Category Archives: Innovation

How Leading Organizations Manage Their Open Innovation and Crowdsourcing Efforts – Part Two

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How Leading Organizations Manage Their Open Innovation and Crowdsourcing Efforts - Part OneIf you missed How Leading Organizations Manage Their Open Innovation and Crowdsourcing Efforts – Part One, you can find it here.

So what do leading organizations do to encourage the successful use of external talent?

They build a solid foundation:

  1. Seek to understand where the challenges will lie in the transformation
  2. Have passionate business owners
  3. Secure top level support
  4. Make a long term commitment to the use of external talent
  5. Negotiate master agreements with external talent providers at the center
  6. Create a common language of innovation and external talent
  7. Implement the processes and systems to manage and measure innovation efforts

They get strategic:

  1. Create an external talent strategy
  2. Make a plan for achieving the strategy
  3. Attach goals to the strategy (e.g., P&G’s 50% goal)
  4. Communicate the goals of the strategy and measure goal achievement

They focus on communications and ownership:

  1. Do not underestimate the importance of communications, education, and dialogue
  2. Create guidelines for when and how to use different external talent sources
  3. Have someone own and manage the external innovation efforts
  4. Have owners and champions in place in different business units or product groups
  5. Educate employees on how to engage owners and champions

They continuously reinforce their efforts:

  1. Recognize and reward those who go outside
  2. Weave external focus into internal systems (e.g., innovation system prompts)
  3. Get cross-functional input into problem definition and challenge formation
  4. Make resources available for integration
  5. Work to make the organization more flexible and adaptable

In addition, successful organizations understand that it is about making and maintaining connections and community – you build it for when you need it, instead of building it when you need it. Successful organizations understand that attracting and managing external talent is as important as finding and hiring the best internal talent, and are changing their budget allocations to fit this new paradigm. The role of HR in the near future will not be just to recruit, develop, and manage staff, but also to build and curate talent pools. The HR profession will have to build new core competences in network orchestration and managing talent – no matter where the talent lives (inside or outside the organization). It is time to start preparing.

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Before moving on to the final section, let us look at a few brief examples of different companies engaging external talent for business success and one case study of a leader pushing farther:

  • Threadless decided to base their whole business on external talent and build a community of designers and customers that they could leverage to come up with the t-shirt designs that they sell.

  • Quirky has taken the Threadless model of utilizing external talent to simultaneously make invention accessible and build a consumer products company. You submit your idea, the community curates it, the company evaluates it, and actually produces and sells the chosen inventions online, and even at a handful of retailers.

  • P&G went outside with a plastic technology and created a joint venture with competitor Clorox that focuses on trash bags, food storage, and related areas.

  • Intuit uses its Collaboratory web site to connect with entrepreneurs and to publicize their open innovation challenges, and their Labs web site to engage with the developer and customer communities to get immediate feedback on some of their experiments in order to engage in some level of co-creation.

  • Psion Teklogix has built one of the more robust corporate open innovation communities – Ingenuity Working – complete with a video from their CEO front and center.

  • SAP has started The Global SAP Co-Innovation Lab Network (aka COIL) with HP, Intel, NetApp, Cisco, VMware, and F5 Networks to facilitate project-based co-innovation with its members and to enhance the capabilities of SAP’s partner and customer ecosystem through an integrated network of world-wide expertise and best-in-class technologies and platforms.

  • MyStarbucksIdea.com is an example of engaging the creative energy outside your organization that most companies will not want to follow. They throw things wide open for all idea submissions, not focused on any particular challenges, for all to see. As a result, Starbucks exposes the company to the risk of brand equity destruction from not following through on suggestions. At the same time, this approach provides free market research for competitors and creates a lot of sifting and communications work for internal resources.

If you missed How Leading Organizations Manage Their Open Innovation and Crowdsourcing Efforts – Part One, you can find it here.

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Software Design Challenge – Less is More

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Software Design Challenge - Less is MoreI originally posed this software design challenge to application developers in September 2008 based on an InfoWorld article that warmed my heart, but have yet to see any major changes in how most software applications are designed.

For far too long, especially on the PC, software developers have been building applications with a feature arms race mentality. Because of rapidly expanding memory and hard disk space on customers’ machines, developers have not had to write tight code in the same way they had to in the early days of the PC.

Now, hopefully Symantec’s focus on creating Norton applications that install in under a minute and consume far less memory will spread to other industry players. Just because I have 4gb of RAM and 160gb of hard disk space does not give software developers the right to consume it thoughtlessly or to make my computer run slower.

Why can’t software developers give us adaptive software?

If I don’t use a feature of a product in 30 days, it should uninstall itself.

Why can’t I choose lean and mean (give me only the basic features) as an install option?

Software should be smart enough to minimize its footprint, while at the same time giving you the opportunity to add a feature easily later. So, an unused feature should get uninstalled, and simplify the menus as a result. But, if I hold the bottom of the menu it should expand to show uninstalled menu features in grey. If I select a greyed out feature it should tell me it is going to re-install it and then do so automatically.

I can only imagine how much smaller Vista, Office, Photoshop, and other applications would get if they were designed in this way.

If you know of applications designed in this way, please feel free to let me know by commenting on this article.

What do you think?

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How Leading Organizations Manage Their Open Innovation and Crowdsourcing Efforts – Part One

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How Leading Organizations Manage Their Open Innovation and Crowdsourcing Efforts - Part OneAlthough there are simple and cost effective ways to jumpstart your efforts – for example, leveraging a company like InnoCentive to host prize-based challenges in order to rapidly find solutions to your most pressing problems – leading organizations that wish to truly embrace open innovation and crowdsourcing do so through careful planning. When seeking to engage external talent, one of the first of many questions you must first ask yourself is: Why are we doing this? What do we hope that external talent can achieve for us that our internal talent cannot (or should not) achieve, and how do we integrate the two together?

The second question leading organizations in open innovation ask themselves is: Why will they care? And one good place to start in answering this difficult question is to ask: What kind of organization do you have? Do you have a product-driven organization like Microsoft that is very much organized around products? Do you have a customer-driven organization like Hallmark that is organized around customer moments instead of around products? Or do you have a purpose-driven organization? While it does not technically matter what kind of organization you have, the key is to find something that not just your employees will engage with, but that your customers and partners will engage with as well. This could be purpose, but it could also be love for a brand or a well-designed, emotionally-connected product.

Other questions to ask:

  • In our organization, where does open innovation fit in our overall innovation efforts?

  • How are we looking to connect?

  • Do we want to build our own proprietary global sensing network that allows us to pull together insights and ideas from lots of different types of sources in different locations?

  • Or, do we want to utilize external service providers like InnoCentive to get up and running faster or go wider than our own proprietary networks can go?

  • Are we looking for crowd labor or creativity, or are we looking to engage in open innovation or civic engagement in creating innovative solutions?

  • Are we looking for possible solutions to problems that we have already identified?

  • Are we looking with current and potential suppliers at the intersection of what is needed and what is possible?

  • Or, are we looking more broadly to identify new insights through which we can drive our innovation efforts?

Note that one must be careful not to become too focused on ideas. Great ideas fail all the time – poor value translation, poor value access, poor timing, and so on. Rather, getting to creative solutions to problems and challenges is key to innovation success.

Another important questions is: What tool is best for this problem? We have all heard the saying that if you have a hammer every problem looks like a nail. Well, when it comes to open innovation and crowdsourcing, there are lots of tools that we can use, but only if we first understand the nature of the work we are trying to get done. Is it a creative piece of work that we can put out to a community like 99Designs? Or do we just need someone to help us temporarily through a place like PeoplePerHour? Or, perhaps we are trying to solve problems, both big and small, and want to leverage a company like InnoCentive to create and tap into both internal and external communities of problem solvers to accelerate our innovation efforts.

Smart organizations identify the different work and challenge scenarios they expect to face over time and then identify which resourcing option(s) make the most sense for each scenario. They then work to form the relationships and agreements necessary with firms like InnoCentive to make sure that they will have reliable resources in place for when they seek to utilize a particular type of resource to tackle the matching challenge or work scenario.

Successful organizations have a plan for how they are going to interface with external resources and how they are going to bring ideas and potential solutions in house for further development and launch. What will the cultural obstacles be? You must consider what the potential cultural obstacles might be to engaging external talent in your organization. P&G had to work very hard to change of its culture from ‘Not Invented Here’ to one where people embrace new things being ‘Proudly Found Elsewhere.’

Some of the reasons that you may face resistance in implementing an external talent strategy include beliefs that career advancement comes from increasing the number of headcount managed, a fear of failure, a lack of management support, and people not wanting to go outside their comfort zones (‘I get paid to manage and make things incrementally better’). But when people start to hear stories about some of the successes, see some proof of the benefits, and see other people get recognized for utilizing external talent, acceptance of an external talent strategy starts to spread. And when senior leadership or middle management start talking about what is being done with external talent, and people using external talent start training their peers on what they are doing, you know people are starting to fully embrace your external talent strategy.

If you want to read How Leading Organizations Manage Their Open Innovation and Crowdsourcing Efforts – Part Two, you can find it here or…

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External Talent Strategies for a Global Talent Pool

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Why Having an External Talent Strategy is Becoming Increasingly Important

External Talent Strategies for a Global Talent PoolThe old way of winning the talent wars was to search for and hire the very best talent and keep them inside your own four walls by offering them competitive compensation, benefits, and perks. Your hope was that your talent is better than your competitors’ talent. But over the last couple of decades, companies have increasingly found that employees who pursue what they do with passion will outperform an employee with a gun to their head every time. Circuit City learned very publicly that people are not commodities and went out of business from treating them as if they were. At the same time, we know that diversity is very important and hard to foster internally. And so it is to get to this diversity of thought in order to accelerate product launch and innovation timelines that companies must open up – it is a global economy with a global talent pool.

The question becomes: what is happening at the micro level with this global talent pool? Well, the world continues to move away from being a place where employees expect to have jobs for life, and fight against any change to this paradigm, to a world where portfolios, personal branding, and project-based work will become more common in an increasing number of industries. The evolving world of work is becoming a world in which individuals will need to be really good at collaborating and playing well with others, while also honing their skills at standing out from the crowd. At the same time, the external perception of your network value will expand from a focus on internal connections to also include the talented minds you might know outside the organization that can be brought in on different projects or challenges.

At the macro level, we are also confronted by an economy right now that is characterized by high unemployment – especially for the young. And for those that have jobs, many are underemployed. Meanwhile, at the other end of the age spectrum, many baby boomers will continue to look to make money and stay involved in the workplace in significant numbers. And for those not retiring who still have jobs, many employees now are doing more work but feeling less engaged. When you combine the macro and micro pictures, you can see that there is an army of talent out there looking to build their resumes or their balance sheets by working on interesting challenges and projects.

As your organization opens up and crafts a formal external talent strategy, there are several ways external talent can help benefit your organization.

Increased Speed:

  • External talent networks can form an expanded rolodex of experts that you can consult with to expand your knowledge on a particular search area or market and give you a running start instead of a standing one.

  • You can use your external talent strategy to find existing solutions from outside your industry. One example of this is a tire company adapting existing technology for cutting cheese to cutting rubber. Another is InnoCentive client OSRI, who used concrete construction principles for the purpose of oil spill cleanup (see sidebar).

  • To accelerate innovation and product development timelines, many companies strategically partner with external talent to advance their projects and help fight through roadblocks or work on other components when the lead team is off the clock. Dissecting work and distributing it to the individuals, groups, or partners that can best complete the work is an essential component of open innovation strategy.

Increased Success:

  • You can form a relationship with a particular expert and work together to solve a problem, to evaluate a range of potential solutions from internal folks, to tap expertise you lack currently in your organization, or to add diversity of thought.

  • You can use your external talent strategy to engage a large number of potential solvers on a tough problem. Through open innovation and crowdsourcing, Roche found a solution to a problem it had been struggling with for fifteen years by engaging the InnoCentive global solver community. At the same time, the company validated that the approaches it had already tried were the logical and correct ones.

  • When you engage external talent, you can collect lots of little ideas from outside, and connect them internally, uncovering some really big ideas that properly applied and executed can lead to some great new breakthrough innovations.

Increased Learning:

  • An under-appreciated and under-utilized benefit of working with external talent is to use it to learn new problem solving techniques by analyzing how the external talent solved the problem, to learn new technical skills not held internally by having external talent train internal talent, and by encouraging information sharing from the outside-in from external talent working in different disciplines.

Teamwork and Collaboration:

  • An increasing number of problem solvers are working together to solve challenges posed by organizations and this collaboration and teamwork is yielding higher quality solutions. Research by EMC into their own internal innovation challenges has shown that teams were more likely to successfully create winning challenge entries. InnoCentive, for instance, has responded to this behavior by creating more collaborative features for its global solver community to use in responding to challenges.

Consider scale for a moment. A person delivering a ton of value does not need a ton of headcount anymore if they are employing an effective external talent strategy. In an era where organizations are focused on increasing productivity and output without changing the number of headcount (focusing on revenue or profit-per-head), smart employees and business units will increasingly focus on being a force multiplier – getting more work done with the same number or even less headcount.

Two of the most important job skills in this new world of work will be the ability of the individual and the organization to deconstruct the work into portable units that can be executed by a mix of internal and external talent, and construct a project plan for distributing, aggregating, integrating, and executing the component parts to achieve the overall project goal.

But to maximize the efficiency and effectiveness of your work with outsiders – as well the output – you need to be strategic in your approach because the speed of adaptation (your ability to adapt and integrate work from outside into the inside) will become more important. And the flexibility you show as an organization and the ability of your employees to execute under immense market and customer pressures will become increasingly important as well. You must be strategic because ultimately you want to design scalable external talent strategies, policies, and processes.

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Innovation or Invention? – Dog Washing Machine

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Innovation or Invention? - Dog Washing MachineI saw the second picture in this article (of a dog washing machine in Japan) over my wife’s shoulder during a leisurely reading of the Sunday Seattle Times yesterday. I think it was in the Parade magazine, and as I started writing this article I found the same picture posted two years ago here, so it became clear that this idea – a dog and cat washing machine – has been already productized and in use for at least a year in Japan. But then I found the first picture in this article (which looks a lot like my daughter’s dog) in an article about the Dog-o-Matic that appeared in The Daily Mail back in 2009, meaning some inventive Brit appears to have beat out someone from Japan by nearly a year.

Dog Washing Machine - JapanNow, I can say with reasonable certainty that very few dog or cat owners really enjoy giving Fido or Princess a bath, and so the idea of a machine that you lead Fido or Princess into and shut the door and push a button to accomplish the job, sounds very appealing. It can be an incredibly messy operation fraught with danger and frustration (thus the rise of self-service dog washing places), but when you look at the first picture, is the emotional trauma of the experience something that dog or cat owners (or dogs/cats for that matter) could endure over the long term?

Hmmm…

Looking at these images, they remind me of an experience my wife and I (or mostly my wife) had in an automatically cleaned public restroom at a train station in Versailles, France that was just about as traumatic. But that’s a story for another day…

So, what do you think? Invention or innovation?

Is this something that will catch on with dog owners around the world?

I’ll leave you with a video of the Japanese version in use:

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Targeted Advertising While You Fly

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It has been four years since I first wrote this article for my personal blog and because not many people saw it and because not much has changed I thought I would update it a bit and share it on Innovation Excellence.

Flying to Hawaii four years ago, I was reminded of the phrase, “You may be talking but nobody is listening.” Hawaiian Airlines had seen fit to pollute the cabin with an endless stream of un-targeted advertising on the plane’s set of televisions (no fancy seatback units here).

Now, at least on American Airlines the “advertising” mostly masquerades as entertainment (CBS sitcoms or clips of Letterman and 60 minutes) to try and keep the shows’ viewer base loyal or to pull in new viewers, but it’s still advertising. American Airlines has traditional advertising as well, but less than what I saw on Hawaiian Airlines four years ago. Since then I’ve flown all around the world delivering innovation speeches and innovation training, using a variety of carriers (Korean Air, Air France, Delta, etc.) and even on seatback inflight entertainment units I have yet to see any targeted advertising, and I’ve flown on a lot of flights without seatback entertainment units (although more and more airlines are updating their fleets).

Broadcast networks have at least some justification for spamming people over the airwaves (it’s their only revenue source and they are only able to target based on dominant audience profiles). The availability of on-demand, seatback entertainment systems, leaves airlines with no excuse, and in fact advertisers would be willingly to pay more for targeted impressions.

For targeting purposes, the airlines know who purchased the ticket (likely their age (senior/adult/child), phone number, e-mail, address, zip code, how much they paid, the credit card they paid with, etc.). About frequent fliers they will also know how frequently they fly, their home airport, and maybe even whether they are traveling on business and for which company. So it would definitely be possible to design a system to target advertising in-flight. And properly designed you could roll it out across a whole range of airlines to help airlines increase their revenue and advertisers reach their target audiences. So why haven’t airlines implemented such a system yet?

At its simplest, airlines could define the programming schedule as a mixture of content blocks and advertising blocks (interstitial advertising) and target the advertising by seat, using passenger data. Passenger data could be loaded up at the beginning of each flight by a gate agent using a USB key, smartcard, or other portable data storage device. Every seat could potentially receive a different combination of commercials during the flight.

Airlines wishing to avoid interstitial advertising could design a more complex system to support advertising that would appear during the programming (as banners, or whatever). Whichever way the airlines went, they have the opportunity to create a system that would likely attract the highest rates for video advertising on the planet to help them pay for the increasingly expensive fuel to fly the plane.

So why haven’t they done it?

P.S. I also thought it was interesting that Hawaiian Airlines had chosen four years ago to go “cash-free” and only accept debit and credit cards (which many other airlines have since copied). I agree with offering credit and debit cards as an option, but I’m not sure I agree with abandoning cash. Why would you want to do anything to make it more difficult for people to give you their money?

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Followup – Following the Line to Innovation at Costco

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Followup - Following the Line to Innovation at CostcoDuring the winter holiday shopping season in 2007 I was suspicious when a man at Costco asked if he could scan my Costco card while I was standing in line, thinking that he was going to try and sell me on their executive card. I was pleasantly surprised when he then scanned my items with a portable scanner/computer and gave me a slip of paper to alert the cashier that he had done so.

It is a pretty simple system:

  1. Scanner/Computer reads my Costco account number and creates a record
  2. It then associates the item numbers scanned with that record, and sets a flag in the system that this temporary record exists on my account
  3. Cashier enters my Costco account number and retrieves my account
  4. The flag in the system enables the cashier to transfer the scanned item numbers into a live order
  5. The cashier verifies the number of items
  6. The cashier processes payment
  7. The system deletes the temporary record

I thought “wow!”, this is brilliant, this is exactly the type of potential process improvement that I’ve talked about before, most recently in Following the Line to Innovation (a November 2007 refresh).

The fact is that when it comes to busy holiday seasons, Costco and all other retailers have a fixed number of registers and the cashiers can only scan items and process payment so fast. If the cashiers only have to process payment and maybe throw a few things in a box, then the throughput of each cashier increases and lines become shorter or non-existent. This appears to be a new process to accommodate the increased volume of shoppers that all retailers experience during the holiday season, but the process could be even better.

Normally when I go to Costco there is a cashier working busily and a box person working less frequently. It seems to me that this scanner/computer task could become the normal job responsibility of the box person. If the jobs were re-distributed then maybe the non-holiday throughput could be increased and possibly free up people for other tasks.

All I know is that I was a happier customer that day. And–as I’ve said before–by making more efficient use of waiting time, companies can potentially decrease costs and increase revenue at the same time, while also increasing customer satisfaction. What can be better than that?

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Retained Innovation

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Retained InnovationAs a provider of innovation coaching services along with training and innovation speaking, I try to talk to as many other fellow practitioners as my schedule allows to keep abreast of what others are experiencing and doing. What I have found in the area of billing clients is that there are a myriad of ways of receiving compensation for the work that we do. Everything from traditional hourly/daily/weekly to at-risk payment types like graduated rates, milestone payments, equity stakes, contingencies based on achieved savings, royalties, and even retainers.

Of all the different methods that I’ve seen, I think that royalties and savings contingencies make the most sense in revenue augmentation and cost reduction scenarios. Companies should be willing to reward those practitioners that deliver real revenue increases and cost savings, and practitioners should be willing to accept lower compensation if they don’t.

But when it comes to looking at innovation projects and innovation process then I think that the retainer model is the best way to go. Innovation is about competitive advantage and in today’s competitive environment, companies can’t afford to wait around until their favorite practitioner is available to fully engage, and at the same time they can’t afford to go with whoever is available regardless of quality and fit.

I believe the retainer model works best for innovation projects and innovation process because the guidance is there when you need it. It can be as proactive or reactive as the needs of the client dictate, and it provides the continuity necessary to keep program improvements on track. The retainer model also allows the company to access their practitioner a few hours at a time, something that would be unworkable for both sides if a new contract was needed each time.

The retainer model also can be quite useful to companies who would like to have a Chief Innovation Officer (a steward of the innovation process and culture for a company), but can’t justify the overhead of a full-time resource.

But regardless of how a company chooses to resource their innovation capability, every company should have an innovation strategy, and that should include continuous re-evaluation and improvement using both inside and outside resources to preserve freshness and to introduce new thinking.

So what is your innovation strategy?

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Innovation Requires Diagonal Thinking

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Innovation Requires Diagonal ThinkingThe outcome of a back and forth of a dialog on Twitter with Scramray E. Pinkus generated a lovely quote worth sharing:

“Innovating is like thinking diagonally. A perfect combination of both linear and lateral.”

– Scramray E. Pinkus (@Easelton)

The conversation sprung out of a tweet I posted that postulated that when people use technology (iPads, smartphones, laptops, etc.) and television as child minders, that they are actually promoting linear thinking in their children at the expense of the lateral thinking that our society so desperately needs. We need strong lateral thinking to compliment the dominant linear thinking out there, so that together they can drive the social innovation the world needs to fix this mess we’ve made.

What do you think?

Technology as child minder, positive or negative effects on the innovative capacity of our children?

One of my proof points is this article from The Washington Post.

Any other proof points out there?

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Food Innovation Sighting – Doritos Tacos

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Food Innovation Sighting - Doritos TacosI don’t typically frequent fast food restaurant chains, but today I did, and I had a food innovation sighting for my trouble. I stopped by the local Kentucky Fried Chicken (KFC) and Taco Bell combination store and as I was picking up my crispy strips order I heard a guy order two Doritos Tacos.

“Doritos Tacos?” I thought to myself. Then I looked up and sure enough Yum Brands has teamed up with PepsiCo’s Frito Lay to bring you the Doritos Taco. It’s just like it sounds. Frito Lay has created giant round Nacho Cheese Doritos and folded them into the shape of a taco shell, and then Yum Brands employees combine them with the usual Taco Bell taco fillings.

Now I didn’t actually try one, but how could they not be good and absolutely stuffed with calories?

So hats off to Frito Lay and Yum Brands on the creation of this simple food innovation.

For those of you keeping score with your SCAMPER framework scorecard, file this one under Combine.

What other food innovation combinations would make sense for two companies to create?

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