In this article, we’ll explain the basics when it comes to open innovation, crowdsourcing, and co-creation, as well as outlining what makes them different. We’ll also look at some examples of these techniques in practice.
When it comes to innovation in business, there are a lot of terms and definitions you need to keep in mind.
Open innovation, crowdsourcing, co-creation: even for the experts, keeping track of these concepts can be a challenge. Read enough articles and definitions, and you’ll soon find yourself with a headache for your troubles.
But fear not - we’re here to break it all down for you.
First, though, let’s start with a few simple definitions.
Open innovation is a distributed, participatory approach to innovation. This concept recognizes that useful knowledge exists in a number of different places, including both within and outside a business.
In practice, open innovation involves businesses and organizations gathering ideas from external sources as well as internal ones. It’s a great way to boost company innovation, and lets established businesses break through the secrecy and silo mentality of traditional R&D.
Since being defined by Henry Chesbrough in the early 2000s, the concept of open innovation has changed the way businesses approach the development of ideas. Now, plenty of companies are looking beyond their office walls for their next big breakthrough.
As Chesbrough notes, the flows of information have changed in the modern world, and innovation practices need to keep up with these changes: “Useful knowledge today is widely distributed, and no company, no matter how capable or big, can innovate effectively on its own.”
This makes is essential for companies to invite a wider range of viewpoints when searching for solutions to tough problems, either through innovation challenges, research partnerships between startups and corporate firms, or public events like hackathons.
Compared to traditional business R&D, open innovation has some amazing benefits:
Open innovation is a great technique, but it also requires businesses to balance the following considerations:
Now, let’s take a look at the second of our innovation techniques: crowdsourcing.
Put simply, crowdsourcing involves companies or organizations seeking knowledge, goods, or services from a large body of people.
Companies can use crowdsourcing to invite people to submit ideas in response to online requests made either through social media, smartphone apps, or dedicated crowdsourcing platforms. These people can be paid freelancers, but often they are simply volunteers or fans.
In practice, crowdsourcing is an incredibly diverse practice, involving things from online restaurant reviews using sites like Yelp and Zomato, all the way through to distributed scientific research like the Human Genome Project.
Crowdsourcing is a way of looking beyond a business or organization’s internal capacity for ideation, and turning the question over to a wider group of thinkers. This offers businesses with a way to complete complex tasks faster, and to access expertise they don’t have internally.
One key detail, though: don’t get crowdsourcing mixed up with crowdfunding. Crowdfunding sites like Kickstarter and Patreon offer ways for individuals and businesses to seek funding and support for an emerging project. This isn’t the same thing.
Like open innovation, crowdsourcing involves some great benefits for companies:
Just like with open innovation, crowdsourcing also involves a set of considerations businesses and organizations need to keep in mind:
Last in our trio of innovation techniques is co-creation.
Co-creation is when businesses include outsiders in the ideation and development process. Typically, this involves working alongside private or public individuals (usually customers or hard-core fans) to develop ideas for new products, services, and systems.
Businesses can invite outside parties to contribute via social media platforms (for example, the ‘My Starbucks Idea’ Twitter account, or through using a dedicated co-creation portal (for example, the DeWalt Insight Community).
A great example of co-creation in practice is DHL’s innovation centers, where the logistics company invites experts and hard-core fans to collaborate in solving complex problems like remote package delivery and voyage sequencing.
In many ways, co-creation is the modern equivalent of old-fashioned research and development techniques, such as focus groups, surveys, and polls. Co-creation gives companies the chance to work alongside die-hard customers and understand how to give them more of what they want.
By allowing companies and organizations to work closely with their customers and fans, co-creation offers the following benefits:
When co-creation goes well, the results can completely transform business. However, companies need to bear the following considerations in mind:
Whether a business is looking for great ideas for new products, ways to involve a wider range of expertise in its internal systems, or build a community of fans, each of these three innovation techniques is a great way to approach problem-solving.
But what sets these techniques apart from each other, exactly?
It comes down to the following factors:
Considering which innovation technique to use involves balancing these factors and matching the demands of the project against the different options.
To help you decide which innovation technique to use for a particular project, we’ve outlined a series of key questions you should work through.
Your answers to these questions will tell you which of these innovation techniques are right for the job. For example, if you don’t want to commit to a resource-heavy co-creation project, you could look at crowdsourcing customer suggestions instead.
On the other hand, if the project involves valuable intellectual property or commercially sensitive information, traditional internal R&D is probably the best way to go.
If you intend to kick off an open innovation or crowdsourcing project, consider a dedicated platform like Innocentive, or develop a bespoke innovation portal like Unilever, DeWalt and other companies. For crowdsourcing, social media platforms like Twitter or Facebook will be enough.
Sometimes the best way to illustrate a concept is to look at a few real-world examples. Here, we’ll cover a handful of great examples of open innovation, crowdsourcing, and co-creation, and show you how these all work in practice.
As one of the world’s leading tech giants, Samsung relies on valuable ideas for new products and services to stay on top. One of the ways Samsung does this is through open innovation.
That’s why Samsung participates in thirteen industry consortiums around the world, helping to source cutting-edge expertise and ideas for new products and services. Samsung also has close relationships with a range of universities through academic partnerships.
This diverse approach to open innovation illustrates the fact that valuable ideas can come from anywhere. By partnering with academics and other experts, Samsung helps to secure its commercial advantage and anticipate the next big movement in the market.
As one of the biggest and most influential companies in the world, Google has built its success in part through an ongoing commitment to crowdsourcing.
Google realises that helpful information is widely distributed around the world. That’s why the company incentivizes its users to contribute this information to make its products and services more accurate, timely, and useful.
A great example of the company’s commitment to crowdsourcing is Google Maps. This product includes a baseline commitment to crowdsourcing, feeding information from each user back into the system to make sure that voyage information is current.
In fact, this crowdsourcing feature is now so widely-used, most people probably don’t even think of it as crowdsourcing!
Lastly, Lego’s Ideas platform is a cool and colourful example of co-creation at work.
As one of the world’s leading toy outfits, Lego has a huge community of dedicated fans ready to contribute great ideas for new sets. To make the most of this community, Lego established its Ideas platform, giving fans the chance to compete for their proposals to be selected.
Since establishing this platform over ten years ago, over a million Lego fans have submitted their ideas for new sets. The platform has not only been a commercial success for Lego, but has also helped strengthen the company’s global fanbase and earn Lego some great press.
Open innovation, crowdsourcing, and co-creation are all excellent innovation techniques. Used well, they can form a core part of any business’s innovation strategy.
With these techniques, you can speed up idea generation, kick off your next suite of innovation projects, and harness the power of your online community of fans and customers.
Before you start using these techniques, though, you need to know what you’re dealing with. That’s why we’ve put together this article to help unpack these innovation concepts, explain the differences between them, and illustrate how they work in practice.
Whether you’re looking for a way to break through the status quo with open innovation, harness the power of the crowd with crowdsourcing, or find valuable new ideas with co-creation, these techniques have a lot to offer.
So, be sure to check these innovation techniques out and see how they might work for you.
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