October 14, 2008

Open Innovation on the cheap

Kellogg’s (the cereal company) has a website soliciting “GR-R-REAT Ideas!” It offers: “Ideas or innovations? Team up with Kellogg.”

Food industry blogger Dan Mitchell is not impressed:
Kellogg Might Pay You a Paltry Sum for Your Ideas. Or Not.
By Dan Mitchell
October 13th, 2008 @ 3:12 pm

Kellogg has never scrimped on research and development. Its W.K. Kellogg Institute for Food and Nutrition Research is considered to be among the best research facilities in the corporate world. The company spent $179 million on R&D last year.

But Kellogg can always use some new ideas. So it is asking you for yours.
Mitchell’s point is that Kellogg wants these ideas cheap — it’s willing to pay a small amount (maybe) for some ideas and nothing for other ideas.

To me, it looks like Kellogg is really looking to stimulate user innovation — the self-revealing that Eric von Hippel argues is essential for firms to learn what their users are thinking.

So Mitchell is right — no commercial firm in its right mind would sell its ideas for these kind of sums. But perhaps users — lacking other ways to commercialize their ideas — would be willing to share their insights in exchange for a nominal incentive payment.

Update Nov. 24: Kellogg's has posted a comment (below) that clarifies its position. Here’s the money quote:
Kellogg will work directly with the individuals and businesses whose proposals have intellectual property protection (patents or copyrights) to negotiate the appropriate compensation for these innovations.

4 comments:

Bhargav-------------------------------------------- said...

That is the latest trend for all the company which ran short of great ideas from its people. What about google 10 power 100? These are desperate strategies to make money and increase Pr.

mike harrop said...

selling corn flakes gets you used to selling nothing for too much. so the big innovation here is getting too much for nothing.
just reading your blog about this cheapo attitude will have removed anything kellog from a lot of readers' lives.

Jim Melluish said...

I’m responding to the recent blog posting regarding the Kellogg Company’s “Great Ideas” portal and the compensation process for submitting ideas, namely that it would only be “$5,000 were it to be accepted by Kellogg.”

Your posting alerted us to the confusion that may have been caused by language on the Kellogg Web site, which has since been changed. The compensation process is not as you interpreted it. Kellogg will work directly with the individuals and businesses whose proposals have intellectual property protection (patents or copyrights) to negotiate the appropriate compensation for these innovations.

We apologize for any confusion this may have caused.

Thank you

Jim Melluish, Director of Marketing for Kellogg Company’s Open Innovation, on behalf of the Kellogg Company

Andrew Carey @ Triarchy said...

This is exactly the kind of criticism The Economist faced when it solicited ideas from readers for its Project Red Stripe innovation project. Almost word for word:
http://projectredstripe.blogspot.com/search/label/crowdsourcing