Generating ideas externally
In addition to generating ideas internally, it is critical to look externally for new product and service ideas. While this has long been done by successful innovators, it remains relatively rare – the “not invented here” syndrome is seductive and difficult to overcome. However, as popularized by Henry Chesbrough’s seminal work Open Innovation, it is vitally important. Companies that source ideas externally as well as internally perform far better on every key innovation metric.
Sourcing ideas externally is much more complex than internally, because there are many external groups of stakeholders who may offer insights of value. As such, as illustrated in table 2, we recommend a two dimensional phased approach. Begin with a first phase that focuses on a limited number of tactics with a few key stakeholder groups. Over time, add more sophisticated tactics, and add additional stakeholder groups. By phase three, you will be sourcing ideas using a wide range of tactics from a full range of external stakeholders.
Interviews / individual collaboration – you can begin quickly and easily this by reaching out and speaking with people. Many customers, partners and influencers will willingly share their thoughts if you only ask them. While a discussion guide can be helpful, these interviews should be fairly unstructured to allow for rich conversations and idea generation.
Focus and brainstorming groups – assembling small focus groups can also be a relatively easy tactic. Usually eight to twelve participants, these sessions need a skilled moderator that leads the discussion and helps participants walk through problems and explore possible solutions.
Monitoring blogs – with the emergence of blogs as a mainstream medium, it is wise to keep track of the blogosphere in your space, particularly comments and ideas from customers, competitors and influencers.
Online research – with essentially infinite information online about every known subject, a central element of external idea sourcing is of course extensive online research. Key targets will include relevant companies, university research, media, patent applications, and industry association events.
Advisory board or panel – create an advisory board or panel of customers, partners or influencers. These groups should be kept small, represent a cross-section of opinion and avoid exposing competitive sensitivities. Advisory boards should meet on a semi-regular basis and be enabled by web-based technologies. To keep the group focused, your organization should supply them with specific issues for discussion, but also allow the group to self-regulate and brainstorm freely.
Customer experience mapping – mapping the customer experience is an important tactic. While this methodology can involve varying degrees of sophistication, the essence is to document how your customers perceive your company and its offerings throughout the purchase, use and support cycle.
Non-customer analysis – it is important to consider the ideas of non-customers. Their feedback as to why they did not select your product, and their suggested improvements, can be more valuable that your satisfied customers.
Reverse engineering – this well known tactic involves buying and analyzing competitive products to understand the thinking and engineering behind them. Based on this analysis, generate new product and service ideas.
Intermediaries – these entities include brokers, agents, venture and innovation capitalist and provide a company with raw or market-ready ideas.
Licensing – other companies can be a source of ideas, and frequently they are open to licensing them. Large corporations also monetize their patents by allowing companies to locate them online.
Strategic investment – this involves identifying and investing in start-ups to secure and build upon their ideas.
Co-creation – at the end of the external innovation spectrum is joint development of product ideas. In this methodology, customers, partners, complementors or even competitors share in idea generation and product development.
Enthusiast community – setting up an enthusiast community is a large undertaking, but can allow your users to interact naturally and suggest valuable improvements. While it can be difficult for companies to create these communities, they can also leverage third-party sites where users congregate and interact.
Extended observation / shadowing – this involves closely observing the user experience – how users go about their lives, the problems they encounter, and how they interact with your product or service. Many needs are unknown to the customer, and can only be discovered through in-depth observation. Because this is usually done in a native environment, your team can identify new areas of opportunities.
Acquisition – similar to strategic investment by taken to the next level, this involves identifying and acquiring companies for their ideas and technologies.
Technology transfer – universities and research institutes usually have an extensive intellectual property portfolio and are willing to license it. Usually these ideas are more technical in nature, but if your company can create a solid business case or couple them with other ideas, they can be a source of tremendous value.
Incubator program – companies such as Salesforce.com have pioneered creative programs to keep the pulse of related start up activity. These programs involve providing companies with resources such as technology platform, technical advice, or office space. Often this is done in exchange for equity; however, in other instances there is no equity exchanged. In the latter instances, the incubator allows the larger company to gain early insight into innovations that benefit their business or provide an avenue for acquisition.
Idea exchange – this is common when a company has generated an interesting idea that falls outside of its core business. In this case, it collaborates with another company and exchanges its idea with one from their portfolio.
Crowd and open sourcing – leveraging large, web-based innovation platforms or open-source technology to come up with ideas. Some companies have integrated crowd-sourcing into their business model to tap collective knowledge and creativity.
Initiative, forum, or promotion - to tap independent innovators, many companies allow for free-form submittal of ideas. Many of these programs reward selected product ideas by acquiring or licensing the solution.
Technical innovation community – several technical exchanges exist where a company can anonymously post their technical problems and the members of the community submit their proposed solutions. The rationale for using such a platform is the appeal of having a significantly larger number of people tackling your problems from potentially diverse angles.
The tactics and methodologies listed above, representing the thinking of innovation thought-leaders, are a menu of choices, not a rigid list. Design and continually refine your external idea generation programs using this framework and these tactics as inputs
Generating high potential new product and service ideas is the critical foundation for successful innovation and new product development. In this article, we have presented a practical approach to help you build a best practice idea generation capability within your company.
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