Open Innovation Communities – where companies and customers collaborate on ideas for new products and services – can be one of the most valuable ways to invest in community engagement. Unfortunately, this type of community is also one of the most difficult to get right. Many companies have experimented with this type of Open Innovation – Lego Ideas, Dell’s IdeaStorm, Starbucks’ My Starbucks Idea – and each of these companies have seen value from the communities. The bad news is that most companies fail because they lack the vision and commitment to see beyond the initial tactic of soliciting customer ideas.
In my community practice, I’ve seen 4 stages that are typical in the maturation of an Open Innovation Community.
- The Social Suggestion Box – Launch an open space for customers to give feedback or make suggestions
- Overwhelming Backlog – Period where the company can no longer process the backlog and may abandon the community
- Managed Sprints – Develop a strategy to shape feedback and ideas by introducing a more formal process and constraining topics & time
- Collaborative Innovation – A significant evolution of programs and platforms that layer ongoing ideation into all design and decision making
The Four Stages of Open Innovation Communities
Stage 1. The Social Suggestion Box
Most companies start their Open Innovation Community with an open-ended call for ideas and feedback. Community members are welcome to submit any idea, and the broader community (hopefully) comments on the idea and rates the idea using a simple scale or upvote. Community managers take the most highly rated ideas to the product team for discussion, and eventually some ideas are chosen for production.
The Social Suggestion Box phase is valuable in the short term, as customers will likely have suggestions they have been holding on to since they began their relationship with the company – essentially a communal backlog, if you will. Companies become stuck in this phase when they are unable to process the backlog of ideas, manage the growing community and deliver quality ideas to internal teams (typically product) in a format and within a timeline that aligns with product roadmaps. This break between the promise of a constant stream of new ideas, and the lack of a process and the ability to shape ideas into a usable format is the key challenge.
Stage 2. Overwhelming Backlog
The equivalent of the “trough of disillusionment” from the Gartner Hype Cycle, companies in the Overwhelming Backlog phase can often find themselves with a large pile of unread ideas, a community platform in need of a serious overhaul, an innovation program that no one really values and a community in revolt.
This situation may sound extreme, but it was exactly the one I walked in to when I joined Dell in 2010. IdeaStorm, Dell’s Open Innovation Community, had launched in 2007. After enjoying 2 years of valuable idea contributions, positive PR and internal support, year 3 found IdeaStorm as a “ghost ship” community, with no leadership, vision or community management. Things became so bad that a community member posted the idea that Dell should shut IdeaStorm down. The community quickly upvoted that idea, it caught the attention of Michael Dell and my team was given the task of “making it better, fast”. I eventually hired the community member who posted the “take it down” idea to become the new community manager for IdeaStorm.
To navigate out of the mess we were in, the team immediately began research to inform our new strategy. I wanted to know the financial impact of IdeaStorm to date, understand why ideas weren’t being responded to, and to understand what the barriers were in getting ideas from the Community into the the product teams at Dell. We found that the financial impact from IdeaStorm was really high ($100s of Millions), that we lacked an agreed upon internal process for scoring and prioritizing ideas, and that we needed to create a new type of community management role to help facilitate the new process – an Idea partner that lived on the product team. The final piece of the puzzle was implementing an archiving policy for ideas that didn’t score well in the community. Within a few months we had processed the ideas backlog, started design on a new platform (with the community), and had reengaged most internal product teams.
Stage 3. Managed Sprints
Companies come out of the Overwhelming Backlog phase with the key insight that shaping the topic, type and form of ideas they would like to receive is critical to realizing value and long term success. Many companies will implement a sprint-like approach to ideation, using phased ideation and design sessions to focus on a single topic or product.
This approach involves developing a clear business or design problem, and then breaking solution development in to smaller ideation projects that are facilitated, in sequence, over a number of weeks. The output of each sub-project helps shape the proceeding sub-project. Ideas and design concepts are generally of higher quality because the problem definition is clear, product teams participate, and community members get real-time feedback from the product team.
Dell did this successfully on IdeaStorm with Project Sputnik, co-creating a Linux-based laptop with and for developers. Other examples of the Managed Sprint stage include Unilever and General Mills. Jovoto (client), an “On Demand Creative Community”, has on of the best Managed Sprint approaches I have seen – you can find more information on their site, and in the book their CEO Bastian Unterberg coauthored, “Crowdstorm“.
Stage 4. Collaborative Innovation
In many ways, moving through Stages 1-3 are a necessary process for companies to undertake in order to develop the strategy, process, alignment, platforms and business models to move beyond what are essentially sporadic innovation campaigns.
Collaborative Innovation is an ideal state where an organization and its community of customer, partners and employees are engaged in an ongoing process to perfect existing products & services and to bring new products and services to market. We’ve talked for years about the boundaries between companies and customers disappearing – in the Collaborative Innovation stage, the boundary is permeable – customers create new products & services with the companies assets, and receive value in return (use, compensation, reputation, etc.).
There are examples of large companies partially engaged in the Collaborative Innovation stage, but none that have extended this to every part of their business.
Some examples include:
- IP Sharing: Tesla & Mozilla opening their patents
- Product Co-Development: Lego Ideas, Firstbuild
- Pretailing: Kickstarter, Barnraiser (client), CrowdSupply
- Customer Lab: Autodesk’s Pier 9, Firstbuild’s Microfactory
- XIR (X in Residence): Autodesk’s Artist in Residence, MAKE’s Maker in Residence
Opportunity While Other Stall
The truth is, most companies never make it beyond stage 2, “Overwhelming Backlog”. Dell, an early pioneer in the space (and my former employer) has been regressing back from Stage 3 for a few years (unfortunately). The other notable pioneer, Starbucks, has optimized My Starbucks Idea to be a very well run & designed Stage 1 community. While Communities at each stage offers some dimension of value, companies progressing through to Stages 3 & 4 will discover the most value and innovation.
The potential opportunity for the next wave of Open Innovation Communities is incredible. Why?
- Customers have shown they are willing to collaborate & create
- Customers are willing to buy products still in the conceptual phase (millions of examples of crowdfunding)
- The tools to create & share complex designs are free and relatively easy to use – see Fusion 360 & OnShape
- Innovation platform companies have an opportunity to move beyond text / pictures / video into immersive & real-time 2d & 3d collaboration. PS – Platform companies – I would LOVE to work on this and have a ton of ideas.
Many companies could realize tremendous value from Open Innovation Communities. Most don’t because they don’t experiment, or do a poor job of planning their initiatives. Companies that commit, support and evolve their Communities see value. Beyond the current practice examples of Open Innovation Communities, the next wave will feature immersive and real-time design as a key feature. Those who wish to innovate need to be evolving their platform, programs and internal process now.
I’m offering a session on Jolt that expands on the concepts in this post, and goes in to more strategic detail about how to build the best Open Innovation Community for your business. Feel free to book a session and chat with me about tailoring to your organization’s needs.
As the United States prepares to celebrate Thanksgiving this week, the team at Structure3C is thankful for another great week of growth and development in the #CollaborativeEconomy. We also have some exciting news to share: Bill Johnston (Founder of Structure3C) was nominated in the first cohort of Fellows for the Life Reimagined Institute. Read the full news release here.
1. “Uber Is Not the Future of Work” via The Atlantic – “The rise of Uber has convinced many pundits, economists, and policymakers that freelancing via digital platforms is becoming increasingly important to Americans’ livelihood.” – http://goo.gl/jfnDJH
2. “How Segment Models Growth for Two-Sided Marketplaces” via Segment – “Marketplaces are awesome because, without them, buyers and sellers face complex, risky, and time-consuming transactions.” – https://goo.gl/1vfyjF
3. “Airbnb Banishes NY Superhosts” via rented. – “Airbnb “superhosts” awoke on November 12th to news that their listings had been removed and all of their future reservations had been cancelled.” – http://goo.gl/vGQ23p
4. “How to Start Using the Sharing Economy for Your Events” via Successful Meetings – “Because they’re convenient and affordable, service like Airbnb and Uber are growing more popular by the day.” – http://goo.gl/q98Iy3
5. “How to Market Collaborative Consumption Businesses” via Business 2 Community – “Collaborative consumption gives people the temporary benefits of ownership while reducing personal burden and, in many cases, lowering environmental impact. – http://goo.gl/jeEV4L
6. “A sharing economy for governance? 3 ingredients for sustainable cities” via GreenBiz – “When governments consult cities in the development of national policies and openly work with them to localize legislation, it creates a sharing economy for governance.” – https://goo.gl/fuQOgv
7. “There’s a simple step Airbnb and Uber can take to make the sharing economy safer” via Quartz – “A regulatory system developed over decades oversees hotel companies, taxi services and retailers, attempting to protect the health, safety and security of the people who use those services. But these rules and regulations largely do not apply in the sharing economy.” – http://goo.gl/P2c0ug
8. “Is the Gig Economy Good for Workers?” via Triple Pundit – “The growth of freelance, contract, consulting and gig workers in recent years has caused policy makers to re-evaluate how workers and wages are counted in state and national employment figures.” – http://goo.gl/TaMikA
9. “Why Digital Marketing Should Join the Sharing Economy” via Marketing Land – “At its core, the sharing economy is about fostering collaboration to turn underutilized resources into new revenue streams.” – http://goo.gl/I6uiLV
10. “Uber’s chief adviser on benefits of the sharing economy” via CNBC – “Part of our challenge is to sit down with the government and explain what’s on the other side of this.” – http://goo.gl/whTKCR
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