Open Innovation – Evolving from the Exotic to the Everyday

Posted by Michael Franklin on Jul 22, 2016 6:42:04 AM

Since their re-emergence at the turn of the millennium, crowdsourcing and open innovation have been buzz-phrases of the business world - frequently spoken, but less frequently understood. They represented excitement, novelty, competitions, rapid results. Everything that the age of technology promised and more. As time proceeded and companies moved beyond just talking about crowdsourcing to actually undertaking it, this newness and excitement may have receded somewhat, but instead an accurate realisation and usage has taken its place. Open innovation has evolved from the exotic, to the everyday.

The early stages of the twenty-first century were the first point when the business world really stood up and took notice: the awarding of the Ansari X-Prize coincided with the release of Henry Chesbrough’s seminal Open Innovation: The New Imperative for Creating and Profiting from Technology. Something major was occurring and even if it was poorly understood, companies started campaigning to utilise the power of the internet to solve their problems and leverage technology to innovate faster. It was the revolution that was promised; offering faster, cheaper, more diverse solutions whereby a prize and competition structure would induce greater outcomes as innovators from around the world reached for the stars.

Globalisation had brought open skies, tariff-free trade, and global cultures. Web 2.0 would now facilitate the explosive growth of crowdsourcing and open innovation. Firms wanted to be involved; to jump on the trend and ensure they weren’t losing out as others flourished. They may not have always fully understood its capacity, may not have always appreciated the nuances, and may not always have acknowledged the limitations, but this was an opportunity that couldn’t be missed. Crowdsourcing providers were also in this boat – the theory stated it should work, but without the detailed background testing it could be a real life beta.

Over a decade has passed since these heady days when boybands and Nokia phones ruled the world, and the intervening years have seen a maturity in both the crowdsourcing marketplace, and the customer usage. Open Innovation providers have honed their methodologies, improved their Challenge writing ability, expanded their crowds and better understood how to interact with them to best utilise their expertise. Tech platforms have taken strides forward with additional functionalities, security features, personalisation elements and others. The understanding of not only how to run a crowdsourcing Challenge, but also its limitations has grown – in doing so facilitating a far better service and higher probability of success. InnoCentive Challenges alone have seen award rates climb quickly to their current figure of 70%.

It has not only been the honing of delivery and methodology, but also the diversification. Challenge based open innovation has been accompanied by; internal idea management; patent searches & technology transfer; external idea generation; design competitions; crowdlabour & micro-consulting; coding tasks and many others. Business needs are complex and varied, and thus the various suppliers who occupy the marketplace have reacted to meet these demands – connecting companies to external talent in the most appropriate way to the problem.

Alongside this provider improvement has also been a progression in customer expectations, understandings and realisations of use. At InnoCentive we now see a far greater appreciation for outcomes and a higher baseline knowledge on crowdsourcing from our clients. Hand-in-hand has also been the understanding of the limitations of crowdsourcing. It shouldn’t be represented as an elixir or panacea that can cure all commercial ills, and issue selection, problem structure, and organisational support are all needed to give higher likelihood of success. Industries are better appreciating where open innovation fits within their processes and paradigms: it is a supplementary method and can give cutting-edge results, but should not be seen as supplanting more traditional methods or being a fix for all needs.

As with all new technologies, methodologies and working paradigms, initial excitement could be misplaced and in fact create a bubble from which the process may never recover. However crowdsourcing and open innovation have been delivering outcomes for the past fifteen years, and the process is still standing, and importantly advancing. Maturation from both the crowdsourcing providers and client industries have led to a stable and sustainable working methodology that can be repeated and supplement more traditional innovation methods. Open innovation has evolved from the exotic, to the everyday.

Topics: Innovation Insights

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