World Innovation Convention 2010, Ibiza, Spain

I had fairly interesting three days participating in the World Innovation Convention in Ibiza, Spain. In the beginning I thought it was too small a gathering, but it turned out to be a blessing. I had a chance to discuss many innovation related issues at depth with attendees from Nokia, Thomson Reuters, Microsoft, and Shell among others.

The first day began with a keynote by Prof. Deschamps in which he drilled down into the concept of "innovation leadership". Some of the interesting points that came out of that were:

* Innovation leaders do not necessarily have to be innovator themselves
* Two different styles of leadership, more creative exploratory front end leaders and execution oriented backend leaders that will get your innovation faster to the market
* Enemies of successful innovation - arrogance, complacency, greed (now the last one is quite interesting!)
He touched upon the notion of top down and bottom up styles of innovation. In his view radical innovations that change business models would have to be done top-down whereas incremental innovation is suitable for bottom-up innovation. My view is a little different. I think any type of innovation, there has to be synergy between the gathering of ideas whether they come from the leadership or from the average Joe and the leadership team that ultimately makes final decisions. So a radical, business model changing idea could come from a grass root, open ended innovation exercise in a truly bottom up manner. The difference would be in the scale and the leadership level at which it will get evaluated, selected, and implemented.

I gave my ending keynote on the second day. I mainly talked about the idea of democratizing innovation, why there is a surge in companies wanting to do this, strategies for executing this bottom-up approaches, and some observations about how companies go about doing this. The message was to move away from insular innovation to a more transparent and open model.


We heard a series of presentations, mainly by employees leading innovation in their companies in some capacity. Some described efforts that started at the top (e.g. Amanda West, Chief Innovation Officer of Thomson talked about their incubation program), some were about individuals leading the charge via specific projects and initiatives (Ron Exner from Kraft Foods talked about innovations in packaging and the process of taking those innovations from R&D to production).

Open Innovation
Companies are increasingly keen on collaborating with other companies as well as individuals outside the company. The main reason for collaboration with other companies is to take advantage of their respective core competencies to quickly bring new products to the market. P&G's collaboration with Dunkin Donuts is a good example of this where P&G combined their expertize in supermarket distribution channels with the unique brand of coffee produced by Dunkin Donuts. Coke's collaboration with illi on coffee products is another.

Collaboration with customers or individual innovators is often done to support incremental product improvements, but some time also done to create new products based on innovative ideas suggested by customers or individual innovators. Customer feedback sites like Dell's IdeaStorm are a well known example of the former. Martin Ertl from Bombardier talked about co-creating railroad technologies (e.g. improved car designs) via customer competitions which also fits within the first category. P&G's "Connect + Develop" and Shell's "Game Changer" initiative illustrated the later. Micheal Ruggier from Shell gave a good example of an innovation that results via such collaboration: a device for measuring 3-phase flows created by applying body scanning technology found in medical devices.

Internal Innovation
A number of speakers (Philips, Kraft Foods, BASF, Thomson Reuters) talked about traditional innovation processes that originate and managed in a top-down manner. Most of these were in industry segments that rely on complex technologies to create value and therefore inherently rely on subject matter experts to create and deliver innovations. Most companies have a system of evaluating emerging trends and inferring key strategic innovation areas that should become the focus for their R&D efforts. Coke, for example, identifies the "Need States" and pairs that with demographic factors to get insights into unmet market needs as well as drive product marketing.

Surprisingly there was relatively little discussion on employee-driven innovation except in two cases. Hannes Erler from Swarovski gave a very good overview of their innovation process. Swarovski creates upwards of 1300 products every year and benefits tremendously from suggestions posted on their on-line idea management system. Novartis presentation mentioned "Innovation Oscars" but did not provide much detail.

Going Green
Green technology was definitely a hot topic. Prof. Markku Wilenius talked about Kondratieff cycles as measured by 10 year yield on S&P 500. The current downturn is unique in the extent to which it is affecting the entire world. The major challenge in coming out of this economic cycle would be the balancing act between increased human demand for resource consumption and lowering ecological impact of future development. It was interesting to hear technologies developed in this direction including oil spill containment, eco-friendly cars, and electronic printing technologies.

Innovation Measurements
I heard a few interesting thoughts about measuring results of innovation process. Shell's Game Changer program converts roughly 1% of submitted ideas into working products. Dr. Martin Curley mentioned that success rate of innovation is 5% although the source of this information was not clear. Bombardier presented an interesting way of characterizing the value of socializing innovations. He provided statistics on the "value" provided by users participating in their YouRail contest. He computed that value based on the money the company would have spent to have their employees engage in a similar collaborative innovation effort. The calculation was done by mapping hours spent on the competition sites, page views, and number of designs produced by the community.

Are you smarter than a sixth grader?

I recently finished coaching a team of middle-schoolers competing in the Odyssey of the Mind (OM) tournament. My team was working on building a set of balsa wood columns designed to maximize supported load given a set of weight and distribution constraints.
The unique feature of the OM competition is its emphasis on letting kids solve the chosen problem completely on their own. A coach is not allowed to make any decisions for the team, nor is he allowed to offer preferences or direct solutions to the problem. This makes coaching extremely frustrating at times (Three points in space defines a plane, so if introduce a fourth point that makes the system unstable. Can't you see it?). On the positive side, I looked at the whole process as a lab experiment about how humans (well ok a bunch of sixth graders - pretty close) collaborate to solve an open ended problem subject to time, resource, and monetary constraints.

As expected I observed plenty of things that could have been improved upon, but I also saw a few "best practices" that can be followed when grown ups like me and you are collaborating within a social network. I am posting some of my observations as a question to the readers. Unfortunately you don't win million dollars if you have all the right answers. On the bright side, if you fail you get to post a comment on this blog that says "My name is [insert your name here] and I am not smarter than a sixth grader!


Are you employing the right information aggregation mechanisms?
My team had to select five members out a total of seven to compete in the "sponteneous" section of the competition. I am not sure about the rationale behind forcing the team to select a sub-group in this manner but I am guessing they do it to test the collaboration spirit. For us it proved to be a daunting task given different combinations of personal preferences, desires, gender conflicts, etc. Ultimately the team decided on a voting model that involved each kid writing in five names for three possible variations of the sponteneous problem. After everyone cast their ballots, we simply selected the top five vote getters in each of the three possible variations of the problem. Amazingly, the team collectively seemed to have made a better choice than most of the team selections proposed by each team member individually.

Selecting the right aggregation model is crucial to the success of collaboration communities. In general the end goal of these models is creating a ranking of competing entities such as people, ideas, outcomes, best practices, etc. Spigit offers a number of aggregation mechanisms including:

• Polls - very simple mechanism for analyzing crowd preferences
• Prediction Markets - determine likelihood of future outcomes
• Idea Markets - Allows users to invest virtual money on ideas and in the process ranks ideas according to their potential
• Automated Graduations - Engages the crowd in idea filtering by aggregating information about buzz, voting, reviews, team memberships, etc.

Is your community composed of a diverse, independent-minded individuals?
Our OM team required different kinds of talents to be successful. Some team members were good at column designs, some were good at building, and some were good at writing and acting. It also turned out that the roles and contributions changed as we went along. Initially boys on the team were keen on building and the girls were engaged in writing/acting aspect of the problem. These roles and interests changed over a period of time as the kids discovered some hidden talents that they didn't know they had.

The evolution of the OM team is fairly representative of what we see in the 400+ communities that are supported on the Spigit platform. When you expose the ideation process to a large number of participants with diverse skill sets and experiences, it greatly speeds up the innovation process. If implemented correctly, individual biases tend to cancel out. Community members are quick to point out flaws based on their experience and jump in to greatly enhance the idea's potential. In some cases, we have seen bad ideas turned into very good possibilities when users suggest a different use case for the same basic concept. Great ideas are often suggested by users that happen to be interested in areas out of their "designated" expertise or users who are close to the customer.

Are you encouraging an open ended exploration of the solution/idea space?

When our team started tackeling the column design problem, I explained the physics behind column building process. I talked about truss designs, different types of forces, failure modes, etc. The kids did take some hints from that explanation, but very quickly started experimenting with different design possibilities. It wasn't quite the linear process one adopts in solving text book problems. They created 50+ column models that included different cross-sections, truss patterns, laminations, etc. The team then tested more promising ones and ultimately selected a design that was best in terms of the supported weight and stability.

This exploration strategy reminded me very much of the way bees decide on the best source of nector as described in James Surawieki's "The Wisdom of Crowds" book. The most exciting thing about social innovation is how the crowd can collectively break the mold and come up with ground breaking ideas and solutions via taking random walks through the solution space. Traditional R&D centric approach tends to perform poorly in this area. Tools like spigit offer communication efficiencies that scale very well and enable this approach. In conjuction it is important to encourage open ended thinking. Radical ideas may be adversely reviewed by the peer network, but sponsors should be careful not shutting down those ideas before the owner has a chance to prove the critiques wrong.