In the past decade, ‘open innovation’ has become a popular term describing how executives might reach beyond the walls of their own organizations to seek help.
Source from the crowd
Some projects can usefully harness the rambunctious ‘crowd’ made famous in the popular press in recent years. There are different ways to think about using the crowd, including for its scope, its speed, its diversity of opinion and its scale. Since 1999, for instance, SETI@home has used home computers to search for extraterrestrial intelligence. The experiment taps into the machines when they’re not in use, and currently has over three million individual participants. This large, faceless crowd is a useful resource for such a large-scale project, which requires more programming power than human insight.
Alternatively, executives can think about tapping the crowd specifically for its intelligence. As Sun Microsystems co-founder Bill Joy famously commented in 1990, “No matter who you are, most of the smartest people work for someone else.” Many companies have sprung up to create systems that promise access to those who might know better than you do.
Alph Bingham, for instance, founded the Massachusetts-based consultancy, InnoCentive, as a systematic way to get smart people to solve wicked problems. To date, the company has registered more than 250,000 ‘solvers’–people who might submit solutions to the challenges posed.
Ask the experts
Some projects specifically require deeply- knowledgeable experts to contribute critical input. As technology and networks have scaled and become more robust, it is easier to find and access trained professionals who can be brought in to help on a case-by-case basis, rather than have to be hired full-time. A number of companies have sprung up to promise access to just the right people at just the right time. For example, long-time media maven John Winsor set up Colorado-based Victors & Spoils as an alternative to what he sees as the wasteful practices of the advertising business. The company’s structure invites individual creative talent from all over the world to pitch for marketing and advertising campaigns from clients such as Harley-Davidson.
Award a prize
Not every organization can fund multimillion dollar investments, but offering a prize has become a common tactic to spur innovation. For example, in 2009, Netflix famously awarded $1-million to a globally-diverse team of engineers that improved its movie-recommendation algorithm, and in 2000, Goldcorp founder Rob McEwen put his company’s geological data online and offered a prize to anyone who could suggest an effective way to find the next significant source of gold. The worth of the resulting gold mined to date has exceeded $6-billion – not a bad return on an investment of just over half a million dollars.
Launch a joint venture
Joint ventures are nothing new, but the way in which executives have begun to approach them to tackle complex challenges has evolved to become less about ‘command and control’ and more about ‘watch and learn’. In 2004, GE Aviation and Honda Aero launched a joint venture to design, manufacture, sell and support a new class of light jet engines. “We both knew it was risky in that it wasn’t a proven market, but we also knew the trends were going that way,” says GE’s Ms. Comstock. “We both brought something to the table; so we provided joint funding and created a joint venture.” The result of the partnership, the Very Light Jet, a new entry to the world of business aviation, is scheduled to come to market soon.
Create shared value
In the January/February 2011 issue of Harvard Business Review, Michael Porter and Mark Kramer made the case that companies should reinvent capitalism by focusing on creating shared value. In essence, they argued that executives should look outside of their own walls to innovate around key global, systemic issues. It’s an important argument that has real bearing on how we will solve some of society’s most pressing problems.Report Typo/Error