22 September 2009
There is an interesting article in The Economist this week about an innovative approach to innovation.A service called InnoCentive outsources research and development to an open community on the web.Companies can post challenges on the website and enterprising problem solvers across the world can submit solutions.Unlike many open community approaches, this one offers actual monetary compensation for workable solutions.
The service has been expanded to include a service called InnoCentive@Work.This replicates the challenge/solution market within a company and solicits responses from a company’s internal employees before moving them to the public community.One of InnoCentive’s leaders was quoted saying “Companies often don’t know how much they already know”.
Having worked for several large, global insurance companies, I could immediately relate to this statement and was intrigued by the possibilities of this innovation model.Could an outside service administrate innovation more effectively than the time-tested “suggestion box”?Could the promise of a direct cash award, distributed by an objective third party, take the place of the sometimes awarded, internal bonus for “a great idea”?
After visiting the website, I came away with the impression that, to date, manufacturing companies are participating more than service providers.However, I’m betting that some financial services firms will sign on and see results.Although the insurance industry suffers more from a lack of execution than innovation, given the outlook for constrained revenue growth, every advantage matters.