How Crowdsourcing Impacts Innovation Portfolio Management

By: Rick Wielens

In this in-depth article we present how Open innovation meshes with crowd sourcing, drawing on ideation, market needs and opportunities, to fuel a balanced portfolio with actionable innovation challenges, or « the right things to do », and converges these with a need driven approach to source the ways of « doing things right ». We will illustrate this innovation continuity with a number of examples and a focus onto the food and drink industry.

Whether it is called social media, community management, ecosystems, crowd capital, predictive markets, wikis or just simply crowd sourcing, having access to this cognitive surplus has become key to any innovation strategy or program. By definition, crowd sourcing consists of individuals, more or less isolated, and this makes per se for highly dispersed  information, creating a challenge of sourcing, managing and curation. Open Innovation, a super-set of crowd sourcing, is an important component in the innovation arsenal and can be highly effective in making sense of the chaos of dispersed knowledge and connects the dots between need ideation and their realisation.

The Internet has had a profound influence on innovation practices. Crowd sourcing has tipped the innovation balance from the domination of large corporations towards smaller entities and access to these innovation sources has become an important part of innovation strategy. Customer crowd sourcing, such as MyStarbucksIdea, has opened new avenues of identifying customer needs and trends. Another highly powerful way of applying crowd sourcing is in the identification of technology solutions to fulfil needs, whether they are customer or corporate. Needs driven innovation and Open Innovation are at the convergence of these two crowd sourcing methods.

Background: From Research to Search

Firstly, this article provides a background and sets the innovation scene, illustrated by some of the beliefs related to open innovation, and explains how open innovation inserts into innovation portfolio planning and value creation in general.

The need driven innovation model

Secondly, the article introduces and discusses the “need driven innovation model”, providing a vision of an alternative approach to sourcing possible solutions to fulfil client and industry needs. By placing the innovation cursor within the needs, rather than the solutions, is particularly effective and Open Innovation at this boundary accelerates innovation cycles, opens the solution horizon far beyond industry boundaries and detects and connects to the unobvious. A number of innovation examples will be cited to illustrate how need-driven innovation engenders new opportunities and business models.

Key capabilities needed for open innovation

Thirdly, the article presents a number of key capabilities needed for open innovation with a perspective on identifying and realising latent customer needs.  These key capabilities make up a virtuous circle where each item feeds from the precedent.

1. Define a balanced need portfolio (priority, budget, resources, objective….)
2. Transform the needs into well-crafted challenges
3. Diffuse the challenges (internally or externally) to gather quality solutions
4. Assure the clear execution of the solutions by absorbing and integrating into
   the portfolio action plan
5. Continually monitor to detect opportunities, threats, signals of change and trends… these are used to keep the dynamic of the portfolio needs (item 1)

These key capabilities will be elaborated upon inside the full article.

Case study: how Kraft integrated Open Innovation Crowd Sourcing

NineSigma has been active in Open Innovation crowd sourcing since 2000 and has run over one thousand highly diverse projects in food and drinks industry, ranging from melt proof chocolate packaging to microbial contamination detection.

The article will present a case study that shows how Kraft has integrated Open Innovation Crowd Sourcing in a very effective way to solve their challenge for an innovative packaging solution to prevent chocolate from melting. This example will show how preliminary work on identifying “the right things to do” can result in “doing things right”, to accelerate identifying and acquiring the solution.

Lessons learned from over 12 years of Open Innovation project management

The article concludes with an overview of lessons learned by NineSigma from over 12 years of Open Innovation project management. These 5 lessons involve:

• Create an environment that nurtures, encourages and rewards open innovation
• Define clear challenges and process ownership
• Decide about the span of control, both internally and externally
• Establish realistic time-lines and budgets.
• Plan your resource allocation.

We believe that there are three trends related to the future of Open Innovation and that can apply transversally across many industries: Collaborative Sustainability – Value Chain Open Innovation  –  Innovation Portals:

Future trends

The article continues with a vision of the future of Open Innovation in the consumer goods industry. The food and drink industry and more specifically fast moving consumer goods (FMCG) companies, like Procter and Gamble and Unilever, have been early adopters of open innovation practices. Their vision and deliberate outreach to the global open innovation community goes far beyond sourcing new technology, but embraces the search for new product ideas and opportunities, innovative packaging and materials and processes. We see that in those companies where Open Innovation is embedded into the company strategy that there is a deliberate overlap in their use of crowd sourcing in the ideation process and technology identification and acquisition.

By Rick Wielens