The cost of doing innovation is a key factor in enterprise decision making but open innovation and collaborative innovation have a short history – so how do you go about modeling the cost of launching a collaborative or open innovation program? Doug Collins lays out the territory.

Internal sponsors of innovation initiatives begin with envisioning the possibilities that open when they convene their community. What critical question does the organization face which the sponsor wants to invite the community to explore? What sort of engagement and level of commitment does the sponsor envision from the people she wants to attract? What does success look like? Can we measure it?

The rubber then meets the road. The vision that the sponsor has for the community meets the reality of bringing it to fruition in material ways. Who needs to do what when and at what cost?

As the sponsor of your organization’s program, you will want to have a way to think about allocating resources to the activity that supports your goals for it. Estimating the resources needed to support collaborative innovation so that the organization realizes the full potential of the community can represent a green field activity in its own right, however.

This article offers a place to start by identifying the variables you will want to consider modeling as you calculate program costs.

1  The Demand Side of the Resource Equation

Each new member of a community, along with serving as the next valuable contributor, represents a new support obligation.

First, let’s look at the demand side of the equation: the factors that determine the level of support you need to provide in order to establish and grow your innovation communities.

  • The number of community members involved. Each new member of a community, along with serving as the next valuable contributor, represents a new support obligation. When you invite them to participate you commit to supporting their engagement with you. Engaging on community expectations takes time and effort, for example. Members’ questions range from the basic, “Can you help me access the community resources?” to requests to gain a deeper understanding of your view on the day in the life of an idea, now that they have contributed their insights.  Don’t underestimate the support people need, particularly if you want to go deep into critical questions.
  • The number of ideation challenges. Some organizations run one grand challenge after another. Others host a plethora of smaller challenges that the community members themselves initiate. Still others run a mix of activities as they grow more confident in their ability to manage the associated tasks in parallel. Each activity, big and small, has a life cycle associated with it: an introduction, the engagement period itself, and the resolution, in which the community explores the possibilities the challenge opens to them. Engaging in these conversations—helping the right people convene in the right room at the right time—takes work. For example, experience suggests that, as you scale, the resources you need to support that next incremental challenge do not in turn scale in linear fashion. Your group will have already tackled part of the learning curve associated with managing a collaborative innovation program. At the same time, the level of baseline resource you will need to provide does not fall below 50% of the amount you allocated to the first challenge.
  • The nature of the ideation challenges. Some challenges represent a relatively low maintenance burden for the program—for example, “blue sky” ideation challenges without a finite time limit, in which the community continually forms and evolves ideas, taking some portion of them offline to try in the real world. Other challenges may by contrast require more support: challenges with a definitive beginning, middle, and end. Challenges whose ideas must be further evolved and reformed by specialists who work the with the team who have committed to incubating the idea (e.g., financial analysts when the challenge has implications relative to capital budgets or market researchers when vetting the ideas would require more formal forms of traditional field research with the anticipated beneficiaries). Consider, too, the extent to which you plan to support the larger innovation lifecycle, including, for example, prototyping and trialing concepts that emerge from the community.
  • The extent to which the community members take ownership of the process. Some innovation programs have the implicit goal of transforming the culture of an organization. With respect to resource, you will want to consider the extent to which the people supporting the innovation initiative can serve as coaches, helping the community more fully form their ideas, as opposed to taskmasters, politely pestering people to do the next thing on the whatever innovation to do list they have created? And, what possibilities for change emerge when the person who contributes an idea, along with their supporters in the community, pursue their own charter to realize that idea’s potential?

In practice, your resource load changes and lightens as your community takes increasing ownership of the process of innovation, so the ownership moment becomes critical to what you can do.

In practice, your resource load changes and lightens as your community takes increasing ownership of the process of innovation, so the ownership moment becomes critical to what you can do, cost effectively. To this end, the fourth factor, ownership, represents the most important, exponential factor in your calculations, not only from the perspective of estimating resources, but also from the perspective of transforming the organization.

Figure 1 depicts the demand side of the resource equation that expresses the potential for communities to scale as they grow within the organization.

Figure 1: Modeling the demand side of the resource equation

Figure 2 charts one implication of the equation, depicting the extent to which the community takes the lead in owning the practice of innovation influences the way in which the program team engages with its members. The view that you create for your own initiative will profoundly shape your perspective on what it means to have the right people in place to support your communities.

Figure 2: the nature of the engagement changes as a function of the leadership the community

Calculating the resource demand based on the above model represents a three-step, as follows:

  1. Take into account the macro, quantitative factors of the number of members, the number of challenges per time period, and the general nature of the challenges themselves (e.g., blue-sky versus time bound or targeted versus transformative).
  2. Factor in the sort of environment the program aspires to create in helping each member of the community achieve leadership in innovation. What does the world look like when the community becomes self-sustaining, requiring less programmatic support and more consultative engagement by way of coaching?
  3. Anticipate when members of your community decide when challenges make sense and when the teams that form around challenges should splinter from the mainstream to pursue their idea to its fruition. In other words, consider fully the ways in which the creation of ideation communities can and should transform the organization and ways in which community members come to take ownership of the ideas they originate.

2 The Supply Side of the Resource Equation

You can now begin to model the supply side of the resource equation by estimating the headcount one typically allocates to a collaborative innovation program, identifying people by the critical roles of sponsor, community manager, moderator, coach, reviewer, communications, and administrator.

You will want to explore two critical questions on the supply side, as depicted by Figure 3.

  • To what extent do the one or more innovation challenges that comprise your initiative run concurrently?
  • To what extent does the sponsor of each challenge take ownership (there’s that word again) of articulating the critical question on the front end and making meaning of the contributions on the back end of the process? Both activities require thoughtful, time-consuming work. In other words, where does your charter begin and end, relative to your peers?

Figure 3: modeling the initiative to calculate the supply side of the equation

In closing, please contact me for a copy of a resource planning spreadsheet that attempts to map supply with demand. I welcome your perspective on the extent to which it succeeds in realistically doing so.

By Doug Collins

About the Author:

Doug Collins serves as an innovation architect. He has served in a variety of roles in helping organizations navigate the fuzzy front end of innovation by creating forums, venues, and approaches where the group can convene to explore the critical question. He today works at Spigit, Inc., where he consults with Fortune 1000 clients on realizing their vision for achieving leadership in innovation by applying social media and ideation markets in blended virtual and in-person communities.

Previously, Doug formed and led a variety of front end initiatives, including executive advisory programs for industry influencers, early adopter programs for lead users, corporate strategic planning, and structured explorations of new market and product opportunities. Before joining Spigit, Doug worked at Harris Corporation and at Structural Dynamics Research Corporation which is now part of Siemens Corporation.