Democratised Innovation

The need for involving larger numbers of stakeholders in innovation fostering activities has become abundantly clear in recent years as organisations have recognised the value of highly diversified input.

This concept of ‘democratised innovation’, where individuals from all across an organisation’s power (decision making) spectrum, and even those outside, can come to together to help shape future innovations, has many benefits over traditional controlled innovation focused activities. In this post, we will be focusing on two main methodologies of democratic innovation fostering: ‘Internal Innovation Crowdsourcing’ and ‘Open Innovation’.

i) Internal Innovation Crowdsourcing

Traditionally, the term crowdsourcing has been referred to as the sourcing of knowledge, finance or other assets from a large crowd of individuals, mostly commonly from the general public. Platforms such as Kickstarter and Indiegogo have enabled smaller, less established teams to raise funds and validate their innovations with minimal prior interaction with institutional bodies. However, this term also holds context for lager organisations. By harnessing the power of crowdsourcing and focusing inwards, organisations are capable of extracting valuable ideas and insights from their entire employee base, gaining a greater level of understanding of a potential innovation and the context it exists in. Some examples of internal innovation crowdsourcing in practice are i) the running of internal hackathon style events, where employees are invited to participate in 24-72 hour long events in centralised locations, forming teams and working outside the rules of normal operations to build and pitch prototype concepts for potential new innovations , and ii) the use of idea-challenge software, where specific organizational challenges are posted, on a digital portal, which any employee can attempt to solve regardless of their position in the company.

Recognising that no one employee in a large organisation has all the answers to a particular problem, in 2007 Facebook began the first of its internal Hackathon events. Championed by Pedram Keyani, who was Facebook’s Director of Engineering at the time, these events initially began with just 20 employees but today the average hackathon in the company involves hundreds of individuals. While these hackathons take an unstructured approach in terms of rules, participants are incentivized to work on projects not related to their day-to-day jobs, encouraging employees to think outside the box and further reinforcing the importance of taking a holistic approach to problem solving and innovation. At the end of each hackathon, teams are given a 2 minute ‘elevator’ style pitch where they can present their solution prototype to other participants and senior staff members from across the organisation. To date, some of Facebook’s most notable features have originated from these hackathons, including the LIKE button, Facebook Chat, and the Timeline.

Internal Crowdsourcing Success At Facebook

While these methods have been successful utilized by companies to drive innovation fostering efforts, there are several shortcomings in the formats. Hackathons require employees to give up long periods of time, outside of normal working hours, to take part, increasing barriers to entry. Furthermore, because of the nature of these events, where physical presence is required to participate, the potential value which could be generated by individuals from other locations (particularly notable in the case of multinational or cross-regional organizations) is effectively lost. In the case of traditional idea-challenge software, barriers to entry also remain high as individuals are tasked with solving entire problems by themselves and often require long solution proposal forms to be filled out, requiring a significant time investment. Furthermore, perspective and insight can be limited due to the lack of collaborative problem solving.

However, innovation sandbox platforms (the features of which I discussed previously) attempt to solve many of the problems listed above and are beginning to unlock the full value surrounding internal innovation crowdsourcing.

ii) Open Innovation

Open Innovation is a paradigm which suggests that organisations can and should use external ideas as well as internal ideas, and explore external paths to market as well as internal ones. In effect, it is the act of co-creating with external stakeholders (customers, community and partners) to help facilitate innovation fostering activities. There are several practices which fall under ‘Open Innovation’ which include but are not limited to:

There are several strategic advantages to such activities including research cost reduction, risk reduction due to pre-validation with the customer, increased innovation-market fit, strengthened customer relations, PR benefits and community engagement, and the potential for access to readily available customers with whom pilot programs can be run.

In 2015, BankMobile, a division of Customers Bank, launched ‘BYOB – Build Your Own Bank’, an open innovation idea contest, aimed at utilizing fresh user-focused perspectives to help set the company’s course for the near, medium, and long-term future. Several high value ideas were generated, including the contest winner ‘Beyond Banking’ from contestant Stephanie Hallgarth, whose solution proposed that an individual’s personal schedule should be directly linked to the contents of their bank account. Aside from the collection of unique solutions for the bank, the company also benefited from a high level of customer insights which were generated as a result of the contest.

BankMobile utilised open innovation during their 'Build Your Own Bank' contest last year

To learn more about democratized innovation please contact toby.farren@playtank.net

Until next time,

Toby!