Open Innovation Strategy- A new approach
How BCG designed an avant-garde Open Innovation campaign.
The markets are chaotic- today more than ever. Consumer trends are changing rapidly, perhaps even capricious. Technology, design, economy, and consumerism are constantly evolving. How does a company survive let alone keep its standing in such a world? The answer is Innovation. And innovation comes from the people.
Would you unhesitatingly say that all the smartest people and the best resources in the world reside in your company?
Perhaps not.
Introducing ‘Open Innovation’
Open Innovation is the new big thing that companies deploy today to stay ahead in the market and beat the competition. Almost every other company (from Apple to Zara) today use Open Innovation — quite obviously sometimes and sometimes in the most crafty ways.
What is Open Innovation
My definition: Open Innovation is simply a means of attracting or extracting ideas, methods, and technologies or services from outside the company followed by an exchange of information. This outsourced innovation then aids and complements the internal innovation efforts of the company to develop and commercialize an amazing product or service.
Open Innovation drives the company’s expansion to new markets, derives inspiration for new products, and builds an edge over competing products. On the contrary, Closed Innovation stems the company’s performance and success by limiting the possibilities and opportunities.
The graphic below is called the Innovation funnel.
There are several strategies that companies deploy which are explained in this blog by Alfredo Adams published on Medium (link).
In this article, I will be talking about the most widely used Open Innovation strategy called the “Innovation Challenge” and how Boston Consulting Group’s (BCG) recent effort is a seemingly new yet interesting modification to it.
What is an Innovation Challenge?
An Innovation Challenge is generally a model where the company posts its problem statement and seeks solutions- generally as ideas from the participants. This is organized as a competition among the participants to emerge with the most valuable ideas.
Fine examples of such challenges can be found here and here.(Click on the links to participate. I’m sure you will enjoy the experience)
The key incentive to the participants is the prize money, which is often lucrative and suitably distributed. These innovation contests happen online through Innovation platforms such as Eyeka, Qolab, HYVE, or Open Ideo.
These models usually deploy a method wherein the Innovation Challenge promotes networking among the participants. This Innovation Challenge campaign encourages the participants to comment, vote, and even provide feedback on each other’s ideas in order to improvise.
Let’s discuss how Boston Consulting Group has come up with a new modification to the Innovation Challenge;
BCG is a pioneer in Innovation consultancy, moreover indeed in the field of open innovation. According to BCG’s modus operandi, there are 6 categories of Open Innovation with which they help their clients.
Refer to the infographic below;
In this recent effort, BCG has used the fourth category of Open Innovation method — The “Expander”- to strategizing their campaign on The Forage (www.theforage.com). Forage is originally not an Open Innovation facilitator, but rather a website that hosts virtual experiences.
BCG is leveraging the Forage platform to source ideas from participants in an attempt to seek possibilities to expand their business to new markets in a bid to drive a digital transformation. An area in which they help their clients succeed. What an irony, eh?
The main differences
There are no tangible incentives provided by BCG to the participants, unlike the usual Innovation Challenges. Although, BCG does provide a “digital badge” of recognition to the participant on successful submission of the idea. The real catch to participants here is the “learning experience” gained — as some would deem it to be.
Secondly, there is no provision for participants to comment, vote, or provide feedback on ideas. Therefore, the co-creation element of the usual Innovation Challenge model is being exempted here.
Lastly, this BCG campaign has not granted any mentorship access or literature support to the participants. Yes, the usual Innovation Challenges do that — mainly for controlling the quality and level of relevance of the submitted ideas.
The differences being discussed, in my opinion, this campaign design by BCG is pure genius. Very apt and clever use of a virtual experience platform like the Forage. More importantly, the minimized cost of sourcing innovation — which I think is down by 30 %. After all a very crafty way of deploying Open Innovation, right?
Finally, the main determinant of the new BCG campaign success will be the Quality and Usability factor of the idea submissions. This information will be concealed for intellectual property rights and related reasons. The story of every Open Innovation campaign ends similarly. It is difficult to ascertain the risk as well as the degree of success that a campaign brings. But what we know for certain is that when companies have endeavored on sourcing open innovation, they have accomplished a great deal in the market — new opportunities that have brought millions in revenue. What makes or breaks a campaign is dependent on how companies strategize it — Innovation strategy being BCG’s forte — they have devised a good suiting campaign. Similarly, we at Qolab are on the toes to help you strategize and facilitate your Open Innovation needs in the most exceptional ways. Today, Open Innovation is not just a management strategy — it is a necessity for the survival of a company.
Reach us at support@qolab.io NOW !!
