Best Practices – Designing Idea Submission Programs for Success

EXECUTIVE SUMMARY

image001Companies ranging in size from the Fortune 500 to small, privately owned experiential brands are increasing adopting Idea Submission Programs as part of their Open Innovation program in an effort to connect with customers, suppliers and other 3rd parties. Idea Submission Programs hold promise for topline and bottom line growth when managed correctly, and can deliver insights, technologies and marketing benefits (particularly stakeholder goodwill and cultural impact) to the sponsoring firm.

Idea Submission Programs can be unsolicited (e.g., a web-based portal through which inventions and new products are submitted to the corporation for review) or solicited (e.g., a Call for Innovation or a Product Challenge that represents an expressed need or “want” that the corporation is looking to solve for). This article describes some of the choices to make, and tradeoffs to consider, when designing and managing an Idea Submission Program.

BACKGROUND

The past decade has seen a transformation in how companies think and organize around innovation and growth platforms. Much of the change has been driven by Open Innovation, a management philosophy publicized by Henry Chesbrough in his 2003 ground-breaking article, “Open Innovation: The new imperative for creating and profiting from technology.” Chesbrough defines Open Innovation as a paradigm of using external ideas as well as internal ideas, and internal and external paths to market.

OIfirmsOutside of academia, P&G is largely credited with popularizing Open Innovation through their Connect + Develop (“C&D”) program. Other well-known brands like Clorox, Mars, General Mills and others also have prominent Open Innovation programs. Different firms are embracing and executing against the Open Innovation philosophy in different ways. To some, much of the focus is on strategically managing their supply chain. To others, scouting and joint ventures are high on the list of priorities.

Many large and medium sized firms have explored or launched Unsolicited Idea Programs (UIPs) – programs set up to permit 3rd parties (e.g., outsiders) to submit ideas/inventions to companies for review and hopefully land a licensing, joint development, or other commercialization relationship. The hope and promise of UIPs is that external actors can accelerate a firm’s innovation path to market with market insights and discontinuous / disruptive inventions. And by being “open” to these 3rd parties, a firm can enter into a deal with the inventor and grow accordingly in new markets (or, alternately, avoid being disrupted and shut out of new opportunities).

It should be noted that most Open Innovation experts would agree that internal resources are best positioned and resourced to execute against flankers and line extensions – so UIPs are usually reserved for “farther afield” innovation. UIPs are web-based systems that permit users to submit their idea or invention to the company through a form submission process.

image010A variation on the UIP is the Call for Innovation or Innovation Challenge (essentially the inverse of a UIP), a specific announcement soliciting submissions from external parties that is responsive to a firm communicating a desire to find/buy specific technologies or capabilities. Gene Slowinski popularized the Want/Find/Get/Manage conceptual model of Open Innovation – an actively managed process of identifying “wants” and designing systems and processes for finding, getting, and managing these “wants” – in his seminal 2004 work, “Good Practices In Open Innovation”. Unlike a UIP, a Call for Innovation has a ready and willing buyer in the form of the company issuing the Challenge, and now the task is communicating that need and desire to the right audience who may already have a solution, a path to a solution, or a willingness to invent a solution.

The intent of this paper is to provide a roadmap for companies that are launching or looking to redesign their Idea Submission Programs for maximum success. As noted broadly in literature, Idea Submission Programs hold promise for topline and bottom line growth when managed correctly, and can deliver insights, technologies and marketing benefits (particularly stakeholder goodwill and cultural impact) to the sponsoring firm.

PROGRAM DESIGN CONSIDERATIONS

When designing an Idea Submission Program, the first step is to understand the goal of the program – is it to capture unsolicited ideas, support innovation challenges, or both. The next step is to consider the various stakeholders and additional objectives of the program. As shown in Figure 1, Idea Submission Programs are a balancing act of benefits and costs, and different firms may weight aspects differently, leading to different program designs.

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Figure 1

A firm needs to consider two broad areas of benefits and determine their value to the organization.

(1) expected value captured by the program – market insights, trend identification, disruptive opportunities, new technologies, and network connections. This is difficult to value in advance, but over time should be quantifiable by periodically reviewing submissions and follow-up actions and assigning “value” scores.

(2) impact of Culture Signaling – if a firm desires to signal above and beyond the idea submission program that 3rd parties’ (and employees’) thoughts, ideas and suggestions are valued, and that collaboration and inside/outside teamwork is part of the cultural paradigm, the existence of an Idea Submission Program and the language and the design of the program matter. Culture Signaling is part of the brand experience and architecture as well – if customers and suppliers feel ignored or irrelevant, that will affect their brand perception. If a brand is an experiential brand, this is a critical element in program design.

After outlining the benefits and upside to an Idea Submission Program, the company then needs to think through costs and risks. On the cost side, there are out-of-pocket dollars for technology design and hosting, for agencies or consultants providing PR or evaluation services, and for legal services. Given the typically low yield and low subject matter expertise of submitters, managerial distraction and staffing is a non-trivial cost of Idea Submission Programs. If management does not devote sufficient time to reviewing submissions, the benefits of the program are largely lost; but conversely, management time and distraction can be expensive in terms of both real cost and opportunity cost.


The most complex and challenging part of Open Innovation is often IP ownership. This can be particularly tricky to navigate in the context of Idea Submission Programs due to the murky distinction between an idea and an invention, the stage of development of a submitted idea, the active pursuit (or lack thereof) of patent claims, the need for additional development and collaboration, etc. The risk of IP Contamination adds additional potential cost to an Idea Submission Portal and needs to be managed carefully.

A successful Idea Submission Program reflects a series of choices made within the context of a particular firm’s goals and culture to maximize benefits and minimize costs and risks.

RISKS, TRADEOFFS & BEST PRACTICES

While the promise of Open Innovation is encouraging, it is not a replacement for internal R&D or internal product development. So managing the messaging around an Idea Submission Program is important (lest employees feel it is either a criticism and/or they move into passive aggressive mode trying to undermine it). Open Innovation is part of a portfolio approach to innovation and depending on where a firm’s particular strengths and weaknesses are, different designs and elements are appropriate. There are three trade-offs to consider when designing an Idea Submission Program: Expectations (internal & external), Guidance, and Staffing.

Expectations: A firm launching (or re-launching) an Idea Submission Program needs to balance internal enthusiasm and company expectations against the likelihood of discrete, point-shoot-score successes. An Idea Submission Program is unlikely to yield a specific count of X products in market from the Program in Y years. How many ideas have not made it to market that were internally generated? How many new product launch windows does your organization have annually? Success needs to be more broadly defined by whether the Program influenced product launch decisions or created new network connections that yielded unexpected downstream benefits. Brand value and impact to customers and suppliers also need to be factored into the evaluation. If a product does happen to come through the Program, that is wonderful; but lack of a license deal or Joint Development Agreement does not necessarily equate to failure. Similarly, external expectations needs to be managed – how do you promise to treat idea submissions? How fast will you respond? How does an inventor know he or she will be treated fairly? Best practices include talking to your target audience in their language (plain simple English if you’re looking for plain-speaking submissions, or deep technical language if your Program is designed solely for specialists and experts). Focus efforts on managing and tracking progress and all types of results and impact rather than setting grand goals in advance.

dreamstime_xs_7148571Guidance: An Idea Submission Program is not equivalent to going to a store and picking up a new innovation in aisle 9. And putting a shopping list on your website of your top “wants” that your internal team hasn’t solved is not actionable by 99.9% of the world. If your firm has a very full new product innovation queue, and your most critical need is to solve some unmet “wants”, by all means feel free to share that broadly (see more below about the importance of awareness raising). However, most successful companies try to strike a balance between giving submitters a blank canvas upon which to paint their idea/invention/concept, and some guidance around what things are most attractive to the company at point in time. With no guidance at all, submission count will be high with relative yield low; with too much specific guidance, submission count will be low, and relative yield will be highly volatile and a function of how narrow and specialized the “want” is and how well it was publicized to a relevant audience.

Staffing: In 2012, Oliver Alexy and his team researched and interviewed many Fortune 500 firms and published a paper, “Managing Unsolicited Ideas for R&D”. Alexy’s research concluded that a centralized innovation senior manager or team reviewing submissions and involving business units or relevant departments after the first quality screen is the most effective model. Many companies have found that using an outside 3rd party to do the initial screening can reduce IP contamination risk and make management more efficient as the 3rd party synthesizes, standardizes and does preliminary research on promising submissions while screening out weak submissions (particularly relevant when management is bandwidth constrained). It is clear from general innovation research that Idea Submission Programs need internal champions just as much as internal projects need them, so staff resources should be made available to work on promising submissions as part of their normal responsibilities, not as an “add-on” to their day job.

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Awareness: The quantity and quality of submissions is directly correlated to awareness within the customer/supplier network that the company has an Idea Submission Program and/or a Call for Innovation. To maximize Culture Signaling and total quantity of submissions, programs should be linked directly from the home page on the website (“average” quality/yield may be correspondingly low). If an open, collaborative culture is already part of the company’s known behaviors, it may be more efficient to remove home page links as quality submitters will generally find the submission portal and noise from off-target submissions is decreased. For Innovation Challenges or Calls for Innovation, specific PR campaigns and awareness programs to identify and connect with relevant experts should be pursued.

Patents vs. Pre-patents: Only reviewing patent-pending or patented inventions can reduce IP contamination risk, but it seriously undermines a company’s ability to see and engage with leading edge technology and solutions. Using 3rd parties to do initial screening and protect against accidental disclosures is generally more effective.

Legal Dept as stakeholder: Putting the Open Innovation or Idea Submission Program in the legal department is counter-productive. Alexy’s research confirms Idea Submission Programs should be in Marketing or R&D, depending on a firm’s particular culture. Involve legal downstream when agreements are being negotiated.

Insights and Sparks vs. Solutions: Idea Submission Programs and Innovation Calls have much higher yields at identifying insights and sparking new directions and paths vs. finding perfect solutions (end-to-end, turnkey solutions are very rarely discovered through these types of programs). Successful programs focus on identifying partners and directions for collaboration, and less on turnkey answers to new-to-the-world products.

Transparency and Clear Communication: Fear of being abused is the greatest threat to Open Innovation and Idea Submission Programs. Be as clear as possible with potential partners around expectations and goals, be responsive as quickly as possible, and be transparent around issues and opportunities. This will build trust and create an environment where everyone can win.

Use of 3rd parties: A support industry has grown up around Open Innovation and Idea Submission Programs in particular (both unsolicited and Calls for Innovation). These agencies and solution providers often accelerate success, reduce risk, and provide excellent outsourced solutions across a spectrum of services.

CONCLUSION

Idea Submission programs, both solicited and unsolicited can be very powerful tools to assist in speed to market and finding creative insights to new products or innovation gaps. An organization’s overall philosophy, goals, and culture need to be taken into account when designing an idea submission program. There is no free lunch with idea submission management programs, and care must be taken to manage IP contamination while simultaneously maximizing the gains to be realized from collaborating with 3rd parties outside the enterprise.

ABOUT THE AUTHOR

John T. Funk is Managing Partner at Evergreen Innovation Partners, a boutique Open Innovation services firm that is a market leader in managing Idea Submission Programs. John holds a BA from Northwestern University, an MBA from Kellogg Graduate School of Management, and graduated cum laude with a JD from Northwestern School of Law. John has been practicing in the field of Open Innovation since 2004, is a named inventor on 5 issued patents, and has deep expertise on various aspects of new product development, entrepreneurship, and start-ups.

ADDITIONAL READING:

Slowinski, G. 2004. Reinventing Corporate Growth. Gladstone, NJ: Alliance Management Press.

Slowinski, G., and Sagal, M. W. 2003. The Strongest Link: Creating Profitable and Enduring Corporate Partnerships. New York: AMACOM Press.

Witzeman, S., Slowinski, G., Dirkx, R., Tao, J., Ward, S., and Miraglia, S. 2006. Harnessing external technology for innovation. Research-Technology Management 49(3): 19–27.

Chesbrough, H. 2003. Open Innovation: The New Imperative for Creating and Profiting from Technology. Boston, MA: Harvard Business School Press.

Alexy, Oliver and Criscuolo, Paola and Salter, Ammon, No Soliciting: Strategies for Managing Unsolicited Innovative Ideas (September 7, 2011). California Management Review, 54 (3), pp. 116-139. Available at SSRN: http://ssrn.com/abstract=1659749 or http://dx.doi.org/10.2139/ssrn.1659749