Problem Solving and External Innovators

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Interactive Value Creation

CASE 1: InnoCentive: The Idea of Crowdsourcing


1. Why would firms use InnoCentive´s service to solve scientific and technical problems?

* First, a seeker typically comes to InnoCentive because it has not been able to solve a problem on its own.

* The Use of InnoCentive may lead to Bigger breakthroughs/increases the potential of innovations

* Organizations can tap into the diversity of the InnoCentive Marketplace to find gifted individuals they would never otherwise identify.

* The pool of potential participant-solvers is quite broad including many people from many backgrounds, countries, personal and professional situations and experiences * The Web-based marketplace has attracted more than 135,000 solvers from 175 countries. * IC´s pool of Solvers, 40% of whom held PhDs, represented diverse fields and included private sector participants, academics, students, consultants, and retirees, among others. * Often these individuals have a unique perspective that allows them to “connect the dots” in ways the organization never would.

* Limited number of scientists in a single knowledge domain leads to a so-called local-search phenomenon.

* Problems tend to be identified, defined and handled with based on local expertise, experience, and knowledge, using tools that were effective to the in-house group in the past. * When local search do not work, problems are often not solved or simply lay dormant. * Even when this search approach works, the problems are often resolved with a suboptimal solution due to the limited search of solution space. * These inside problems might well be solved by connecting diverse outside scientists to them. * A company that could make such connections could moreover increase not only the likelihood of a problem being solved but also the productivity of problem solving itself.

* Faster time to market for products:

* When thousands of minds worldwide working on a problem simultaneously, organizations find solutions faster than they could with in-house R&D resources.

* Lower R&D costs:

* The Seekers pay or reward only for success. Therefore R&D costs decrease dramatically. * The Use of InnoCentive reduces risk of research failure and enables companies to save time.

* Access to world class talent:

* Address a global lack of scientific and engineering talent by expanding the reach to expertise outside of the organization.

* More benefits:

* More than 200 Solvers typically express formal interest in working on any given challenge. On average, submissions are received from 10 Solvers. Seekers are, in effect, presented with results from 10 parallel experiments in problem solving. * Seekers shift their perspective from that of “having” a problem to that of evaluating solutions to it. Therefore seekers have to articulate their problems precisely, a non-trivial task which will be supported properly by InnoCentive.

2. What is the motivation for Solvers to participate in InnoCentive?

* Monetary Rewards:

* Winning Solvers earn cash with prizes ranging from $5,000 to $1,000,000. * Some of InnoCentives most prolific Solvers have even quit their day jobs to focus on finding the answers to problems full time.

* Intrinsic motivation:

* The challenge of solving puzzles and personal satisfaction that derived from tackling and devising solutions to difficult problems. * Discovering that what had become a pattern in one scientific field might potentially be applicable in another - that motivates solvers. * Recognition:

* Winning over other competitors
* Winning solvers are announced/posted at the InnoCentive Website * Solvers feel good about their contribution...
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