3 cs of innovation 2.0 - crowdsourcing, competition, collaboration
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3 Cs of Innovation 2.0Crowdsourcing, Competition, Collaboration
Hutch CarpenterVP of Product@bhc3
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What is this “innovation” you speak of?
Innovation: A change in a product offering, service, business model or operations which meaningfully improves the experience of a large number of stakeholders
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Multiple Forms of Innovation
minimal technology
change
create new market
radical technology change
manage existing market
Low risk, many
competitors
High risk, high reward
Customer experience; cost savings
High risk, defensive strategy
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Innovation = ROI
Leading innovators generate 430 basis points more in shareholder return than do average companies
Market CapAnnual Increase in Shareholder Return Per Day
€ 500 million € 21,500,000 € 58,904 € 1 billion € 43,000,000 € 117,808
€ 1.5 billion € 64,500,000 € 176,712 € 2 billion € 86,000,000 € 235,616
My entire year has been a quest to find quantifiable ROI… Finance agreed - it ain't easy.
Where we did quickly find quantifiable business value was during an ideation proof of concept. Ideas that are discovered and turned into action have produced dollarized return of business value.
Laurie Buczek Social Computing Program Manager at Intel
All I Want For Christmas is my E2.0
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Innovation 1.0: Two Centers of Innovation
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Innovation 2.0: Employees Rule!
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Crowdsourcing
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Crowdsourcing? What is that?
Crowdsourcing: Soliciting the ideas, knowledge, experiences and judgment of a large, diverse group of people to solve a problem
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Diversity of Inputs Drives Idea QualityId
ea A
sses
smen
t
high diversity of connections
low diversity of connections
Diversity Means QualityProf. Ron Burt, Structural Holes & Good Ideas
Crowds of people, each calling on their own incomplete and private information, are able to arrive at optimal solutions as well as, or better than, a small group of smart people.
Diversity in crowds expands a group’s set of possible solutions.
James Surowiecki, The Wisdom of Crowds
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Crowdsourcing Brings Edge Perspectives In
ITmarketing
manufacturingR&D
productfinance
customer service
field operations
acco
unt m
gtsales
customers
customers
custo
mers
custo
mers
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Three Models of Crowdsourcing
Crowdsourced Submissions
Crowdsourced Feedback
Selection by Experts
Crowd Sentiment, Expert Decision
Crowdsourced Submissions
Crowdsourced SelectionCrowd Decision
Selection by Experts
Crowdsourced SubmissionsExpert Decision
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Crowdsourcing Isn’t Immune from the 1:9:90 Participation Ratio
Propensity to formulate & submit ideas
Num
ber o
f Em
ploy
ees
low high
typical idea suggestion curve
Estimated distribution of employees’ propensity to share ideas
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Goal-Setting Changes the Participation Ratio
Propensity to formulate & submit ideas
Num
ber o
f Em
ploy
ees
low high
typical idea suggestion curve
goal-driven ideation curve
ideas increase due to goal-setting
Goals Stimulate Employee Idea Sharing
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Why Does Goal-Setting Work?
1. Signals increased management attention to ideas on a topic
2. Sets an expectation of participation
3. Establishes a target the community can rally around
4. It creates an event orientation
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Goals Must Relate to Tangible Outcomes
Product Design
Procure-ment
Manu-facturing
Distribu-tion Marketing Customer
Experience
What are the top emerging use cases of our product?
How do we increase
throughput by 10%?
How do we increase fleet fuel efficiency
by 10%?
“Reduce truck idling time during morning loading”
“Pre-build components for
later install”
“Used in development of
green technology”
How do we increase
customer sat. scores 20%?
“Route service calls by component, not
vertical”
Product Delivery Value Chain
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Competition
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Two Senses of Competition
Competition: Process of determining how a finite resource will be allocated among a set of alternatives
Competition: Actions taken to advance in a given endeavor, satisfying one’s internal need to excel
System Competition Individual Competition
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Innovation Thrives on Soft Competition
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Marketplace Competition for Best Ideas
Innovation 1.0
Political connections
Selling skills
Completeness of idea
Heroic persistence
Innovation 2.0
Idea’s key benefits
Long tail interests
Iterative development
Idea incubation
Competition reduces innovation friction
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Paragone Creates an Innovation MeritocracyDuring the Renaissance, paragone implied the placing of two artists’ individual works side by side in order to judge them, weigh them, distinguish them, and critique them.Using rivalry to spur innovationBernard T. Ferrari and Jessica GoethalsMcKinsey Quarterly
Sofia’s idea
Maximo’s idea
Wisdom of the crowd
distinguishes among
submitted ideas
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Paragone Creates Performance Curiosity
Greater freedom to innovate and decide which ideas are best leads naturally to a desire to better understand one’s own performance.
Feedback
benchmarkingrecognition
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Game Mechanics Are Performance Metrics
Authoring
…Translates to
Interacting
Positive Feedback
activity currency
collaborator badge
reputation score
Activity…
Professor Andrew McAfeeShould Knowledge Workers Have Enterprise 2.0 Ratings?
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Game Mechanics Are Reinforcement
I would suggest that @ replies in twitter trigger a dopamine response. And thus the addiction. Who's with me? /via @cammybean /// I am :)
Behavior achieved is what you actually reward. Pavlovian but true. To achieve full value of 2.0 need tech + culture.
Laurie Buczek (tweet)Social Computing Program Manager
Intel
Claire Flanagan (tweet)Senior Manager, Enterprise Social CollaborationCSC
Social incentives reward and reinforce the goals in innovation
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Collaboration
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When I Say “Collaboration”, I Mean…
Collaboration: Building toward a defined outcome through the interactions and input of multiple people
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Typical Collaboration Is Poorly Suited for Innovation
Group Composition and Decision Making: How Member Familiarity and Information Distribution Affect Process and Performance, 1996 (pdf)
Standard collaboration group formation is…
…great for project execution…
…but limiting for innovation.
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Collaboration Based on Emergence
Traditional Collaboration
Dedicated teams beforehand
Team formation in response to some authority
Participation is a requirement
Known go-to people on team
Executive’s project
Structured interaction
Crowdsourcing Collaboration
Virtual, on-the-fly teams
Teams form on a common interest
Internally motivated participation
Contributions from anyone
Response to anyone’s idea
Emergent interaction
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Innovation Requires Emergence and Structure
crowdsourcing
competition
Emergent Collaboration Structured Collaboration
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Reward Innovation Collaboration as Much as Idea Origination
Scott BerkunAuthor, The Myths of Innovation (pdf)
The Work of Innovation
What people focus on
The work that makes eureka possible
Need to make collaboration as important as origination
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Make Collaboration Sexy and Worthwhile
Purposeful Work
• Stokes one’s passion
• Part of project team
• Solves a burning issue for me
Social Incentives
• Community feedback on your input
• Milestone achievements
• Reputation rating
Recognition
• Acknowledge team, not just originator
• Publicize collaboration achievements
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Spigit: Innovation Driven by Enterprise 2.0
spigit.com Hutch CarpenterVP of Product
@bhc3
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