Hack:
Global solutions, local failure - Overcoming barriers in implementing open innovation

Frank:
Very interesting.

When traditional organizations undertake Open Innovation (OI) for the first few times - it is very important to have successes early .. else all the internal antibodies will smother any external creativity. Since OI has a high probability of disrupting known reward paradigms in organizations - even when OI brings fruitful results, the trajectory of OI success is threatening to the internal environments in organizations. The benefits of OI need to satisfy the power structures in orgs. One way to suceed is to show an OI success trajectory via numerous small wins. What would you source as an initial OI challenge - an organization weakness or strength? I would argue to show OI success early and often - it is important for the initial OI challenge be in an area of organizational strength (core competency) so one can manage it well and succeed. The organization power structures know very well how to find association with core competencies (internal or external). Once you you have an OI success trajectory and the organization power structures have learnt how to share the success - then the organization is ready to run OI challenges in areas of organization weakness!

I read your article, great work. Unfortunately I recognized all of the barriers.. You stated that broadcast search is very suitable for technical problems in the mechanical engineering domain. From my experience (in the chemical industry) it seems easier to find solutions for products than for processes. Is that also in line with your research?
I can imagine that after applying broadcast search for a moment you could compile a list of (successful) solution providers for the seeker company. At that moment it becomes attractive to contact these solution providers directly; instead of using an intermediary. Were you able to identify such solution providers that popped up multiple times already and could it be beneficial to setup a more intense relationship with some of the solution providers?

Thanks for sharing! This is really interesting stuff.
I wonder how this relates to the boundary spanning roles that Tushman etc have identified. Is it related? Is it rather to sensitize and persuade? In any case, this is really good.

Frank,
I downloaded the research and found myself nodding in agreement at many of the barriers identified. A general comment is to start small and focused with the pilot. The first deal we orchestrate is always our worst. As our partners learn about us and vice versa, we both craft better deals the next time around. I have found these small pilots are often spring boards for bigger projects as our partners offer us additional solutions.

The B6 barrier (Allocating wrong task to Pilot) is one I'd like to comment on. You do a very good job in discussing the need to select the right task for the OI effort. I would add that the construction of a clear and compelling RFP description is also just as critical. We walk a fine line here. The technologists want it written to such a precise degree no alternative solutions could be considered, while the legal department wants it written so broadly our competitors.....and everyone else has no clue what we are interested in. The RFP also has to be written in a way to entice creative minds to engage and offer solutions to the challenge.

The Promoter Troika approach is a great one to implement. I wish I had engaged this strategy in some of my earlier OI work. I have had pilots fail because one leg of this Troika Stool was weak or missing. I would add that in my industry OI experience I have found that the Power role is often split with money coming through one channel and resources (people, facilities) coming from another source. Both are needed to Evaluate and Re-Integrate the solution. I personally found that funding was easier to get than people resources. I would be curious to see if this was similar in other industries
cheers, John

That's an extremely useful open innovation hack! It definitely helps resolve organizational issues to make crowdsourcing more operational. Thanks for sharing it!

Thanks for very interesting and useful ideas! As many of these pilots fail, I was wondering whether some kind of team structure/configuration is more conducive to learning from failure? Or is it indeed a matter of getting it right from the start? Good luck!

Your findings are not surprising, but you have done a great job articulating the challenges/barriers to a successful OI pilot and the solution (well defined roles and processes). As you know, the need for the 3 promoter roles never goes away and are clearly evident even in mature OI programs.

However, I would value your thoughts on one aspect of an OI pilot. Do you find the "Level of Urgency" impacts the dynamics of an OI pilot? My sense is an organization's white blood cells can attack more successfully if the Level of Urgency is low. For those initiatives, which must innovate or die, perhaps the team is more receptive to this new approach and more likely to crush the Nay-Sayers. Your thoughts?

Arie,

thanks for your great feedback! You asked some really good question here and I will try to answer them as best as possible.

(1) Up until now we are not able to provide detailed recommendations for problem selection yet, as we cannot draw conclusions like this from our (small sample) case studies. But what we can say for sure is that from our experience, the best approach is to start with a small set of different problems in order to find out what works best for your company/ industry. Here, at least in the course of pilot projects, the focus should not be so much on diversifying risk, instead the reason for posting different types of problems should be to find out what kind of problems work best in practice.
(2) Usually, in the process we describe in our hack, solvers do not collaborate with each other in the problem solving process. Even though collaboration between solvers is not forbidden and thus cannot be ruled out, it is also not explicitly encouraged. As the goal of the process is to match seekers and solvers, the optimal project outcome is that both parties collaborate in the end.
(3) In the course of a pilot project this surely depends on who actually initiated the (pilot) project. We have seen both, bottom-up as well as top down approaches to OI and crowdsourcing. Particularly in the cases where senior management was not on board right from the start, and was thus not involved in the problem selection, promoter roles (especially process promoter and power promoter) contributed significantly as they communicated the approach and justified the problem selection to various internal stakeholders. A team or business unit conducting a crowdsourcing project has to be aware of which questions they are allowed to ask and which technical problems they should better not broadcast. Problem selection is thus an issue concerning executive management as well as legal/IP department and R&D staff. The best way to secure strategic alignment is, as you suggested, having executive management, IP/Legal Department as well as technical staff participating in the problem selection.

I would like to thank you once again for the many stimulating ideas and questions concerning our hack. We got a lot of questions concerning how we identified promoters in a company.

Basically there is no panacea or best known approach for the identification of promoters. However, we identified two strategies that have proven to be quite successful to recognize individuals with promoter characteristics. The first approach is based on a network analysis. In this case, the search begins with sending out a questionnaire to all company employees asking them a set of questions related to persons with distinct promoter characteristics e.g. (and these are only some examples of questions):
Who of your colleagues …:
- ...is especially receptive to novel (problem solving) approaches and does not hesitate to share and discuss his/her ideas openly with others?
- ... does, in your opinion, follow a particularly creative approach to problem solving?
- Who do you go to when certain technical expertise in the field of X is lacking in a project?
- Do you know someone in your company who has a unique position insofar as she/he is combining outstanding technical as well as business/management expertise?
- Who do you ask for help when critical resources are missing in an innovation project and there is no time to follow the regular procedures?
The result of this analysis is a map of key persons of the company who are potential promoter candidates.
The second approach is based on a pyramiding search process which has proven to be very efficient in the context of lead user identification. Requiring an average of only 30% of search effort as compared to a full screening process, pyramiding is often faster and less expensive than a comprehensive network analysis. Here, the same set of questions (slightly different formulation though) is addressed to a limited number of employees. The researcher uses a system of referrals to network himself up to the top of the pyramid to find individuals who best meet the desired attributes. For a detailed description of this search please refer to [von Hippel, Eric; Franke, Nikolaus and Prügl, Reinhard Wilhelm. 2009. Pyramiding: Efficient search for rare subjects. Research Policy, 38 (9). pp. 1397-1406]. In the course of our research we applied the pyramiding approach in combination with our questionnaire to identify promoters.

I was asked to go a bit deeper on the reasons for multi nationals to invest in separate innovation centers. They situated the centers in (the neighbourhood of) highscools and (technical) univerities. Often the innovation projects were financed by the companies and investigating manpower was found on the universities. Once an invention was devellopped for the market, mostly a start up was created by starting up a new small company giving the means and money to grow.

Professional and successfull innovation requires different competentions from people/employees than "normal" daily operational production or service activities. The operational production requires highly disciplined workers that are satisfied and mostly need a secure activity within fixed protocols, budgets and schedules.

Professional innovation requires highly intelligent and creative "out of the box" thinking people. Those competentions donot match with the competentions required for daily systematical disciplined production activities.

It is because of the reasons described above that the boards of larger companies like multinationals decided to outsource their very important innovation activities in separate innovation centers.

Dutch multinationals invest in separate specialised innovation centers because normal efficient daily production needs other skills.

Frank and Team,

This is an incredibly useful solution framework. I like all the key parts: the list of barriers, the process, and certainly the 3 promoters concept.

Just a few questions:

1) Is it best to pilot the OI project with one problem or a small set of problems, to diversify the failure risk?

2) Can the process allow for more collaboration between the company and the solvers, or between different solvers?

3) Does the executive management team have to participate in selecting the problem(s) to ensure strategic alignment?

And if so, what is the role of the promoters in facilitating the above?

I am looking forward to reading the final solution.

Arie Goldshlager
@ariegoldshlager

Great read! As an innovation professional the situation you outlined is my every day's business and you named the most important challenges of successful industry innovation work.

I like your troika-approach and will certainly think about how this could be utilized for our work. The most challenging part will likely be to find truly dedicated promotors, which in turn likely depends on the quality of corporate innovation culture and from my experience many companies struggle to implement (and cultivate!) such an enviroment that helps to identify and (self-)motivate promotors.

Any tips on how to do this best?

There is a price to pay for increasing innovation, even if everyone agrees to view the practice as a social good.

Congratulations Frank. This is really super useful research. I've encountered many of these in the process of introducing crowdsourcing into areas like marketing and design.

Wondering if you have seen many examples of the promotors coming from across multiple organizations - for example, external partners like media firms or specialized, celebrity experts. Thinking of examples like GE partnering with venture firms for their Ecomagination Challenge or Innocentive often partnering with publishers such as the Economist or GAP working with an existing community like Threadless.

Curious if external partner enthusiasm, commitment and de-risking might also help drive adoption and counter the barriers you have identified.