Innovate or Die – Open and Crowd-Sourced Innovation

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“Innovate or Die.”  While there exists some controversy about who said it first in the modern age, Charles Darwin really hit it on the head the earliest.  “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”  In this age of rapid disruption, if your company is not changing, you are dying.

With a few notable exceptions, internal innovation is no longer enough.  Before you spout “what about Apple,” they are one of those notable exceptions.  Ivory Tower thinking may very well be the death knell to your innovation efforts.  In my post on 6/24, Collaboration, Sharing and Social Business, I talked about the creativity of open groups.  You also need to understand the reverse of that.  Closed groups are less creative.  They will always be at a disadvantage.

There are few buzzwords to describe this new trend of bringing your customers into your business improvement efforts.  Open Innovation, crowd-sourcing, user innovation, cumulative innovation, mass innovation and distributed innovation all can be used as descriptors.

Why do the Lawyers Worry?

The first time you broach this subject with the intellectual property attorneys at your company, you will receive a nice bit of feedback.  When I say feedback, you should translate that to opposition.  If you are lucky enough to find an IP attorney who understands this space, thank karma.  Most of you will not be that lucky.

So what are they worried about.  Here are a few things that they worry about, and some suggestions:

    • Ownership – shared ownership is something that is hard for people to get their hands around.  When you were a kid, did you every buy something with a friend.  How did you work out the sharing arrangement?  Invariably there is an argument.  Guess what, you could have the same problem here.  Lawyers are most comfortable with full ownership.  In open innovation, you do not own it all.  Work out a reasonable transfer of ownership, or work out a reasonable license to use.
    • Alternatives to Ownership – Are you in the business of selling ideas to other companies?  If not, you are in the business of providing products and services to your consumers.  As long as you are able to freely do that, why would you get hung up on the exact ownership of the ideas underlying it.  Think about reasonable licensing, or compensation to those you work with in the open innovation environment.
    • Liability/Indemnity/Bad Actors – There are people out there that will try to take advantage of your openness.  There is a possibility that they might already have protected the ideas that they are giving you.  Did they tell you about that?  Did they waive your liability?  If you didn’t dot this particular ‘i’ you might find yourself at the receiving end of a nice misappropriation or infringement lawsuit.
    • Identification of the Creators – When you bring folks in for focus groups you know who they are.  When they sign up on your open innovation portal, do you know who they are.  This is another problem with open innovation that your attorneys may bring up.  Who is the person who is accepting all my terms and conditions.  I have even heard it suggested that you get an agreement to participate in open innovation physically signed by the participants.  Depending on the value of what you are creating, this may not be a bad idea, though a bit extreme.

Why You Should Worry

Left uncontrolled, open innovation portals do run the chance of becoming a mix of complaint site, customer service portal and idea repository.  This mix will make proper care and feeding of the community that much harder to do.  Quite frankly, if you are not caring for you all of your communities, they are all going to devolve.  Open innovation is no exception.

All of the concerns I identified above should be addressed before you ever open the door.  Posting signs as they walk up, getting agreements signed before they enter the premises are all good and fine.  If they enter it and it is a mess, all that work is for naught.

Here are a few of my thoughts as to how to address the practical concerns:

    • Proper Staffing – proper staffing does not just mean the number of people.  You need to find motivated people that are going to interact with your users.  Their excitement will spur greater participation.  They also need to be tied in to the folks that do product development at your company.
    • Tangible Results – this ties into that last thought.  If your staff are talking with the product development teams, they know what is being worked on and what is not.  Within certain constraints they should be sharing that back out to the community.  The more that the community sees this, the more they are also motivated to continue.  The flipside will be the death of your community.
    • Recognition – this one is tricky.  Some will think of monetary compensation being enough.  Some will think that a pretty badge next to their username is enough.  The bottom line is both camps are right, and both camps are wrong.  You need to truly consider the community you want to attract and do something appropriate.  And then be ready to change it at a moment’s notice.
    • Avoid Anonymity – In order for a community discussion to be vibrant and lively, all participants must know something about the people they are talking to.  In some instances this may be real names.  It doesn’t have to be.  It can be location, or interest.  Something that provides context to their contribution.  For instance, if you didn’t know I was a NY Mets fan you might mis-perceive my comments about the NY Yankees.

Embrace All Participation

Open Innovation is something you need to consider.  If you don’t you will be fighting for a smaller and smaller part of the business.  Innovate or Die.  Do it smartly, though.

NOTE: This post talked about embracing consumer, or user, participation.  What I didn’t talk about was embracing third party participation outside of users.  Your vendors, your campaign partners, etc, all can provide creative boosts.  Protecting yourself in those situations is a bit more sticky.  Consult a good IP attorney who understands transactional work before you embark on those types of partnerships.

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