Tapping Communities To Accelerate Corporate Innovation

May 2009

Tapping Communities to Accelerate Corporate Innovation

What We’re Going to Talk About spigit Strategic value of innovation less than 5 seconds ago from PowerPoint spigit Email ≠ communities less than 5 seconds ago from PowerPoint spigit Corporate innovation is more than a popularity contest less than 5 seconds ago from PowerPoint spigit If you can’t measure it, you can’t manage it less than 5 seconds ago from PowerPoint spigit Wrap up less than 5 seconds ago from PowerPoint

Strategic Value of Innovation Leading innovators generate 430 basis points more in shareholder return than do average companies. Put another way, if an average company were to return 7.7% on your investment, leading innovators would return 12.0%. As an investor, that’s pretty attractive . “ Best-in-class innovators hit product revenue targets and launch dates 46% more often than industry peers. The best-in-class companies are 30% more likely to systematically capture and track ideas , and 40% more likely to tap external communities for new ideas and feedback.”

Our Innovation Leader Examples Really Don’t Offer Guidance #1 Apple Creator-in-Chief #2 Google Ad Market Dominance Fuels 97% Revenues

Create Sustainable, Ongoing Innovation Adi Alon and Daniel D. Chow How to Get the Most From Your Best Ideas “ If senior executives expect to achieve repeatable and ongoing improvements in business performance, the innovation discipline needs to be supported by tools, capabilities and resources that are accessible across the organization” The vast majority of innovation is incremental and built from one’s everyday experiences . Provide communities a way to share their ideas, and to identify those with the most merit .

Spigit: Enterprise Idea Management Platform employees customers partners Collaboration tools Idea stages User reputation scores Analytics Idea trading Prediction markets Role-based workflow

Email ≠ community photo: flickr.com/photos/ajagendorf25/3033960008/

Is This Any Way to Manage Innovation? email suggestion box customer service database post-it notes

Ad hoc, siloed approaches to managing ideas fail to foster innovation on three counts:

Cross enterprise visibility

Inadequate collaboration

Innovation share of mind

Community-Driven Idea Management R&D customer feedback field ops market research project mgt Source idea Post idea Idea Description Category Media Select and implement Refine and build out Community feedback reviews views wikis email votes forums

Communities Span the Structural Holes Source: Professor Ronald Burt, Structural Holes and Good Ideas Chicago professor Ronald Burt analyzed the structural holes between groups of employees. Specifically, he evaluated employees who broker across holes, and those who are network constrained . Being connected across groups provides a significant benefit to employees in terms of accessing alternative, non-redundant information .

Diverse Knowledge and Perspectives Significantly Increase Idea Quality Source: Professor Ronald Burt, Structural Holes and Good Ideas Employees of a supply chain group for a major electronics firm were asked for one idea to improve company operations. Their ideas were then rated by two senior executives. Ideas generated from employees with exposure to more diverse viewpoints and non-redundant knowledge were consistently rated higher .

Community Innovation Cycle Sustainable, ongoing innovation

Corporate innovation is more than a popularity contest photo: flickr.com/photos/lcrward/2665896822/

Sometimes Popularity Is Enough Basic consumer products

When does simple popularity (e.g. number of votes) work well for identifying the best ideas?

End buyer requests

Lower complexity features

No concentration of buying power

Think of it this way: Each vote represents the purchase of a product.

Sometimes Authority Is Required Many ideas will be strategic, more complex, niche-oriented or affect multiple operations. Stronger filters than simple popularity are required. The best idea management philosophy: Equality of opportunity for every idea , but different levels of authority for every person.

What determines authority?

Acknowledged expertise

Peer-reviewed contributions

Significant customer or partner

Wilson Haddow , Microsoft Corp. “ There are times when the collective wisdom is what we need. But what about those times when we need to make a strategic decision and only a few in the crowd have the necessary background and insight to help? How do we separate the knowledge from the noise? How do we know to whom to listen ? How do we find them?”

Community Reputation Systems

Building on Randy and Bryce’s work, user reputation systems need:

Two ways to establish authority: earned and assigned

Associate content feedback to its creator

Decay older feedback

Use reputation as a weight in managing user contributions

Bryce Glass Current Yahoo Randy Farmer Former Yahoo

Four considerations for reputation systems:

Scale - manage and present an overwhelming inflow of user contributions

Quality - filter good stuff from bad

Engagement - reward contributors

Moderation - stamp out worst stuff quickly

If you can’t measure it, you can’t manage it photo: flickr.com/photos/melancon/3051916304/

Measuring and Managing Emergence Emergent, incomplete idea Structured, managed initiative Other enterprise platforms Idea management platform D. Lynn Kelley Measurement Made Accessible “ Measurement is assessing the degree to which a variable is present . Notice that there is no reference to counting or quantifying the variable in the definition.”

What Can Be Measured? The process of community-driven innovation generates valuable data that can be used to improve the innovation management process. Reward community participation by taking a positive accountability approach to measurement.

Innovation Measurement’s Benefits Identify areas where innovation is excelling, understand how that applies across communities Create an environment where individuals are recognized for their good work and can impact company direction. Provide transparency into the innovation process.

Wrap-Up

Communities Will Drive Innovation spigit Innovation is a critical driver of corporate performance less than 5 seconds ago from PowerPoint spigit Most ideas are incremental, ideal for sustainable, ongoing innovation less than 5 seconds ago from PowerPoint spigit Can you see the new ideas that employees, customers and partners continually generate? less than 5 seconds ago from PowerPoint spigit Exposing ideas to diverse perspectives significantly increases their quality less than 5 seconds ago from PowerPoint spigit Apply user authority when appropriate, and monitor and improve your innovation process through measurement less than 5 seconds ago from PowerPoint

Contact Us Website: http://spigit.com Email: [email_address] Phone: (925) 297-2600 Over 1 million employees at Fortune 500 companies use Spigit