Executives have long noted the disjuncture between corporate R&D spending and innovation. Nokia for example was for years one of the largest R&D spenders in the world, yet for all this spending missed the smartphone revolution. Even companies known for innovation, make expensive mistakes. Google’s major effort around Google+ involved creating a team of over 1,000 individuals, creating a secret building close to their CEO, and following up with a major PR blitz once the project was launched. Four years later, Google is winding down the project.
So what are our alternatives? Increasingly we see successful companies taking a leaner, faster, and ultimately cheaper route by using a range of “innovation enablers” such as hackathons, innovation labs, and incubators/ accelerators. Meanwhile innovation management tools help create “idea markets” within organizations. Finally, the rise of open data and open application programming interfaces (APIs) mean companies can create new data-driven services and products, cheaper and faster than ever before.
Last week my colleague Charles Green held a webinar examining the rise of these innovation enablers. Here are some of the key points from the discussion:
- Hackathons create new ideas at little cost. The beauty of the technique is its simplicity and flexibility- whether you decide to run a short internal hackathon, or launch a major 3 day event inviting people from across the world, the approach can be changed to fit your needs. By bringing together different perspectives, new ideas and possibilities will emerge. And if you´re still not convinced, take a look at the very serious hackathon which the European Organization for Nuclear Research (CERN) is running later this year.
- Foster “idea markets” with the use of tools. Companies need to harness the power and ideas of all their employees. Here at Belatrix for example we invested heavily in developing an innovation platform which relies on the principles of gamification, to encourage people to share ideas. In the first few weeks of launching, over 90% of employees accessed the platform, and nearly 70% actively participated by sharing comments and ideas.
- Innovation labs provide a path around the corporate hierarchy. In any mid to large size organization bureaucracy cannot be avoided. Setting up a distinct lab, separate from the main corporate offices, helps organizations bypass the usual hindrances which slow down new initiatives.
- APIs provide the basis for new business models and services. The emergence of APIs as the spur for new innovation, is closely and intricately linked to the increasing availability of data. APIs enable organizations to open up select access to their data to developers. In addition, the open data movement has led to much greater availability of previously inaccessible data, such as the Open Government Initiative started by President Obama.
- Incubators help companies take a venture capital mindset. Other organizations partner with or invest in startups. This helps companies stay at the leading-edge of technology and industry developments . Microsoft has its Microsoft Ventures program for example, which provides startups with help ranging from access to mentors and industry experts, to the use of Microsoft technologies, to making investments once they have achieved some early business success.
In addition to using these “innovation enablers”, I believe we must also embrace a shift in our mind-set. The principles of design thinking provide a unique approach to solving problems. For example, in software development, by combining design thinking with Agile development we can better approach the problems which our customers come to us to help with (and sometimes identify solutions they haven´t considered), while iteratively developing and improving the software.
What has been your experience with these techniques? Are you re-evaluating your R&D budget and expenditure? Have you trained your team in the principles of design thinking?