Open Innovation – the power of the crowd

By Eric van Niekerk – Research Lead, Innocentrix

The invention and widespread use of the internet as a communication and networking tool has had a serious impact on how we go about our daily lives. The ability to be constantly connected, to have access to vast amounts of knowledge, and to be directly linked to billions of people, have changed the way the world works. The same is true for how we can approach innovation.

Previous articles in the Innovation Series have focused on unlocking the hidden potential to innovate within your own organisation. But, it is not only an organisation’s innovation teams and general employees who possess the ability to come up with innovative solutions. By using Open Innovation approaches, you can harness the power of the crowd.

What is Open Innovation?

A term coined by Henry Chesbrough, Open Innovation (OI) refers to using human resources outside of the confines of your organisation to aid in solving innovation challenges. Usually, this is done through the use of an online OI Platform. Chesbrough’s initial idea with OI was to bridge the gap between business and academia, allowing for businesses to tap into academic specialists’ knowledge to help solve difficult challenges.

Typically, an organisation would post a challenge on an OI platform, asking for an innovative solution. These challenges could vary in complexity, and can generate solutions from thousands of potential collaborators. Collaborators with the best contribution can be rewarded in a variety of ways.

Since the introduction of the term not much more than ten years ago, there has been a massive rise in popularity of OI strategies. Some of the world’s largest organisations use OI on a daily basis to develop products and services. Samsung, AT&T, Ford, NASA and Tesla constitutes only a few of the organisations that have gone to considerable effort to maintain and manage OI initiatives.

OI has found particular success in highly specialised industries like genetics and medicine, with organisations likeHarvard Medical School and Lilly sporting game-changing discoveries due to OI. Specialists have predicted that this platform will continue to gain support and popularity until it becomes a standard business practice for the majority of large organisations.

LEGO – building innovation

With the rise of electronic toys and entertainment (especially video games) in the mid-90s and early 2000s, the popular plastic brick maker, LEGO, was having an exceptionally tough time staying on top of the kids’ entertainment market, as detailed in David Robertson’s book Brick by Brick. The LEGO Company tried their hand at traditional innovation, but it turned out MIT innovation veterans struggled to understand the minds of 4-10 year olds: LEGO tried to incorporate technology into their designs, but soon found that their products were being used by those outside of their target market, in ways they could never have foreseen. At this point, facing bankruptcy, the future did not look too bright.

In a possibly company-saving move, LEGO took a step back and decided to tune-in to the market by engaging with the people who were actually buying their products. As it turned out, engaging with a crowd of thousands of individuals though an OI platform produced far more innovative ideas than a handful of MIT specialists ever could.

LEGO dedicated resources to incorporate the ideas generated from their OI process, and saw immediate returns. This move to OI was seen as the saving grace of the LEGO Company, and to this day LEGO still maintains a very active OI drive through their LEGO Ideas platform. Here, anyone can submit an idea for a new LEGO model or product, and an active community votes for the best ideas. If an idea reaches 10 000 votes, it is passed on to the LEGO Review Board. The board can refine the idea, and eventually take the product to market. Ultimately, the contributor of the design or idea may receive royalties from all global sales of the product, and will be recognised as the product’s designer. It constitutes a win-win situation for both the contributor and the organisation.

Considering OI for your Organisation?

An innovation technology system used to create an online OI challenge, will possibly be necessary for organisations starting out on their OI journey. With the rise in popularity of the use of OI platforms, the OI technology landscape has undergone some rapid changes, with more and more options added to the market place. Solutions are becoming more flexible and affordable. Innocentrix has just embarked on an analysis process for available innovation technologies, and can assist you or your organisation in finding an OI approach that works for you.

 Organisations considering an OI approach should keep the following points in mind:

  1. Build a Culture of Innovation. If your organisation, its employees and its leaders, do not support innovation practices, then innovation will ultimately fail.
  2. Networking is key. To run an optimal OI challenge, organisations will require contact with as much of their target audience as possible. Once you have access to these markets, you will need to engage them and motivate them to participate in your challenge.
  3. Innovation must have a clear goal. Innovation outcomes should be aligned to core business strategies. Clear results determined with reliable methods of measuring success should be communicated to the organisation.

Collaboration is key to Innovation

Innovation relies on collaboration, whether it be internal collaboration with employees, external collaboration with other organisations, or open collaboration with members of the public. For more information on Collaborative Innovation within the South African innovations space, be sure to have a look at our Innovation League Report. Engaging your business ecosystem in collaborative efforts can greatly increase an organisation’s innovation output.

2016-03-08T14:16:11+00:00 August 21st, 2015|Innovation How To... Series|