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Outsource magazine: thought-leadership and outsourcing strategy | September 21, 2017

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The secret to successful open innovation initiatives

The secret to successful open innovation initiatives
Outsource Magazine

A new study which I have co-authored with Henning Piezunka, PhD candidate at Stanford University, reveals that organisations that display a feedback button on their website to invite suggestions from customers frequently struggle to foster thriving online forums for new ideas.

Our study, which has been published online by the journal Research Policy, looked at over 23,800 organisations, and found that success with the online feedback mechanism varied widely.

Our findings have broad implications since businesses and other organisations increasingly turn to the internet to engage customers, and adopt so-called “open innovation” strategies to harvest ideas. It has been shown that organisations can innovate if they interact with their customers. However, many organisational attempts at open innovation campaigns often wither and die. We wanted to see how companies can elicit suggestions successfully.

The types of organisations we looked at represent nearly every sector: public entities ranging from rural towns to national governments, and private companies ranging from small start-ups to multinational corporations. We worked with one of the leading software companies in the field of online feedback in order to conduct a more comprehensive study than what had been attempted before.

One of the biggest reasons why most organisations fail is that they don’t realise how much effort needs to go on behind the scenes to make an external engagement campaign take off. Firms often make the mistake of thinking that all they need to do is launch their campaign and customers will start engaging.

Therefore, we identified several actions that organisations must take if they want external contributors to send in their suggestions:

Foster proactive attention. Instead of waiting for suggestions, the organisation should initiate the conversation with an internally developed suggestion to stimulate debate.

Foster reactive attention. Organisations should actively respond to suggestions from external contributors to signal that their thoughts are being heard. The study found this was especially important for newcomers to the discussion.

Catalyse. Organisations should focus their efforts on new users and the early stage of their open innovation effort. In particular, organisations need to be aware of the time, effort, and commitment required to nurture a fledgling forum into a thriving discussion. This includes establishing a process for retrieving, reviewing, and responding to suggestions – especially those offered up at the outset.

Some organisations underscore the great potential of engaging users and some take great joy in unravelling the benefits. For example, Microsoft’s crowdsourcing campaign for Bing Ads was successful in actively engaging customers to contribute with genuinely useful suggestions.

We realise not all organisations have platoons of customers or the instant name recognition of a company like Microsoft. Nevertheless, smaller entrepreneurial organisations can also succeed in eliciting suggestions. One very good example of this is Swiftkey, a London-based start-up behind the popular screen-based keyboard, who was successful in eliciting numerous suggestions from its customers, which ultimately guided its innovation process.

Our suggestions may seem like common-sense rules for successful communications, but the reality is that organisations frequently underestimate the investment needed, and often fail to apply such widely understood best practices when it comes to corporate engagement. If organisations actually adopt the strategies of proactive and reaction attention, they can then unlock the enormous potential of open innovation.

About the Author

Linus Dahlander 150Linus Dahlander is an Associate Professor and KPMG Chair in Innovation at the European School of Management and Technology, Berlin.


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