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Innovation must embrace the crowd- world innovation forum

June 22, 2012

Earlier this week I was fortunate enough to have been invited as a guest at the World Innovation Forum’s New York event. 

It was inspiring to hear the likes of Clay Shirky , Jane McGonigal  and Henry Chesbrough talk about their respective worlds and the implication of those changes on the way companies need to think about new ideas.

In many ways, they were all talking about much the same thing; the notion that opportunity happens when you open things up.

Henry Chesbrough, a Professor at Haas Business School, gave the example of Philips Research, who back in 2003, transformed its space from an enclosed lab surrounded by barbed wire to an open campus that invited outside companies in and encouraged collaboration by having only one restaurant on site.

Chesborough’s big point was that the nature of innovation has changed completely and that without bringing lots of outside thinking into the process, there was no way for companies to compete effectively. In addition, he saw product innovation running out of runway as the pace of competitive “copying” narrowed the differentiation window.

He used mobile phones to make his point- explaining to us how Motorola had cleverly exploited the lack of the design in the category to create the best selling Razr; but design was an “innovation” that was very easily copied by all competitors and Motorola had nothing else, so it got trumped and eventually sold to Google for its patent library.

Chesborough believes that product innovation has to be combined with service innovation in order to create something that ownable and different. He encourage companies to really think hard about how they can bring a service dimension to the product side of their business- as an example he used GE aircraft engines that cost $millions, but their 30-year service contracts make more money for GE than the initial engine sale.

McGonigal believes the “crowd” can be motivated by gaming mechanics and that bringing games to real life is a way to make things more engaging and participatory. She shared a great example of a community garden network that was inspired by Farmville, to put its gardens online and encourage community members to have their participation and involvement in the real world, credited in the online world. This change and the addition of gaming mechanics radically increased real participation in the gardens.

She also showed us the power of games to solve problems for science and scientists such as protein folding and how game structures help people understand complexity. Her game, “World without Oil” forced players to imagine their personal futures in a world where oil was very scarce, the act of participating in the game, forced the players to think differently about how they consume and act in real life.

Shirky is another believer in the power of the crowd to create and to voice its opinion when things don’t seem right. He was quick to jump on the recent news surrounding the 9-year old Scottish food blogger- Martha Payne– who found her blog banned by her local council, until a tsunami of web support from the crowd forced the council to retract its ban.

What Shirky understands is the dramatic shift of control that’s happened thanks to the Internet and the rise of social media. A change that forces companies to really think differently about the experiences they create, the products they make and the way they communicate with customers and prospects. Most importantly, he recognizes that crowds have demands that might not fit the financial models that companies have been using for decades. To illustrate this point, he talked about the site, Patients Like Me, which collects a lot of valuable data for pharmaceutical companies, but can only do this because it provides a rich set of community features for its users to engage with. These features offer very little in the way of insight or direct financial value and under most business models their very existence would be questioned, but of course, in this new world, they are absolutely fundamental to the success of the site.

Another example he gave to show the passion and enthusiasm of the crowd was the book reviews section on Amazon for the first Harry Potter book. According to the site, there are over 5,800 customer reviews for the book and they are still coming in. The most recent, having been written by someone who read the book as a teenager and was now reading it to her children. Shirky described these reviews that didn’t confirm to the classic stereotype of expert review, but instead were manifestations of fan culture.

To summarize, the three speakers reminded us how we really need to embrace the opportunities that exist outside of our own four walls to find new ideas.

A company’s success in the future will significantly depend on its ability to collaborate, share and engage with the crowd. Doing this is clearly not a walk in the park, it requires a fundamental new attitude and a willingness to throw out many of the new rules.

As Influx has suggested many times before- it’s not simply about being present in social media, it’s about how you use the channels to get closer to your customers and to bring them into the process, instead of merely controlling and managing them from an ivory tower.

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