Start Innovating Already: 13 Poisons to Open Innovation

Start Innovating Already.A Punk View of 13 Poisons to Open Innovation& Building Engaged Communities
Lisa ThorellRutgers University PDS - Keynote Address, June 7, 2011
Off the Grid PR

Build It All Yourself
1
POISON
Source: © Henry Chesbrough, 2006
Slow time to market High Fixed Costs Closed Pool of Talent

That model arose in the early 1900s.
Concerns of the day were…
Economies of scale – Coordinating large numbers of people – Limit Liability

Today we buy in more quickly…

We throw out more quickly…
18
Months from purchase to discard of a cell phone for a person living in the US or UK.
Months from purchase to discard for a cell phone user in Japan.
The number of iPods you would own if you upgraded to every new iPod that had come onto the market from 2001 to 2009.
12
18
Source: Rachel Botsman & Roo Rogers book ‘What’s Mine Is Yours: How collaborative consumption is changing the way we live (2011)

Creating 100 gigapascals of pressure
Source: http://www.mckinseyquarterly.com/The_challenges_ahead_for_supply_chains_McKinsey_Global
_Survey_results_2706Nov 2010

Also rocking our world…
Source: McKinsey Quarterly Riding Asia’s Digital Tigers

Rocking it still more: Hyper Innovation
Source: Adrian Ott, The 24-Hour Customer: New Rules for Winning in a Time-Starved Always-Connected Economy

What’s a way to go faster?
Take in more ideas from outside?
Spin out ideas for others to use?
Solution: Punch more holes in the funnel.

Open Innovation
ANTIDOTE
Source: © Henry Chesbrough, 2006

Get to Market Faster

Break into Partner Markets

Transfer risk to someone else

Make your customers crazy-scream with rage…
…If they can’t get your product.

Employees as Lifeblood
2
POISON
Expensive fixed assets Salary independent of performance

As Bill Joy said,
“There are always more smart people outside your company than inside it.”
Bill Joy,
Founder, Sun Microsystems
Partner, Kleiner Perkins

Crowdsourcing:Lifeblood on steroids
ANTIDOTE
Example: Netflix $1 Million Challenge
Pay only on Performance
Off the Grid PR

Crowdsourcing:Netflix $1 M Challenge
ANTIDOTE
Netflix $1 Million Challenge
55,000 Engineers Enter
A huge virtual workforce Decrease HR costs: Talent finds you!

Crowdsourcing:Netflix $1 M Challenge
ANTIDOTE
Movie Recommendation Engine
Improved 10%
Problem Solved: 5 2 years
Decrease Time to Market

3
The Human Resources Department

Hire People HR would Never Hire
ANTIDOTE

People HR would Never Hire
ANTIDOTE
1760 A self-educated clock maker invents longitude
1990’s Design firm Ideo creates up the best-selling kid’s toothbrush by working with anthropologists
A home-schooled coder invents WikiLeaks
2007 An oil-industry outsider provides the solution for cleaning up oil spills borrowing from the concrete industry
.
.

Diversity + Will-to-Win Trump Superstars
ANTIDOTE
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Trad Market Research
4
Interviews
Secondary
Research
Roundtables
Focus Groups
Surveys
Great…brilliant clarity on the past Usually company internal
Budget-constrained sample size

Customer Crowdsourcing
ANTIDOTE
Up-to-minute 24 x 7 customer feedback
Community vetted
Social Proof of
Open Brand
MyStarbucksidea
Build it? No!

Customer Crowdsourcing
ANTIDOTE
Over 100,000 ideas
100 ideas launched
Note Starbucks did not
build this. They license the platform from SalesForce.com
MyStarbucksidea
Build it? No!

Profitability
Animate with Annual Report, Investors, SEC sliding up under NI.
You own a company thatsells a product, like tee-shirts
5
Limits Shape-Shifting
Makes C-levels risk-averse

You run a community thathappens to sell tee-shirts
ANTIDOTE
Decrease
Time to Market
Source: http://www.ithnk.com/category/co-creation/

Share Community II(The Sequel)
Play your community forward (new markets)
ANTIDOTE
Advertise
Advertise
Dell laptops – Havaianas flipflops– Griffin iPhone accessories

Your BalkanizedWeb 1.0 Website 1.0)
6
You control. You make your customers come to you.

Problem: In 2008 the average public radio station listener visited their local radio station website only 2x per month.
Source: http://www.slideshare.net/davewrightjr/redesigning-nprorg

Different NPR Customers needed
Different news formats
Differentplatforms

GiveItAway GiveItAwayGiveItAway Now
NPR Content For Free
400,000 new stories
500,000 audio files
30,000 blog posts
Content from dozens of NPR station affiliates
ANTIDOTE

An Open API for Developers to Access
Result: more formats, more platforms

Source: http://www.npr.org/templates/archives/archive.php?thingId=125099093

Business as Usual
7
7
Own the facility
Build out a kitchen
Operate set hours
Serve familiar food
Charge as much as the market will bear.
Advertise in newspapers and radio
Off the Grid PR

Business Unusual: LudoBites
Restaurant/ Kitchen
Operate Std
Business Hrs.
Charge
Market Prices
Serve Familiar
Food
Advertise
Borrow
Someone
Else’s
Kitchen
Announce by Surprise +
Limited opening
Pay Forward
Savings
Serve One-of-a-Kind
Food
Use
Social Media
Chef Ludo’s famous
Cheese CupCake

TheEconolapse
“The main reason to thinkoutside the boxis there is no more oxygen leftinside the box.”.
Lisa Thorell

You need to own it to sell it.
8
Under-utilized assets Sitting inventory

The The New Share Economy
ANTIDOTE
You broker others’ owned spaces.

Better than Zipcar…
ANTIDOTE
Example companies how they do it.
You can broker others’ under-used cars.

ANTIDOTE
Saatchi & Saatchi showed you can even broker ad space in
Out-of-the-Office email auto-replies.

ANTIDOTE
To cost-share its rent fees, Best Buy is offering shelf space to other retailers.

IP Control & Lawyers
9

Strategically Mine Knowledge
ANTIDOTE
Source: http://blogs.hbr.org/cs/2011/05/stop_obsessing_with_ip_rights-.html

Netflix again…
ANTIDOTE
Database Shared
Solution
Gained
Solution Shared

ToToxic Boxes
10
Net Income
Sales
Revenue
Taxes
Operating Expenses
Cost of Sales
Regarding your industry cost structure as immutable & unassailable.

The monsters who guard the Net Income box
It’s not that I’m against
fiduciary responsibility.
It’s the fear of
shape-shifting and
risk aversion that the
monsters can engender.
Net income can be
Increased by paying
attention to
other boxes…
Annual Report
SEC
Investors
Net Income

Exploring NonToxic Boxes:
Service Blueprinting
ANTIDOTE
http://priyankashetye.com/html/medsystem.html

Business is serious stuff…
11

Gartner Forecasts 50% of Businesses will Gamify by 2015
ANTIDOTE
Use of leaderboards to inspire frequent use & competence-by-competition.
Reward points that can be converted to product upgrades or discounts .
Badges for frequent contributions, levels achieved, other milestones.

How Many Prizes did Netflix Give away?
ANTIDOTE
http://offthegrid-pr.com/socially-responsible-pr/2009/9/28/six-marketing-lessons-of-the-netflix-crowdsourcing-experimen.html

The Excruciating Politeness of Poser Innovation
12
Observation: OI consultants tend to PR their best client case studies.
Open
Innovation
Whitewashing ->

A Wikileaks for Open InnovationCase Studies?
ANTIDOTE
How can we learn if we can’t see
the parallel universe of failures?

Open Innovation as a “Try on”
13
No. Do or do not.
There is no try.

Open Innovation as a Necessity
ANTIDOTE
If they didn’t...
LudoBites
P+G Connect
+ develop
NPR
Threadless
Another high-overhead restaurant in a
recessionary economy.
More small agile CPG competitors
96% of listeners would not access online.
Another commodity tee-shirt company

Transformers ask…
What can you build for others?
Whose products/tech can you build on?
Find New Markets
Customers saying “Meh…”
How do you get closer to your community?
What assets do
you have to barter?
Decrease
Time to Market
What can you give away for others to build on?
How do you motivate them to become addicted to your product?
Decrease
Fixed Costs
Whose products/tech/space/people can you partner with?

Moral of the story:
Stomp on poisonous snakes.
Transform.
Start Innovating Already…
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Start Innovating Already: 13 Poisons to Open Innovation

by Lisa Thorell on Jun 28, 2011

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