Sustaining corporate internal venturing through tailored innovation contest Géraldine Vidou* SSI Dept., Research Public Centre Henri Tudor, 29 av. J-F. Kennedy, L-1855 Luxembourg, Luxembourg. E-mail:
[email protected]
Laurence Johannsen SSI Dept., Research Public Centre Henri Tudor, 29 av. J-F. Kennedy, L-1855 Luxembourg, Luxembourg. E-mail:
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Olivier Zephir SSI Dept., Research Public Centre Henri Tudor, 29 av. J-F. Kennedy, L-1855 Luxembourg, Luxembourg. E-mail:
[email protected] * Corresponding author Abstract: Within a global economical context marked by scarce R&D capabilities, companies inquire for diverse leads to innovate. New strategic innovation systems and processes are introduced to facilitate multidisciplinary innovation and efficiently bring new ideas on the market. This paper comes within an extensive investigation on innovation triggers from a Research and Technological Organization (RTO) internal point of view. It addresses one specific practice of internal venturing: internal innovation contest. The contribution of this paper is to propose a framework for the organization of innovation contests. This framework is composed a critical variables, which can be tailored to the specific context and objectives of the contest. These variables are activated in a four-step approach. The method to design this framework, iterating from literature, observations and practice, ensures its scientificity. The lessons learnt from this experimentation will enable improving the quality of the innovation contest framework. Keywords: innovation contest, collective creativity, internal venturing.
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Introduction
Nowadays, companies must propose new services at low cost to remain attractive and retain their customers. In fact competitiveness is a driving force behind innovation. However innovation does not happen on demand and people cannot be creative at a given time. Some conditions and determinants must be present to create an environment conducive to creativity and idea generation. Corporate venturing - an incentive promoting
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ideas generated within the organization - is a novel open innovation strategy, frequently used by multinational enterprises to explore new business opportunities. In this paper, we propose to sustain internal venturing by organizing internal innovation contest. In the section 2, we present the concept of innovation contest and its benefits. The section 3 presents different observations and their conclusions. In the section 4, the support service to the organization of innovation contest is presented.
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Innovation Contests and learning
Terwiesch et al.1 stand that the innovation “process starts with the creation of many innovation opportunities that are then evaluated in a filtering step that selects the most promising opportunity from among the candidates”. This process can be traditional closed processes or in open, where the outside world creates opportunities and select the best from among these alternatives. “The importance of Innovation contests, compared to traditional innovation processes are growing, following the trend towards outsourcing and off-shoring of innovation related activities and have become solid R&D problem solving”. “Despite this growing popularity little remains known about when such innovation contests should be used and how innovation contests should be executed.”1 Definition of innovation contest An Innovation contest is a competition of innovators who use their skills, experiences and creativity to provide a solution for a particular contest challenge formulated by an organizer. The idea for participants is “to submit solutions to a given task within a given timeframe”2. “In an innovation contest, a firm (the seeker) facing an innovation problem posts this problem to a population of independent agents (the solver) and then provides an award to the agent that generated the best solution”. Benefits of innovation contests
Raising performance of solutions
Terwiesch et al.1 list several benefits a firm gets from an innovation contest: “(a) it induces competition among solvers”, (b) the seeker only pays for successful invocations, (c) the seeker gains access to a broad pool of solvers, so problems are solved by those who have the most relevant expertise (d) there exists an opportunity of (...) cost savings (e) an increase in the capacity of idea generation and testing.”
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C. Terwiech & Y. Xu, 2008, “Innovation contests, open innovation, and multi-agent problem-solving”, Management Science, Vol. 54, No. 9, September 2008, pp. 1529–1543 2 F. Piller & D. Walcher, 2006, “Toolkits for idea competitions: a novel method to integrate users in new product development”, R&D management Vol.36, issue 3
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Fighting the stickiness of information
One of the major limitations companies encounter the new product or service development process is to collect information from the users: this collecting activity is costly and difficult. This is due to the information stickiness, i.e. “the incremental expenditure required for transferring information to a specified locus in a form that is usable to the information seeker”1 or to the lack of tools. Innovation contests enable to reach potential users or costumers and involving them in the new service development process, to access this knowledge from the source, avoiding the pitfall of customer needs assumptions. Indeed, Von Hippel2,3 among other researchers, has shown that many inventions originate from the user as “a user is an actor who expects to profit from an innovation by consuming or using it, while a manufacturer expects to profit from selling or licensing an innovation”.
Creating and developing an innovation culture within the organization
Organizing internal innovation contests leads to emergence of new ideas, but also to the development of the innovation culture inside the company. During contests, participants become familiar with innovative practices, they learn new techniques to be in creative mood. The innovation culture fosters creativity and promotes emersion of new ideas. In order to confirm these affirmations and define a common basis to organize internal venturing, we conduct observations of innovation contests in different contexts.
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Observations
Scientific studies as well as field experimentations have been conducted in different contexts to propose a framework for an innovation contest. The 24H of Innovation4 The 24H is a contest organized by the French Engineering Institute ESTIA. The principle of this contest is to develop innovative solutions, answering to proposed subjects by companies, laboratories, universities, associations, etc in 24 hours. Several challenges are submitted to teams of students who proposed at the end of the contest their solution in a 3 minutes presentation. The aims of the observation were to study the innovation activities in a student contest and to collect inputs on the co-creation.
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S. Ogawa, 1998, “Does sticky information affect the locus of innovation? Evidence from the Japanese product convenience store industry”, Research Policy, 26, 7-8, 777790 2 E. Von Hippel, 1988, The sources of innovation, Oxford, Oxford University Press 3 E. Von Hippel, N. Frake & R. Prügl, 2005, “Efficient identification of lead users: screening vs. pyramiding”, Proceedings of the summer marketing Educator’s conference (AMA), San Francisco, CA 4 24 heures de l’innovation, ESTIA, http://www.24h.estia.fr/
These information collecting was performed through the exploitation of an existing tool gathering project management activities and capturing of observations data on the place. The observation of the 24H showed that the innovation process is composed of different activities, occurring in a non-linear mode. It has been noticed that the ideation phase is an important phase in the innovation process, which can be applied on different dimensions of the idea. The GSJ1 The Global Service Jam is a meeting all over the globe of people interested in service design, problem solving and creativity. In a spirit of experimentation, co-operation and friendly competition, teams have 48 hours to develop brand new services inspired by a unique and shared theme. The GSJ was a different context than the 24H as it was an international contest, with much more contestants. It was an opportunity to apply our observation tools. The objective of this observation was to gather information on innovation activities, dimensions of the idea addressed during the contest, and the interactions inside the observed team. The results of the observation corroborate that the innovation process is not linear, where the ideation phase is an important step in the elaboration of a new idea, even if the team is bigger, the duration of the contest is longer and more teams are involved in this event. ACSSION The ACSSION contest was organized during a RTO corporate team-building seminar. Objectives of the contests were to: ‐ Foster a culture of creativity within the company by creating a creativity dedicated space, ‐ Raise awareness and develop competences in the field of service systems, ‐ Foster knowledge exchange among collaborators, help them get to know each other and what they are doing. A single challenge was proposed to the participants, who had 7 hours to design their solution and present it at the end to the audience, in a user-experience centred approach. The observation aimed at gathering information on the conduct of the event and the performed activities. The ACSSION contest constituted a use-case to study the innovation process in a context of service system design and to test the framework of innovation contest organization. From this view, it can be noticed that the ideation phase is a constant phase whatever the context. Conclusions Some conclusions had been taken from the conducted observations. Each contest is dependant of the context in which it takes place – professional, student, corporate, European, international, duration. Nevertheless some components are common to each context but have specific values. Our proposition is to organize well-structured innovation contests. In this objective, we propose a framework supporting the organization of innovation contest. 1
Global Service Jam, http://www.globalservicejam.org/
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Service support to the organization of innovation contest
Researches and observations have highlighted critical determinants in orchestrating an innovation contest, as they impact the motivation of the stakeholders and support collective creativity. Topic of the contest, award, assessment process, logistical support or clearly defined roles are crucial to creating a framework conducive to collaborative creativity. Concretely, we have implemented these determinants in three distinct phases: preparation, "D-day", and follow-up. Preparation phase During this phase, specific variables must be tailored to the specific context and objectives of the field: rules, condition for participation, roles of the different stakeholders and challenge. Variable 1: the challenge The challenge is the seeker’s problem, to which the solvers will have to answer. It is the trigger to creativity. The nature of the challenge needs to fit the objectives of the contest. Number of challenges: one and only challenge for the contest reinforces the comparability of solutions, favouring cohesion among participants and collective sensemaking. Multiple challenges enable participants to choose the one they want to contribute to. Specificity: the specificity of the contest is its openness. If task specify is high, seekers are looking for a solution for a precisely formulated problem1. The lower the specificity of the challenge is, the more innovative and diverse the proposed solutions are. Ideation contests address broad and non detailed innovation problems, therefore the challenge should have a low level of specificity, be open in order to enable participants to find innovative solutions. Variable 2: Participation Participants are the solvers of the challenge. Different modalities for participation exist: participation can be free or subject to conditions, it can be either individual or in teams. Entry conditions: participation can be based on the willingness of the contestants, which is often the case in ideation contest, where the challenge will rely on the creativity of participants. In cases of expertise-based or trial-and-error projects, the challenge calls to the expertise and competences of participants. Their motivation and willingness are not the only factors. There can be requirements to the participation; application and assessment process for potential solvers. Individual or in team participation: participation can be either individual or in teams. In an intra-organisational context, with cohesion and trust issues, team participation should be favoured. Team composition can be free: teams will be composed on the affinities of 1
F. Piller & D. Walcher, 2006, “Toolkits for idea competitions: a novel method to integrate users in new product development”, R&D management Vol.36, issue 3
participants, raising their motivations, whereas, imposed team compositions still enable to mix different profiles and have an impact of inter knowledge among participants. Variable 3: Roles The sponsor: it is the sponsor who sets the objectives of the contest and validates its design. He gives legitimacy to the contest and has a crucial role to play in the communication. He decides on the winner(s) and grants the award to the winner(s). The sponsor can be an organization (seeker of solution in open innovation contests); or an individual in intra-organisational contexts. Ringmaster: he is the designer of the contest on basis. The ringmaster is the contact for participants: communicating the rules. He is also a helpdesk and one-stop shop for the duration of the contest. The assessors: the assessors are the persons evaluating the contributions of participants. Assessment should be performed by judges, i.e. those highly familiar with the domain in which the service or product is created. The number of judges should be between 3 and 10, as recommended by Teresa Amabile in her CAT measure for creativity1. The D-day On the D-day, the focus is on the animation of the contest. Variable 4: Animation of contest Animator: the Ringmaster is the animator of the contest, the helpdesk for participants. He reminds the rules, is the time and rules keeper during the contest, helpdesk for the participants. Duration: the duration of the contest depends on two criteria – nature of the participation expected output. Whether the participation is physical or virtual: online innovation contests or challenges’ duration has to leave time for the participants to understand the challenge, imagine and design their solution and post it. Physical contests last for a day (ACSSION 2011, 24H 2 or two at the most (Global Service Jam3). The expected level of elaboration of the output: if the expected level of elaboration is high, the participants need time to elaborate their solution. If the contest is an ideation contest, it should just be long enough to enable participants to ideate, if it is a trial-and-error contest, participants need time to design the experimentation protocol, run the experimentation and analyse it. Framework: if the contest is organised online, it should support the workflow’s stages: from challenge announcement, to solutions posting, announcement of the winners and rewards granting. If the contest is physical a dedicated venue is required: big enough to let subgroups and teams have their own space to support creativity and collaboration. Support material: be the contest it physical or virtual, the contest should provide support to the participants: a bank of creativity techniques and tools, instructions for submitting 1
T.M. Amabile, R. Conti, H. Coon, J. Lazenbi & M. Herron, 1997, “Assessing the work environment for creativity”, Academy of management Journal, 39, 5; pp. 1154-1184 2 24 heures de l’innovation, ESTIA, http://www.24h.estia.fr/ 3 Global Service Jam, http://www.globalservicejam.org/
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the solutions, contact point. If the expected level of specification for the solution is high, then templates, tools and software, as well as the list of requirements are provided. The follow-up phase The follow-up phase - crucial to the recognition of creativity - be this peer or corporate recognition, is a key incentive for participants. The award nature and allocation structure were also designed to support participants' motivation. Variable 5: Award Open innovation initiatives often rely on the altruism of its community members1, their motivation being the desire to compete for status within the community2 or their self interest reflecting their role as user of the innovation3. Nature of award: the first motivation for users participating in a contest is that, if they win, the organiser or sponsor will produce a product or service integrating their needs or improvements1. Intrinsic motivations, such as the need for recognition by peers or the company are met through non-monetary symbolic awards: promotion of contributors, medals or trophies. Cash rewards or licensing contracts can also be proposed to the winners. Award allocation structure: the award can be a fixed prize, announced at the beginning or performance-contingent: in this case, it is indexed to the assessed value of the winning solution. Variable 6: Assessment of the contributions Submissions are evaluated by a panel of members from the solution seeker and ranked accordingly to a set of criteria4. The assessors (see roles) The assessment criteria: Cat METHOD Amabile5 is a generic measure for creativity which can be used to evaluate the innovativeness of a product or service. It is particularly relevant in contests with low task specificity. In cases of more specific contests, these three criteria can be used a “starter” assessment grid, and completed with dedicated assessment criteria, set defined by the sponsor. - Novelty or originality: How unusual or unexpected an idea is, compared to other ideas?
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C. Terwiech & Y. Xu, 2008, “Innovation contests, open innovation, and multi-agent problem-solving”, Management Science, Vol. 54, No. 9, September 2008, pp. 1529–1543 2 C. H. Loch, B. A. Huberman & S.T. Stout, 2000, “Status competition and performance in work groups”, Journal of Economic Behavior & organisation, issue 43, PP; 35-55 3 E. Von Hippel, 2005, “Democratising Innovation”, MIT Press, Cambridge, M 4 F. Piller & D. Walcher, 2006, “Toolkits for idea competitions: a novel method to integrate users in new product development”, R&D management Vol.36, issue 3 5 T.M. Amabile, R. Conti, H. Coon, J. Lazenbi & M. Herron, 1997, Assessing the work environment for creativity, Academy of management Journal, 39, 5; pp. 1154-1184
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Usefulness: What are the expected customer benefits and number of expected beneficiaries? Level of elaboration, or quality of an idea. Measures the feasibility of an idea and how close it comes to the specifications.
The assessment process: the assessment is based on the subjective judgment of experts to measure whether a product or response is creative or not. It can be organised through a collective assessment meeting, but also individually to counter consensus effects.
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Conclusion
In this paper, we address one of the innovation practices: innovation contests. This kind of innovation practice can be tailored according to the context and the expected outputs. Through our researches and experimentations, a service supporting the organization of innovation contests emerged. Further developments of this framework should make it customizable to better match various strategies and contexts, and easily transferrable to various forms of organizations, in order to foster their creativity.
References and Notes 24 heures de l’innovation, ESTIA, http://www.24h.estia.fr/ Global Service Jam, http://www.globalservicejam.org/ Loch C. H, Huberman B.A. & Stout S.T., 2000, “Status competition and performance in work groups”, Journal of Economic Behavior & organisation, issue 43, PP; 35-55 Ogawa S., 1998, “Does sticky information affect the locus of innovation? Evidence from the Japanese product convenience store industry”, Research Policy, 26, 7-8, 777-790 Piller F. & Walcher D., 2006, “Toolkits for idea competitions: a novel method to integrate users in new product development”, R&D management, Vol.36, issue 3 T.M. Amabile, Conti R., Coon H., Lazenbi J. & Herron M., 1997, “Assessing the work environment for creativity”, Academy of management Journal, 39, 5; pp. 1154-1184 Terwiech C & Xu Y., 2008, “Innovation contests, open innovation, and multi-agent problem-solving”, Management Science, Vol. 54, No. 9, September 2008, pp. 1529–1543 Von Hippel E., 1988, “The sources of innovation”, Oxford, Oxford University Press Von Hippel E., Frake N. & Prügl R., 2005, “Efficient identification of lead users: screening vs. pyramiding”, Proceedings of the summer marketing Educator’s conference (AMA), San Francisco, CA Von Hippel E., 2005, “Democratising Innovation”, MIT Press, Cambridge, MA
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