Innovation Inspiration: Where Next on "Open Innovation"?

09 Sep 2009|Added Value

CEO Added Value FranceOpen innovation and co-creation never seem to be out of the business and marketing media. Some organizations are consistently quoted as leading the way: the likes of P&G, LEGO, IBM and Dell; others have only just started to dip their toes in the water.

Whatever stage you’re at, the question always seems to be, ‘where next?’ Here’s some thinking to help you navigate the new era, whoever you are.

In their book, The Co-Creation Connection, Prahalad and Ramaswamy set out to challenge the traditional view that the consumer is outside the domain of the value chain that is wholly controlled by the corporation. Instead, they offer the view that increasingly consumers see themselves as integral parts of the chain and can influence where, when and how value is generated. And they’re happy to be engaged.

Read More: The Co-Creation Connection

In their now famous article, ‘The Next Step in Open Innovation’, McKinsey consultants Bughin, Chui and Johnson coined the term ‘distributed co-creation’. For them, the future lies in going beyond harnessing the power of consumer communities to include all the participants in the value chain – they talk of a “convergence of like-minded parties” who collaborate for a variety of reasons to crack innovation challenges. Think of creating a global community of your key partners on line who work together to fill your innovation pipeline…

Read More: The Next Step in Open Innovation

This is of course endorsed in practice by P&G. In this Fortune Magazine article, CEO A.G. Lafley and management consultant Ram Charan put forward their philosophy both about the centrality of the consumer and about casting the net broad for ideas: “the more connections, the more ideas.”

Read More: The Consumer is Boss

Despite all the hype though, a McKinsey study suggests that corporations are unhappy with what they’ve achieved with web 2.0 technologies. Chui, Miller and Roberts’ work over two years with 50 early adopter organisations found that despite their potential to have a more far-reaching impact than technologies such as CRM and supply chain management, web 2.0’s disruptive tendencies can be unsettling for many executives. Successful organisations practise controlled disruption.

Read More: Six Ways to Make Web 2.0 Work

What about the impact on the Market Research industry? Writing in Advertising Age, Jack Neff reports from the Advertising Research Forum on the industry’s future. He quotes Kim Dedeker from P&G on how research needs to move away from “feeding the metrics monster” and start listening to consumers’ stories. A digital platform provides a perfect place for people to tell their stories whenever they want, using whatever medium they want.

Read More: Researchers Could Use a Softer Touch

And finally, writing in Marketing Research, Hamilton, Vries and Tramp describe their work using a customer community – or customer community council – of 2000 IT professionals across 3 countries for Microsoft. They describe the key benefit of how the community generates a continuous feedback loop for the corporation, hardwiring consumer insight into business processes.

Read More: Building a Research Community

By Jonathan Hall, CEO Added Value France
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