Monday, February 01, 2010

Open Innovation

A provocative comment by Jason on This Week In Startups had me stop and think about the open innovation "fad".

He said something to the effect that all the open feedback and idea suggestion sites like UserVoice and GetSatisfaction were nothing but a great way for your competition to sponge on your success and out-innovate you by just pilfering all the good ideas. And you'd be a muppet to use one for your business.

The automatic reaction is that this makes logical sense. It is similar to the classic objection by the insecure and IP-obsessed to justify a closed innovation processes.

Certainly, innovating in public does expose you to some risk of IP leakage. That's undeniable. But maybe it's not so black and white: it's whether on balance you will gain more through greater engagement of an interested and motivated audience than you lose from competitors looking over your shoulder.

Personally, I think this is a false conundrum, for two reasons:
  • Good ideas are not hard to find, it's what you do with them that matters

  • Open Innovation is not just about the ideas

Good ideas are not hard to find, it's what you do with them


As Scott Berkun writes, it is a myth that "good ideas are hard to find".

So what if a competitor can look at all the ideas suggested and rated by your users? Who has the skill and determination to sort the wheat from the chaff and execute? Unless you have the balls to believe you can out-execute your competition, you should probably think twice about running an open innovation process.

And if you are up against a company that is running an open innovation process, Dilbert has the best advice for you.


Open Innovation is not just about the ideas


So you put up a site soliciting ideas and feedback, sit back and just implement whatever comes in. Really?

Unfortunately that is plain fantasy, perhaps with a certain appeal to (a) those who don't really like dealing with people, (b) the lazy, and (c) epic procrastinators.

Opening up to your customer base and inviting them to participate in improving your products or service is not just a cheap way to downsize the R&D group.

First, it may not be that cheap, and second, you may not get many new ideas you haven't at least considered before. But done well, what you are building is a genuine relationship with your organization's most important constituents: real and potential customers. You are giving them some power over your process, engendering ownership and loyalty.

It is also not a one way street. People will soon give up on submitting new ideas and lose any warm and fuzzy feeling if it appears their suggestions just disappear into a black hole.

In other words, closing the innovation loop with feedback is critical.

It doesn't take much effort either - just commitment. Dell use a simple blog (Ideas In Action) to showcase how IdeaStorm submissions have wormed their way into actual product and service innovations at Dell. Simple and effective, and reinforces the value of participation (hopefully accelerating the innovation process in turn). Contrast the success of IdeaStorm with other innovation forums that do not have an closed-loop process (Oracle's Mix for example).

A competitor looking over the fence into your garden may be able to steal ideas, but they can't steal the community you are building, and can't replace your role in the virtuous feedback cycle.

They can however steal your business if you screw up on execution, or treat your own customers with disdain. But if that's the case, they would have crushed you whether you ran an open innovation site or not, right?

Soundtrack for this post: With A Little Help From My Friends - Joe Cocker

2 comments:

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The automatic reaction is that this makes logical sense. It is similar to the classic objection by the insecure and IP-obsessed to justify a closed innovation processes.