The Practical Side of Crowdsourced Innovation

The practise of innovation as a business discipline has been firmly entrenched in many organisations. The discussion is no longer around whether it must be done, but more about how to ensure that an innovation programme is sustainable and successful. What does a successful innovation programme look like, how is it managed and what are the main lessons learned in the process? Although guidance and thought leadership on relevant processes or successful value driven projects can be found with relative ease, little is available on the specifics of how successful innovators are winning.

In the light of our own Innovation League Report 2016 to be released shortly, wherein we will detail the state of innovation in South Africa, we decided to unpack some of the most recent reports on the topic in the coming weeks. The aim is to pull together insights and to provide a backdrop to the global status quo from a crowdsourced innovation management perspective.

We start the discussion with a recently released multi-industry benchmark study from Spigit called: 2016 – The State of Crowdsourced Innovation.

Spigit, an acclaimed innovation management software vendor, conducted an extensive study across 13 industries to investigate how companies today use crowdsourced innovation to develop new ideas, open new markets, and drive operational efficiency.

The main themes investigated considered innovation programmes in general, employee engagement, executive sponsorship, implementing ideas and measuring impact, with the aim to highlight the most important lessons and insights from leaders who are managing innovation as a strategic priority, on a daily basis.

The results show that effective innovation programmes are crucial to business.

The majority of organisations embarking on an innovation initiative want to strengthen a culture of innovation.

Many organisations firmly believe that crowdsourcing and formal innovation management can be the foundation on which this transformational culture can be built.

The most important innovation objectives being pursued by organisations embarking on an innovation programme are culture building, increased employee engagement and the streamlining of processes.

Most Important Innovation Objectives

Most important innovation objectives

As a starting point, innovation teams are often made up of 2-3 employees and are run like small start-ups, with a myriad of responsibilities. As the programme grows, resource requirement grows with it as companies often build up their crowdsourcing capabilities over the first two years.

The success and failure of an innovation programme often comes back to executive leadership.

The same holds true for innovation management software. Sponsorship at programme and project level is important, as idea implementation is more likely to happen when a sponsor for those ideas is identified and engaged from the beginning. The majority of programme managers (57%) report results to the CEO, another C-level executive, or the entire senior leadership team as successful programmes are both executive-sponsored and employee-powered.

Leadership is required at various levels.

Idea implementation stands a better chance of success if it has a business sponsor and secured funding, but one of the most critical factors remains follow-through in the form of an implementation owner. The lack of cooperation between groups and poor business planning further hamper the successful implementation of short-listed ideas.

Factors that kill idea implementation

Factors that kill idea implementation

Research suggests that over time difficulties in implementing ideas diminish, which suggests that there is a learning curve to building a successful innovation programme – and the successful sponsorship for the programme with it. As organisations become better with innovation management, the problems associated with making it work becomes proportionally less.

Without a “crowd” of engaged participants it could be all for nothing.

Large, diverse crowds tend to produce diverse, robust solutions to business problems.

Many organisations start a crowdsourced innovation programme with a “go big or go home” approach and roll-out the idea challenge company-wide, but it seems that more choose to pilot in 2-3 groups, departments, or functional areas in order to test the concept and its capabilities. Ultimately, it isn’t the number of ideas that matter but the quality of the ideas that are developed by the crowd so that the business sponsor can act on them. On the whole, companies are great at tracking ideas and participation in the ideation process, but seem to have trouble documenting the implementation and impact once the best ideas turn into projects.

The path to implementation varies considerably from company to company.

No matter how differently companies transition an idea through a process, it seems that in general 24% of ideas selected for action, get fully funded and implemented. Innovation portfolios also differ from organisation to organisation. Operational improvement ideas are the focus of just over half of the organisations surveyed while 32% focus more on growth ideas. A balanced approach however seems to pay off and although growth ideas are more difficult to generate, it also sees more success and provide a higher return on investment.

Every business wants to know the return on-investment (ROI) resulting from its innovation programme. But there is no denying that this is a tricky metric.

The window of time between the birth of an idea and its successful implementation could be a period of weeks, months, or – more likely – years. The longer the window, the more difficult it is to calculate ROI, and the less likely it will be linked back to its origin. Tracking the impact on the bottom line is important, but it’s also not the only measure of a successful innovation programme. Intangible business benefits such as empowering employees and creating a transparent ideation process translate into stronger, more successful innovation programmes, and outcomes.

Considerable cost savings can come quite quickly, but an executive sponsor should provide the proper incentive to each of the groups involved in the process to track and report data that can ultimately reveal the value of the final outcome, and do this in a manner that makes sense to the organisation.

After all, isn’t that why they embarked on the innovation journey in the first place?

 

The information provided here is based on the paper by Spigit 2016: The State of Crowdsourced Innovation. For a full copy of the report, click here.

The Innovation League report, published by Innocentrix will unpack innovation management practises in South Africa. Follow us on Twitter, LinkedIn and Facebook to get notified of its release.