Perspectives on Innovation

By Dwayne Spradlin, CEO of InnoCentive

This blog is the third installation of a four part series: ”The Profound Importance of Challenges,” by Dwayne Spradlin and Alph Bingham, authors of The Open Innovation Marketplace, published in 2011 by FT Press.

To read the other posts in this series, click on the links below:

The Profound Importance of Challenges (Part 1 of 4) by Alph Bingham and Dwayne Spradlin

The Profound Importance of Challenges: The Fundamental Unit of Problem Solving (Part 2 of 4) by Alph Bingham

The Profound Importance of Challenges: A Powerful Strategy Tool (Part 4 of 4) by Dwayne Spradlin

In our book “The Open Innovation Marketplace: Creating Value in the Challenge Driven Enterprise” published this year by FT Press, Alph Bingham and I explored Open Innovation and the Challenge Driven Enterprise. As we continue our discussion of Challenges and why they are profoundly important in this four part series, we turn our attention now to Challenges as a better way to organize and distribute work.

There are many kinds of work. There’s work on the assembly line, analyzing water for impurities, delivering newspapers, and fighting wars. And loosely speaking, Challenges may have a role to play in all these kinds of activities. And there is a different kind of more intellectual work requiring more creativity and invention, whereby a need is identified and a solution sought. Examples include development of a marketing strategy, a new plastic material for manufacturing, or an innovative approach to engaging customers.

In this latter kind of work, well-defined Challenges represent a powerful tool for organizing human activity and motivating innovative outcomes.

Organizations have spent years defining efficient organizational forms, writing Standard Operating Procedures (SOPs), crafting job descriptions, and even developing robust platforms for planning and tracking work. And they are becoming more efficient. Use of contract labor and outsourcing of work, even whole functions, is more commonplace than ever. These approaches have often improved the bottom lines of businesses by increasing flexibility, lowering costs, and enabling projects to be accelerated. However with notable exceptions, these exercises in efficiency and shifting labor costs have done little to fundamentally change the rules of the game—to create anything like a “step change” in business performance and breakthrough innovation. In most instances, the 20th-century approach is essentially institutionalized resource planning and labor arbitrage that is simply commoditizing work and trading high cost labor for lower cost alternatives. It is not creating a unique competitive advantage. And it is certainly not tapping the creative capacity of organizations and the world to innovate. In some cases, it has actually achieved the opposite effect. Consider how many companies arguably lost their innovative edge by focusing so singularly on cost reduction that they lost the very resources and capabilities needed to be competitive over time (for example, Dell, General Motors). Some even created their next generation competition by turning their suppliers and partners into the only true sources of innovation (for example, semiconductors). (more…)

As we turn the page on 2011 and turn our eyes to 2012, I wanted to reflect on some of the remarkable things we accomplished together this past year.

In 2011, we added many thousands of people to our Global Solver Community.  We distributed more than $2m in Challenge awards.  And we welcomed Popular Science and EDF as strategic partners, resulting in a wealth of new Challenges for Solvers to tackle and an expanded pool of diverse minds for our Seekers to tap into.  We elevated Novel Molecule Compound (NMC) Challenges, providing higher award amounts and introducing fingerprinting technology, which resulted in greater uptake in Solver engagement and renewed confidence from our Seekers, ultimately leading to a doubling of NMC Challenges posted and solved as compared to 2010.

But we did something much more important. We accomplished the goal we set for ourselves when we embarked on this journey together – and I don’t say this lightly – we changed the world.  Together we brought solutions to light that would never have been uncovered any other way.  Below are a few of the Challenges that were awarded in 2011 that I’m particularly proud of.

Prize4Life – this was our “walk on the moon” Challenge.  The big, audacious goal that we weren’t sure was even achievable, but was so important that it carried a $1m award.  First launched in 2006, the Prize4Life Challenge sought a biomarker for ALS, also known as Lou Gehrig’s Disease – a rare disease with such a rapid rate of advancement that there was literally no way to measure its progression.   In 2011, Solver Seward Rutkove was awarded the full $1m for his biomarker, which used a method called electrical impedance myography (EIM)  to measure the flow of a small electrical current through muscle tissue.  This biomarker has the potential to reduce the cost of Phase II clinical trials by more than 50%, and by correlating closely with disease progression, to remove one of the primary obstacles to industry investment in potential ALS therapies.

EDF Nitrate Capture System – PhD candidate Patrick Fuller submitted an innovative solution for the capture of toxic nitrates – and won the award on his first Challenge.  This solution could mitigate the 50-80% of fertilizer applied to commercial crops in the U.S. that is not absorbed by plants and is instead lost to water and air, causing dangerous environmental and health impacts in a growing number of watersheds around the country.

Cincinnati Children’s Hospital Games for Health – anyone who has cared for a chronically sick child knows the challenges that adolescence brings.  The increasing need for independence and social interaction makes following a prescribed health regimen difficult.  Cincinnati Children’s Hospital came up with a unique approach to inspire teenagers and pre-teens to take care of themselves – a video game.  The solution to this Challenge has the potential to dramatically improve health care outcomes for sick kids.  We’ll have more news on this solution in the coming weeks.

Humanitarian Air Drop – The Challenges posted by the Air Force Research Labs have truly captured the attention of our Solvers and of the media.  Of the seven posted so far, the humanitarian air drop Challenge hits closest to home for me.  The notion that distribution of aid to the most vulnerable communities, often in the middle of a war zone, could actually cause harm to people needing that aid, is difficult to accept.  Two Solvers, one from Indonesia and one from Peru, solved the Challenge, one of them referencing a well-known mechanism for moving coal from a mine shaft.  This is a perfect example of diversity and the uniquely prepared mind at work, as my colleague and InnoCentive Co-Founder Alph Bingham might say.

These Challenges represent just a few of the highlights of 2011.  The year 2012 is positioned to be even more impactful – we’ll be awarding new delivery options for the polio vaccine, better sanitation for billions of people in developing countries, and viable disposal options for environmentally toxic electronics.  Over the coming weeks and months we’ll be posting new Challenges that promise to be just as interesting, fulfilling, and earth shattering as those we saw in 2011.

Thank you for your continued participation in the InnoCentive Solver Community.

Warmest regards,
Dwayne

by Alph Bingham and Dwayne Spradlin

This blog is the second installation of a four part series: ”The Profound Importance of Challenges,” by Dwayne Spradlin and Alph Bingham, authors of The Open Innovation Marketplace, published in 2011 by FT Press.

To read the other posts in this series, click on the links below:

The Profound Importance of Challenges: The Fundamental Unit of Problem Solving (Part 2 of 4) by Alph Bingham

The Profound Importance of Challenges: A Better Way to Organize and Distribute Work (Part 3 of 4) by Dwayne Spradlin

The Profound Importance of Challenges: A Powerful Strategy Tool (Part 4 of 4) by Dwayne Spradlin

Clearly the notion of a challenge as a tremendously powerful and versatile tool for innovation is gaining credibility quickly.  We explored this idea in depth in our book “The Open Innovation Marketplace: Creating Value in the Challenge Driven Enterprise” published this year by FT Press.  Below and over the next few weeks we share some of the discussion on Challenges from our book and would love to have your thoughts and feedback.  Enjoy!

What Is a Challenge?

Dictionary.com defines a “challenge” as “a summons to engage in any contest” or as “a job or undertaking that is stimulating to one engaged in it.” However, it is much more. Well-constructed “Challenges” are an astonishingly powerful and uniquely effective tool for focusing the energies of multitudes of creative, inventive, talented people on the important problems facing organizations, nations, and the planet on which we live.

The Challenge is core to InnoCentive’s business, and its power has been on display now for several years. We see early, though isolated, glimpses of this approach throughout history well before InnoCentive’s founding. Striking examples of its use range from the Longitude Prize offered by British Parliament in the 1700s to the Ortiz Prize that induced Charles Lindbergh to cross the Atlantic. It has been shown to have broad and general applicability.

InnoCentive has more experience with Challenges than any organization in the world and provides an intriguing sampling of the potential of Challenges in areas as diverse as business entrepreneurship, life sciences, mathematics, and manufacturing.

Challenges can deliver breakthrough strategies or highly technical solutions and apply to every business function and every type of problem, large and small, strategic and tactical.

But Why Does It Work?

We first began to understand the Challenge as a powerful business tool a few short years ago. It was at this time that a number of key concepts were beginning to converge, namely that a Challenge exhibits three important properties. The Challenge is:

• The fundamental unit of problem solving;
• A better way to organize (and distribute) work;  and
• A powerful strategy tool.

Over the next few weeks, we will explore each of these three properties in more depth.

Warm regards,
Dwayne Spradlin and Alph Bingham

By Dwayne Spradlin, CEO, InnoCentive

I recently attended NASCAR Racing School as a birthday present from my family. And it was an incredible experience. In the midst of the searing Texas heat, I was given several hours of instruction on both the car and the rules of the road. Somehow, Texas Motor Speedway looks less daunting on television than when you’re sitting in an actual racing car. Did I call it a car? My mistake. It is a rocket engine with a steering wheel. And the banked areas of the track have a much more severe incline than you could imagine. I must say that even though I pride myself on being even keeled, my heart was pounding.

The highlight of the school is taking several laps around the track at whatever top speed you feel comfortable with. In reality, you follow an experienced driver, so when you are ready to go faster, you signal to the car in front of you by coming within a few yards of their car, which is the sign to accelerate – both terrifying and invigorating at 140 MPH (not actually sure why a headset isn’t a better idea).

I grew up learning to drive near Chicago and I assure you, I-94 is not sufficient coursework for being a NASCAR driver. Although it felt like an eternity, I was driving on the roadway for less than 30 minutes. My top speed? Just under 150 miles per hour, not even close to the speeds professionals must manage every day. This was the adrenaline rush of a lifetime!

Adrenaline or not, stepping on the gas was not a natural act. Every fiber of your being senses danger because, in your head, you know that man should not be going this fast. There was an ever present fear that something bad was right around the next bend. Self-preservation and fear of the unknown are hard to overcome because they are instinct. Professional drivers must have a certain skill set, including a level of fearlessness.

The same is true of change agents within organizations. They know that the organization conforms to a certain set of rules. The safety margins are built in and the performance of the vehicle is well understood. Standard operation procedures, culture and management systems ensure that; employees follow their “experienced drivers” to reach a desired destination at their comfortable speed. To go outside that comfort zone is to take an organization into new territory, to push the comfort level. Suggesting an organization can deliver higher performance levels is suggesting that current systems are inadequate. Pulling ahead puts you right in the sights of all the other cars on the track, signaling to all the spectators that those other cars are falling behind. And those other cars are not going to exit the track. They are going to fight to keep things just as they were. Although challenging the status quo within an organization may not feel life threatening, it may feel career threatening. (more…)

Recently we challenged a team of students from Tufts to create a video in their own voice about what it means to be a problem solver. And to make it particularly challenging, we gave them no resources or guidance.  They’d have to make magic happen with only their creativity, energy, a video camera, and a PC for editing.

The final video, which they titled ‘Don’t let a good idea get away!’ blew us away.  It is fresh, humorous, and captures the power of that “Eureka!” moment all at the same time.

We were so encouraged by the Tufts students that we have decided to award special prizes for our 2012 Video Challenge to teams of College students.  We’ll award Solvers in three categories – best video overall, best video by a college student or team from the US and best video by a college student or team from outside the US. First prize will be $5000 – the 2 runners up will receive iPads. More details can be found in the Challenge statement here.

Kudos to the Tufts students who brought this video to life from all of us at InnoCentive!  We love the video and know InnoCentive community will as well!

Enjoy!

Dwayne Spradlin
InnoCentive CEO