In my new book “Evolution of Innovation Management: Trends in an International Context “, published by Palgrave MacMillan and co-edited with my colleague Alexander Brem, I have underlined that, when it comes to the strategy for innovation, there is an increasing tendency for companies to extend their outside reach through a “collaborative” innovation strategy in order to explore fresh and radical ideas with external partners such as consumers, distributors and other business partners, third parties, developers, academics, even regulators.
By opening up their innovation processes, firms are trying to get what is known in the innovation research community as “sticky information”, in other words any information that is difficult to obtain, to transfer, and to use in a new location; a typical example is information about the tacit or latent needs of customers which is often quite difficult to formalize without direct contact.
Companies are also trying to overcome the “local search bias” which is so current when it comes to find new ideas and is also known as the NIH (Not Invented Here) syndrome: internal ideas are ideas are often biased by a reapplication of knowledge, methods, and solutions which hinders creativity and market sensitivity.
To find new external ideas, firms are using an increasingly popular ideation tool: the web based idea contest. There is a long-standing history of idea contests, starting with the Longitude Prize in 1714 by the British government for example. The concept has been updated with crowdsourcing principles and technology. Thus, today, idea contests are mostly web-based competitions of users who make use of their skills, experiences and creativity to provide ideas or initial solutions for a particular contest challenge.
In a chapter of our book, Volker Bilgram shows how idea contests have gained tremendous popularity for achieving “ co-creation” with outsiders. In Europe only, large companies such as BMW, DHL, Henkel, Lufthansa or Siemens are successfully using those contests. Smaller companies are also increasingly using this ideation instrument because new cost-efficient platforms (known as software-as-a-service (SAAS)) do offer now credible alternatives to highly customized branded platforms for Internet contests.
Initial results of Internet idea contests look quite promising. Various studies show that customers generate more innovative product ideas than employees for instance. Furthermore co-creation initiatives and idea contests in particular offer additional marketing benefits which are sometimes neglected by the firms as they help to establish close and even passionate consumer-brand relationships and support a positive and innovative image of a brand. For instance, in a recent idea contest organized by BMW, within only 72 hours after contest launch, more than 3,100 users “liked” the BMW Group contest on Facebook and thus created buzz for the initiative and positive innovative image of the company.
Still, there are still few metrics to evaluate the value of co-creation tools such as ideas contests. On that matter, Bilgram offers an interesting conceptual frame to assess the performance in the different steps of the process and to derive the relevant Key Performance Indicators.
Finally it is important to mention that web based contests do have some downsides and are not the ultimate “silver bullet” for idea generation. The “dark side” of this kind of contest is when disappointed participants feel the co-creation contest is not fair and when they start complaining massively.
It did happen to Henkel with a contest for creating a new packaging design for the dishwashing liquid Pril: the favorite design voted on by users was not approved by the jury; actually it was a funny design of a roast chicken, which obviously was not meant to be a serious submission. But the decision created an outburst of an outrage on the platform and social media channels which reached traditional mass media and ultimately generated a counterproductive effect on the corporate brand image.
This paper is one of a serial about the latest trends in Innovation. If you want to find more about my new book go to the Macmillan Palgrave website at http://tinyurl.com/aj2rnuo or on the amazon website at http://tinyurl.com/adjqga9