The concept of social relationships, how we connect, how we shop, we are constantly engulfed in a sea of influence. And this should influence the way companies innovate.
Today, every company is global because of the convergence of industries, networking of customers, commoditization of products and the globalization of markets.
Fun Fact: The iPad itself could be a Fortune 500 company.
Why do firms need to look “outside”?
- There are many more ideas and smart people outside your firms thatn you can hope to hire
- Innovation is socially construted – the community is wiser thant he sum of its members
- It is too expensive and time-consuming to go it alone in innovation
Connected innovation: A networked approach to innovation that relies on harnessing the creativity and expertise of external contributors to increase innovation reach, accelerate innovation speed, and improve the quality of innovation outcomes.
Principles of Connected Innovation
- Co-creation with customers
- Leveraging the “global brain”
- Social knowledge creation (be innomediaries)
- Division of labor among specialized players
- New intermediaries to facilitate innovation
- Non-traditional business models
Levels of Connected Innovation
Connected Innovation is a 360-degree approach. It encompasses all elements of a product or service, from ideation and design, testing, to how it is advertised and then supported. Below are fascinating examples of each of the 5 levels.
1) Customer Co-Creation
Leveraging the creativity and expertise of customers to define, design, and deliver offerings by giving them social and economic rewards in exchange for their contributions. Here at GSW, we are all familiar with My Starbucks (cue afternoon coffee run now). The Starbucks platform has brought in nearly 100,000 ideas for everything from new drinks and food to the entire Starbucks experience. Starbucks employs 50 full-time employees to manage and follow up on these ideas.
Collaborative Ideation: McDonalds Build Your Own Burger – Germany
Using social media for menu development, McDonalds created a campaign called “Mein Burger” (My Burger) and used an array of social channels to reach customers, inviting them to “build their own burger and be famous.”
During the first 7 days of the campaign, 45,000 burger designs were submitted (using not a single dollar for media promotion). By the end of the campaign more than 116,000 burger were created (that is one every 26 seconds!). This single campaign, in a single country resulted in more new customers, more promotional menu items sold and more total revenue generated than any other McDonalds campaign…ever.
Collaborative Testing: Kraft FirstTaste
Kraft FirstTaste is an open group that alerts members of the newest Kraft products and gives them a peek into what is being done in the test kitchens. Kraft sends daily updates to each user and encourages them to be the first to try new products and recipes. From there, testers can share what they think about the products through surveys and forum with other group members.
Collaborative Advertising: PopTent
If you are an artist waiting for your big break, PopTent helps you keep food on the table while you wait for that big break. PopTent allows people to find opportunities to create commercials for brands, assemble a team of other PopTent users and then receive money if their work is chosen. For brands, it allows for a new style of advertising at a fraction of the cost.
Collaborative Support: Cisco
Cisco found that their tech support often came from their own customers. From there, Cisco Support Community, a forum that allows customers to interact to solve each other’s problems and lets people vote for the most helpful advice and user, was created. Cisco included a leaderboard that puts the users that receive the most votes to be displayed on the sidebar of the community.
Collaborative Design: Smart Car
SmartCar created a “studio” for people to visit the website and create new designs to make the SmartCars a bit more edgy. In one month, they received over 52,000 designs that took nearly 13,000 hours to create.
How to make co-creation work:
- Open your mind to customer inputs
- Choose right customers to collaborate with (McDonalds = all customers | SmartCar = designrs)
- Create platforms and tools for collaboration
- Design inventives for collaboration (social recognition is a big deal)
- Ensure that customer input actually gets used (Create a dashboard that shows the idea pipeline)
- Manage intellectual property rights
2) Innovation Ecosystems
Have you ever heard of “Jamming” at IBM? It’s a global online brainstorm to bring together an ecosystem of participants and ideas to solve problems. This ecosystem comprises hundred of thousands of thought-leaders, employees, customers, business partners, clients, alliances, scientific community, government, and the list goes on.
Jam has created 10 spin off companies and has actually become a new product and revenue stream product for IBM.
3) Innovation Marketplace
Limitations of innovation ecosystems:
- Companies have limited reach
- Companies have a limited field of view
To avoid the limitations above, companies must become “Innovation Intermediaries” (or Innomediaries). Early adopters of this philosophy have designated an individual or team charged with making connections between organizations and teams and fostering the relationships and expectations.
How can you prepare your organization
Overcome the “not invented here” syndrome
- Accept that you have no monopoly on expertise
- Be prepared to let go to grow
Communicate across the enterprise
- Get buy in from internal stakehodlers
- Emphasize complementing internal innovation efforts
Create new roles/units
- Responsible for creating innovation
Build the capabilities
- Strive to become preferred partners
- Articulate the partner value proposition
- Rish and portfolio management skills
- Tools and platfroms for collaboration