Innovation Marketplace, Alpheus Bingham & Dwayne Spradlin
difference it would make to your business if you could pay only for the results
of great ideas and projects that worked rather than for the many that didn't
business is principally the act of continual value creation, and this occurs
through the process of innovation. Innovation is what enables companies to
maintain their competitive edge. The alternative is to be driven to compete on
price, convenience, added services, or some other aspect of business.
Spradlin’s book describes a cutting edge approach that is growing into the
standard way that great organizations innovate.
The value of this book lies in the authors’ articulation and compelling
promotion of a process that can be adopted by any business or organisation, of
commercial innovation is carried out with an estimated 80% internal resources
and 20% external ones. The costs are borne entirely by the organisation. With
the advances in communication the adage that 'none of us is a smart as all of
us' can been scaled up and globalised. Most of the smartest people are not in
your organisation, nor can they be, nor need they be, provided you could access
their input. This is where the open innovation marketplace plays its role.
turn-of-the-century there were only a few organisations that provided a
platform for ‘crowd sourcing’ innovations. Amongst these were Hello Brain,
InnoCentive, TopCoder, BountyQuest, and the not-for-profit foundation X-Prize.
crowd sourcing platforms are able to achieve is best illustrated by the example
of the Canadian mine, Goldcorp. It had mining rights on about 55,000 acres near
Red Lake in Northern Ontario, but little idea of where exactly to engage in the
costly activity of sinking a mineshaft. Founder and chairman at the time, Rob
McEwen, listened to the many perspectives offered by his staff on how and where
the gold might be found in greater quantities, yielding a higher overall mine
productivity. These conclusions were based on assumptions and models that
McEwen wanted to challenge.
He had the
geological survey data given freely to anyone seeking it in exchange for the
hypothesis on where gold might be more prevalent. The answer that best suited
Goldcorp's efforts, would receive $575,000 in prize money. The survey data was
shared with over a thousand groups and individuals. Proposals came in from all
around the world. The winning entry was a collaborative effort by two groups
from Australia. Their graphic method provided an entirely new perspective of
the data and led the mine to become the most productive gold mine in history.
Life Sciences Directorate issued a public challenge to solve the problem of forecasting
solar events. A semi-retired, radio-frequency engineer from rural New Hampshire
contributed the best solution to this challenge. His idea on how to address
this problem was so unusual and clever that NASA described it as exceeded their
requirements. Just a smart person, who was paid a modest $30,000 for his
A university researcher
involved in a line of work similar to the open challenge may easily and out of
interest add the issue to what he is doing anyway with no thought of monetary reward.
receive less attention from large commercial organisations than the more common
types and are therefore best addressed through open innovation. A foundation
known as Nathan's Battle was established by the parents and friends of a young
boy, Nathan, suffering from a rare and fatal neurodegenerative disorder known
as Batten’s Disease. Their website lists scientific and clinical efforts, and
solicits specific needs that would enable the foundation to continue with the
studies. Not only do they use the crowd, but they are using the crowd to search
the crowd for those who know of “...a Good Manufacturing Practices facility to
produce clinical grade virus vector for us to be used in the toxicity testing
and in the clinical trials.”
open innovation is the formulation of the challenge with precision. Einstein
famously said, “If I were given one hour to save the planet, I would spend 59
minutes defining the problem and one minute solving it.”
What can a
business expect from the full adoption of challenge driven innovation as a
strategic practice? For starters it is a more cost effective problem-solving
methodology because you pay for results and not for trying.
innovation from outside the organisation is not just a numbers game. There are three
characteristics of the crowd’s problem-solving capability that ensures greater
value. One is “diversity” - having a large number of people tackling the
problem using widely different approaches. Another is the “marginality” of the
respondents who are, most often, not from the discipline that posed the
problem. The radio-frequency engineer
mentioned above was not an astrophysicist. Thirdly, there is the
uncontrollable, unpredictable “serendipity,” one of those factors completely
outside the control of either the organization or the individual attempting to
invent or innovate.
of a body’s displacement of water was a function of serendipity. Why was it
that this maths and science oriented, intelligent person had failed to discover
how his body displaced water on any of his many prior baths? It was serendipity that he had the insight
just when he needed it for determining the quantity of gold in Herio’s crown.
open innovation represents a dramatic revolution in enabling more effective,
efficient, and predictive innovation. Even if you only try this approach
internally (at first, of course,) a well-constructed challenge is an astonishingly
powerful and uniquely effective tool for focusing staff energies on the most
important problems facing your organisation.
Innovation Marketplace is a superb read for your year-end vacation when you
will have the time to ponder its implications and possibilities.
Insights High +---- Low
Ian Mann of Gateways consults internationally on leadership and strategy