Note: This is the second piece in a series of monthly columns written by Ehsan Ehsani on a current hot topic: Web-enabled open innovation. He is a researcher and consultant in the area of innovation and product development and one of the contributors to InnovationManagement.se. Ehsan is working with Accenture Product Innovation and PLM practice in New York City and has previous experience from a variety of firms both in Europe and the United States.
In the first part of this monthly column series, I talked about the fact that while web-enabled open innovation has got lot of attention during the last years, few companies have been able to truly take advantage of the power of web-technology to create value for their innovation process.
Looking at the results a multi-year research conducted by industry and a group of European and U.S. universities among more than 200 global companies; we realized that pioneers in this area pay special attention to a series of factors in organizing their web-enabled open innovation efforts. Lessons learned derived from experiences of such companies can provide valuable insights for the ones who want to enter this area (For a general overview, see the first piece of this column series “Web-enabled open innovation: From hype to reality – Part 1”).
In this post I will share some more insights derived from our research:
Product Innovation as a process is not only limited to the activities involved in idea management or developing a new concept for a product: The process virtually covers all the activities throughout a product lifecycle, from the inception of the idea till the moment product is offered in the market and/or service after sales is offered to the customers.
Consequently, web-enabled open innovation has found its way to these activities and different models of collaboration with externals are being utilized for each stage of the product lifecycle (See Figure 2 – Click on image for larger view).
Figure 2: Use of web-enabled open innovation in different stages of product lifecycle.
During our research studies, we were curious to see the distribution of companies using web-enabled open innovation in each stage of product lifecycle. We were particularly interested to know if companies have a tendency to use web-technologies in one stage of the innovation process more than others.
…there is a tremendous tendency among many companies to use web-enabled open innovation in the early stages…
After looking at the information derived from our sample companies under study, we realized that there is a tremendous tendency among many companies to use web-enabled open innovation in the early stages of innovation process namely idea and concept generation while many other innovation activities and stages of product lifecycle were neglected.
At the same time, we noticed that companies which have been successful in the use of web-enabled innovation have taken a different approach and here was when we found out about the second lessons learned: Instead of going with the crowd and focusing on typical applications of web-enabled innovation, pioneers tried to identify where the critical link in the product lifecycle is and focused on using the technology to strengthen that piece of the value chain.
For a company like Google, which is developing numerous applications and products in a short period of time, it is crucial to identify errors and enhancement opportunities quickly so that the products can function flawlessly and in line with customer requirements. Therefore, Google relies heavily on its platform called “Google Labs” so that external developers can provide suitable feedbacks and enhancements applications for its products under development.
Developed products with a low level of complexity are tested by customers online via a web-page. Google also launches some of its products in the preliminary stage or “Beta Version” to the public so that customer can comment and give feedbacks on the potential bugs or enhancement opportunities. However, Google is rarely using idea generation portals or other mechanisms for online ideation as those are less challenging areas for the company.
I remember a conversation with a European Innovation Director in a global health and body care company where I was told: “At the moment the processes for idea generation and getting consumer insights for the new products all around Europe are working properly; we are getting lots of different ideas from the market through different channels, but our challenge is to identify which ideas are the ones customer value the most…[the act of] prioritizing thousands of ideas we receive and focusing on truly valuable ones is quite a difficult task”.
Figure 3: Refocusing web-enabled innovation from idea generation to idea evaluation in a consumer goods company.
The above mentioned consumer goods company, therefore, started a new initiative to engage consumers through different online platforms to comment on their preferences, value perceived and priorities. The new online initiative helped the firm to find a new powerful lever to prioritize the large pool of ideas in hand and move forward with the most promising ones.
I don’t intend to make this column longer than this therefore, leave the rest for the next month: In the next column I will discuss the disruptive nature of web-technology and its potential to substitute traditional ways of conducting innovation activities.
Till then, I’d like to hear your comments!
By Ehsan Ehsani, Product Innovation and PLM Practice at Accenture
About Ehsan Ehsani
Ehsan Ehsani is a researcher and consultant in the area of innovation and product development. Working with Accenture Product Innovation and PLM practice in New York City Office, he has consulted and worked with a variety of firms including ExxonMobil, Diageo, Sara Lee, Henkel, Unilever, UPM-Kymmene, Ericsson, SKF, Telefonica, Repsol, Abertis Telecom and Lego. He can be reached at Ehsan.firstname.lastname@example.org