External crowdsourcing: an exercise in open innovation (part two)
External crowdsourcing opens the door to a vast pool of knowledge, from customers and suppliers to startups and large corporations. Leveraging this network of talent is key for an effective open innovation strategy.
In part one of this post, we considered the opportunities and rewards that a successful open innovation strategy can bring. Open innovation is about breaking down the boundaries and accessing the vast knowledge pool that lies outside of your organisation. Having touched on the necessity of balancing risk and opportunity as well as the need to offer appropriate rewards, this post will cover the different approaches to open innovation.
There is a vast network of talent sat outside the walls of your organisation and these people come from a variety of different sources. From individual customers to large corporations, there is wide scope for generating ideas and solutions. However, the different types of innovator must be approached in different ways; you wouldn’t treat a customer in the same way as you would treat a firm and refining this strategy is key to successful open innovation.
Crowdsourcing from customers
Never underestimate the power that lies within your customer base. These are the people with first-hand experience of your product or service and, as a result, the insight they provide can be highly valuable. Large companies such as Apple often turn to their users to propel the creation of new products and services. The very foundations of their business models rely on customer input and feedback. Many customers will offer unsolicited feedback on a regular basis, but how can you hone in on the valuable ideas with this approach?
One method of generating a more tailored response from your customers is to run a contest, posting a problem and offering a reward. Although you may only need one solution, you will be exposed to a whole host of different points of view and information. This is ideal for when you have a specific issue that needs solving and that is appropriate for wider public consideration. Contests must be structured in a way that clearly explains the problem but without revealing too much unnecessary information to avoid a leak of intellectual property.
The relationship between brands and customers has evolved to become far more personal than ever before, especially with the prevalence of social media platforms. Customers expect to be listened to and will readily share opinions and ideas. Take advantage of this – it is a free resource of unlimited potential and if you do not leverage this knowledge pool, you can be sure that your competitors will. When crowdsourcing from your customers, it is important to be responsive and persistently engaged. Avoid backing out as soon as you get what you want from the crowd – this will only serve to alienate and you need to keep people involved with the process.
Crowdsourcing from other firms
Not all the talented people within your industry work for your company. This is a given but it is easy to overlook the fact that a whole network of skilled experts lies just outside the walls of your organisation. Collaboration with suppliers or even competitors can widen the crowdsourcing resources, whether it is sourcing new technologies or forming a long-term partnership. Ideas do not have to be original every time – crowdsourcing is as much about new ideas as it is about finding new ways to implement and profit from these innovations.
Involving other parties can add great value to your innovation output. For larger organisations in particular, crowdsourcing from other firms is a smart strategy for open innovation. For example, big corporations are traditionally low risk in their approach to innovation. However, partnering with a smaller business would provide a much-needed balance, given that startups tend to have a greater appetite for risk and actively seek disruption.
A note on internal crowdsourcing
For the best results, organisations should combine both internal and external crowdsourcing. It is important to refine your internal innovation strategy before embarking on an open innovation approach. You need to ensure that the internal resources are in place to facilitate the open innovation outputs in an efficient and cost-effective way.
Similarly, employees should feel motivated and confident to share knowledge and challenges with external innovators where appropriate. Internal and external crowdsourcing should not be viewed as separate entities, but rather as complementary approaches in your overarching innovation strategy.
“A strong foundation along with clearly defined business goals is important to maximize the potential of Open Innovation in each innovation initiative.” – Accenture, ‘Bridgemakers: Guiding Enterprise Disruption through Open Innovation’
- Leverage the power of your customer base by devising a strategy to filter and process the best ideas via structured contests and engaging conversations.
- Consider ways of partnering with other firms to add value and momentum to your open innovation strategy, whether it is a supplier or a startup.
- Ensure that substantial internal processes are in place to support external crowdsourcing; your open innovation strategy should complement your internal crowdsourcing initiatives.