What’s the Point of User Innovation?
By: Melinda ,November 7, 2011
Over the past year, I’ve been working with a Fortune 50 company to integrate user innovation into their 1970s-era business model. Truth be told, user innovation can be a tough sell to an executive: throw out your tried and true methodology and instead open your multi-billion dollar business to chance interactions. Yikes, right? But what happens if a company doesn’t do it? What happens if you don’t begin innovating with the crowds that care about your brand? You risk being seen as old, antiquated. Worse, you might be viewed as uncaring of your consumer. And far, far worse: you risk becoming irrelevant. Other companies in your industry will pass you by as they incorporate the many benefits of user innovation. That’s because user innovation is quicker, cheaper, wiser, and more sustainable and older models of innovation. My said clients know this, they know that they can’t afford not to utilize user innovation within the current economic and technological world. What about you – are you incorporating user innovation into your business model? What is User Innovation? User innovation is an important tool that can be very effective when utilized within larger, systemic innovation: Crowdsourcing takes advantage of the talent and wisdom of the public to generate ideas.
User innovation cultivates and matures these crowdsourced ideas into business solutions. Open innovation (aka distributed innovation) is the mechanism that opens your organization to these crowdsourced solutions, and combines them with your own internal assets, to drive sustainable growth. Who Are Users? Users can be anyone who is involved in your supply chain: Consumers Distributors Manufacturers Suppliers Employees Partner organizations Competitors Mechanisms for incorporating each of these users are going to be quite different. It’s important to first define your goals, and then research the best users needed for your innovation outreach and engagement. Why Do Companies Open Themselves Up to User Innovation? Here are some of the potential benefits of user innovation: 1. 2. 3. 4. 5. 6. 7. 8. 9. Developing new products or services you know your consumers will want Positive earned media Potential first-mover advantage Reduced risk Shared rewards Lower R&D costs Quicker R&D development Improved internal collaboration Access to inexpensive talent
10. Stronger community 11. Customer (or supplier or distributor…) loyalty and satisfaction 12. Organic, sustainable growth There will be even more benefits specific to your own company as you continue to open yourself up to user innovation. Why Do Users Participate in User Innovation? Why would you ever give up your ideas for free? 1. 2. 3. 4. 5. Satisfaction from contributing your ideas to a greater social good Financial rewards (funding, prizes or business development) Social rewards (prestige, support or networking) Access (to information, systems or mentors) Personal development (skills development, mutually beneficial collaboration) 6. New Opportunities (unknown but endless potential, particularly in the current economy) Incidentally, I’m giving up my ideas right here in this blog article for some of the same reasons. Current technology has dispersed the power to each of us, giving us all new opportunities if we’re in the right place at the right time with the right ideas. If you’re a user like me, or you’re like most corporations, you don’t really have a shortage of ideas. So there is no reason to hold onto your ideas if they have the potential to open up new opportunities. We all know that not every one of our ideas is going to hit the jack pot. But at the same time, we all hope that one of our ideas will. Innovation Is a Two Way Street You can’t take user ideas without given something in return. A lot of corporations forget this, and their crowdsourcing platforms suffer sometimes fatally for it.
You need a social and/or reward system, you need to build and sustain a complex community, and you need to provide and allow sharing of quality content. Examples of User Innovation There is a large variety of effective user innovation models out there, and they are growing quickly. Here are just three examples of companies utilizing user innovation effectively: 1. MyStarbucksIdea.com: Starbucks built a simple idea platform to capture basic user-generated ideas. They offer users a leaderboard that shows high scores for the most implemented ideas, they track ideas in action, they offer a daily “question of the day”, and they feature some “Idea Partners” on the homepage. Starbucks claims that “hundreds” of these user ideas have been implemented. 2. X Prize Foundation: One of my favorites, the X Prize offers challenge-driven philanthropy, “fostering innovation through incentivized competition.” The first X Prize was given in 2004. The goal of the prize is to “bring about radical breakthroughs for the benefit of humanity, thereby inspiring the formation of new industries & the revitalization of markets that are currently stuck.” And to be clear, the X Prize is conducted largely offline – showing that user innovation isn’t just an online endeavor. 3. P&G’s Connect + Develop: Proctor and Gamble is one of the early adopters of user-generated innovation. C + D was developed out of a dire need to increase R&D productivity in 2000. Since then, they have built their user innovation models to the point where 50% of their innovations now include ideas from external sources, they have a 6% growth rate in an industry growing at 2-3%, and their R&D productivity has increased by 60%. What’s Your Experience with User Innovation? Has it been tough for you to make the case for user innovation at your organization? Or, have you had any great innovation experiences with businesses? We’d love to know!
User innovation is an important tool that can be very effective when utilized within larger, systemic innovation:
1.)Crowdsourcing takes advantage of the talent and wisdom of the public to generate ideas.
2.)User innovation cultivates and matures these crowdsourced ideas into business solutions.
3.)Open innovation (aka distributed innovation) is the mechanism that opens your organization to these crowdsourced solutions, and combines them with your own internal assets, to drive sustainable growth.
Here are some of the potential benefits of user innovation:
1.)Developing new products or services you know your consumers will want
2.)Positive earned media
3.)Potential first-mover advantage
6.)Lower R&D costs
7.)Quicker R&D development
8.)Improved internal collaboration
9.)Access to inexpensive talent
11.)Customer (or supplier or distributor…) loyalty and satisfaction
12.) Organic, sustainable growth