Open Innovation – Part 2

Background
I am discussing the concept of open innovation (OI), the form of innovation where organisations make use of sources outside of the organisation to innovate.  OI has developed from a buzzword into an established practice of innovation management. Sources of external input for innovation are plentiful, including market actors like customers, suppliers, competitors; the scientific system of university labs and research institutions; and mediating parties like technology consultants, media, and conference organisers.  In the previous article I mentioned that the concept of OI is not that familiar or much used formally in Namibia, but there is one aspect of OI that is fairly easy to exploit, and that is getting product-, service- or marketing ideas from your customers.  This process of formally soliciting ideas from people outside the organisation, is a specific area of OI referred to as “crowdsourcing”.
Crowdsourcing
Jeff Howe coined the phrase “crowdsourcing” in a June 2006 magazine article: “Crowdsourcing is the process by which the power of the many can be leveraged to accomplish feats that were once the province of a specialised few.”   Although crowdsourcing is associated with soliciting services and ideas, I want to focus on soliciting ideas here.  So in the classic use of the term, how it works is that problems or challenges are publicised to an unknown group of solvers in the form of an open call for solutions. Users – the crowd – submit solutions which are then owned by the entity which publicised the problem – the crowdsourcer. The value to the contributor of the solution or idea is that he or she is compensated monetarily, with prizes, or with recognition. Ideas or solutions may come from anywhere and crowdsourcing may produce solutions from amateurs or volunteers, working in their spare time, or from experts or small businesses which were unknown to the initiating organisation.  So let’s look at examples where organisations made use of crowdsourcing in practice.  Lego (the colourful interlocking plastic bricks) has an online open innovation platform that lets members of the public submit product ideas, which if they come to market will net them a percentage of the sales royalties.  Users can create a page outlining their new concept and then share it with others to see what they think. Once the project has received 10,000 supporters it is reviewed by the Lego team to see if it meets the company’s standards for playability and safety and that it supports the Lego brand. Another example is Coca-Cola that has a “Shaping a Better Future” challenge, which asks entrepreneurs to create improvement-ventures for the project-hubs of youth employment, education, environment and health.  In addition, its “Where Will Happiness Strike Next?” series of short films and TV-commercials relies on the input of Coke customers, contributing ideas about creating happiness. How can you make use of crowdsourcing in your organisation?  Well, the easiest and simplest way is to talk to your customers!  I am talking about a more constructive manner than the suggestion box at the door (that never gets used anyway).  As an example, I worked with a client in Namibia who sourced ideas from customers through the organisation’s idea management system.  What they basically did, was to extend their idea campaigns to “trusted” customers, whose inputs they valued and who could contribute suggestions on improvements from the customer’s perspective.Next Time
In this article I wanted to outline the specific area of OI called crowdsourcing. It makes me think of the old saying: “two heads are better than one”, with the distinction here that the second head comes from outside your organisation! In the next article I want to discuss the issue of national innovation and how countries and nations can boost their economies and solve national challenges through national innovation.  I conclude with a quote from Ross Dawson: “While many think that crowdsourcing is about cheap labour, there are many crowdsourcing models that are based on tapping a pool of the most talented people in the world, trumping any organisation that relies only on their staff”.
Sources:
Chaordix. 2013.  What is Crowdsourcing? Online: http://www.chaordix.com/crowdsourcing-101/