Perspectives on Innovation

By Alph Bingham

This blog is the final 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 previous posts, 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 Better Way to Organize and Distribute Work (Part 3 of 4) by Dwayne Spradlin

In this last segment of the series, we will address the role of a Challenge as an instrument of strategy.

Too often organizations measure their innovation success by % of sales spent on R&D, how many patents they own, or whether the leading academics in their fields are on retainer. However, in today’s economy, these should all matter much less to the management of the organization or to the shareholders than whether they can get a new product to market before the competition and dominate the category or whether resources are being managed to ensure the firm can aggressively pursue new business opportunities when they emerge.

Too many organizations struggle to even clearly define their problems and goals, much less to innovate with the precision and efficiency needed to compete in the world today. Whether building better business processes or designing new technologies to dominate a market, traditional business practices are no longer sufficient. Nowhere is this truer than in large corporations where years of accumulated standard operating procedures, poorly aligned incentives, ever-increasing bureaucracy, and entrenched culture work together to ensure that increasingly expensive and mediocre innovation is the best they can do. The existing systems are failing and firms are in desperate need of new methods to improve responsiveness and competitiveness.

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 audiences on the important problems facing organizations, nations, and the planet on which we live. These audiences can be employees, customers, partners, and a planet of resources. (more…)

We are excited to announce the addition of OmniCompete to the InnoCentive family.  Best known for its annual Global Security Challenge, OmniCompete has executed nearly two dozen high profile Challenges throughout its history in the areas of security, energy, healthcare, and cloud computing.  This addition helps create a richer portfolio of offerings for customers and exciting opportunities for both InnoCentive and OmniCompete Solvers.

We asked Dwayne Spradlin, CEO of InnoCentive, and Simon Schneider, CEO of OmniCompete, to share their thoughts on the acquisition and what it means for Seekers, Solvers and the overall open innovation landscape.

Why did InnoCentive acquire OmniCompete?

Dwayne:

OmniCompete has played a significant role in establishing the Grand Challenge category – finding big solutions to daunting, world changing problems.   Under Simon’s leadership, they’ve done very well.  They’ve been aggressively expanding their name and presence in Grand Challenges and building their business in the United States and Europe.  Their heritage in security, the leadership they bring to Grand Challenges, combined with InnoCentive’s Challenge platform; capabilities and experience create substantial value for our customers.  Culturally, the OmniCompete and InnoCentive teams share the same vision of innovation being transformative for organizations.  There’s a tremendous coming together of the minds that is good for companies and customers – it’s good for everyone.  It was an easy decision from our end.
Simon:

Simon:

As the prize industry matures, we’ve noticed that clients are becoming better informed and increasingly requesting specialized services. At OmniCompete, we’re very good at these front-end services: custom consulting, design, marketing and branding, but we need to reach more Solvers. This is where InnoCentive excels, so the joining of our companies will mean a one stop shop for clients.  Our work is about problem-solving, and above all we are client-driven, so with this acquisition our whole team is looking forward to being able to give our clients more. It’s never an easy decision to sell a company that you started from nothing, but we see this as the beginning of a lifelong partnership, rather than an exit.

What does the acquisition mean for Solvers? (more…)

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, Founder and Board Member, InnoCentive

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 (Part 1 of 4) by Alph Bingham and Dwayne Spradlin
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 Alph Bingham

Recently Dwayne Spradlin and I published a blog titled “Why Challenges will transform the future of innovation, work and business” in which we laid the groundwork for the topic “What is A Challenge?”  In this blog, we described the Challenge as:

We committed to exploring each of these facets in more depth.  In today’s post, we’re going to begin the discussion of the Challenge as the fundamental unit of problem solving.

The Challenge as fundamental unit of problem solving – Part 1

As we worked to create a successful business around this new model, new language sprang up to characterize it.  We have mentioned the coining of the terms “crowdsourcing” by Jeff Howe and “broadcast search” by Karim Lakhani.   Internally InnoCentive used familiar terms in very deliberate ways.  Our customers, providing challenging problems to our network, became “Seekers.”  And our network was one of “Solvers.”  The problems themselves evolved to “Challenges.”  And we used these descriptions as we analyzed questions like:  What was the value proposition to Seekers?  Why did Solvers engage? And how did the properties of the Challenge serve to effectively contribute to its solution?

As we deepened our knowledge of the Challenge and its role and the means of maximizing its service, we recognized that the Challenge shares DNA with the modularity processes, earlier described by Carliss Baldwin and Kim Clark of Harvard Business School. A portion of the global innovation objective is formulated as a Challenge, in which a “Challenge” essentially represents the problem statement for a block of work that can be modularized and in most cases rendered “portable.” That is, such a block of work can be outsourced or insourced as an integral unit. (more…)