3 Cs of Innovation 2 .

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Crowdsourcing , Competition , Collabora

Hutch Carpenter
VP of Product @bhc3

What is this “innovation” you speak of?

Innovation: A change in a product offering, service, business model or operations which meaningfully improves the experience of a large number of stakeholders

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Multiple Forms of Innovation
create new market

minimal technology change

Low risk, many competitor s Customer experience; cost savings

High risk, high reward High risk, defensive strategy

radical technology change

manage existing market
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Innovation = ROI

Leading innovators generate 430 basis points more in shareholder return than do average ROI… Finance agreed - it ain't companies
in Shareholder € 500 million € 21,500,000 Return € 1 billion € 43,000,000 € 1.5 billion € 64,500,000 € 2 billion € 86,000,000

easy.

was during Annual Increase Per Day concept. Ideas that are discov Market Cap an ideation proof of
€ 58,904 € 117,808 € 176,712 € 235,616

Laurie Buczek Social Computing Program Manager at Intel All I Want For Christmas is my E2.0
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Innovation 1.0: Two Centers of Innovation

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Innovation 2.0: Employees Rule!

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Crowdsourcing

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Crowdsourcing? What is that?

Crowdsourcing: Soliciting the ideas, knowledge, experiences and judgment of a large, diverse group of people to solve a problem

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Diversity of Inputs Drives Idea Quality
Diversity Means Quality
Prof . Ron Burt , Structural Holes & Good Ideas

of possible solutions.

Idea Assessment

n incomplete and private information, are able to arrive at op

high diversity of connections

low diversity of connections

James Surowiecki, The Wisdom of Crowds

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Crowdsourcing Brings Edge Perspectives In
er m s

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to s

customer service IT marketi R&D ng manufactur ing produ ct finan ce field operations

e om st s r

account mgt

sales
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cu e om st s r

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Three Models of Crowdsourcing

Crowd Crowdsourced Crowdsourced Submissions Selection by Experts Sentiment, Feedback Expert Decision
Crowdsourced Crowd Decision Crowdsourced Submissions Selection

Expert Decision

Crowdsourced Submissions Selection by Experts

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Crowdsourcing Isn’t Immune from the 1:9:90 Participation Ratio
Estimated distribution of employees ’ propensity to share ideas

Number of Employees

typi cal idea curv suggest ion e

low

Propensity to formulate & submit ideas

high

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Goal-Setting Changes the Participation Ratio
Goals Stimulate Employee Idea Sharing

Number of Employees

goal -driv en i curv deatio e n
typi cal idea curv suggest ion e
ideas increase due to goalsetting

low

Propensity to formulate & submit ideas

high

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Why Does Goal-Setting Work? 1. Signals increased management attention to ideas on a topic 2. Sets an expectation of participation 3. Establishes a target the community can rally around 4. It creates an event orientation

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Goals Must Relate to Tangible Outcomes

Product Delivery Value Chain

Product Design Procure-ment -facturing Manu Distribu-tion Marketing Customer Experience

p emerging use cases of our product? How do we increasedo we increase fleet fuelwe increase customer sat. sc How throughput by 10%? do efficiency by 10%? How

“Used in development of green technology”

“Pre-build components for later install”

“Reduce truck idling time during morning loading”

“Route service calls by component, not vertical”

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Competition

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Two Senses of Competition

System Competition

Individual Competition

ing how a finite Actions takenbe allocated in a givenset of alternatives Competition: resource will to advance among a endeavor, satisfy

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Innovation Thrives on Soft Competition

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Marketplace Competition for Best Ideas

Innovation 1.0 Political connections Selling skills Completeness of idea Heroic persistence

Innovation 2.0 Idea’s key benefits Long tail interests Iterative development Idea incubation

Competition reduces innovation friction

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Paragone Creates an Innovation Meritocracy

dividual works side by side in order to judge them, weigh

Using rivalry to spur innovation Bernard T. Ferrari and Jessica Goethals McKinsey Quarterly

Sofia’s idea

ubm ong s am s he s gui i sti n d c ro w d the Maximo’s m of Wi s do idea

as d ide i t te

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Paragone Creates Performance Curiosity

Feedback

benchmarking re best leads naturally to a desire to better recognition

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Game Mechanics Are Performance Metrics
Activit y… … Translates to activity currency

Authorin g Interacti ng Positive Feedback

collaborator badge reputation score

Professor Andrew McAfee Should Knowledge Workers Have Enterprise 2.0 Ratings?

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Game Mechanics Are Reinforcement

ieved is response And thus the addiction. Who's true. To ac dopamine what you .actually reward. Pavlovian butwith me? /vi

Claire Flanagan (tweet) Senior Manager, Enterprise Social Collaboration CSC

Laurie Buczek (tweet) Social Computing Program Manager Intel

ocial incentives reward and reinforce the goals in innovation

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Collaboration

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When I Say “Collaboration”, I Mean…

Collaboration: Building toward a defined outcome through the interactions and input of multiple people

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Typical Collaboration Is Poorly Suited for Innovation
Standard collaboration group formation is…

…great for project execution… …but limiting for innovation.
Group Composition and Decision Making: How Member Familiarity and Information Distribution Affect Process and Performance, 1996 (pdf)
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Collaboration Based on Emergence
Traditional Collaboration Dedicated teams beforehand Team formation in response to some authority Participation is a requirement Known go-to people on team Executive’s project Structured interaction Crowdsourcing Collaboration Virtual, on-the-fly teams Teams form on a common interest Internally motivated participation Contributions from anyone Response to anyone’s idea Emergent interaction

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Innovation Requires Emergence and Structure

Emergent Collaboration Structured Collaboration
cro wds our cin g

n tio i pet com

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Reward Innovation Collaboration as Much as Idea Origination
What people focus on

The Work of Innovati on
Scott Berkun Author, The Myths of Innovation (pdf)

The work that makes eureka possible

Need to make collaborat ion as important as originatio n

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Make Collaboration Sexy and Worthwhile

Purposeful Work Social Incentives

Recognition

•Community feedback on your input , not just orig •Acknowledge team es one’s passion •Milestone achievements •Publicize collaboration achiev of project team •Reputation es a burning issue for merating

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Spigit: Innovation Driven by Enterprise 2.0

spigit . co m

Hutch Carpenter VP of Product @bhc3
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