Igniting innovation: how hot companies fuel growth from within

Ask for ideas from your employees

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Recent research published in MIT Sloan Management Review shows that engaging employees across all functions and ranks in “innovation communities” can lead to some highly creative ideas, as well as practical suggestions for their implementation.

IBM’s 2006 InnovationJam involved 150,000 IBM employees, family members, business partners, clients (from 67 companies) and university researchers. Participants posted ideas from 104 countries, and conversations continued 24 hours a day.

The research describes the case of food retailer SUPERVALU Inc., where each year 35 to 40 mid- and director-level managers break up into four teams to discuss strategic issues suggested by executives in the different business units.

The managers examine issues outside their own areas of expertise and work on their leadership development at the same time.

Over periods of five to six months, they hold electronic meetings at least weekly and meet in person at least five to six times to discuss the issues, all while continuing to perform their regular duties.

They then send their recommendations to company leaders, who determine which ideas to implement and whether revisions are necessary. SUPERVALU reports that over the past 10 years recommendations have been implemented from 22 out of 29 projects completed.

Techniques for fostering intrapreneurship

Some companies, like General Electric Co., involve consumers and business clients in new product discussions as well. Since 2001, IBM has used “Jams” — massive online brainstorming conferences — to generate ideas and solve problems.

IBM: InnovationJam

Its famous 2006 InnovationJam involved 150,000 IBM employees, family members, business partners, clients (from 67 companies) and university researchers. Participants posted ideas from 104 countries, and conversations continued 24 hours a day.

The InnovationJam resulted in US$100 million being appropriated to start 10 new businesses for IBM, including a 3D internet systems unit and a unit called “Big Green Innovations” to develop and apply environmental technologies.

Crowdsourcing

Tapping the wisdom of crowds will become an indispensable source of ideas for companies, according to Christopher Tucci, Professor of Technology Management at the Ecole Polytechnique Fédérale de Lausanne (EPFL) in Switzerland and previously an industrial computer scientist at Ford Aerospace.

“A digitally networked world offers the unique ability to broadcast a problem to a large group of people or community (called the ‘crowd’) and call for solutions,” he says.

Tucci notes that “crowdsourcing” — the term was coined by Wired magazine writer Jeff Howe in 2006 — has produced some interesting results already and will undoubtedly get bigger with time.

For example, Facebook, which was entirely in English at first, recruited its own users to translate its pages into different languages. The process was highly efficient: Facebook launched a complete Spanish site in just a few weeks, and repeated the process with many other languages. It also incorporated an automated quality-control element by asking users to vote on which translations were the best, raising the overall translation quality.

Similarly, Tucci explains, companies can do “internal crowdsourcing,” which means tapping the knowledge base of their own employees. This can be done using traditional techniques, such as ratings and feedback on R&D projects or a virtual suggestion box.

Or it can take a radically different approach, such as creating an “idea exchange” or “market for innovation.”

The rise of popular ideas

The latter is a technique for evaluating the quality of ideas and predicting which are most likely to work and therefore deserve backing. It resembles a stock market (or a prediction market used to predict election outcomes), except that instead of stocks, people trade in ideas, using virtual currency.

Popular ideas rise in price; unpopular ones drop. The price forms a kind of forecast about whether an idea is strong enough to merit continued investment. “This trend is in its infancy, but expect to see many varieties of crowdsourcing in the years ahead,” Tucci says.