“Crowd sourcing,” or “open innovation” – the practice of drawing from resources outside of a corporation to develop new ideas and products – is grabbing the attention of big companies on the hunt for their next level of growth. So-called open innovation portals are cropping up everywhere and there are countless books on the topic. Still, companies serious about innovation need to reconsider opening the door to ‘open innovation’ and stop following the crowd.  Here’s why:

Companies fail to realize that generating ideas is not the problem. In fact, developing numerous ideas just makes any business challenge that much more challenging. If nothing else, after spending time generating the additional ideas, you’ll need to sift through to determine the best one.  It’s much better to start with a clear understanding of the need you’re trying to solve. Success starts and ends with meeting those customer needs.

Companies need to adopt a strict process of innovation. In order to guarantee success, firms must develop criteria to determine if an idea is the right idea and discard it if it is a bad idea.  If your solution to innovation is simply to tap additional resources to create more ideas, then the only thing you will find is a higher failure rate.

It’s a common perception that markets change very quickly. But this is simply not the case.  The actual customer need or job that needs to be performed is very stable. It’s the delivery vehicle that changes.  Take the music distribution industry, for example.  Hundreds of years ago music was shared across parties by pen and paper which years later evolved to records, tapes, CDs and MP3s.  The platform in which music is delivered changed drastically over time, but the general job function – how do I get music from one place to the next – remained consistent.

Open innovation is not necessarily bad and more ideas are not necessarily good, but the key is to develop and deliver products, services and solutions that meet customer needs.

Strategyn

About Strategyn

Started by Tony Ulwick, Strategyn has generated billions of dollars in equity value for its clients and has achieved the highest innovation success rate of any firm. Whether your goal is to protect, grow or disrupt existing markets, successfully enter new markets or to optimize your customer's product/service experience, Strategyn will help you achieve your growth objectives.

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