P29 Open Innovation Is a Pathway to Worldwide Diversity

  • Welcome to the Proven, Practical, Profitable Innovation podcast! I am Richard and I thank you very much for taking time out of your busy day to listen to this podcast.
  • My goal is to make sure you get a high return on your time investment listening to this podcast. I want you to immediately be able to use the information in this podcast to help you sell more and make more.
  • Please be sure to listen to the end of this podcast where I give you an exciting preview of future podcasts.
  • As you know from these podcasts, I am a big believer in diversity as a major driver of generating more and better ideas open innovation is a relatively new development in the last decade. This podcast provides an overview of some of the key elements along with an example of one of the more successful, recent open innovation efforts.
  • If after listening to this podcast you feel a need for more help, please contact me directly—my email is richard@i2ge.com. You can also go to my website—i2ge.com– where you can explore many innovation topics, especially check out the DIY Innovation Training on the menu bar. We customize all the training programs to our clients’ unique needs and circumstances.
  • I want to reiterate how I’m defining and using the word innovation in this podcast. While many people think of innovation as new product innovation, I am using the term in a far broader sense. Innovation to me is whenever you want to make something better. For example, human relations might want to develop a better health insurance program, manufacturing might want to develop a better and more efficient manufacturing process, sales might want to develop a more persuasive sales presentation for new customers, and marketing might like to develop a better product promotion plan for the next year. Very simply, innovation is something that you do whenever you want to make something better.
  • Open innovation.
    • What is it? Open innovation augments internal innovation by bringing external thinking and ideas into the overall innovation effort. Different companies do it different ways, but at the heart of this is a structured process to invite interested external innovators to share ideas either on a specific need or, in fewer cases, an open request for any and all ideas. Open innovation can also be referred to as crowdsourcing innovation.
    • Who is doing it? Larger companies primarily pioneered this effort. Today you have companies like Procter & Gamble, Ford, Clorox, General Mills, Phillips, and Rubbermaid as a few examples of companies regularly using some version of open innovation. Increasingly, smaller businesses have begun using open innovation and I will provide you with an example in this podcast.
    • What are the advantages of open innovation? Some companies find that it helps to reduce R&D costs while improving the quantity and quality of ideas available for a particular need or opportunity. In many cases, it is a way to access research being done by more off the grid resources and to get customers directly involved in the innovation process.
    • What are the disadvantages? Most of the disadvantages revolve around maintaining the integrity and confidentiality of innovation programs and ideas. There’s a risk of revealing too much information about a company’s need and protecting the intellectual property that comes through open innovation. Some dimensions of innovation can become more complex as a company attempts to control and integrate external sources.
    • Examples of organizations that facilitate open innovation. InnoCentive at innocentive.com is a major player with clients ranging from Procter & Gamble to Eli Lilly to technology companies. Other companies also include Bright Idea and the Disney Institute.
    • Quirky: an example of a recent company that has entered the open or crowdsourcing innovation business.
      • The company started in 2009 and its biggest successes to date have been home related products like a bendable power strip and a desktop cable organizer. 20,000 retailers sell their products, including Best Buy, Walmart, and Home Depot. In 2014 their sales were almost $50 million, which is 70% higher than the previous year. While $50 million sounds like a lot to money to most of us, in the business that they are in, it is a very small company relative to the market leaders.
      • They are more than 1 million members who submit an almost never-ending flow of ideas. When Quirky engineers approve a product for the development process, they start with prototypes and when the process is successful a new product ends up in the marketplace.
      • The company shifted its strategy to form partnerships with companies like Mattel. They are looking to tap into the million plus members to see if they can define the future of play. While the strategy shift has several benefits, it also has a potential downside of making most ideas have to go through the filter of a larger corporation.
      • The big advantages of a company like Quirky are that they provide clients access to a community of innovative thinkers that the company on its own would have a very difficult time duplicating. Net, this helps to inject greater diversity into the innovation process. A note of caution – yes it is greater diversity but is the diversity the best fit for a particular client need? Are there better alternatives?
    • Ongoing close.
      • We have covered a fair amount of information about open innovation or crowdsourcing innovation. How can this help you.
        • First, when a company can gain access to a vast community of innovative thinkers, there is the potential to dramatically improve an innovation program that is solely focused on internal efforts. The challenge is making sure there is a good match between the community and the client need. For example, Quirky’s community is probably a good fit for many and even most in-home consumer products. On the other hand, Innocentive is a very good fit for companies wanting to access scientist worldwide and a large community of leading-edge technology innovators.
        • Second, the diversity that comes through the open innovation process has very limited power when compared to the diversity as it is used in quantum idea generation. The big difference is that in open innovation there is not any opportunity for collaboration within the community or when there is collaboration it is in a small, unstructured environment. Recall as diversity works in quantum idea generation that diverse inputs immediately interact in a small group of four people in a live, dynamic environment. The quantity and quality of ideas that come out of this process are much bigger than those that come out of most open innovation processes. Interestingly, there are some options that we are considering to bring ideas from an open innovation community into our more intense, collaborative process. In effect, the inputs from the open innovation community become very high-level stimulus.
        • Third, you can leverage some elements of the open innovation process within your own company. For example, you can communicate an innovation need to everyone in the company and ask them to submit ideas in an organized, rewarding, open process. This is not the old “suggestion box.” Rather, you want to have a process for active response to ideas and recognition of ideas that are the most helpful. Some companies actual turn the submission of ideas into a rewarding contest.
      • If you would like to see the key written points from this podcast, you can find them in my blog – i2ge.com/blog.
      • If you would like to contact me, please email me at richard@i2ge.com.
      • If you would like to create far more robust innovation capabilities within your business, I have a complete portfolio of training programs that we tailor to your unique needs. If you would like to learn more, go to the Innovate2Grow Experts website – i2Ge.com and click on DIY Innovation Training.
      • One of my six books is Proven Practical Innovation That Delivers Results. This very low-cost book is available at Amazon in paperback and has a Kindle book. Is truly packed with lots of practical help.
      • Importantly, if you found this podcast helpful, please consider helping us with a five-star rating for these podcast. Thank you in advance for your support.
    • A preview of some future podcasts.
      • Upcoming podcast focus on specific case studies and powerful innovation insights that are relevant to almost any business and business need.
      • The next podcast shares some very special insights into what makes Apple so successful. In the best Tim Cook interview ever, he reveals the special criteria they used to make new product decisions, what they do to maintain a vibrant and relevant innovation culture, and the single fundamental core belief that has driven 100% of Apple’s success. You will want to make sure you listen to this podcast and then immediately start thinking about how that can help your business.
    • Thank you very much for your time and I look forward to reconnecting with you soon. Please have a great day.

 

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