by Madeline Weiss and June Drewry

How Collaboration Enables Affordable Innovation

Aug 29, 20113 mins

Top companies are turning to crowdsourcing on public and private networks to pave the way to more affordable idea creation

Ten years ago, pharmaceutical giant Eli Lilly launched an internal website called InnoCentive. The aim was to harness brainpower from its global staff to solve problems that had thus far stymied its R&D experts.

Today 34 companies—including Boeing, DuPont, Novartis and Procter & Gamble—use InnoCentive to find solutions from 250,000 solvers in more than 40 disciplines across nearly 200 countries. Scientists receive payments of up to $1 million for their ideas, which have launched such innovative products (and huge revenue generators) as P&G’s Swiffer floor mop. (For more on innovation culture, see “Finding the Right Road to Successful Innovation.”)

The success of sites such as Inno­Centive has spurred Internet-enabled innovation in myriad industries.

At the Society for Information Management’s Advanced Practices Council (SIM’s APC), we see the CIO’s business strategist role evolving to include leading innovation efforts, outpacing the competition and anticipating customer needs. Yet identifying innovative opportunities and solutions can be costly and difficult. Internal R&D is expensive and doesn’t always yield profitable results. Employees at large companies who don’t get a fair hearing for their ideas often get discouraged and stop trying—or worse, take their good ideas elsewhere.

Over the last few months, APC researchers and members identified some successful low-cost approaches to finding innovative opportunities and solutions. What all of these approaches had in common was this: smart use of the Internet and of company intranets.

Building the Pipeline

For example, Cisco recently awarded $250,000 to the winner of its Internet-based campaign to identify its next billion-dollar business: a sensor-enabled smart electricity grid. Two years ago, Netflix’s Internet-based Netflix Prize campaign awarded $1 million to people who could improve the accuracy of predictions of customers’ movie preferences.

Chubb Group of Insurance Companies has funded 24 ideas with $5 million since 2009, extending its original internal search for profitable growth ideas outside to independent agents, partners and suppliers. Chubb’s second innovation jam, which was focused internally, generated cost reductions in such areas as application support and project lifecycle streamlining.

AT&T also took an internal approach by launching The Innovation Pipeline (TIP) on its intranet to convert its patent portfolio into revenue-generating ideas for customer products and services. There are three phases to each TIP campaign, which lasts three months.

The initial social innovation phase issues an open call to AT&T’s 40,000 staff members. Ideas are posted on the intranet for employees to discuss and to invest in with TIP dollars ($10,000 in virtual currency granted to each staff member), placing bets on which ideas have the greatest revenue potential. Winners are selected for the second phase, then provided with funds to develop a prototype and business case. The third phase identifies and moves some projects from prototype to production.

IBM has long been a thought leader in collective brainstorming, hosting innovation jams since 2001 for staff, business partners and customers. The jams are intended for idea creation, incubation and implementation. Ideas generated through its ThinkPlace intranet have garnered $500 million for IBM since 2005.

All of these companies provide inspiring examples of leadership in business strategy that leverage public and private networks to get a competitive edge in today’s markets. CIOs from any industry can take advantage of these models of low-cost but high-payoff approaches. So now the question becomes: How are you harnessing the power of these technologies for innovation in your company?

Madeline Weiss is director of the Society for Information Management’s Advanced Practices Council (APC). June Drewry is former CIO of Chubb and a contributing adviser to the APC.