Yesterday I listened to Boris Pluskowski of Spigit talk about his vision for the next evolution of innovation, and he presented a brief history of innovation that I found quite compelling.
First, some context. The Groundswell, as Forrester calls it, is in full swing. Social technologies continue to change the fabric of our interactions, both personally and professionally. Three to five years ago, consumers’ use of social media was laying the groundwork for companies’ broader adoption of tools and technologies to not only interact with consumers but among internal teams and business units.
And, although the financial crisis itself was much more far-reaching than this, it has brought with it new demands for accountability, participation and transparency that affect the business world as a whole. To paraphrase Boris: Consumer and employee empowerment is pulling the centers of control from a select few executives within a company and redistributing that control to customer-facing employees at the edges of the company. And I’d argue that – thanks to social media – more and more employees are customer facing.
With the groundwork for the Groundswell in place, this has all the right ingredients for social-industrial revolution! A brief look at the history of closed innovation (according to Boris).
- The lone inventor: This is the guru – a smart, passionate person who has lots of ideas and comes up with interesting new concepts on his or her own.
- R&D labs: The company realizes that, if one smart person can bring value to the company, then multiple bright people can bring more value.
- Suggestion boxes: Within a firm, smart people don’t work only in the R&D lab. With the suggestion box, the company signals that other people in the office have valuable ideas.
Enter Web 2.0 and a new era of openness!
- Idea management systems: As companies go global and business becomes digital, more formalized idea management systems allow people from the far reaches of the organization to submit their suggestions.
- Innovation management: The company uses technology to methodically connect the best ideas to company goals and incorporate them into the innovation process.
- Collaborative innovation: At this stage, the firm begins to seek out broader employee input throughout the innovation and development process, not only at the ideation stage.
- Open innovation: What if the best ideas aren’t inside the organization? Now, customers, suppliers and other constituents outside of the company are tapped for input and ideas in the never-ending search for competitive advantage.
Be mindful that what you get from the open innovation process depends on who you include. Your core users already see value in what you offer. Focusing only on their input might get you tweaks and a new iteration of what you’ve already got, but this won’t impact competitive advantage. Lead users are your “inner fringe”. They are ‘happy-enough’, but through their own adaptations, they push the product in new directions that it wasn’t originally intended for. These customers can lead you to the next generation of your product. Last, non-customers have needs that you don’t currently fulfill, and their input may very well be the future of your company and open up new spheres of innovation.
“Open innovation” is an attractive destination to aim for. Many companies today are struggling to bring multiple constituents together within the confines of the firm, and this movement to a more open innovation cycle is reliant on a combination of technology and company-wide culture change. Collaboration is key to opening innovation.