Associations NextUsing Open Business Models

to Create New Value

Chuck Davis, InnoCentiveJeff De Cagna, Principled InnovationPeter Turner, MCI GroupAugust 18, 230-345pm

Connecting Great Ideas and Great People

Session Flow

What would you like to takeaway? What is open innovation & open business models? Why bother (WIIFM)?

McKinsey explains Our view

InnoCentive case study Follow up conversation for context Q&A Players to watch & learn Research on Open Innovation For more information

What US company is the most profitable company for its stockholders

in the history of Wall Street?

Courage to change

Take calculated risks

Learn & apply from early adopters

How large is your Brain?

Engagement Models

Member Relevance

Business

Product Development

Governance

What are they?

Open Innovation Uses “networks” rather than “hierarchies”

to unchain creativity, fresh thinking, knowledge sharing and collaboration

Open Business Model is the use of “communities” as a means of

collaborative exchange driving new forms of revenue and profit potential (for all)

Why Bother?

Manage Relationships Better Technology lets you delegate substantial control to insiders and

outsiders by outsourcing work to them in networks Using consumers as innovators

Using customers as product developers who buy and promote it Tapping into a world of talent

Decentralized innovation via networks allows you to find specialists, free agents, and talent networks

Mastering Web 2.0 as a “strategy of engagement” As early adopters learn to use these tools they will innovate smarter

and faster ways for individuals and teams to create value through interactions (competitive advantage)

Putting more science into management Explosion of management techniques…Google fosters innovation

through an internal market: employees submit ideas, and other employees decide if an idea is worth pursuing or if they would be willing to work on it full-time. Intel integrates a “prediction market” with regular short-term forecasting processes to build more accurate and less volatile estimates of demand

Opportunity for Assns (Our View)

Open Innovation for AssociationsTap a wider network for knowledge and skill, lower costs to

create products and services, speed time to market of products and services, promote the ability to share risks &

rewards with others, and build stronger customer loyalty

Traditional member value Consumer-centric

Untapped blue ocean Producer-centric

Your member’s value chain

Learn Certify

NetworkingPublish Advocate

Where they learnWhere they work

Volunteer

Closed Hierarchy

Seek funding

Collaborate freely

Volunteer or Paid

Open Network-centric

Earn a living

Generate Knowledge

Chuck Davis

InnoCentive

Players to Watch & Learn

Pure Players Big Idea Group Business

Innovation Factory InnoCentive InnovationXchange NineSigma ArtistShare SellaBand

Corporate World P&G’s Connect &

Dev Nike’s NikePlus Intel’s Prediction

Markets BBC’s Innovation

Labs Mn Public Radio’s

Public Insight Network

Research on Open Innovation

Bain & Co - Customer-Focused Innovation Forrester Study - Customer Content, Participation, Purchasing Forrester Study 2006 - Audience Segmentation Gallup 2006: Strengths Development Culture & People

Engagement HBR Study: Community Built Around Product Sells More Product How Business Uses Web 2.0 Tools - McKinsey Study Incentivizing Online Community - Various Innovation Using Emerging Business Units - London School of

Business 2003 Innovative Service Concepts in the US - PeerInsight Lead User Method - MIT Sloan Rosabeth Moss Kanter - DNA of Organizational Confidence User Generated Content Motivators - BCG 2002 We the Media: Grassroots Journalism - Center for Citizen Media