Category Archives: Open Innovation

The Pitfalls of Crowdsourcing

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How to Overcome Them to Spur Innovation

The Pitfalls of Crowdsourcing: How to Overcome Them to Spur Innovation

GUEST POST from Diana Porumboiu

There is a lot of buzz around open collaboration as a driver for innovation. Studies, academia, research, and the myriad of examples from companies are boasting about the amazing results brought by ideas from external parties. A study shows that 85% of the top global brands have used crowdsourcing during the last decade.

But is crowdsourcing truly effective to spur innovation? Even though its popularity increased so much, there’s also plenty of evidence that dispute its effectiveness.

As tempting as it is to fall into the trap of the latest trends in innovation methods, it’s not wise to jump headfirst. So, we decided to write this article and show you the hard facts of crowdsourcing, which will help you decide if this is something your organization can benefit from.

For this, we’ll explain the pitfalls of crowdsourcing and provide practical tips on how to overcome them. To put things in perspective, let’s start with the broader picture, of what crowdsourcing is, or isn’t. 

What is crowdsourcing?

As the word indicates, crowdsourcing is all about leveraging the power of the crowds. If you’ve been reading our blog, or worked with innovation topics before, you might think that we are actually referring to open innovation. Not quite. Indeed, the two terms are oftentimes used interchangeably, and the concepts are similar.

But it’s best to make the difference between the two, because setting on the right terminology will also help you better communicate your innovation initiatives to your organization, and to external stakeholders too.

Basically, both crowdsourcing and open innovation refer to engaging external individuals to participate in the innovation process by suggesting ideas and solutions to a specific topic.

Crowdsourcing is the practice of obtaining ideas, solutions, or services from a large, sometimes undefined group of people through an open call. It is a process that leverages the collective intelligence and creativity of a crowd to solve problems, generate new ideas, or carry out tasks.

On the other hand, open innovation includes many other activities that involve people outside the initial working group (open data, scouting, trend research, idea management, etc.). If you want to learn more about the topic, our blog provides vast resources on open innovation which you can find here.

Now, while open innovation, as the name states, is specifically done to generate more innovation, crowdsourcing is used in other contexts too. Methods like crowd labor, crowdfunding, or crowd curation can be valuable if you need to outsource routine and well-defined tasks, manual work or fund your project. These can, in fact, be part of an innovation strategy, but they are not specifically targeting innovation.

That’s where crowdsourcing for innovation comes into play, and what we’ll focus on next.

The pitfalls of crowdsourcing

While crowdsourcing can be an effective way to generate ideas, solve problems, and engage with a community, unless it is properly planned, executed, and managed, it can come up short.

Let’s take a closer look at each of these pitfalls. 

  • Risk management: 

There are many risks that come with open collaboration, and some of the most cited are intellectual property and data privacy. Organizations are apprehensive about exposing themselves to the large public and weary about potential conflicts that could arise from ownership, and copyright as well as exposure to competitors.

So, when considering crowdsourcing as part of your innovation strategy, you should weigh the risks associated with it.

There are four main things to keep in mind when it comes to legal risks associated with crowdsourcing:

  • Existing patents and patents protection for technical solutions
    • Trademarks applicable when sourcing new product names, logos or brands
  • Design of the visual appearance of new products
  • Copyrights for any original texts

That’s why it’s best to have clearly pre-defined contractual terms, NDAs and confidentiality agreements that deal with intellectual property ownership and data protection. So, make sure to establish clear ownership and copyright guidelines upfront.

This can include requiring contributors to agree to terms and conditions that grant the sponsoring organization the right to use and modify the contributions. Providing clear attribution and recognition for contributors can also help to avoid disputes over ownership. Rewarding participation doesn’t just help with motivation and engagement, but it can also mitigate the legal risks.

  • Crowd management: 

The success of your crowdsourcing initiative hinges on the participation of individuals who provide ideas. However, many crowdsourcing projects fall short due to low engagement levels, inadequate idea generation, or low quality.

These issues may arise because contributors don’t recognize the significance of their contributions, lack motivation, misunderstand project requirements, or are unaware of the initiative.

Because crowdsourcing initiatives require a lot of time, effort and specific skills it’s best to delegate the project to someone who is not involved in everyday innovation activities (if you have those already in place).

Even so, crowdsourcing should still be aligned with the overall innovation and strategic goals, and therefore managed as part of existing processes. 

To ensure crowdsourcing runs smoothly, contributors are engaged, decide on the roles and responsibilities for managing the process and ensure that there is adequate support for contributors.

Also, to reach the right people, and as many as possible, you should design effective campaigns that encourage participation.

To ensure quality control establish clear guidelines and criteria for contributions. This can include specific requirements for content, format, and presentation, as well as screening and review processes to filter out low-quality or irrelevant contributions.

Using a platform that allows for peer-review or voting can also help to separate the wheat from the chaff. This what can also facilitate evaluation, which we’ll explore next in more detail.

  • Idea evaluation: 

Evaluating ideas is one of the most complex and challenging aspects of idea management, particularly when it comes to crowdsourcing initiatives where you have a significant number of ideas to sift through and assess.

  • First, it can be time-consuming and overwhelming to select the ideas to develop.
  • Second, ideas and perspectives might differ so there will be inconsistency and biases in the evaluation process.
  • Third, there is a tendency to pick the familiar over the distant ones.
  • And last, there is also the issue of the quality and level of detail of ideas varying widely, making it difficult to determine which ideas are truly innovative and valuable.

With all these challenges, you could overlook potentially great ideas. What’s more, in a crowdsourcing environment, there is often limited interaction between the idea generators and the evaluators, which can make it challenging to provide feedback and refine the ideas further.

To mitigate this, you need a methodical framework for evaluating ideas. You can learn everything about idea evaluation from this article.

In short, to create an evaluation process that works for you, it’s best to decide on a set of criteria that can help you sift through the ideas. For example, Viima’s evaluation tool gives you the flexibility to choose your own metrics and then analyze and make decisions based on those criteria, without the hassle of going through each of every idea individually.

To have a clearer understanding of how this works in practice, try out the crowdsourcing board template. We set it up so you can easily and safely start collecting ideas from outside the organization.

But remember that even with the best tool, before opening up the organization to the crowds, you will still have to work out your internal process and how that fits into the bigger picture, which takes us to the next point. 

  • Process integration: 

Poorly designed or executed processes can lead to low-quality submissions or misunderstandings about the goals of the initiative. A study suggests that besides the issue of managing crowds, organizations also fail to create a process around it.

This is a trap in which many organizations fall. Unless you build a process and plan that goes beyond the first steps of the crowdsourcing initiative, you might waste a lot of time and distract internal teams from using the time and resources on actually executing the strategy.

So, first thing first is to ask yourself if crowdsourcing will serve a bigger purpose. If so, how will it be part of your internal processes and what resources it will require?  Crowdsourcing shouldn’t impede internal practices and processes. It should align with the overall strategy and provide value for the organization.

Crowdsourcing shouldn’t impede internal practices and processes. It should align with the overall strategy and provide value for the organization.


Although we have discussed a number of potential pitfalls of crowdsourcing, it’s important to recognize that these issues are often complex and multifaceted. As such, there is rarely a single reason for failure.

To provide a more comprehensive understanding of crowdsourcing, we will next look at some examples of both failed and successful initiatives. 

When crowdsourcing goes wrong

1. Pepsi Refresh

In 2010, Pepsi launched “Pepsi Refresh”, a crowdsourcing initiative that invited people to submit their ideas for projects that could benefit their communities, with the winning ideas receiving funding from Pepsi.

While the initiative generated significant attention, it was ultimately considered a failure. Even though in terms of reach and visibility the campaign was a great success, the goal of increasing sale was missed. In fact, “Pepsi Refresh” did the opposite, losing the parent company some $350m.

One reason was the lack of alignment between the initiative and Pepsi’s core brand message. While Pepsi had traditionally focused on promoting its products, the Refresh Project shifted the company’s focus to community engagement and social responsibility.

Another issue with the Refresh Project was the complexity of the submission and voting processes. There were also concerns about transparency and fairness in the voting process. Some critics suggested that the system was easily manipulated, allowing certain ideas to receive more votes than they deserved, while others were unfairly overlooked.

This outcome highlights the importance of ensuring alignment with business strategy and values, as well as the big role played by transparency.

2. Nokia’s “IdeasProject”

Nokia’s “IdeasProject” was a crowdsourcing initiative launched in 2008 to gather ideas from customers and the public for the company’s product development. While the initiative generated significant interest and engagement from users, it ultimately failed to produce significant results, and was eventually discontinued.

One reason for the failure of the IdeasProject was a lack of follow-through and implementation of the ideas generated. While thousands of ideas were submitted and discussed on the platform, few were actually developed or brought to market by Nokia. This led to disillusionment and disengagement among users, who felt that their contributions were not valued or taken seriously.

Another issue was the lack of clear communication and marketing of the IdeasProject. Many customers and potential contributors were not aware of the initiative or did not understand its purpose, which limited the overall reach and impact of the platform.

3. Yahoo’s “Assignments”

In 2007, Yahoo launched “Assignments,” a platform aimed to leverage the collective intelligence of its users to generate high-quality content. The initiative allowed users to submit original content, including articles, photos, and videos, which other users could rate and review. Yahoo planned to use the best-rated content to enhance its news and information websites.

Yahoo failed to create a strong community around the initiative, which made it difficult to generate high-quality content. Furthermore, there were concerns about copyright violations, as some of the content submitted by users was copyrighted material.

Because the platform was plagued with issues, including a lack of quality control over articles submitted and disputes over payments to writers, the platform was eventually shut down in 2012.

When crowdsourcing goes right

Despite the challenges associated with crowdsourcing, we should acknowledge that there is still potential for success, and not all crowdsourcing efforts are doomed to fail.

1. Linux

Linux is a popular open-source operating system that was developed through a crowdsourcing initiative. The project was started by Linus Torvalds in 1991, who was a computer science student at the University of Helsinki in Finland. Torvalds wanted to create a free and open operating system that could be used by anyone, and he enlisted the help of other developers from around the world to contribute to the project.

The project’s success is attributed to its collaborative and decentralized development model, which fosters innovation and customization, as well as a strong community of passionate and supportive developers. Moreover, Linux’s technical merits, such as stability, security, and flexibility, make it a popular choice for a diverse range of applications, from web servers and supercomputers to smartphones and home appliances.

2. Ford

The “Make it Driveable” crowdsourcing campaign by Ford was launched in 2018 to gather ideas and solutions for making vehicles more accessible to people with disabilities. The campaign invited individuals and organizations to submit their ideas for features or modifications that would make driving and traveling in a car easier for people with disabilities.

The campaign engaged a diverse range of people and organizations, including disability advocates, engineers, and designers, in the co-creation process who generated a broad range of innovative ideas and solutions.

The “Make it Driveable” campaign showcased Ford’s innovation and leadership in the automotive industry, demonstrating the potential for crowdsourcing to drive meaningful change and create value for both the company and its stakeholders.

3. Lego

As mentioned above, Lego’s crowdsourcing platform, Lego Ideas has been running successfully since 2008. The platform allows Lego fans to submit their own designs for new Lego sets, and the community votes on their favorite designs. The Lego Ideas platform has been hugely successful, with several of the winning designs becoming popular and highly sought-after sets.

For Lego, crowdsourcing is a cost-effective approach to supplement its in-house capabilities and expand their line of products. Even more, because of the voting system they can assess whether a product idea has potential and demand among its customers.

For participants, Lego Ideas provides a valuable platform to share and contribute to the company’s mission of inspiring future builders. Users can gain recognition from their peers for their ideas and benefit financially if their product is successfully released to the market.

These are just a few examples which show how crowdsourcing can be applied successfully, as long as it’s in line with the company’s core values and goals, and it’s built on a framework that enables systematic use of the ideas from outside the organization.

But as previous examples have shown, crowdsourcing can also go wrong even for the most successful organizations. These examples can hopefully help you make a more informed decision, and inspire in the way you approach crowdsourcing, or open collaboration in general.

To recap, you need alignment between your crowdsourcing initiatives and the overarching strategy, integration with internal processes, a framework that enables idea management, evaluation and development and last but not least, an effective campaign to gather the crowds around your organization.

How to start crowdsourcing

First thing first. Does crowdsourcing align with your current strategic plans? If it does, the first step is to develop a clear plan for using crowdsourcing effectively.

If you are not sure which way to go, as a first step in choosing your approach, you can find inspiration in this chart from Deloitte, which shows a variety of crowdsourcing activities that cater for different needs.

Viima Crowdsourcing 1

Depending on your strategy, industry, and your company profile, you will probably know what type of crowdsourcing is most appropriate for your organization.

This will help you decide on other factors such as the type of contributions you are after, the resources required, and the audience you will target.  

Viima Crowdsourcing 2

 

1. Define your goals and set boundaries

The first step is to set clear goals for your crowdsourcing campaign. What do you want to achieve: is it brand awareness, ideas for improving products or customer satisfaction?

Decide on a set of metrics that will help you evaluate the success of the campaign and measure its impact. This will help you adjust as needed but also set realistic targets about the outcomes you think are possible. If you’re set to get disruptive or completely novel ideas that require technical knowledge and complex solutions, you have to carefully consider whom you want to target with the campaign.

2. Define the target audience and the engagement mechanisms

This step is essential for the success of your crowdsourcing. Without the right participants, you won’t have enough relevant ideas.

Think about who would have the most knowledge and expertise in this area and who would be most interested in providing their ideas and insights. Consider demographics such as age, occupation, location, and interests.

Depending on the goals you set or the types of ideas you are after, you will need different audiences. Sometimes there might be more generic ones, while in other cases you will want specific people with knowledge of the topic or interest in the field. On the other hand, sometimes it is more beneficial to have a diverse audience that can bring new and fresh ideas.

Once you have identified your target audience, you need to develop engagement mechanisms that will motivate them to participate in your crowdsourcing campaign.

Engagement mechanisms refer to the various ways in which you can interact with your target audience and encourage them to contribute their ideas. These mechanisms may include online platforms, social media channels, email campaigns, targeted advertising, events, and rewards or incentives.

It’s important to remember that engagement mechanisms should be designed specifically for the target audience.

3. Decide on a platform to support your activities

Once you have decided on the goals, determined the target audience, and the engaging mechanisms, you should next look for a platform that can cater to all your needs.

The platform should act as a transparent communication and exchange forum for participants. It should be easily accessible and simple to use, but also flexible enough to allow different use cases.

As mentioned above, many crowdsourcing failures are related to the inability of organizations to manage and integrate the initiative in their existing processes. Providing feedback and encouraging ongoing participation are also other important elements to consider when scouting for a crowdsourcing tool.

To get an idea of what open innovation platforms are out there and how they can be used for crowdsourcing, you can read this Guide to Open Innovation Platforms: How to Unlock the Power of Collaboration.

The selection criteria should consider factors such as accessibility to the target audience, the ability to integrate relevant engagement mechanisms to promote ongoing participation, and the capability to distribute incentives after the completion of activities.

4. Pilot and iterate

Consider starting with a pilot initiative to test the approach before scaling up.

No matter how well you prepare for something new, like crowdsourcing might be for some, you will most likely stumble a couple of times. And that’s completely fine.

No amount of research and shortlisting will give you the full scope of how it works in practice for your organization. That’s why it’s important to pilot on a smaller scale. And once you’re happy with the pilot results you are ready to scale up.

Doing pilots allows you to test the platform, check for compatibility with the platform, and test your plan and ways of working.

If you are not sure about the first step, get started with a platform and see how it would work in practice internally. Some vendors offer free user-based versions, like us here at Viima, and some have demos or other free trials.

Additionally, piloting may also help evaluate if you’re searching via the wrong criteria (of if your goals are misguided), or if your ways of working or processes are wrong for what you want to achieve. Also, consider using feedback from participants to iterate and refine the initiative over time.

Conclusions

As you can see, just as there are good parts about crowdsourcing, there are also bad ones. There is no one size fits all solution when you want to innovate, and just like many other methods and tools, crowdsourcing can be a great enabler for innovation.

Regardless of the pitfalls and numerous failures from other companies, crowdsourcing can still be highly beneficial for your organization.

To summarize, let’s recap the positive aspects of using crowdsourcing for innovation and the main factors to consider to fully leverage its benefits.
First, for crowdsourcing to work well, it should make sense for the organization’s strategy and overall goals. Make a plan, assess the needs and the capabilities to manage a process like this. Because indeed, crowdsourcing should be designed as a process that complements, and doesn’t hinder other activities within the organization.

Second, make sure you choose the right platform from the get-go. For optimal results you should aim for something that is flexible enough that allows multiple uses, from external idea collection to managing the entire innovation process.

Lastly, don’t over-rely on technology either, because that is just a tool that helps you move forward and be more efficient. The true benefits come when you start building connections, nurture talent and find new approaches to solve problems.

Image credits: Viima, Pixabay

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Leading Your External Innovation Network

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Orchestrating Collaboration

Leading Your External Innovation Network

GUEST POST from Art Inteligencia

The days when a single organization could dominate innovation solely through internal R&D labs are over. In the age of exponential change, innovation is a contact sport. As a thought leader focused on human-centered change and innovation, I see the most successful companies shifting their focus from being self-sufficient inventors to becoming expert orchestrators of external networks. They understand that the collective intelligence of an ecosystem—comprising startups, universities, competitors, and even customers—far exceeds the capability of any lone corporation.

Leading an external innovation network is fundamentally different from managing an internal team. It requires shifting from command-and-control to influence and co-creation. It’s about building a robust, diverse, and fluid network of partners who share a common purpose but bring radically different skills and perspectives. This isn’t just “open innovation”; it’s strategic, purpose-driven collaboration, designed to achieve breakthroughs that would be impossible alone. The challenge for today’s leaders is not acquiring external assets, but mastering the art of the symbiotic relationship, where mutual value and growth are guaranteed.

The Three Imperatives of Network Orchestration

To successfully lead an external innovation network, a leader must focus on three core imperatives:

1. Define the Shared Problem, Not the Solution

External partners aren’t looking for a contract; they’re looking for a mission. Your organization must clearly articulate the Wicked Problem it aims to solve (e.g., “How do we make urban logistics carbon-neutral?” rather than “We need a faster drone model”). Defining the problem invites a diversity of approaches and technologies. Defining the solution constrains creativity and filters out the radical ideas often found outside your walls. This clarity establishes the shared purpose that binds the network.

2. Design the Interface for Trust and Speed

Bureaucracy kills collaboration. The interface between your company and its external partners must be lean, fast, and built on psychological safety. This means simplifying IP agreements, offering flexible contracting models (like joint ventures or co-development agreements rather than simple vendor contracts), and establishing clear, transparent communication channels. Trust is the transactional currency of the external network, and a fast, clear process is the best way to earn it, particularly with agile startups.

3. Cultivate a Portfolio of Relationship Models

Not all external partners are created equal. A startup requires venture capital and mentorship; a university needs joint research grants and data access; a mature competitor might require a formal standards consortium. Successful orchestrators manage a portfolio of relationship models, matching the right type of engagement (e.g., challenge, investment, acquisition, co-development) to the specific partner and the innovation maturity level. This avoids treating every partner like a transactional vendor.

The Internal Barrier: Managing Cultural Change

External innovation is doomed to fail if the internal culture remains resistant. Leaders must proactively combat the pervasive “Not Invented Here” (NIH) syndrome. This requires:

  • Mandating “External Ambassadors”: Creating roles or rotating assignments where internal experts are rewarded for successfully sourcing and integrating external ideas.
  • Measuring Network Health: Shifting innovation metrics to include Relationship Velocity (how fast partners move from ideation to pilot), Diversity Index (the variety of partners used), and the Rate of External Integration.
  • Celebrating External Wins: Publicly celebrating the external partners and the internal teams who worked with them, positioning collaboration as a prestigious act of corporate agility.

The goal is to transform internal employees from being gatekeepers of ideas into curators and integrators of solutions.

Case Study 1: P&G’s Connect + Develop (C+D) Program

The Challenge:

In the early 2000s, P&G realized its internal R&D productivity was declining, despite massive investment. They were constrained by the “Not Invented Here” syndrome and needed to source more ideas and technologies from the outside to meet ambitious growth targets.

Network Orchestration Model:

P&G fundamentally shifted its innovation strategy to Connect + Develop (C+D). This was not a passive idea submission portal; it was a global, active network orchestration effort. They created specialized internal “Technology Entrepreneurs” whose sole job was to scout, broker, and integrate external innovations. Key partnerships included:

  • NineSigma: Used to run open challenges and solicit solutions from a vast network of scientists and small firms worldwide.
  • Innovation Intermediaries: Partnering with consultants and organizations that specialize in linking technology with unmet consumer needs.

Crucially, P&G made its own proprietary technologies available to partners, fostering a two-way intellectual property exchange built on mutual benefit. P&G offered scale and market access; partners offered speed and radical concepts.

The Innovation Impact:

Within a few years, C+D was responsible for over 50% of P&G’s product initiatives and billions in revenue growth. Iconic products like the Swiffer Duster and Olay Regenerist were either fully or substantially developed using external technology. P&G demonstrated that external innovation is not a marginal activity but the main engine of corporate growth when expertly orchestrated.

Case Study 2: BMW’s Open Manufacturing Platform (OMP)

The Challenge:

BMW, like all automotive manufacturers, faced the challenge of digitizing its vast, complex global production network. Achieving real-time data analysis, predictive maintenance, and operational efficiencies required a common data and technology standard across its supply chain and factory floor, a goal too large for one company to tackle.

Network Orchestration Model:

Instead of building a proprietary solution, BMW co-founded the Open Manufacturing Platform (OMP) with Microsoft. OMP is an open, community-driven initiative built on open standards and open source technologies (specifically, the Microsoft Azure cloud platform). The goal was to create a common reference architecture for industrial IoT and AI solutions. BMW actively encouraged competitors and suppliers—including Daimler, Bosch, and hundreds of smaller tech firms—to join. They relinquished proprietary control to foster a pre-competitive collaboration space for infrastructure, ensuring they could focus their internal R&D on differentiated applications.

The Innovation Impact:

By orchestrating this platform, BMW gained access to a wider pool of talent and accelerated the development of key manufacturing solutions. The OMP rapidly became an industry standard, benefiting BMW by creating a harmonized, scalable technology ecosystem that they could then build differentiated applications on top of. This case illustrates leading an external network not through ownership, but through platform stewardship, focusing on shared infrastructure to unlock superior results for all participants, dramatically reducing the cost and risk of digital transformation.

The future belongs to the innovation ecosystem architect. To succeed, leaders must cultivate a culture that views external partners not as threats or transactional vendors, but as co-investors in a shared future. It requires courage to give up some control, trust to open up the IP discussion, and clarity to define the societal or market challenge you are collectively addressing. By mastering the orchestration of this dynamic network, your organization can move from incremental improvement to exponential, sustainable breakthrough.

Extra Extra: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.

Image credit: Google Gemini

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Why No Organization Innovates Alone Anymore

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The Ecosystem Advantage

Why No Organization Innovates Alone Anymore

GUEST POST from Chateau G Pato

For centuries, the story of innovation was a story of closed walls and proprietary secrets. Companies poured resources into internal R&D labs, operating under the fiercely competitive belief that only self-reliance could guarantee advantage. This mindset, rooted in the industrial age, is now the single greatest obstacle to sustained change and growth. As a human-centered change and innovation thought leader, I assert that today’s most profound breakthroughs occur not within the isolated organization, but within expansive, fluid innovation ecosystems. The future belongs to the orchestrators, not the hoarders.

The speed and complexity of modern disruption — from advanced digital services to grand societal challenges—render the solo innovation model obsolete. No single company, no matter how large or well-funded, possesses all the necessary capital, talent, data, or technical expertise. The Ecosystem Advantage is the strategic realization that exponential innovation requires the symbiotic sharing of risk, resources, and intellectual property across a network of partners—customers, suppliers, competitors, startups, and academia. Critically, this collaborative model is inherently more human-centered because it forces the integration of diverse perspectives, mitigating internal blind spots and algorithmic bias.

Modern technology
— APIs for seamless data exchange, cloud platforms for shared development, and secure tools like blockchain for transparent IP tracking—makes this complex collaboration technically feasible. The challenge is no longer technological; it is strategic and cultural: managing complexity and balancing competition with collaboration.

The Three Strategic Imperatives of Ecosystem Innovation

To transition from isolated R&D to ecosystem orchestration, leaders must embrace three core strategic shifts:

  • 1. Shift from Ownership to Access: Abandon the idea that you must own every asset, technology, or line of code. The strategic imperative is to gain timely access to specialized capabilities, whether through open-source collaboration, strategic partnerships, or co-development agreements. This drastically reduces sunk costs and accelerates time-to-market.
  • 2. Curate the Edges for Diversity: Innovation often arises from the periphery—from startups, adjacent industries, or unexpected voices. Ecosystem leaders must proactively curate relationships at the “edges” of their industry, using ventures, accelerators, and challenge platforms to source disruptive ideas and integrate them rapidly. This diversity of thought is the engine of human-centered innovation.
  • 3. Govern for Trust, Not Control: Traditional contracts focused on control and IP protection can stifle the necessary fluid exchange of an ecosystem. Effective orchestration requires governance frameworks that prioritize trust, transparency, and a clearly defined mutual value proposition. The reward must be distributed fairly and clearly articulated to incentivize continuous participation and manage the inherent complexity.

“If you try to innovate alone, your speed is limited to your weakest internal link. If you innovate in an ecosystem, your speed is limited only by the velocity and diversity of your network.”

Case Study 1: Apple’s App Store – Ecosystem as a Business Model

The Challenge:

When the iPhone launched in 2007, its initial functionality was limited. The challenge was rapidly expanding the utility and perceived value of the platform beyond Apple’s internal capacity to develop software, making it indispensable to billions of users globally.

The Ecosystem Solution:

Apple did not try to develop all the necessary applications internally. Instead, it built the App Store — a highly curated platform that served as a controlled gateway for third-party developers. This move fundamentally shifted Apple’s role from a monolithic software provider to an ecosystem orchestrator. Apple provided the core technology (iOS, hardware APIs, payment processing) and governance rules, while external developers contributed the innovation, content, and diverse features.

The Innovation Impact:

The App Store unlocked an unprecedented flywheel effect. External developers created billions of dollars in new services, simultaneously making the iPhone platform exponentially more valuable and cementing Apple’s dominance. This model proved that by prioritizing access to external intellectual capital and accepting the risk of external development, the orchestrator gains massive leverage, speed, and market penetration.

Case Study 2: The Partnership for AI (PAI) – Ecosystem for Ethical Governance

The Challenge:

The development of advanced Artificial Intelligence poses complex, societal-level challenges related to ethics, fairness, and safety—issues that cannot be solved by any one company, given the competitive pressures in the sector.

The Ecosystem Solution:

The Partnership on AI (PAI) was established by major tech competitors (including Google, Amazon, Meta, Microsoft, and others), alongside civil society, academic, and journalistic organizations. PAI functions as a non-competitive ecosystem designed for pre-competitive alignment on ethical and human-centered AI standards. Instead of hoarding proprietary research, members collaborate openly on principles, best practices, and research that aims to ensure AI benefits society while mitigating risks like bias and misuse.

The Innovation Impact:

PAI demonstrates that ecosystems are not just for product innovation; they are essential for governance innovation. By establishing a shared, multi-stakeholder framework, the partnership reduces regulatory risk for all participants and ensures that the human element (represented by civil society and academics) is integrated into the design of core AI principles. This collaboration creates a foundational layer of ethical trust and shared responsibility, which is a prerequisite for the public adoption of exponential technologies.

The New Leadership Imperative: Be the Nexus

The Ecosystem Advantage is a human-centered mandate. It recognizes that the best ideas are often housed outside your walls and that true change requires collective action. For leaders, this means shedding the scarcity mindset and adopting a role as a Nexus — a strategic connector who enables value to flow freely and safely across boundaries.

Success is no longer measured by the size of your internal R&D budget, but by the health, diversity, and velocity of your external network. To thrive in the era of exponential change, you must master the three imperatives: prioritizing access over ownership, proactively curating the edges of your industry, and establishing governance models built on trust. Stop trying to win the race alone. Start building the highway for everyone; that is the new competitive advantage.

Extra Extra: Because innovation is all about change, Braden Kelley’s human-centered change methodology and tools are the best way to plan and execute the changes necessary to support your innovation and transformation efforts — all while literally getting everyone all on the same page for change. Find out more about the methodology and tools, including the book Charting Change by following the link. Be sure and download the TEN FREE TOOLS while you’re here.

Image credit: Pixabay

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Open Source Innovation is Sharing for Greater Impact

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Open Source Innovation is Sharing for Greater Impact

GUEST POST from Art Inteligencia

For decades, the competitive landscape has been dominated by a zero-sum mentality: innovation was a tightly guarded secret, proprietary technology was the ultimate moat, and intellectual property was a weapon. But as a human-centered change and innovation thought leader, I argue that this closed-loop model is becoming increasingly obsolete in a world defined by exponential complexity and interconnected challenges. The future belongs to a more expansive, collaborative paradigm: Open Source Innovation. This isn’t just a technical methodology for software development; it’s a profound strategic philosophy that leverages collective intelligence, accelerates problem-solving, and cultivates an ecosystem of shared value. It’s about moving from a mindset of hoarding knowledge to one of sharing for greater impact, proving that when you give away your best ideas, you often get something far more valuable in return.

The core principle of open source innovation is simple yet radical: by making certain intellectual assets (code, designs, data, research) freely available for others to use, modify, and distribute, you tap into a global network of talent and creativity that far surpasses the capacity of any single organization. This collaborative ecosystem drives faster iteration, more robust solutions, and greater societal benefit. The perceived “loss” of proprietary control is vastly outweighed by the gains in adoption, collective improvement, and the establishment of industry standards. It’s a human-centered approach to problem-solving, built on trust, transparency, and a shared belief that many minds are better than one, especially when tackling grand challenges.

The Strategic Imperatives of Open Source Innovation

Embracing open source innovation requires a significant shift in corporate culture and strategy. It’s about strategically deciding *what* to open and *how* to engage with the community:

  • 1. De-Risking and Acceleration: By exposing nascent ideas or foundational technologies to a wider community, you gain diverse perspectives, catch bugs faster, and accelerate development cycles. The collective scrutiny and contribution dramatically de-risk the innovation process.
  • 2. Building Ecosystems and Standards: Open sourcing foundational technologies can establish them as industry standards, creating network effects that benefit everyone, including the original contributor. It fosters a collaborative ecosystem that attracts talent and partners.
  • 3. Enhancing Trust and Transparency: In an era of increasing skepticism, open source demonstrates a commitment to transparency and community. It builds trust by showing a willingness to share, inviting external review and collaboration.
  • 4. Focusing on Higher-Value Activities: By open-sourcing non-differentiating “commodity” components, organizations can free up internal resources to focus on proprietary innovations that truly create unique value and competitive advantage.

“True innovation is not found in guarding secrets, but in inspiring shared discovery. Open source is the engine of collective genius.” — Braden Kelley

Case Study 1: Linux – The OS Built by the World

The Challenge:

In the early days of personal computing, operating systems were proprietary, expensive, and controlled by a few large corporations. This limited access, stunted innovation, and created vendor lock-in. The challenge was to create a robust, reliable, and accessible operating system that could compete with commercial giants without the resources of a corporate entity.

The Open Source Solution:

In 1991, Linus Torvalds released the initial version of the Linux kernel under an open-source license. This simple act invited developers worldwide to contribute, audit, and improve the code. What started as a personal project rapidly evolved into a global collaborative effort, harnessing the collective genius of thousands of programmers. The open development model allowed for:

  • Rapid Iteration: Bugs were found and fixed faster, and new features were integrated at an unprecedented pace.
  • Community Ownership: Developers felt a deep sense of ownership, driving unparalleled commitment and quality.
  • Unprecedented Customization: The open nature allowed Linux to be adapted for an incredible array of devices, from supercomputers to smartphones (Android is built on a Linux kernel).

The Human-Centered Result:

Linux fundamentally reshaped the technology landscape. It provided a powerful, free, and incredibly flexible operating system that became the backbone of the internet, enterprise servers, and mobile devices. It democratized access to powerful computing, fostering an explosion of innovation that would have been impossible under a proprietary model. Linux is the ultimate testament to the power of shared intellectual capital, proving that collective endeavor can create solutions far more robust and impactful than any single corporate entity.

Case Study 2: Arduino – Democratizing Hardware Innovation

The Challenge:

Microcontroller platforms, essential for building electronic prototypes and interactive objects, were traditionally complex, expensive, and geared towards professional engineers. This created a high barrier to entry for artists, designers, educators, and hobbyists who wanted to innovate with hardware.

The Open Source Solution:

In 2005, the Arduino project was launched, offering an open-source hardware and software platform. The physical circuit boards (hardware schematics) and the integrated development environment (software) were made freely available under open licenses. This meant anyone could build their own Arduino board, modify its software, or create extensions. This open approach led to:

  • Massive Accessibility: Lower cost and simpler programming made electronics accessible to a non-expert audience.
  • Explosive Innovation: A global community emerged, sharing thousands of projects, tutorials, and libraries, collectively innovating on the platform far beyond what a single company could achieve.
  • Educational Impact: Arduino became a staple in STEM education, teaching foundational principles of coding and electronics.

The Human-Centered Result:

Arduino revolutionized the maker movement and democratized access to hardware innovation. It empowered countless individuals to turn their ideas into tangible prototypes, leading to everything from home automation systems to interactive art installations and educational robots. By choosing an open-source model, Arduino didn’t just sell products; it built a vibrant ecosystem of creators and learners, proving that sharing foundational technology can unlock exponential human creativity and societal impact.

Conclusion: The Future is Collaborative, Not Proprietary

The lessons from open source are clear: in an increasingly complex world, no single organization holds a monopoly on good ideas or the talent to execute them. The greatest innovations often emerge from the intersections of diverse perspectives and collaborative efforts. Open source innovation is not about altruism alone; it is a powerful strategic choice that fosters speed, resilience, and an unprecedented capacity for solving shared challenges.

Leaders must actively explore how to strategically embrace open source principles—whether by contributing to existing projects, open-sourcing internal non-core technologies, or fostering a culture of internal transparency. By moving beyond a mindset of proprietary hoarding to one of strategic sharing, organizations can tap into the collective genius of the world, driving greater impact, building stronger ecosystems, and ultimately, ensuring a more innovative and collaborative future for all.

Extra Extra: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.

Image credit: 1 of 950+ FREE quote slides for your meetings and presentations at http://misterinnovation.com

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Corporate Venturing as a Catalyst for Innovation

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Venture Beyond

Corporate Venturing as a Catalyst for Innovation

GUEST POST from Art Inteligencia

In today’s rapidly evolving business landscape, the pursuit of innovation is no longer optional; it’s existential. Yet, many large, established corporations struggle to innovate at the pace of the market. Internal bureaucracy, risk aversion, and a focus on incremental improvements can stifle the disruptive thinking required for true transformation. As a human-centered change and innovation thought leader, I am here to argue that one of the most powerful and underutilized strategies for overcoming this inertia is corporate venturing. This isn’t just about investing money; it’s about strategically engaging with the startup ecosystem to ignite new growth, access frontier technologies, and inject a vital dose of entrepreneurial DNA into the heart of your organization. Corporate venturing is a deliberate act of looking beyond your walls to find the future.

Corporate venturing encompasses a range of activities, from direct venture capital investments (Corporate Venture Capital or CVC) to incubation programs, accelerators, and strategic partnerships with startups. Its core purpose is to bridge the innovation gap between the agile, disruptive startup world and the established, resource-rich corporate entity. This symbiotic relationship offers startups access to capital, market reach, and mentorship, while providing corporations with a window into emerging technologies, new business models, and fresh talent. More importantly, it acts as an external nervous system for innovation, allowing the corporation to sense, adapt, and respond to market shifts with a speed that internal R&D often cannot match. It’s a human-centered approach to expanding your innovation capacity, leveraging the entrepreneurial spirit that often flourishes outside traditional corporate structures.

The Strategic Imperatives of Corporate Venturing

To truly leverage corporate venturing as a catalyst for innovation, it must be approached with strategic intent, not just as a financial play. Here are four key imperatives:

  • 1. Strategic Alignment, Not Just Financial Return: While financial returns are welcome, the primary driver for corporate venturing should be strategic. How does this investment or partnership align with your long-term vision? Does it open up new markets, provide access to critical technologies, or deepen your understanding of future customer needs?
  • 2. Active Engagement, Beyond Capital: Successful corporate venturing is not passive. It requires active mentorship, resource sharing, and a genuine effort to integrate lessons learned from startups back into the core business. It’s a two-way street of learning and collaboration.
  • 3. Build Bridges, Not Walls: The biggest challenge is often integrating the fast-paced startup mentality with the established corporate culture. Dedicated venturing units should act as translators, bridging the gap between the two worlds and fostering mutual understanding and respect.
  • 4. Portfolio Thinking and Experimentation: Treat your venture portfolio like an experimental lab. Not every investment will succeed, but each provides valuable learning. Diversify your bets across different technologies, markets, and business models to hedge against uncertainty and maximize discovery.

“Don’t just acquire the future; invest in building it. Corporate venturing is your strategic lens into tomorrow’s disruption and market expansion.” — Braden Kelley

Case Study 1: Google Ventures (GV) – Investing in the Adjacent Future

The Challenge:

Google, despite its massive internal R&D capabilities, recognized that innovation often happens at the edges of an industry, driven by small, agile teams. The challenge was to systematically identify and invest in groundbreaking startups that could either complement Google’s core business or open up entirely new growth areas, without stifling their entrepreneurial spirit with corporate bureaucracy.

The Corporate Venturing Solution:

Google established Google Ventures (GV) as its venture capital arm. Unlike traditional corporate VCs, GV operates with a high degree of autonomy, investing in a broad range of technology companies, many of which are not directly related to Google’s immediate product lines. However, the strategic alignment is clear: GV invests in areas that represent the adjacent future of technology—AI, life sciences, consumer tech, enterprise software—giving Google an early window into the next wave of disruption. GV provides more than just capital; it offers startups access to Google’s unparalleled expertise in engineering, design, and marketing through its “GV Experts” program.

  • Strategic Alignment: GV’s investments provide Google with intelligence on emerging technologies and market shifts that could impact its long-term strategy.
  • Active Engagement: The “GV Experts” program offers invaluable operational support, helping startups scale and overcome technical challenges.
  • Autonomy and Agility: By operating somewhat independently, GV avoids many of the bureaucratic pitfalls that can slow down corporate innovation efforts.

The Result:

GV has been incredibly successful, with a portfolio that includes major companies like Uber, Slack, and Nest (which Google later acquired). These investments provide significant financial returns, but more importantly, they offer Google a strategic vantage point. It allows them to understand and even influence future technological trajectories, keeping the parent company at the forefront of innovation. GV demonstrates how a well-structured CVC can act as a crucial early warning system and growth engine for a tech giant.

Case Study 2: BMW i Ventures – Driving Future Mobility

The Challenge:

The automotive industry is facing unprecedented disruption, driven by trends like electrification, autonomous driving, shared mobility, and connected vehicles. BMW, a legacy automaker, needed to rapidly adapt and innovate beyond its traditional car manufacturing core to secure its position in the future of mobility. Relying solely on internal R&D would be too slow and limited in scope.

The Corporate Venturing Solution:

BMW established BMW i Ventures, a corporate venture capital fund dedicated to investing in early- to mid-stage startups in the mobility, digital, and sustainability sectors. The fund strategically targets companies developing cutting-edge technologies and services that could shape the future of transportation and enhance the overall customer experience. This includes areas like advanced materials, AI for autonomous systems, smart charging solutions, and innovative digital services for car ownership or sharing. BMW i Ventures provides capital, but also offers strategic partnerships, pilot opportunities within BMW’s ecosystem, and valuable market insights.

  • Strategic Alignment: Every investment is directly tied to BMW’s long-term vision for sustainable, intelligent, and human-centered mobility.
  • Access to Frontier Tech: The fund provides early access to technologies that might take years or decades to develop internally, accelerating BMW’s innovation timeline.
  • New Business Models: Investments in areas like shared mobility or digital services help BMW explore and validate entirely new revenue streams beyond traditional car sales.

The Result:

BMW i Ventures has allowed the company to stay ahead of the curve in a rapidly changing industry. It has fostered collaborations with innovative startups, informed BMW’s internal product roadmaps, and positioned the brand as a leader in future mobility solutions. By strategically venturing beyond its core business, BMW has gained agility, expanded its innovation ecosystem, and proactively secured its relevance in the coming decades.

Conclusion: The Future of Innovation is Open

Corporate venturing is more than just a financial vehicle; it is a mindset—an acknowledgment that the most profound innovations often emerge from outside your established walls. It’s a strategic embrace of openness, agility, and the entrepreneurial spirit. For large corporations, it represents a vital pathway to overcome internal inertia, access game-changing technologies, and build a more resilient and future-ready organization.

As leaders, our challenge is to move beyond short-term thinking and embrace a portfolio approach to innovation. By strategically venturing into the unknown, by actively engaging with the disruptors, and by fostering a culture that learns from both successes and failures, we can unlock unprecedented growth and ensure our organizations are not just prepared for the future, but actively shaping it.

Extra Extra: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.

Image credit: Pexels

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Tapping into Global Innovation Hubs

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Beyond Your Own Backyard

Tapping into Global Innovation Hubs

GUEST POST from Art Inteligencia

In a world where even the most dynamic ecosystems can benefit immensely from looking beyond their immediate surroundings, one thing has become clear: groundbreaking ideas and transformative technologies are emerging from innovation hubs across the globe. For organizations serious about staying ahead of the curve and fostering a truly human-centered approach to change, tapping into these global networks is not just advantageous—it’s essential.

Innovation doesn’t occur in a vacuum. It thrives on the cross-pollination of ideas, diverse perspectives, and access to specialized talent and resources. Limiting our focus to our own backyard can lead to blind spots and missed opportunities. Global innovation hubs, each with its unique strengths and cultural nuances, offer a wealth of potential partnerships, insights into emerging trends, and access to cutting-edge research and development. By strategically engaging with these hubs, organizations can accelerate their innovation cycles, gain a deeper understanding of global markets, and develop solutions that are truly world-class and human-centered.

Tapping into global innovation hubs requires a deliberate and strategic approach. It’s not just about taking a trip to a well-known tech center; it’s about building meaningful connections and fostering long-term collaborations. Key strategies for leveraging these global networks include:

  • Establishing a Global Scouting Network: Actively monitoring innovation trends and identifying key players and emerging technologies in different hubs around the world.
  • Participating in International Conferences and Events: Engaging with global thought leaders, researchers, and entrepreneurs to build relationships and gain firsthand insights.
  • Forming Strategic Partnerships and Collaborations: Teaming up with innovative companies, research institutions, and startups in other regions to access specialized expertise and resources.
  • Establishing Remote Innovation Teams or Satellite Offices: Creating a physical presence in key global hubs to foster deeper engagement and tap into local talent pools.
  • Facilitating Cross-Cultural Knowledge Sharing: Creating internal mechanisms to share insights and learnings gained from global engagements across the organization.

Case Study 1: Procter & Gamble’s “Connect + Develop” Program

The Challenge: Accelerating Innovation and Expanding R&D Capabilities Beyond Internal Resources

Procter & Gamble (P&G), a global consumer goods giant, recognized that relying solely on its internal R&D capabilities would limit its ability to innovate at the speed required by the market. They understood that groundbreaking ideas and technologies were emerging from diverse sources around the world, far beyond their Cincinnati headquarters.

Tapping into Global Innovation:

P&G launched its “Connect + Develop” program with the explicit goal of sourcing more than 50% of its innovations from outside the company. This involved actively scouting for promising technologies, patents, and startups across the globe. They established a network of external partners, including universities, research institutions, small businesses, and individual inventors in innovation hubs worldwide. P&G created a user-friendly portal for external innovators to submit their ideas and actively participated in international innovation conferences and events to forge new connections. This open innovation approach allowed them to tap into a much wider pool of talent and ideas than they could access internally.

The Impact:

The “Connect + Develop” program has been widely successful for P&G. It has significantly accelerated their innovation pipeline, reduced R&D costs, and enabled them to bring new and improved products to market faster. By looking beyond their own backyard and actively engaging with global innovation hubs, P&G has demonstrated the power of open innovation to drive growth and maintain a competitive edge in a rapidly evolving global marketplace. Their commitment to external collaboration has become a cornerstone of their innovation strategy.

Key Insight: Actively seeking external partnerships and engaging with global innovation ecosystems can significantly accelerate an organization’s innovation capacity and provide access to a wider range of ideas and technologies.

Case Study 2: The Rise of Tel Aviv as a Global Cybersecurity Hub and Corporate Engagement

The Challenge: Staying Ahead of Evolving Cybersecurity Threats

Cybersecurity has become a paramount concern for organizations across all industries. The threat landscape is constantly evolving, with sophisticated attacks emerging from various corners of the globe. Traditional, internally focused security measures often struggle to keep pace with these rapid advancements.

Leveraging a Global Hub:

Tel Aviv, Israel, has emerged as a global powerhouse in cybersecurity innovation, boasting a high concentration of cutting-edge startups, research institutions, and specialized talent. Recognizing this, many multinational corporations have established a significant presence in Tel Aviv to tap into this vibrant ecosystem. This engagement takes various forms, including setting up R&D centers, investing in local startups, and forming strategic partnerships with Israeli cybersecurity firms. These companies understand that by being physically present in this global hub, they gain early access to groundbreaking technologies, can recruit top cybersecurity experts, and develop solutions that are at the forefront of the industry. The collaborative environment in Tel Aviv, fostered by government support and a culture of innovation, provides a unique advantage for companies seeking to bolster their cybersecurity defenses.

The Impact:

Companies that have strategically engaged with the Tel Aviv cybersecurity hub have significantly enhanced their ability to detect, prevent, and respond to cyber threats. By embedding themselves in this global center of expertise, they gain a deeper understanding of emerging threats and have access to innovative solutions that might not be available elsewhere. This case study illustrates how identifying and actively participating in specialized global innovation hubs can provide a critical advantage in rapidly evolving fields like cybersecurity, where staying ahead requires a global perspective and access to the latest breakthroughs.

Key Insight: Identifying and strategically engaging with specialized global innovation hubs can provide organizations with access to unique expertise, talent, and emerging technologies in critical and rapidly evolving fields.

Expanding Your Innovation Horizon

To truly unlock our potential for human-centered change and to develop solutions with global impact, we must cultivate a mindset of global engagement. By actively looking beyond our own backyard, building meaningful connections with innovation hubs around the world, and embracing the diversity of thought and expertise they offer, we can accelerate our innovation journeys and create a future where groundbreaking ideas can emerge from anywhere and benefit everyone.

Extra Extra: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.

Image credit: Pixabay

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The Power of Open Innovation Networks

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From Silos to Synergy

The Power of Open Innovation Networks

GUEST POST from Chateau G Pato

The era of the lone genius is over. The complex challenges and lightning-fast pace of modern business demand a new approach to innovation—one built on collaboration, connectivity, and the shared pursuit of a bigger goal.

For decades, the dominant model for innovation was a closed system: companies built walls around their R&D departments, jealously guarded their intellectual property, and believed that all the best ideas must come from within. This “not invented here” syndrome, while once a hallmark of industrial strength, is now a recipe for stagnation. The world is too interconnected, knowledge is too vast, and the pace of disruption is too rapid for any single organization to possess all the necessary expertise and insights to stay ahead. The future of innovation belongs to those who embrace the power of open innovation networks.

Open innovation is a strategic philosophy that acknowledges the limitations of internal knowledge and seeks to leverage external ideas, technologies, and talent to accelerate innovation and growth. It’s about building permeable boundaries around your organization, allowing for a vibrant flow of knowledge both inward and outward. This isn’t just about outsourcing R&D; it’s about building a robust ecosystem of partners—including startups, universities, customers, and even competitors—to co-create value and solve problems that would be impossible to tackle alone.

Adopting an open innovation mindset requires a profound shift in culture and strategy. It means moving beyond a zero-sum view of competition and embracing a collaborative, win-win approach. It also requires a deliberate and structured process to identify, engage, and manage external partnerships. Here are the key elements of building a successful open innovation network:

  • Cultivate a Strategic Focus: Start by defining your innovation gaps. What are the specific technological hurdles, market challenges, or customer needs that your internal teams are struggling to address? This clarity will guide your search for external partners.
  • Build a Robust Scouting Process: Don’t wait for ideas to come to you. Actively scout for innovation. This can involve attending industry conferences, running innovation challenges, participating in university research consortiums, or dedicating a team to monitor the startup landscape for promising technologies.
  • Adopt Flexible Collaboration Models: Open innovation isn’t a one-size-fits-all approach. You might partner with a university for basic research, acquire a startup to gain access to a new technology, or form a joint venture with a non-competing company to enter a new market. Be prepared to be agile and creative with your partnership structures.
  • Navigate Intellectual Property (IP) with Purpose: IP management is often seen as a barrier, but it can be a facilitator. Establish clear, transparent frameworks for how IP will be shared, owned, and leveraged. The goal is to create trust and a clear value exchange, not to hoard every piece of information.
  • Champion a Culture of Openness: This is arguably the most difficult but most critical element. You must break down internal silos and encourage your teams to be receptive to “not invented here” ideas. Create incentives for collaboration and celebrate successful partnerships to embed this mindset into your company’s DNA.

Case Study 1: The Transformative Success of Procter & Gamble’s “Connect + Develop”

The Challenge: Overcoming Internal R&D Limitations

In the early 2000s, consumer goods titan Procter & Gamble (P&G) was facing a slowdown in innovation. Their internal R&D model was a powerhouse, but it was becoming too slow and expensive to keep up with changing consumer demands and emerging technologies. The company needed to expand its innovation pipeline without dramatically increasing its costs.

The Open Innovation Approach:

P&G launched its groundbreaking “Connect + Develop” program with a bold goal: to source 50% of its product ideas from outside the company. They created a global team of “technology entrepreneurs” tasked with scouting for external innovation. They established an online portal to review submissions from individual inventors, small startups, and established companies. The partnerships they formed ranged from simple licensing agreements to full-blown joint development ventures. This new model allowed P&G to leverage the collective intelligence of a global network.

The Results:

The program was a phenomenal success. It led to the creation of numerous iconic products, including the highly popular Swiffer Duster, which was developed from a prototype submitted by an external inventor. Other successes, like the Olay Regenerist skincare line and the Crest Whitestrips, leveraged external technologies and insights to become market leaders. By the program’s peak, P&G’s innovation success rate had more than doubled, and its R&D productivity had soared. The most important outcome was the shift in culture, proving that a global powerhouse could be agile and open.

Key Insight: Open innovation is not just for startups. Large, established companies can use it to revitalize their innovation pipeline, reduce costs, and accelerate time to market by leveraging a global network of talent and ideas.

Case Study 2: The Collaborative Frontier of Drug Discovery

The Challenge: Tackling Complex Diseases and Skyrocketing Costs

Developing new pharmaceuticals is one of the most expensive and risky innovation processes in the world. With R&D costs for a new drug often exceeding a billion dollars and clinical timelines stretching over a decade, the industry is constantly under pressure. Tackling complex diseases like cancer, Alzheimer’s, and rare genetic disorders requires a deep and diverse pool of knowledge that no single company can possess.

The Open Innovation Approach:

In recent years, the pharmaceutical industry has been at the forefront of open innovation. This includes pre-competitive collaborations where companies share non-proprietary data on disease mechanisms and molecular targets to accelerate foundational research. They also form strategic partnerships with nimble biotech startups to access novel drug candidates or cutting-edge gene-editing technologies. Furthermore, organizations like the Structural Genomics Consortium have created a global network of researchers who openly share data on protein structures, accelerating the discovery of new drug targets for the entire scientific community.

The Results:

This collaborative model is fundamentally changing how drugs are discovered. By pooling resources and openly sharing knowledge, companies are reducing redundant research efforts and accelerating the pace of scientific discovery. Partnerships with startups allow large pharma companies to de-risk their pipelines and bring promising therapies to market faster. Ultimately, this synergy helps to reduce the financial burden, advance scientific understanding, and increase the likelihood of bringing life-saving treatments to patients sooner. It’s a powerful example of how collaboration can be more effective than competition when facing a common and complex challenge.

Key Insight: In high-stakes, highly complex fields, open collaboration is not just an option—it’s an essential strategy for accelerating progress and creating a greater collective impact.

The journey from silos to synergy is a challenging but necessary one for any organization that wants to remain a relevant and powerful force for innovation. It requires a fundamental shift in how we think about intellectual property, risk, and partnership. It demands leaders who are willing to build bridges and foster a culture of trust and shared success.

In a world where change is the only constant, the ability to connect, collaborate, and co-create with a vast network of external partners is no longer a competitive advantage—it’s a core competency. The future is open, and for those who are willing to break down their walls, the possibilities for innovation are limitless.

Extra Extra: Because innovation is all about change, Braden Kelley’s human-centered change methodology and tools are the best way to plan and execute the changes necessary to support your innovation and transformation efforts — all while literally getting everyone all on the same page for change. Find out more about the methodology and tools, including the book Charting Change by following the link. Be sure and download the TEN FREE TOOLS while you’re here.

Image credit: Dall-E

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Why Data-Based Decisions Will Lead You Straight to Hell

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Why Data-Based Decisions Will Lead You Straight to Hell

GUEST POST from Robyn Bolton

Many years ago, Clay Christensen visited his firm where I was a partner and told us a story*.

“I imagine the day I die and present myself at the entrance to Heaven,” he said. “The Lord will show me around, and the beauty and majesty will overcome me. Eventually, I will notice that there are no numbers or data in Heaven, and I will ask the Lord why that is.”

“Data lies,” the Lord will respond. “Nothing that lies can be in Heaven. So, if people want data, I tell them to go to Hell.”

We all chuckled at the punchline and at the strength of the language Clay used (if you ever met him, you know that he was an incredibly gentle and soft-spoken man, so using the phrase “go to Hell” was the equivalent of your parents unleashing a five-minute long expletive-laden rant).

“If you want data, go to Hell.”

Clay’s statement seems absolutely blasphemous, especially in a society that views quantitative data as the ultimate source of truth:

  • “In God we trust. All others bring data.” W. Edward Deming, founding Father of Total Quality Management (TQM)
  •  “Above all else, show the data.” – Edward R. Tufte, a pioneer in the field of data visualization
  • “What gets measured gets managed” – Peter Drucker, father of modern management studies

But it’s not entirely wrong.

Quantitative Data’s blessing: A sense of safety

As humans, we crave certainty and safety. This was true millennia ago when we needed to know whether the rustling in the leaves was the wind or a hungry predator preparing to leap and tear us limb from lime. And it’s true today when we must make billion-dollar decisions about buying companies, launching products, and expanding into new geographies.

We rely on data about company valuation and cash flow, market size and growth, and competitor size and strategy to make big decisions, trusting that it is accurate and will continue to be true for the foreseeable future.

Quantitative Data’s curse: The past does not predict the future

As leaders navigating an increasingly VUCA world, we know we must prepare for multiple scenarios, operate with agility, and be willing to pivot when change happens.

Yet we rely on data that describes the past.

We can extrapolate it, build forecasts, and create models, but the data will never tell us with certainty what will happen in the future. It can’t even tell us the Why (drivers, causal mechanisms) behind the What it describes.

The Answer: And not Or

Quantitative data Is useful. It gives us the sense of safety we need to operate in a world of uncertainty and a starting point from which to imagine the future(s).

But, it is not enough to give the clarity or confidence we need to make decisions leading to future growth and lasting competitive advantage.

To make those decisions, we need quantitative data AND qualitative insights.

We need numbers and humans.

Qualitative Insight’s blessing: A view into the future

Humans are the source of data. Our beliefs, motivations, aspirations, and actions are tracked and measured, and turned into numbers that describe what we believed, wanted, and did in the past.

By understanding human beliefs, motivations, and aspirations (and capturing them as qualitative insights), we gain insight into why we believed, wanted, and did those things and, as a result, how those beliefs, motivations, aspirations, and actions could change and be changed. With these insights, we can develop strategies and plans to change or maintain beliefs and motivations and anticipate and prepare for events that could accelerate or hinder our goals. And yes, these insights can be quantified.

Qualitative Insight’s curse: We must be brave

When discussing the merit of pursuing or applying qualitative research, it’s not uncommon for someone to trot out the saying (erroneously attributed to Henry Ford), “If I asked people what they wanted, they would have said a horse that goes twice as fast and eats half as much.”

Pushing against that assertion requires you to be brave. To let go of your desire for certainty and safety, take a risk, and be intellectually brave.

Being brave is hard. Staying safe is easy. It’s rational. It’s what any reasonable person would do. But safe, rational, and reasonable people rarely change the world.

One more story

In 1980, McKinsey predicted that the worldwide market for cell phones would max out at 900,000 subscribers. They based this prediction on solid data, analyzed by some of the most intelligent people in business. The data and resulting recommendations made sense when presented to AT&T, McKinsey’s client.

Five years later, there were 340,213 subscribers, and McKinsey looked pretty smart. In 1990, there were 5.3 million subscribers, almost 6x McKinsey’s prediction.   In 1994, there were 24.1M subscribers in the US alone (27x McKinsey’s global forecast), and AT&T was forced to pay $12.6B to acquire McCaw Cellular.

Should AT&T have told McKinsey to “go to Hell?”  No.

Should AT&T have thanked McKinsey for going to (and through) Hell to get the data, then asked whether they swung by earth to talk to humans and understand their Jobs to be Done around communication? Yes.

Because, as Box founder Aaron Levie reminds us,

“Sizing the market for a disruptor based on an incumbent’s market is like sizing a car industry off how many horses there were in 1910.”

* Except for the last line, these probably (definitely) weren’t his exact words, but they are an accurate representation of what I remember him saying

Image Credit: Pixabay

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America Needs to Innovate Its Innovation Ecosystem

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America Needs to Innovate Its Innovation Ecosystem

GUEST POST from Greg Satell

The world today just seems to move faster and faster all the time. From artificial intelligence and self-driving cars to gene editing and blockchain, it seems like every time you turn around, there’s some newfangled thing that promises to transform our lives and disrupt our businesses.

Yet a paper published by a team of researchers in Harvard Business Review argues that things aren’t as they appear. They point out that total factor productivity growth has been depressed since 1970 and that recent innovations, despite all the hype surrounding them, haven’t produced nearly the impact of those earlier in the 20th century.

The truth is that the digital revolution has been a big disappointment and, more broadly, technology and globalization have failed us. However, the answer won’t be found in snazzier gadgets or some fabulous “Golden Era” of innovation of years long past. Rather we need to continually innovate how we innovate to solve problems that are relevant to our future.

The Productivity Paradox, Then and Now

In the 1970s and 80s, business investment in computer technology was increasing by more than 20% per year. Strangely though, productivity growth had decreased during the same period. Economists found this turn of events so bizarre that they called it the “productivity paradox” to underline their confusion.

Yet by the late 1990s, increased computing power combined with the Internet to create a new productivity boom. Many economists hailed the digital age as a “new economy” of increasing returns, in which the old rules no longer applied and a small initial advantage, a first mover advantage, would lead to market dominance. The mystery of the productivity paradox, it seemed, had been solved. We just needed to wait for technology to hit critical mass.

Yet by 2004 productivity growth fell once again and has not recovered since. Today, more than a decade later, we’re in the midst of a second productivity paradox, just as mysterious as the first one. New technologies like mobile computing and artificial intelligence are there for everyone to see, but they have done little, if anything, to boost productivity.

Considering the rhetoric of many of the techno-enthusiasts, this is fairly shocking. Compare the meager eight years of elevated productivity that digital technology produced with the 50-year boom in productivity created in the wake of electricity and internal combustion and it’s clear that the digital economy, for all the hype, hasn’t achieved as much as many would like to think.

Are Corporations to Blame?

One explanation that the researchers give for the low productivity growth is that large firms are cutting back on investment in science. They explain that since the 1980s, a “combination shareholder pressure, heightened competition, and public failures led firms to cut back investments in science” and point to the decline of Bell Labs and Xerox PARC as key examples.

Yet a broader analysis tells a different story. Yes, while Bell Labs and Xerox PARC still exist, they are but a shadow of their former selves, but others, such as IBM Research, have expanded their efforts. Microsoft Research, established in 1991, does cutting edge science. Google runs a highly innovative science program that partners with researchers in the academic world.

So anecdotally speaking, the idea that corporations haven’t been investing in science seems off base. However, the numbers tell an even stronger story. Data from the National Science Foundation shows that corporate research has increased from roughly 40% of total investment in the 1950s and 60s to more than 60% today. Overall R&D spending has risen over time.

Also, even where corporations have cut back, new initiatives often emerge. Consider DuPont Experimental Station which, in an earlier era, gave birth to innovations such as nylon, teflon and neoprene. In recent years, DuPont has cut back on its own research but the facility, which still employs 2000 researchers, is also home to the Delaware Incubation Space, which incubates new entrepreneurial businesses.

The Rise of Physical Technologies

One theory about the productivity paradox is that investment in digital technology, while significant, is simply not big enough to move the needle. Even today, at the height of the digital revolution, information and communication technologies only make up about 6% of GDP in advanced economies.

The truth is that we still live in a world largely made up of atoms, not bits and we continue to spend most of our money on what we live in, ride in, eat and wear. If we expect to improve productivity growth significantly, we will have to do it in the physical world. Fortunately, there are two technologies that have the potential to seriously move the needle.

The first is synthetic biology, driven largely by advances in gene editing such as CRISPR, which have dramatically lowered costs while improving accuracy. In fact, over the last decade efficiency in gene sequencing has far outpaced Moore’s Law. These advances have the potential to drive important productivity gains in healthcare, agriculture and, to a lesser extent, manufacturing.

The second nascent technology is a revolution in materials science. Traditionally a slow-moving field, over the past decade improved simulation techniques and machine learning have improved the efficiencies of materials discovery dramatically, which may have a tremendous impact in manufacturing, construction and renewable energy.

Yet none of these gains are assured. To finally break free of the productivity paradox, we need to look to the future, not the past.

Collaboration is the New Competitive Advantage

In 1900, General Electric established the first corporate research facility in Schenectady, New York. Later came similar facilities at leading firms such as Kodak, AT&T and IBM. At the time, these were some of the premier scientific institutions in the world, but they would not remain so.

In the 1920s new academic institutions, such as the Institute for Advanced Study, as well as the increasing quality of American universities, became an important driver of innovation. Later, in the 1940s, 50s and 60s, federal government agencies, such as DARPA, NIH and the national labs became hotbeds of research. More recently, the Silicon Valley model of venture funded entrepreneurship has risen to prominence.

Each of these did not replace, but added to what came before. As noted above, we still have excellent corporate research programs, academic labs and public scientific institutions as well as an entrepreneurial investment ecosystem that is the envy of the world. Yet none of these will be sufficient for the challenges ahead.

The model that seems to be taking hold now is that of consortia, such as JCESR in energy storage, Partnership on AI for cognitive technologies and the Manufacturing USA Institutes, that bring together diverse stakeholders to drive advancement in key areas. Perhaps most conspicuously, unprecedented collaboration sparked by the Covid-19 crisis has allowed us to develop therapies and vaccines faster than previously thought possible.

Most of all, we need to come to terms with the fact that the answers to the challenges of the future will not be found in the past. The truth is that we need to continually innovate how we innovate if we expect to ever return to an era of renewed productivity growth.

— Article courtesy of the Digital Tonto blog
— Image credit: Pixabay

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Four Innovation Ecosystem Building Blocks

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Four Innovation Ecosystem Building Blocks

GUEST POST from Greg Satell

It’s hard to find anyone who wouldn’t agree that Microsoft’s 2001 antitrust case was a disaster for the company. Not only did it lose the case, but it wasted time, money and—perhaps most importantly—focus on its existing businesses, which could have been far better deployed on new technologies like search and mobile.

Today, Microsoft is a much different organization. Rather than considering open source software a cancer, it now says it loves Linux. Its cloud business is growing like wildfire and it is partnering widely to develop new quantum computers. What was previously a rapacious monopolist, is now an enthusiastic collaborator.

That’s no accident. Today, we need to compete in an ecosystem-driven world in which nobody, not even a firm as big and powerful as Microsoft, can go it alone. Power no longer comes from the top of value chains, but emanates from the center of networks. That means that strategy needs to shift from dominating industries to building collaborative ecosystems.

1. Connect to Startups

In its heyday, Microsoft enthusiastically followed Michael Porter’s five forces model. It saw threats coming not only from direct competitors, but also suppliers, customers, substitute products and new market entrants. Startups, in particular, were targeted for either acquisition or destruction if they were seen as posing a potential threat.

Today, however, Microsoft actively supports startups. Take, for example, its quantum development effort, in which it is partnering with more than a dozen entrepreneurial companies. These firms also get free access to Microsoft technologies, such as its Azure cloud platform and go-to-market resources and advice, through its Microsoft for Startups program.

Another approach that many firms take is corporate VC programs which actively invest in promising new companies. Unlike a typical investor, corporations bring a wealth of market and technical expertise, can help with things like distribution, supply chain management and marketing acumen. Corporations, for their part, get far more insight into new technologies than they could as an operating company.

Scott Lenet, President of Touchdown Ventures, which operates venture funds for corporations, told me that, “Startups thrive on new ideas and big firms know how to scale and improve those ideas. We’ve seen some of our investments really blossom based on that kind of partnership.”

2. Form Ties to the Academic World

When Sun Microsystems co-founder Bill Joy said, “no matter who you are, most of the smartest people work for someone else,” he was explicitly referring to Bill Gates’s assertion that Microsoft was an “IQ monopolist.” Joy’s position was that “It’s better to create an ecology that gets all the world’s smartest people toiling in your garden for your goals. If you rely solely on your own employees, you’ll never solve all your customers’ needs.”

Make no mistake. Innovation is never a single event. It is a process of discovery, engineering and transformation and those three things almost never happen in the same place or at the same time. That’s why the most innovative companies work hard to build links to the best minds in the academic world.

Today Microsoft has an extensive academic program that extends grants to graduate students and faculty members that are pursuing research that is of interest to the company. Google takes it even a step further, inviting dozens of the world’s top minds to work alongside its scientists and engineers for a sabbatical year.

Microsoft and Google are, of course, firms with enormous resources. However, just about any business can, for example, support the work of a young graduate student or postdoc at a local university. For even a senior researcher to collaborate with your staff is rarely prohibitively expensive. Researchers care far more about genuine support of their work than the size of your investment.

3. Leverage Domain-Specific Consortia

By the mid-1980’s, the American semiconductor industry seemed like it was doomed. Tp respond to what it saw as a national security threat, the American government created SEMATECH in 1986. It was a consortium of government agencies, research institutions and private firms focused on making the industry more competitive. By the mid 1990’s, the US was once again dominating semiconductors.

Any significantly complex technology takes years—and often decades—to develop before it becomes mature enough to engineer into a marketable product. So there is great potential in collaborating, even with competitive firms, in the pre-competitive phase to figure out the basic principles of a nascent technology.

For example, Boeing and Airbus are arch-rivals in aviation, much like DowDupont and BASF are in chemicals. Yet all of these companies, along with many others, collaborate at places like the Composites Institute (IACMI). They do this not out of any altruism, of course, but self-interest, because it is at places like the Composites Institute that they can collaborate with academic scientists, National Labs and startups working in the space.

As technology becomes more complex, domain specific consortia are becoming essential to any ecosystem strategy. The Composites Institute is just one node in the network of Manufacturing Institutes set up under the Obama Administration to support this type of collaboration. In areas ranging from advanced fabrics and biofabrication to additive manufacturing and wide-gap semiconductors, firms large and small are working with scientists to uncover new principles.

And the Manufacturing Institutes are just the start. The Internet of Things Consortium is helping bring computation to the physical world, while the Partnership on AI focuses on artificial intelligence and the Joint Center for Energy Storage Research is helping to develop advanced battery technology. All are open to the largest multinationals and the smallest startups.

4. Move From Hierarchies to Networks

Back in the 90s, when Microsoft still dominated the tech world, markets were still based on linear value chains dominated by one or two industry giants. Yet as I explain in Cascades, we are quickly moving from a world of hierarchies, to one dominated by networks and ecosystems. That changes how we need to develop and grow.

In a hierarchy-driven world, the optimal strategy was to build walls and moats to protect yourself against would-be invaders, which is why Microsoft fought tooth and nail to protect its operating system monopoly. Today, however, industry lines have blurred and technology moves too fast to be able to build effective barriers against disruption.

That’s why today “Microsoft loves Linux”, why it developed an academic program to collaborate with scientists at universities and why it often partners with startups instead of always trying to crush them. The technology being developed today is simply too complex for anyone to go it alone, which is why the only viable strategy is to actively connect to ecosystems of talent, technology and information.

Power today no longer sits at the top of hierarchies, but emanates from the center of ecosystems and you move to the center by widening and deepening connections. Closing yourself by erecting barriers will not protect you. In fact, it is an almost sure-fire way to hasten your demise.

— Article courtesy of the Digital Tonto blog
— Image credit: Pixabay

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