February 23, 2012

Strange crowdsourcing ideas

To make a point at CoDev 2012, Fabian Schlage of Nokia Siemens networks presented a series of unusual examples of crowdsourcing:
  • The first video of the Fukushima meltdown — posted to YouTube before the Japanese government acknowledged a problem
  • FixMyStreet.com, a website for UK citizens to report potholes, graffiti or other infrastructure problems in their neighborhood
  • NASA’s “Be a Martian” game, that utilizes crowdsourcing to process images from the exploration of the Red Planet.
  • The Texas Virtual BorderWatch, which allows Internet viewers to watch webcams and report border crimes in progress.
The NASA plan sounds a little like the European Space Agency’s crowdsourced search for earth extinction asteroids or the “Recaptcha” used to digitize Google Books.

The FixMyStreet sounds a bit dicey with its implied promise that something will actually be done to fix the problem. The Virtual BorderWatch injects itself into one of the most controversial issues in contemporary American society (which may be the intention).

Of these, the YouTube trend seems the most representative. I wonder when Google is going to produce a newscast of crowdsourced YouTube videos for Millennials who will never watch TV network news. Or when CNN or the BBC will decide to partner with such an effort before it puts them out of business.

February 15, 2012

Open Innovation in Latin America (II)

For the past five years or so, some of California’s leading OI scholars have been spreading the message of open innovation to Latin America. This includes the father of OI making frequent speeches in Brazil as well as a lesser known SJSU faculty member bringing OI to Chile.

Today at CoDev 2012 — the PDMA-sponsored “Conference on Open Innovation & Co-Development” — a vice president from Kraft Foods summarized how this consumer products giant has been leveraging open innovation to meet local needs in Latin America. The presentation was by given Ivette Bassa, vice president of Research, Development & Quality for Kraft Latin America, which serves Mexico, Central and South America.

While OI was originally demonstrated by Chesbrough in IT firms such as IBM, Intel and Xerox, the interest in OI at Kraft is an example (beyond the iconic P&G) of the growing interest of open innovation in a broader class of mature consumer goods. (Other speakers at CoDev included executives from Unilever, Clorox and International Flavors & Fragrances).

Kraft is certainly a large mature company, with $49 billion in revenues — #2 in the world (after Nestle) in the food category — with sales in 170 countries and operations in 75 countries. Of its brands, 40 are more than 100 years old, 70 have more than $100 million in revenue and 12 have more than $1 billion in revenue.

The Latin America division accounts for $5 billion of those revenues, combining PMI Food and Nabisco Latin America. It includes the familiar Kraft and Nabisco brands (Ritz, Oreo, Philadelphia, Trident) as well as local brands (Trakinas, Bubbaloo). The RD&Q organization within the LA division has 300 employees in Miami and its three major markets (Mexico, Brazil, Venezuela). Six of these are assigned to work on open innovation, knowledge management and IP.

The company scouts outside the firm for possible inputs for the technology development that will enable it to solve specific problems. The Latin America-specific search seemed to be oriented towards products that meet local tastes (e.g. the Sonho de Valsa bonbon) and leverage local supply (sourcing wheat for Club Social from Brazil rather than the US).

Its "Inventing Delicious” framework is organized around three high-level questions
  1. What do we know?
  2. What do others know?
  3. What is our IP strategy?
One of the key insights for Kraft is that in Latin America, the most likely source for external innovation partners are outside firms (something I also heard during my 2008 visit to Chile). Bassa estimated that 80% of innovation capabilities are in government agencies, public or private universities.

Bassa presented a number of examples of ideas submitted or developed with suppliers, including ideas that arose out of the parent company’s October 2011 “Kraft Foods Supplier Innovation Summit.” One of her examples was a product idea that was test marketed by releasing it as a promotional item (that became a permanent product). Two examples were co-development efforts with equipment suppliers to improve the production process — in both cases where Kraft itself applied for a patent from the joint efforts.

In Latin America, the company uses a range of methods to search for external ideas. It has innovation scouts, participates in local forums and trade associations, has a group that works with each national government, and leverages the university ties developed through recruiting.

When searching for outside ideas, a key concern for Kraft was how to search broadly for information while minimizing the disclosure of proprietary information. (This also seemed to be a key concern of attendees, and part of the value added provided by exhibitors such as Nine Sigma and InnoCentive). Part of the solution is to train people how to frame questions to focus on a technical need that can be sourced externally, part is to gain IP in certain areas, and part is to calibrate the risks to the degree of trust and familiarity with external partners.

February 2, 2012

Open innovation in San Diego

Later this month, the Product Development and Management Association will be co-sponsoring CoDev 2012, the 11th Annual MRT/PDMA International Conference on Open Innovation & Co-Development. The conference is being held February 13-15 in a nice hotel near UCSD, at the northern end of San Diego. (The venue alone is going to put visitors from back East into a good mood.)

The conference chair is Cheryl Perkins, who I met in 2006 when she was Chief Innovation Officer of Kimberly Clark and I gave an open innovation orientation to senior managers of Kimberly Clark. Soon after that, she left K-C and started her own open innovation consulting firm, InnovationEdge.

For me what was most interesting were the pre-conference workshops and the managerial interest that they imply:

  1. Business Models Changing the Landscape of Open Innovation
  2. Identifying, Prioritizing & Managing the "Critical Few" Metrics of Open Innovation
  3. Complex Deal Structures - Finding the Right Approach for Successful Partnerships and Mutual Gain
  4. Leading Innovation - Creating a Growth Engine
The first two seem directly aligned to two key research opportunities in open innovation: business models and metrics.

On Feb. 15, I will be delivering the final of the five keynote presentations. More later.