Perspectives on Innovation

This article originally appeared on Steve Shapiro’s 24/7 Innovation blog.

A magazine asked me to write a book review of Innovation Tournaments by Christian Terwiesch and Karl Ulrich. The book arrived in the mail yesterday and I immediately turned to the index to see if InnoCentive was listed. Sure enough, we are mentioned in several places in the book.

This got me thinking: Is InnoCentive a tournament?

The word tournament is derived from the French word for “medieval sport” and is now used to describe a wide variety of competitions.

Most competitions/tournaments are quite entertaining.  And by their very nature, there is always a winner.  One could argue that tournaments are “spectacles designed to find a champion.”

Given this widely held point-of-view, using the word tournament as a descriptor of InnoCentive seems to be inaccurate.

The NCAA basketball championships are a tournament.  The “World Series of Poker” is a tournament.  American Idol is a tournament.  With each of these, there is always a winner.  The purpose of the tournament is to find that winner while (usually) providing entertainment value.

InnoCentive is not interested in finding a winner for the sake of naming the champion.  The objective is to find workable solutions to real business problems.  Their approach is one I call a “contingency-based, value-driven pricing model.” Admittedly, that does not sound as sexy as calling it an innovation tournament.

Here’s how it works.  A company has a problem they want solved. They decide the “value” of finding a workable solution and they offer a “bounty” to anyone who can provide one. The bounty is only paid when they get what they need. This “pay for solution” model outsources the risk associated with complex problem solving.

Here are other examples that illustrate the key difference between the bounty-based approach with the tournament-based approach.

The NetFlix Prize was not a tournament. They only paid the team that improved the recommendation engine by 10%.  This makes it a bounty-based approach. You only pay the bounty when you get a successful solution.

In contrast, The Cisco iPrize, can be thought of as a tournament. According to their website, they will “select up to 32 semifinalist teams that will work with Cisco experts to build a business plan and presentation… Up to eight finalist teams will present their business ideas to a judging panel to compete for the grand prize: a $250,000 award shared equally by members of the winning team.” The LG Electronics competition (read my article on it here) was also a tournament-based approach.

The key difference is the way the challenge is articulated. With the bounty-based approach, the success criteria is clearly defined and you know if someone provided a successful solution: Did you improve the recommendation engine by 10%?  Did you find a chemical compound that has specific properties? Did you develop a mathematical model that optimizes solves a specific problem? The “winner” of the bounty is determined by this success criteria. If the criteria is not met, the bounty is not paid.

With the tournament-based approach, the success criteria is not defined. The winner is the “best” of the submissions. Although these types of competitions can yield excellent solutions, I know from inside-information that the results are often less than stellar. One company that uses this type of tournament described the results as a “PR success yet a commercial failure.”

Both approaches can provide value to any organization. It’s just important to recognize that they are useful in different ways. Tournaments can be great to get a broad set of ideas for an undefined space. Bounties are great for when you are hunting down usable solutions.

I never really thought much about toothpaste.  But at the last two innovation conferences where I spoke, toothpaste was one of the hot topics.

At the FT Innovate conference in London, Unilever discussed their “Signal White Now” (and other brands) toothpaste.  Instead of using harsh bleaches and abrasives, they borrowed an optical-effect technology from their laundry team.  This toothpaste uses a blue pigment to make yellow teeth instantly appear whiter.  This same ingredient is used to make white clothes look even whiter.

At the Open Innovation Summit in Orlando, GSK discussed how their “Aquafresh iso-active” toothpaste borrowed an idea from Edge shaving cream (now a division of Energizer Holdings, Inc).  The toothpaste comes out like a gel, but foams in the mouth, much like the shaving cream.  This formulation, according to the can I was given, removes 25% more bacteria than regular toothpaste – or 3x more according to the picture left.

This got me thinking.  If toothpaste manufacturers can get ideas from shaving cream and laundry detergent, where else could they get ideas?  Within 5 minutes, I thought up a few ideas of how to gain inspiration from other products:

1. Pop Rocks:  As a kid, I loved how Pop Rocks, the carbonated candy, exploded in your mouth.  What if you added Pop Rock-like crystals to toothpaste?  Not only would the toothpaste foam, it would fizz and explode.  Maybe this would blast the plaque off your teeth.  Of course, it might blast off your teeth like Pop Rocks reputedly did a few times.
2. Shampoo: Shampoos are infused with vitamins and minerals to give your hair bounce and shine.  What if you infused toothpaste with these ingredients? Or maybe you could add some homeopathic remedies – for those who believe in these alternative “medicines.”  Sublingual administration (under the tongue) is a common and effective way of delivering drugs directly into the bloodstream.
3. Conditioner: We use shampoo to clean and conditioner to protect.  Maybe they can create a tooth conditioner; a special toothpaste that you use after your regular toothpaste.  It could coat your teeth to prevent staining, bad breath, or split ends.  Even better, they could borrow the “technology” used by shampoos like “Pearl” that combine shampoo and conditioner into one formulation.
4. Moisturizers: Several moisturizers have an AM and a PM formulation.  One is used in the morning and the other at night before you go to sleep.  The AM formula of toothpaste could be infused with caffeine that would be absorbed into the bloodstream sublingually (see idea #2 above).  And the PM formulation could be infused with melatonin to help you sleep better at night.
5. Weight Loss Products:  I’m not sure how this would work, but what if you could create a toothpaste that somehow made certain foods taste bad?  This might cause you to reduce the amount of food you eat.  Or maybe there is another way to make toothpaste a weight loss product.  OK, this one is a stretch, but there might be a kernel of an idea there!

Ideas can indeed come from anywhere. (Read more to find out how!)

If you have other toothpaste innovation ideas, I would love for you to post them as comments!

During dinner not long ago, I compared crowdsourcing to the lifelines on “Who Wants to be a Millionaire?”

Imagine you are sitting in the hot seat.  The show’s host asks you a question.  You are nervous and can’t think straight.  You think you know the answer to the question, but $64,000 is on the line.  You are no longer that sure of yourself.  You have all of your lifelines.  What do you do?

You could of course answer the question on your own.  You answered the previous 10 questions correctly doing it this way.  But the stakes are higher now.  It’s time to get some help.

You could Phone-A-Friend.  Based on the few times I watched the show (admittedly the last time I watched WWTBAM was back in 2001 when was living in England), this option rarely proved reliable.  Of course, if your friend has access to Google and can search quickly, then it is probably the best option.

You could go for the 50/50.  Here, two incorrect answers are eliminated, leaving you only two choices.  This is a great option.  Unfortunately, according to the all-knowing Wikipedia, “the answers eliminated were not random but were pre-selected as the ones the contestant was least likely to pick.”  Well, that makes things a bit harder.

Finally, you could Ask the Audience.  The audience seemed to be nearly always right.  According to Wikipedia, “This is a popular lifeline, known for its near-perfect accuracy. (Regis) Philbin once said that the audience’s answer is statistically 95% of the time correct.”  However, my research shows that this accuracy level is only for the first 10 questions.  For the more difficult questions, I believe that they are often clueless.  Now, if only those who really knew the answer responded, then I suspect the audience could be even more accurate.

In the current version of the show, there are other lifelines, like “Ask the Expert.”  You can guess what this is.

Now, imagine you are in the hot seat at work.  You are working on a pressing challenge.   You think you know the answer.  Or maybe you haven’t a clue how to solve it.  Regardless, how do you want to bet the company’s money?

You could Phone-A-Friend.  That is, you could ask the people around your desk at work.  This would most likely improve your chances.  Sadly, as great as Google is, it will not provide the answers to your more difficult challenges.

You could do the equivalent of “asking the audience” by asking customers for feedback.  MyStarbucksIdea simulates this concept.  Unfortunately, as with the WWTBAM audience, you get a lot of “noise” in the responses because everyone wants to be heard.

You could Ask the Expert.  To do this you might partner with a University or bring on a consultant.    Or maybe you outsource the challenge to a 3^rd party to take responsibility for solving the problem.

Or maybe there is a solution that combines several of these together.  Call it the “Ask the Audience of Experts.”  This might involve posing a challenge to a group of highly skilled experts; people who have a higher likelihood of solving your problems.  You get the viewpoint of many people (much better than Phone-A-Friend), but you also eliminate the “noise” associated with a generic audience.  This gives you the added bonus of having a “50/50″ solution set because you end up with fewer “wrong” answers.

As far as I know, no one has ever won the million dollars on the TV show without using their lifelines.  Why should your organization try to win its millions without using the best lifelines available to you?

Renowned innovation expert Steve Shapiro has recently joined InnoCentive as VP of Strategic Consulting.

On July 1, 2009, I joined InnoCentive as the “VP of Strategic Consulting and Chief Innovation Evangelist.”  Although I just joined the company, for several years now, I have marveled at how the InnoCentive Solver community could tackle problems that have plagued businesses and society for years.  You are changing the world.  And I am thrilled to now be part of your team.

As I followed InnoCentive and observed the success of the Solver community, it got me thinking about how problems are solved.

From my research on innovation personality styles, I have observed that there are two broad ways of solving challenges: relational/creative and rational/analytical.

Steve Jobs, President of Apple Inc, once said, “Creativity is just having enough dots to connect . . . connect experiences and synthesize new things. The reason creative people are able to do that is that they’ve had more experiences or have thought more about their experiences than other people.”  This beautifully articulates how creative/relational problem solving works.

To date, most InnoCentive Challenges have been more technical in nature and are typically solved through a more rational/analytical approach.

When looking at these two styles, I realized that InnoCentive Solvers are perfectly positioned to use BOTH innovation styles.  To explain why I believe this, let’s explore what happens in the brain when solving Challenges. (more…)