Joe’s angle on marketing news you can use.The next step in open innovation
June 30th, 2008 by Joe MeleTags: innovation
In the near future, the best innovations for your business may not come from the R&D department, but from your customers themselves. Are we ready to harness that powerful source?
Image: BusinessInnovationInsider.com
Article excerpt: The creation of knowledge, products, and services by online communities of companies and consumers is still in its earliest stages. Who knows where it will lead? For most companies, innovation is a proprietary activity conducted largely inside the organization in a series of closely managed steps. Over the last decade, however, a few consumer product, fashion, and technology businesses have been opening up the product-development process to new ideas hatched outside their walls—from suppliers, independent inventors, and university labs. Executives in a number of companies are now considering the next step in this trend toward more open innovation.1 For one thing, they are looking at ways to delegate more of the management of innovation to networks of suppliers and independent specialists that interact with each other to co-create products and services. They also hope to get their customers into the act. If a company could use technology to link these outsiders into its development projects, could it come up with better ideas for new products and develop those ideas more quickly and cheaply than it can today? Suppose that a wireless carrier, say, were to orchestrate the design of a new generation of mobile devices through an open network of interested customers, software engineers, and component suppliers, all working interactively with one another.
The rest: McKinseyQuarterly.com
Musing: This powerful article outlines three ways companies can benefit from what they call “distributed cocreation”: through merchandising cocreated goods, by providing complementary services, or indirectly via an enhanced brand or strategic position. This is a very powerful concept. By tapping into the innovation and insights of customers, brands can change in meaningful ways, in directions that would not come from insular groups from within the organization, and the insight can come much more quickly. The key to being able to tap into the power of consumers seems to revolve around a couple of key areas – creating a forum with parameters and boundaries, rewarding users for participation (and these don’t necessarily have to be monetary), and having a structure in place to act upon these insights and bring them to fruition. Just listening isn’t enough – it needs to be formalized and operationalized. That to me is the key area – businesses that are willing to put real resources behind these efforts will be the ones who benefit.
2 Responses to “The next step in open innovation”
Hi Joe, good point about the formalization and operationalization of open innovation (wow, say THAT ten times fast!). As someone who works for an open innovation intermediary I may be somewhat biased, but there’s a world of difference between hanging an online suggestion box on your website (as Starbucks and many others have done), and creating a process for attracting, vetting, and integrating the thinking of clients (and suppliers) into your innovation processes.
Thanks for the feedback, Ash. And I am trying that tongue twister on for size!! I totally agree that there is a HUGE difference between saying “send your ideas to a large inbox somewhere if you like, and we may or may not use them” and really inviting people into a deep conversation. It is not an easy thing to do, but it just seems like such a powerful and valuable addition to any business. The problem is going to be getting past the “bean counters” and just realizing that this is a good thing to do.