First Post! Open Innovation vs User-driven Innovation

Welcome to Spring2 Innovation.

We will discuss many topics around innovation, telecommunications and mobility on our blog. As time proceeds we will expand our areas discussion.

Our first topic is regarding open innovation vs user-driven innovation:

Having worked in an innovation centre that tried both open and user-driven innovation I never thought to distinguish between the two. User-driven innovation is relying on customers for their thoughts and opinions on current products and services and in our case on future products and services.  Also getting customers to tell them what they would like to see in the future. In many ways this is a good way to bring in new ideas but your company still has to develop the product or service on their own. This also leads to developing what customers are looking for now rather than thinking about what your customers will want in a year to 3 years down the line when the ideas are turned into a product or service that hit the market.
Open innovation goes further. Stephan Lindegaard, in his book The Open Innovation Revolution, does a great job of elaborating that open innovation also involves allowing external sources become key players in turning ideas into a business. Involving partners in all parts of innovation. This can scare off even the most dominant players in a market. The idea of sharing ideas and resources?

A great example in Lindegaard’s book is with LEGO. As an example of user-drive innovation – Mindstorm – the programmable bricks with sensors. While it wasn’t LEGO’s initial intent to have user-driven innovation with these bricks, their users had something else in mind. After working on preventing users from hacking their systems LEGO realized the potential of crowd sourcing and getting their users to create with them. In fact, till January 16, 2011LEGO has design byME where you download software that allows you to build your own set. A bit large at 135 MB. Then there is LEGO Cuusoo – where you design a LEGO set and if you get 10,000 fans to vote for your design than it goes into production!
In terms of open innovation P&G is sited as the successful implementation of this model. This involves a high level of involvement from external partners and suppliers as well – where everyone benefits from the innovations. The biggest immediate benefit to companies is reduced R&D costs. The slightly longer term benefits are faster time to market (and thereby more revenue and larger slice of the pie) and greater success rate (reducing risk). More to come in later posts on Open Innovation and P&G.

Which type of innovation is your company implementing? How is it working for you? Let us know in the comments section.