation pipeline early. Output: Lots of raw solutions to a specific problem with varying quality. Example: Fiat Mio

Undefined Problem + Early Involvement = Researching. Ask consumers to come up with solutions to undefined problems. The real value here is the articulation of previously unknown or unmet needs, collected through the initial articulation of customer problems used as a rationale for the solution. Output: Explanation or justification of previously unarticulated consumer challenges or needs with a small number of solutions of varying quality. Example: Dell Idea Storm

Defined Problem + Late Involvement = Prototyping. When you involve the consumer at this point, you’re really asking for a specific designed solution to a problem. Depending on how late in the innovation process they are involved, the output can be anything from concept sketches to fully-functioning prototypes. Output: Depending on how late the challenge is put to the crowd, and how defined the solution must be, expect a small number of solutions. Example: Supdaroo or one of my favorite sites, threadless.

Undefined Problem + Late Involvement = Adopting. Some organizations choose to build idea orphanages, allowing external participants to submit fully thought-out and conceptualized product concepts that may or may not align with their interests. Would-be inventors can submit their concepts with the hope of the organization moving on their idea. Output: Well thought out ideas that may or may not be relevant to the organization. Example: Lego Design By Me

Yes, no maybe so?

Obviously open innovation platforms differ in terms of where they play in an organization’s innovation cycle. In practice, each of the quadrants of the open innovation platform classification isn’t mutually exclusive. But in terms of understanding where their value lies, I think it’s a good starting point.

So what do you think? Agree with the classification? Have any recommendations on how to make it better? Have any great examples of crowdsourcing applications that I’ve missed? Join the comment thread and let me know. Also, if you’re interested in Open Innovation and the Virtuous Cycle, be sure to read Henry Chesbrough’s epic book Open Innovation.

HCI is about people, interactions and system interfaces. First, people do what people are good at, such as observation, interpreting, determining what is important, and making the final decisions. There are situations where human decisions need to be assisted by data visualizations. Secondly, the computer does what it is good at, which is repetitive tasks and routine. Finally, collectively, people will make better decisions or influence each other on their decisions. But neither people (individual or communities) nor computers are forced to do what the other does better. HCI strives to integrate the two so they can compliment each other to achieve more productivity.

There are quite a few challenges in applying universal design in the context of HCI in order to provide the formative insight needed to design interactive products that can be experienced by the mass in different contexts. The distinctive characteristics of these products may be identified by briefly considering the changes in the socio-technical paradigm; from the early days of computing to the 21st century human interfaces intended to provide a gateway into the world of distributed information paradigm; the scope and context of use of the computer (hard to define what a computer is these days, what is the computing power needed in order to be called a computer),;as it becomes a mediating tool for increasing different types of human (both business and personal) activities.

In another short 5-10 years, mini or micro computing devices will be everywhere as medical and consumer devices becoming mass. While HCI is still in its infancy, some HCI practitioners are trying to break away from common conception of an “average” user interacting with a laptop in the office to get work done, and to engage in a conscious effort to develop new understanding, methodologies and tools, in order to understand the following:

How emerging new distributed computational paradigms will create new challenges for HCI designs? How do we research behavior that does not exist today?
How new interaction /interface design can be effectively used to serve an increasing range of system-mediated human activities?
When does interactions / interface design cross the line and becoming service design? Interactive artifacts are now being introduced into service settings in a larger degree.
How new visceral interactions that are driven by interactive paradigms rather than user needs emerge, beyond the imagination of the novice users?
What are the emerging threats to privacy that force us to rethink some fundamental concepts in HCI when attackers, ranging from the curious to the highly malicious, might abuse or subvert the system?

The findings show that executives have very different perceptions of the struggles related to finding and aligning their people. In short, there is still a lack of common understanding despite its importance. Innovation is not in the core curriculum of MBA schools. Another interesting data point is 40% of top managers say that they do not have enough of the right kind of employees. Among respondents who do say enough people are available, however, nearly 50% say the right employees are in place, motivated, and protected by senior leadership, and only 22% say the organization’s culture inhibits them from making progress. The question that immediately comes to my mind when they say they do not have enough of the right kind of employees, I wonder if they have a definition of what are the “right” kinds of employees. That would be an interesting question to add to the survey.

I don’t think you will get answers such as “we need more senior executives with design thinking” or “we need more corporate misfits” etc. People who are trained in various disciplines of design are particularly good at using their instincts more than other individuals. Any innovation strategist must develop a keen interest in what works in marketplaces and what are the desirability factors as well as usability factors. Designers have an advantage and a key role to play in this innovation movement and that’s why I was saying MFA is the new MBA. The innovation field, per se, needs to use many different forms of design, crossover, jammed and integrated, to get beyond some threshold level of activity–enough to get commercially produced and, to be strategic. The great news for designers, about the rise of a corporate interest in innovation, is that it recognizes, more than ever before, the strategic contribution of “design thinking” to products, services, information, and corporate level business strategy. I think this as a long-term trend that will likely persist for at least another decade. I am not saying any designer should be given the decision making power for important business projects. I think we are talking about new capability. I don’t think we can simply put designers together with spreadsheet crawlers and expect innovation to happen.

Design thinking is not only about design. Design thinking is inherently an imagination management and prototyping process. Once you have the idea, you start to play with it. People ask me what is a “concept”, it is an idea that is ready for prototyping. The prototype is a visualization, working model, or even a small book or short film that describes a product, system, or service. Design thinking is about applying their mental models, languages and tools to complex business decision-making. I’d like to see practitioners, design schools, business schools and engineering schools coming together to create broad new cross-functional capabilities and professionalism that will actually meet the underlying need for objects, places, human-centered concepts, and distinctive experiences supported by sustainable business models that human beings crave–and enterprises must increasingly learn to deliver to thrive and prosper.

Original posted in Innovation Playground July 2007

Coordinating colors can be completely confounding. Do the curtains match the carpet? Will the backsplash compliment the dishes? Is the bedding in-sync with the bedroom walls? To attempt to answer these difficult décor questions, most consumers rely on collecting piles of fabric swatches, paint chips, magazine clippings and even a favorite plate or bowl to mix and match them until the secret of personal style is finally revealed. Then, the challenge truly begins: braving a series of separate stores across the city to actually find those items that, in theory and from that pile, really do work together to conjure color coordination. Failure is frequent, and usually by a hue or two.

Color Concierge By Crate & Barrel solves this challenge by packing the style skills of a professional interior designer into a single, easy to use iPhone application. With reliable, robust and dynamic brainpower, it uses intelligent logic driven by color theory, an archive of best practices and pattern recognition of user activities to take a photo of a room or item, extract the color palette, refine color harmonies and generate the perfect product combinations. Then, to make shopping easier, it acquires instant product details, displays color and fabric options, receives smart recommendations from other brands that align to your project and personality, and accesses special offers available only through Color Concierge.

Although it might be difficult to establish a clear correlation between the implementation of social standards and profit making, corporations could aim at raising their reputation by implementing social standards, in order to possibly gain profits – or at least not to make losses- from this reputation, at a later point in time.

Let’s be clear there are 2 types of CSR-CSR as marketing tool (British Petroleum) and CSR as part of a business strategy (Patagonia). BP’s marketing campaign, which is all about looking for alternative energy sources, makes the consuming public feel good about purchasing BP products. But if BP had redeployed billions of dollars into environmental investments that yielded no profits, and its stock plummeted, one would certainly expect investor to dump their stocks. And if they don’t invest in alternative energy as they promised on the adv, they will lose credibility with the public, but does it hurt their profits? Is the credibility of an oil company important?

Let’s try to challenge the idea of corporate social responsibility, while it is absolutely reasonable to expect that corporations should be “responsible” such as by creating quality products and marketing them in an ethical manner, ensuring they are trading fairly with their third world suppliers, operating in compliance with laws and regulations and treating minority shareholders and investors fairly. But the notion that the corporation should apply its assets for social purposes, rather than for the profit of its owners, the shareholders, is irresponsible. This is where the challenge is.

B-School 101, a corporation’s goal is to maximize shareholder value return. They can use solar power for the offices or sponsor local charities. But it would be irresponsible for the management of a company, whose stock these investors purchased, to deploy corporate resources for social causes. Here is a litmus test of the market for corporate social responsibility. For example, Nike could sell a pair of sneakers for $90 and another for $120 with the extra $35 goes to promote a cause or provide micro lending etc. This is using the market to decide what’s best. (The problem should that $30 goes to Nike profit instead and $5 goes to a charity?)

If consumers wanted to pay the extra $35, voting with their wallets for a cause they believe in, they could. I don’ think this works. Consumers want to contribute, but want the freedom to decide and want to make it personalize. Otherwise it is called a tax. Consumer wants to have way to decide, socialize and sometimes exhibit their causes, individually and not through corporations. They certainly do not expect the for-profit corporations in which they invest to deploy corporate assets for social causes unless it helps with business performance.

Management’s job is to invest in projects that drive growth, profitability, innovation, and anything else that drives the shareholders’ return. The question is what if a project creates a second or third bottom-lines and as a result slightly reduces ROE? It is not easy to make these calls. I think the line between using CSR as a marketing tool and as part of a business strategy will blur, companies will slowly realize it is absolutely essential for them to practice CSR in order to win the hearts and minds of customers and employees. Making a greener product won’t do the job anymore. They need to apply the 4Ps of People, Planet, Purpose and Profit as the new mantra management.

Image Source: http://www.kenston.k12.oh.us/khs/academics/business/img/harvard-business-school.jpg;

The NY Yankees and Stadium Associates have taken it to the next level by introducing a line of grass seed and sod products that allow you to walk on Yankee turf any time you play catch in your back yard.

Frivolous? Maybe. But for a fan who will never get the chance to step out onto the field at Yankee Stadium, it’s a product innovation that has incredible emotional appeal.

]]> http://www.ideacouture.com/blog/2009/06/03/yankee-grass-seed/feed/ 0 http://www.ideacouture.com/blog/2009/05/08/innovation-is-the-new-industrial-religion-more-innovation-is-the-new-economy/ http://www.ideacouture.com/blog/2009/05/08/innovation-is-the-new-industrial-religion-more-innovation-is-the-new-economy/#comments Fri, 08 May 2009 20:29:49 +0000 Idris Mootee http://ideacouture.com/blog/?p=173 The Economist called innovation the “industrial religion of the 21st century. ” So what exactly is the new thinking about innovation and why is it so important? Why does it need to be taken so seriously by business and government? Very simply, innovation is the engine of economic progress. Without it many of our firms will go out of business, and those that remain will become second-rate, subservient to international leaders in decision-making and profit taking. Without innovation there won’t be the new businesses and jobs that are necessary to support economic growth.

But what is innovation?  First, we must remember that innovation is not invention. Invention is the creation of a new idea and its reduction to an application. Innovation is the commercialization of an idea. Innovation is often mistaken for research and development. R&D is a component of innovation, but it is only that, a component. Innovation is really about an economically valuable novelty. It is about new products, processes and experiences and all the scientific, technological, organizational and, financial activities that produce them.  Innovation is an emergent event; it happens when practitioners “on the ground” have worked on something enough to have discovered a new approach in the messy variety of practitioner effort, tons of conflicting quantitative research data and unfocused conversations. Innovation only occurs when there is sufficient variety of thought and action; it works more like natural selection, which requires lots of mutation. Innovation is, by its nature, unorthodox.

If you dig deep underneath the veneer of any innovation success story, and you will find lots of trial and error before the (sometimes accidental) eureka moment occurred. And even after that eureka moment, the only reason we think of the outcome as an innovation is because it found traction and really worked. Yes, innovation often sprouts from the messy, trial-and-error efforts of practitioners in the trenches. But there are ways to make purposeful innovation more manageable, there are so many half-truths and myths surrounding innovation that have made it sounds more complex than it is. In the next few weeks I will share my thinking on many of the myths and half-truths with clear steps on how to manage and organize innovation in any company, business unit, nonprofit organization, or government entity.  I will cover ideas on how to maximize your company’s Return On Innovation (ROI) by integrating the different types of innovation (business model, social, experience, marketing, process) and creating a diversified portfolio of innovations.

Image Sources: http://www.flickr.com/photos/barryslemmings/315915865/; http://dvice.com/pics/The-Evolution-of-the-iPod-Nano-2.jpg