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The Profound Importance of Challenges: A Powerful Strategy Tool (Part 4 of 4)

Posted by abingham on Mar 19, 2012 4:51:32 PM

By Alph Bingham

This blog is the final installation of a four part series:  "The Profound Importance of Challenges," by Dwayne Spradlin and Alph Bingham, authors of The Open Innovation Marketplace, published in 2011 by FT Press.  To read the previous posts, click on the links below:

The Profound Importance of Challenges (Part 1 of 4) by Alph Bingham and Dwayne Spradlin

The Profound Importance of Challenges: The Fundamental Unit of Problem Solving (Part 2 of 4) by Alph Bingham

The Profound Importance of Challenges: A Better Way to Organize and Distribute Work (Part 3 of 4) by Dwayne Spradlin

In this last segment of the series, we will address the role of a Challenge as an instrument of strategy.

Too often organizations measure their innovation success by % of sales spent on R&D, how many patents they own, or whether the leading academics in their fields are on retainer. However, in today’s economy, these should all matter much less to the management of the organization or to the shareholders than whether they can get a new product to market before the competition and dominate the category or whether resources are being managed to ensure the firm can aggressively pursue new business opportunities when they emerge.

Too many organizations struggle to even clearly define their problems and goals, much less to innovate with the precision and efficiency needed to compete in the world today. Whether building better business processes or designing new technologies to dominate a market, traditional business practices are no longer sufficient. Nowhere is this truer than in large corporations where years of accumulated standard operating procedures, poorly aligned incentives, ever-increasing bureaucracy, and entrenched culture work together to ensure that increasingly expensive and mediocre innovation is the best they can do. The existing systems are failing and firms are in desperate need of new methods to improve responsiveness and competitiveness.

Dictionary.com defines a “challenge” as “a summons to engage in any contest” or as “a job or undertaking that is stimulating to one engaged in it.” However, it is much more. Well-constructed “challenges” are an astonishingly powerful and uniquely effective tool for focusing the energies of multitudes of creative, inventive, talented audiences on the important problems facing organizations, nations, and the planet on which we live. These audiences can be employees, customers, partners, and a planet of resources.

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Topics: Innovation Insights

The Profound Importance of Challenges: The Fundamental Unit of Problem Solving (Part 2 of 4)

Posted by abingham on Dec 8, 2011 1:11:11 PM

by Alph Bingham, Founder and Board Member, InnoCentive

This blog is the second installation of a four part series: ”The Profound Importance of Challenges,” by Dwayne Spradlin and Alph Bingham, authors of The Open Innovation Marketplace, published in 2011 by FT Press.

To read the other posts in this series, click on the links below:

The Profound Importance of Challenges (Part 1 of 4) by Alph Bingham and Dwayne Spradlin
The Profound Importance of Challenges: A Better Way to Organize and Distribute Work (Part 3 of 4) by Dwayne Spradlin
The Profound Importance of Challenges: A Powerful Strategy Tool (Part 4 of 4) by Alph Bingham

Recently Dwayne Spradlin and I published a blog titled "Why Challenges will transform the future of innovation, work and business" in which we laid the groundwork for the topic "What is A Challenge?"  In this blog, we described the Challenge as:

  • The fundamental unit of problem solving
  • A better way to organize and distribute work; and
  • A powerful strategy tool

We committed to exploring each of these facets in more depth.  In today's post, we're going to begin the discussion of the Challenge as the fundamental unit of problem solving.

The Challenge as fundamental unit of problem solving - Part 1

As we worked to create a successful business around this new model, new language sprang up to characterize it.  We have mentioned the coining of the terms “crowdsourcing” by Jeff Howe and “broadcast search” by Karim Lakhani.   Internally InnoCentive used familiar terms in very deliberate ways.  Our customers, providing challenging problems to our network, became “Seekers.”  And our network was one of “Solvers.”  The problems themselves evolved to “Challenges.”  And we used these descriptions as we analyzed questions like:  What was the value proposition to Seekers?  Why did Solvers engage? And how did the properties of the Challenge serve to effectively contribute to its solution?

As we deepened our knowledge of the Challenge and its role and the means of maximizing its service, we recognized that the Challenge shares DNA with the modularity processes, earlier described by Carliss Baldwin and Kim Clark of Harvard Business School. A portion of the global innovation objective is formulated as a Challenge, in which a “Challenge” essentially represents the problem statement for a block of work that can be modularized and in most cases rendered “portable.” That is, such a block of work can be outsourced or insourced as an integral unit.

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Topics: Innovation Insights, Challenges

Deleted Scenes from The Open Innovation Marketplace

Posted by abingham on Jun 30, 2011 5:22:43 PM

The top rated "The Open Innovation Marketplace", authored by InnoCentive's Founder Alpheus Bingham and President and CEO Dwayne Spradlin has been receiving positive reviews from innovation practitioners, CEOs and executives, industry analysts and the media.  Though the book presents a comprehensive overview as well as a deep dive into the practice of open innovation, the authors still had more to share.  Below is a chapter that didn't make it into the book, which we'd like to share with you now.  Enjoy!

Closed Innovation Suboptimizes Solutions - The World Can Do Better.
by Alpheus Bingham, Founder, InnoCentive

One of the expectations of my early career in the pharmaceutical industry was to design new synthetic routes (ways to make medicines). This was for a whole variety of molecules, not just the ones for which I had some special training and experience.  At various times it included heterocycles, beta-lactams, silanes, inorganic salts, and many others. When asked to undertake such a challenge, I usually did so based on my own grasp of chemistry and the aid of a technician or two to carry out the exploratory experiments. That is not to say I never sought help. In fact a small, informal group of seven or eight PhD chemists would meet weekly and share what they were working on in hopes to gain some insight and ideas from the others. I think my experience was typical in a commercial research environment.

Contrast the approach just described, closed innovation within an industrial organization, to a purely academic exercise from graduate school that was much more successful in exploring a wider range of potential solutions. In a synthetic organic chemistry course, taught at Stanford University and overseen by Professor William S. Johnson, 20 other "generally-accepted-as-swift" chemists and I were assigned one molecule each week. Our job was to design an appropriate synthesis for that substance, that is, ways to make the molecules much like the ones I would later be making in my work assignments. We were not asked to actually conduct the synthesis in the laboratory but to support each of our recommended steps with precedents from the scientific literature. This was, essentially, no different from the first steps I would later take in the synthesis challenges I faced as an employee. These weekly homework assignments were not simple problems. Each assignment required 20 to 80 hours of effort, and students generally dropped all other coursework while this one class was taken. Papers were turned in on Monday, and that Wednesday a special evening class was held, which often extended into the wee hours of the morning.

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Topics: Innovation Insights

InnoCentive and "The crowd factor"

Posted by abingham on Jun 1, 2011 8:27:00 AM

We recently had a news mention from the unlikeliest of venues – ESPN! I’m sure many of you will say the same thing we did: “ESPN, the sports network? How is that relevant?” Well, innovation is relevant in all avenues of life, and that includes business, leisure and professional sports. This brings us to ESPN, and the author’s interest in innovation, crowdsourcing and prizes.

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Topics: Innovation Insights

Challenge Driven Innovation

Posted by abingham on May 2, 2011 1:40:38 PM

We recently announced the publication of The Open Innovation Marketplace, written by InnoCentive Founder Alph Bingham and CEO Dwayne Spradlin.  In the post below, Alph Bingham shares his thoughts on Challenge Driven Innovation.

Business processes make companies smart. They are one of the primary means for archiving and retrieving institutional knowledge. They are what allows Boeing to build a plane or Pfizer to launch a drug -- when in all likelihood NO one employee of any company knows what it takes to accomplish those tasks. But in spite of enabling this almost magical quality of collective knowledge, business processes also make companies dumb. They can archive and institutionalize modes of behavior no longer relevant. They all have a "discard by" date, but too few get discarded on time.

Many of the current business processes related to innovation were forged before the world became "connected." They assumed a reality that ceased to exist as we rolled into a new century. New innovation processes need to be hung on an innovation architecture that reflects a world where knowledge is fluid, where connections are fast and where outcome transcends geography. Corporate innovation practices assume a closed system -- or at least one that is predominately so. Leaders have read much and talked much about the new era of open innovation but how many have rewritten their business innovation processes, how many have changed their metrics for innovation success and how many have gone back and redefined the gate criteria separating the stages of their innovation cycle?

Innovation is risky business. And to manage those risks, project gating criteria are selected that prevent an overabundance of false positives. That is to say that projects likely to fail are periodically reviewed and terminated before they burn too many resources and too much cash. But if those expenses were shared by a partner or better by a network, such terminations would in most instances be premature.

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Topics: Innovation Insights

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