By Morey Stettner
Even if you recruit the smartest people in the world to help you innovate within your organization, they won’t have all the answers. Outsiders — from customers to suppliers to the general public — can offer fresh and valuable perspectives, a concept known as “open innovation.”
To harness open innovation, leaders look to enlist business partners, consumers, vendors and anyone else to provide input on designing new products or services.
To apply open innovation principles:
Replace internal politics with openness.
If your employees vie for attention by hoarding ideas and hogging credit for team achievements, they probably won’t welcome your efforts to solicit ideas from outside. In fact, they may quietly engage in sabotage.
“At a high level, leaders at larger companies need to be ready to incentivize their people to external innovation,” said Tim Bernstein, chief executive of Yet2, a consulting firm in Newton, Mass.
Otherwise, employees may feel threatened by outsiders offering insights. Resentful staffers might think, “I was hired to come up with great ideas. Now I’m ignored and we listen to just about anyone out there.”
Bernstein encourages leaders to create a culture of openness to outside input. Dangle rewards for employees who champion innovations from outside sources rather than just promoting their own proprietary ideas.
Turning to the public for creative breakthroughs has a downside: It can lead to messy intellectual property disputes.
Say outsiders share details of an innovation with a company that’s already well underway in testing the same concept. Once the new product appears, those outsiders might conclude that the company stole their idea.
“The solution is to have a single point of entry, like an online portal platform, for all submissions,” Bernstein said. “Make sure all your employees reject all other points of entry or redirect submissions to that single portal.”
Prepare to collaborate.
Outsiders won’t necessarily present you with a polished, ready-for-market innovation. In many cases, you’ll want to tweak the idea or treat it as a springboard for further exploration.
“Open innovation doesn’t come free,” Bernstein said. “Be ready to commit resources. You’ll need your research-and-development people freed up to work with the [external] solution provider.”
Stay close to customers.
As inventive employees devise new designs, excitement can mount within your organization. But the real measure of innovation is how consumers will respond.
“We’d rather build what other people think is cool, not what we think is cool,” said Larry Portaro, director of FirstBuild, which seeks ideas for new appliances from outsiders. Based at the University of Louisville, FirstBuild connects with consumers through online outreach and even invites them to its Louisville, Ky., headquarters to develop prototypes at its micro-factory.
Portaro adds that bringing in consumers to devise new products “allows for collisions and interactions to happen” that spur innovation.
Let customers bond with each other.
Because innovation often arises from group collaboration, it helps to give outsiders a forum for idea sharing. As they compare notes and combine forces, they might arrive at bolder, more ambitious breakthroughs.
“We host an online ‘success community’ for customers to talk to one another, get help and share ideas,” said Marie Rosecrans, a senior vice president at Salesforce (CRM) in San Francisco.
Close the loop.
Once you solicit input from outsiders, provide regular updates as you follow through. They’ll gain more buy-in if they see that you’re taking their ideas seriously and exploring ways to turn their suggestions into tangible products or services.
“Identify what next steps will be taken and then close that loop when those steps are taken,” Rosecrans said. “Also document when you’ll release” the prototype and how you’ll measure its impact or effectiveness.
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