Below are a few snippets of some of the research presented at the 2014 R&D Innovation Management conference, in Stuttgart, Germany:
1) The use of social media and crowd sourcing to generate new innovations
Karim Lakhani from Harvard Business School presented a strong case for using crowd sourcing and on-line competitions to generate novel and unique innovations. An example was a NASA International Space Station Longeron competition.
With a budget of $30,000 this on-line competition generated better ideas than a multi-million dollar internal project at NASA. The project got hundreds of talented competitors from over 60 countries to participate and provide amazing solutions.
For the approach to be successful: define the problem you’d like to solve, determine the evaluation criteria, set the prize, attract problem-solvers, test the solutions, choose the winner, implement the solution then pay for its performance.
Why do crowd-sourced problem solvers get involved? The drivers are a combination of extrinsic (e.g. prestige, cash price, potential job), intrinsic (e.g. fun, learning) and pro-social (e.g. community contribution, belonging) .
For more details on the approach refer to Lahkani, Boudreau (2013).
2) Leadership Pipeline – how to build a strong innovation culture
John Medcrof from McMasters University in Canada provided an applied update on the leadership pipeline for R&D organisations. The levels include:
i) Manage yourself (entry-level staff)
ii) Manage others
iii) Functional Manager (e.g. in SME CTO, in MNC NPD Manager)
iv) Business Manager or Group Functional Manager (e.g. in SME CEO, in MNC VP R&D)
v) Group Manager (e.g. in MNC (multinational corporation) CTO)
vi) Enterprise Manager (e.g. in MNC CEO)
John suggested steps to help with the transition between these various stepping stones. A note of caution, however, was that you should never promote your best engineer into a managerial role. (You lose out twice – losing your best engineer and getting an at best mediocre manager. Of course there are exceptions.)
Andrea Tietz, Global HR at Carl Zeiss Optics supported the argument that one should be strategic in deciding who to promote from an engineering background. At Carl Zeiss each engineer gets trained in core skills including project management and business planning on an on-going basis. Over time good managers start to bubble to the top supported by strong mentoring and personal development strategies.
Until recently accountants & lawyers were dominating leadership teams of Fortune 500 firms – and only recently have more and more engineers begun to lead technology driven businesses.
3) Sourcing new ideas via social media 2.0 monitoring (Bosch )
At Bosch, another globally very successful family owned and professionally managed Swabian company, they use Web 2.0 Social Software to accelerate open innovation by tapping into a global pool of talent. Peter Guse, CEO of Bosch’s Start-up Platform, explained the synergistic overlap of internal innovation, open innovation and Web 2.0 Cloud based innovation. Here social ideation, open-source engineering and idea crowd sourcing is utilised to generate world-class product/services concepts much faster and cheaper than they could do just relying on internally driven innovation. The process of problem abstraction/definition takes about 10 days, the posting is open for 1-3 months, the evaluation/selection process takes up to 10 days and then the exploitation/ implementation starts. Usually the latter part utilises predominately internal resources.
This means that the idea generation, and design work gets complemented by external input. The implementation and operational support is done by Bosch’s world-class engineering teams. With a substantial data mining exercise that looks at social media sources including social bookmarks, forms, blogs, microblogs, crowd-sourcing sites, and media sharing, Bosch employs a different approach for each different cultural setting when it comes to their social media monitoring. The process typically involves identifying the need for information, selecting sources, retrieving data, filtering and then contacting the originator and using the information. The contracts with external suppliers are very similar to how they are in a normal open innovation process, but vastly accelerated by proactively searching for relevant ‘idea suppliers’. So far over 50% of the ideas implemented came from Europe and about 45% from North America. As indicated in several other talks at this conference, despite companies having distributed R&D centres around the globe, R&D as a function is still difficult to globalise (e.g. Apple is still conducting over 90% of its R&D in Cupertino, California). The Bosch example shows how the R&D process can be well supported and accelerated through the use of clever social media idea generation and open innovation.
4) Balancing exploration & exploitation (Hilti – power solutions)
Hilti is another family-owned and professionally managed company, headquartered in Lichtenstein. They have over 25,000 employees and operate in over 80 countries globally. The backbone of their success is a strong corporate culture. The culture includes sharing the core purpose of the business, acting responsibly & taking responsibility, and winning through establishing high performing teams. Values include integrity, courage, teamwork and commitment. According to their founder, Michael Hilti, the culture is a key foundation for Hilti’s ongoing global success.
Dr Andreas Bong, responsible for R&D at Hilti, provided insights into how they balance exploration and exploitation. Exploration is the increase of organisational knowledge, while exploitation involves leveraging existing, underexploited knowledge resources from within (and outside of the) organisation.
The company uses a whole set of methods and tools to support this balancing process between exploration and exploitation. One of the tools is their Horizon 2020 initiative. This involves monitoring global mega-trends and construction trends (reviewing customer requirements and identifying their needs), the projection of company specific applications, and deciding future product categories. One example is supporting the BIM building model standard and integrating with CAD systems like Revit and building an extensive Hilti Object Library. Another tool is Hilti’s KANBAN style idea board which gives the idea initiator feedback on their idea and possible implementation within a set time frame (reviewed quarterly). The company also runs social media, open innovation competitions to generate innovative new concepts.
In terms of strategic planning the company uses a rolling three strategic planning cycle which sits on top of their operational plans and gets driven by their 5-10 year Horizon or Future initiatives. Like other Mittelstand/SME businesses Hilti experiments with new innovation strategies and approaches on an on-going basis. This helps them to achieve leadership in their chosen market segment.
Author: Martin Knoche, Business Innovation Group at Callaghan Innovation (8. June 2014)