Open Innovation and Solvers

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  • Topic: Open innovation, Motivation, InnoCentive
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  • Published : May 15, 2011
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Technology Strategy

InnoCentive is a challenge driven innovation website that was founded in 2001 by Elli Lilly’s Venture unit. Its objective is to connect companies (the “Seekers”) to independent inventors, scientists or simply people that like challenges and to earn some money out of it (the “Solvers”). On the website, Seekers can post “R&D Challenges” to which Solvers submit their solutions. The Solver(s) that will be deemed by the Seeker to have posted the best solution(s) will be granted with a financial reward. In this process, the InnoCentive scientific team works hand-in-hand with the Seekers in order to make sure the problem posted by the Seeker is articulated in a way to ensure that the problem is fully understood by the Solvers.

IC's Innovation Model
In our point of view IC’s model is essentially based on two key concepts: Crowdsourcing and Open Innovation. Thus, its advantages and success factors are closely related to those of the above terms. When outsourcing a task or a problem to a “crowd” outside the company, the Seeker is able to access an enormous source of talent, ideas, and to a set of different perspectives of the same situation. If we bear in mind that InnoCentive is an Internet-based company, thus having the possibility of reaching almost everyone in the world, we are able to understand the potential of it. On the other hand, an Open Innovation perspective also underlies the InnoCentive model. The beliefs that companies do not own all the talented people and that external R&D can generate significant value, which later can be used or not by the internal R&D to create added value to the company, are noticeable in the company business model. Furthermore, Seekers when posting their problems are convinced that their firm can profit from research even if it was not originated internally, and are even willing to buy other people’s IP if it can contribute to their company’s success. InnoCentive when acting under these principles allows Seekers to be able to capture the knowledge and the distributed innovation that lies outside their company’s boundaries (Appendix 1). Which problems should be posted?

First, considering the specificities of the “problem-solving” approach of IC, we can safely argue that companies should submit the problems that are possible to be broken down into specific practical problems so that seekers are motivated and able to work on it. For example, asking the solvers “we need to find an alternative source of energy” is too wide a question to be relevant since it does not state such a precise problem so that the Seekers are interested or even able to solve it. For the IC process to be effective, the Seeker should clearly expose what the description and requirements of the projects is and especially what the constraints are. To that extent, Solvers should not submit the projects that are in a too early stage to be exposed clearly enough to the crowd because it may bring some inefficient answers and a waste of “posting fees”.

Secondly, companies need to make continuity vs. disruption arbitrage to define whether or not a project should be submitted on IC. If your R&D is part of a long-term strategy plan in a field of expertise that is well known by the company, then submitting it to IC may jeopardize the long-term view of the firm. However, IC should be used in case the company seeks for a “disruptive innovation” that would enable the firm to rapidly diversify itself in a “non-obvious” way. Besides, the flexibility and velocity of the IC community could also enable the firm to outpace its competitor in the launch of innovative products. These two approaches should nonetheless not be seen as separate approaches: the R&D department of a company would benefit from these two perspectives as they can “cross fertilize” as long term R&D can benefit from the “fresh view” of the IC community as these findings can be...
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