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Ideas for Leaders #699

How to Choose the Right Innovation Intermediary

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Key Concept

The use of innovation intermediaries to find outside solutions and ideas or innovation partners is becoming more common. Choosing the right intermediary can depend on factors such as the type and complexity of problems or needs, whether the search for partners or solutions, and the extent of the envisioned collaboration among innovators.

Idea Summary

Reflecting the growing trend of companies searching beyond the boundaries of the firm for innovative ideas, British Petroleum hired innovation intermediary InnoCentive to broadcast an appeal for new ways to help contain the disastrous Gulf oil spill. BP received 1000 ideas… and used none. 

More and more companies are using intermediaries such as InnoCentive to find creative and innovative ideas and solutions to their problems or needs. However, as the BP example shows, choosing the right intermediary and the right kind of search is not as simple as it may seem. To help companies work better with innovation intermediaries, professors Tuba Bakici of ESC Rennes School of Business and Esteve Almirall of ESADE Business School interviewed more than 50 managers and innovators and emerged with a more complete picture of the options companies have in beyond-the-firm innovation searches.

Based on their research, Bakici and Almirall identified five types or models of innovation intermediary searches in which companies can engage:

  • Broadcasting. Broadcasting is the most direct model. An intermediary sends out information about the request to as vast an audience as possible and then gathers the responses. There is no collaboration among the innovators. In some cases, the intermediary works with the seeker company in developing the request and screens the incoming proposals from innovators (this is known as “directed” broadcasting). 
  • Brainstorming. In contrast to broadcasting, brainstorming involves an open submission process in which outside innovators submit ideas and solutions on which other innovators in the community can comment or even, in some cases, vote. As with broadcasting, brainstorming can be directed, in which the intermediary provides support and monitoring during the innovation process, or undirected.
  • Licensing Out. Licensing out is the sharing of innovative solutions — in form of patents, descriptions of technology or prototypes, for example — in the other direction: from the innovative firm to a community of potential adopters.
  • Connecting/Networking. Sometimes companies are not seeking specific technologies or solutions, but are interested in developing their networks to lay the foundation for future innovation. Intermediaries will offer platforms on which companies can create a profile of their interests and projects for potential investors and partners to visit.  
  • Expert Teams. Intermediaries can also play a role in finding and attracting members in the innovative community to join expert teams. This search for expert team members occurs when firms have well-defined but complex problems — problems that require a diversity of knowledge and experience.

Business Application

Most innovation intermediaries are focused on one of these models. Choose the right model and you will choose the best intermediary for your company. 

How do you choose the right innovation intermediary model? One of the first questions to ask is what type of problem or need do you have. If your problem is very specific and defined, broadcasting could be the best option. Brainstorming is better suited for problems or needs that are not clearly defined or that are simply in the early exploratory phases. Very complex problems may require the recruitment of an expert team. 

To further help companies find the right intermediaries, the researchers describe these five models along two dimensions: 1) collaboration or autonomy, and 2) whether the goal is new solutions or new partners — companies seeking international partners or strategic industry partners, for example. 

Combining these two dimensions can help focus companies on the right intermediary. A company looking for new solutions but without collaboration among the innovators should work with a broadcast intermediary. A company looking for new solutions and innovators who collaborate with each other, on the other hand, should work with intermediary platforms that help them manage brainstorming among innovators (especially if they help to rank the solutions developed) or who can find and hire expert teams. 

Companies should also keep in mind the different types of motivations related to the different models. Broadcasting or building expert teams will require monetary rewards — the innovators responding to these types of searches are more likely to be extrinsically motivated. Brainstorming, on the other hand, will more likely attract intrinsically motivated innovators, looking for challenges and fun. Brainstorming offers limited monetary or other extrinsic rewards, such as visibility. 

All of these choices create dilemmas that can limit what intermediaries can do. For example, many innovative solutions or ideas come from recombining existing solutions. Broadcasting takes advantage of a large pool of innovators, but given the lack of interaction among innovators, the chance of a recombination solution emerging from this process is slim. 

In sum, innovation intermediaries today offer a diverse set of capabilities and mechanisms, as well as different levels of support (from strictly connecting innovators to companies to helping companies develop proposals or rank responses). Understanding all of these different facets of innovation searches will help companies make the right decisions in choosing the best innovation intermediary for them.

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Authors

Institutions

Source

Idea conceived

  • July 2017

Idea posted

  • March 2018

DOI number

10.13007/699

Subject

Real Time Analytics