Innovation Exchange, Toronto: Think outside the box - build a better box
Toronto-based Innovation Exchange tunes the crowdsourcing model for the Fortune 5000 crowd
By Ian Harvey
November 24, 2009
November 24, 2009
“Risk,” James T. Kirk once said, “risk... is our business.” But it doesn’t seem like many corporate chiefs have grasped that wisdom. True innovation, like the iPhone or the Wii, is a rare commodity, and this is probably because stepping outside the box incurs a great deal of risk. And no one wants to captain a failure. Think of the exec who ended up wearing the onion sombrero of the New Coke fiasco. Because of this, change is often incremental and cautious. Yet innovation is also what drives growth, wins market share and, above all else, cuts through the noise and gets you noticed. So how does a large company embrace innovation—and profit from it? There seem to be three avenues.
At companies like Apple or Dyson, it’s hardwired into the DNA in the form of a visionary leader: Steve Jobs, Sir James Dyson, etc. Then there are companies built on a culture of innovation, such as Xerox or Hewlett-Packard. HP, for example, nicknames Personal System Group vice-president and CTO Philip McKinney the “Chief Seer.” His job is to plan 10 to 20 years ahead.
There is a third route, as well, one Stephen Benson has thought about for a long time. As a management consultant and the founder of Rethink, he has worked on innovation projects with executives at companies such as RBC Financial, McDonalds and the Toronto Blue Jays. “As a business you should be looking at your first horizon, which is running your business,” he said. “But you should also be looking at the second and third horizons.”
This third route emerged for Benson in 2006, with the rise of social networking and crowdsourcing. In its pure form, crowdsourcing means throwing a challenge or question open to anyone who wants to pitch in. The Web sites wikiHow and Yahoo! Answers are examples of this approach. But Benson realized that in the high-stakes corporate world in which he operates, a completely open free-for-all was not going to work.
Crowdsourcing 2.0
“It is like panning for gold,” Benson said. “What Fortune 5000 companies need to know is that where you pan for gold will [determine if] you find any real gold nuggets.”
And that is the premise behind Innovation Exchange (IX), a Web entity where companies post challenges which are then bid on by a community of engineers, designers, marketers and anyone who might have a better way of doing, designing, making, selling or marketing ideas and products.
The model is actually fairly simple: companies—from consumer packaged goods manufacturers to hospitals and charities—pay to post a challenge, listing a dilemma and detailing the type of solution sought. Registrants then select which challenge to tackle, often pulling together a cross-disciplinary team to take on the issue. Each player brings a unique set of skills and thinking to the table.
It works, Benson said, because the most innovative, outside-the-box ideas come from people who were never in the box in the first place. An automotive company looking for innovation will usually pan in the same streams as its competitors, resulting in the same findings as everyone else. Better to look in a different, unrelated field to yield fresh ideas.
The system also lets participants rate crowdsourcing teams, much like eBay rates buyers and sellers.
“The Innovation Exchange pans for gold for companies that don’t know how to do it themselves,” said Benson, now the company’s CEO. “Or, they are doing it in a capacity which is not delivering gold. What we have done is figure out a way to pan for gold using a global network of innovative thinkers.”
In effect, the IX allows companies to think outside their own box and benefit from the insights of a diverse community where ad hoc teams spring up and collaborate to solve the challenge.
For the winners, there are substantial rewards. The challenges posted come with significant cash awards or, more often, royalties on sales or patents. Registration is free and the process includes entering a basic bio with skill sets and a work-collaboration personality test that helps team leaders select other members.
And that’s how Matt Rao, 23, and Stefan Mag, 24, a couple of college buddies from Long Island, N.Y., snagged a US$40,000 prize for coming up with a better yogurt container last summer.
Mag, a mechanical engineer fresh out of school, had worked on a couple of products such as a medical cart and a flavour infuser for liquor (think Baskin Robbins meets vodka at your local bar). In between hanging out and watching sports, Mag and Rao kicked around a concept for a new yogurt container for Alcan and came up with an upside down, gravity driven solution they say looks a little like a fat tube of toothpaste with an integrated tear-off top.
They can’t say much more because while they won the challenge and will split the reward, the legal paperwork hasn’t wrapped. If a patent is filed they stand to make another US$40,000 between them.
“We just worked over the course of about two and a half months,” Mag said. “I’d say we spent about 15 hours coming up with the concept and 35 hours illustrating, mocking up and refining them together.”
Crowd storm
And that’s all music to Benson’s ears because it fits with the IX concept perfectly.
“Our target market is companies with revenues of more than US$2 billion a year,” Benson said of the start up that launched in 2008 and is achieving its revenue projections despite the global recession.
Benson and his two partners, Mark Hadfield, CTO, and Brnly Hawkins, COO, spent a lot of time thinking about innovation, and that’s the key, Benson said. “If aliens came to earth and looked at Google, they’d wonder how this business makes money. It’s a freaking box. But the value in it is the work that has been done to make it work, and that’s what we’ve done with the Innovation Exchange—it’s the work at the back end.”
They’ve also surrounded themselves with an impressive board of advisors, including a couple of geek legends: John Seely Brown, best known for being chief scientist at Xerox and director of the legendary Palo Alto Research Center (PARC) facility for two decades, where technology such as the mouse and Windows were first conceived; and Rolf Skyberg, one of the brains behind the evolution of eBay, who also carries the title “disruptive innovator.”
Add in David Galloway, chairman of the Bank of Montreal, Robin Korthals, chairman of the Ontario Teachers Pension Plan Board, and a host of other thinkers, and the organization moves from unstructured crowdsourcing to a disciplined method for creating good ideas.
“I gave a presentation at the University of California at Berkley’s Centre for Information Technology Research in the Interest of Society last year,” said Benson, adding he has also taken the concept to conferences across the continent and, on invitation, to the United Nations in Geneva. “And at the dinner I sat with JSB (Seely) who was asked if he’d heard anything of interest in all the presentations. He looked at me and pointed and said, ‘The best thing I heard was from this gentleman. You should ask him.’”
Since then, Benson has met with Seely at his home in Silicon Valley–just down the street from Steve Jobs–and built a social network with other top-level thinkers to develop IX.
It also helps that a perfect storm has developed around these types of efforts, Benson said. First, there is a large community of unemployed and under-employed people cut loose by the recession; second, companies are downsizing, often slashing strategic departments; and last, the growing acceptance of online collaborative tools has made C-level executives more open to this approach.
Also, companies are looking for low-risk revenue right now. With IX, if there are no results there is also no cash paid out, and participants may be corporations looking for ways to develop existing technology and patents. “I met with the chief technology officer of HP Canada and a big part of his job is looking through the vault at all their patents and technology…and dusting them off to see if they’re relevant today,” Benson said.
As such, the gold itself isn’t the trick, he said. It’s what you do with it. “The real gold nugget is understanding what is possible before anyone else does and then actually doing something with it.”
At companies like Apple or Dyson, it’s hardwired into the DNA in the form of a visionary leader: Steve Jobs, Sir James Dyson, etc. Then there are companies built on a culture of innovation, such as Xerox or Hewlett-Packard. HP, for example, nicknames Personal System Group vice-president and CTO Philip McKinney the “Chief Seer.” His job is to plan 10 to 20 years ahead.
There is a third route, as well, one Stephen Benson has thought about for a long time. As a management consultant and the founder of Rethink, he has worked on innovation projects with executives at companies such as RBC Financial, McDonalds and the Toronto Blue Jays. “As a business you should be looking at your first horizon, which is running your business,” he said. “But you should also be looking at the second and third horizons.”
This third route emerged for Benson in 2006, with the rise of social networking and crowdsourcing. In its pure form, crowdsourcing means throwing a challenge or question open to anyone who wants to pitch in. The Web sites wikiHow and Yahoo! Answers are examples of this approach. But Benson realized that in the high-stakes corporate world in which he operates, a completely open free-for-all was not going to work.
Crowdsourcing 2.0
“It is like panning for gold,” Benson said. “What Fortune 5000 companies need to know is that where you pan for gold will [determine if] you find any real gold nuggets.”
And that is the premise behind Innovation Exchange (IX), a Web entity where companies post challenges which are then bid on by a community of engineers, designers, marketers and anyone who might have a better way of doing, designing, making, selling or marketing ideas and products.
The model is actually fairly simple: companies—from consumer packaged goods manufacturers to hospitals and charities—pay to post a challenge, listing a dilemma and detailing the type of solution sought. Registrants then select which challenge to tackle, often pulling together a cross-disciplinary team to take on the issue. Each player brings a unique set of skills and thinking to the table.
It works, Benson said, because the most innovative, outside-the-box ideas come from people who were never in the box in the first place. An automotive company looking for innovation will usually pan in the same streams as its competitors, resulting in the same findings as everyone else. Better to look in a different, unrelated field to yield fresh ideas.
The system also lets participants rate crowdsourcing teams, much like eBay rates buyers and sellers.
“The Innovation Exchange pans for gold for companies that don’t know how to do it themselves,” said Benson, now the company’s CEO. “Or, they are doing it in a capacity which is not delivering gold. What we have done is figure out a way to pan for gold using a global network of innovative thinkers.”
In effect, the IX allows companies to think outside their own box and benefit from the insights of a diverse community where ad hoc teams spring up and collaborate to solve the challenge.
For the winners, there are substantial rewards. The challenges posted come with significant cash awards or, more often, royalties on sales or patents. Registration is free and the process includes entering a basic bio with skill sets and a work-collaboration personality test that helps team leaders select other members.
And that’s how Matt Rao, 23, and Stefan Mag, 24, a couple of college buddies from Long Island, N.Y., snagged a US$40,000 prize for coming up with a better yogurt container last summer.
Mag, a mechanical engineer fresh out of school, had worked on a couple of products such as a medical cart and a flavour infuser for liquor (think Baskin Robbins meets vodka at your local bar). In between hanging out and watching sports, Mag and Rao kicked around a concept for a new yogurt container for Alcan and came up with an upside down, gravity driven solution they say looks a little like a fat tube of toothpaste with an integrated tear-off top.
They can’t say much more because while they won the challenge and will split the reward, the legal paperwork hasn’t wrapped. If a patent is filed they stand to make another US$40,000 between them.
“We just worked over the course of about two and a half months,” Mag said. “I’d say we spent about 15 hours coming up with the concept and 35 hours illustrating, mocking up and refining them together.”
Crowd storm
And that’s all music to Benson’s ears because it fits with the IX concept perfectly.
“Our target market is companies with revenues of more than US$2 billion a year,” Benson said of the start up that launched in 2008 and is achieving its revenue projections despite the global recession.
Benson and his two partners, Mark Hadfield, CTO, and Brnly Hawkins, COO, spent a lot of time thinking about innovation, and that’s the key, Benson said. “If aliens came to earth and looked at Google, they’d wonder how this business makes money. It’s a freaking box. But the value in it is the work that has been done to make it work, and that’s what we’ve done with the Innovation Exchange—it’s the work at the back end.”
They’ve also surrounded themselves with an impressive board of advisors, including a couple of geek legends: John Seely Brown, best known for being chief scientist at Xerox and director of the legendary Palo Alto Research Center (PARC) facility for two decades, where technology such as the mouse and Windows were first conceived; and Rolf Skyberg, one of the brains behind the evolution of eBay, who also carries the title “disruptive innovator.”
Add in David Galloway, chairman of the Bank of Montreal, Robin Korthals, chairman of the Ontario Teachers Pension Plan Board, and a host of other thinkers, and the organization moves from unstructured crowdsourcing to a disciplined method for creating good ideas.
“I gave a presentation at the University of California at Berkley’s Centre for Information Technology Research in the Interest of Society last year,” said Benson, adding he has also taken the concept to conferences across the continent and, on invitation, to the United Nations in Geneva. “And at the dinner I sat with JSB (Seely) who was asked if he’d heard anything of interest in all the presentations. He looked at me and pointed and said, ‘The best thing I heard was from this gentleman. You should ask him.’”
Since then, Benson has met with Seely at his home in Silicon Valley–just down the street from Steve Jobs–and built a social network with other top-level thinkers to develop IX.
It also helps that a perfect storm has developed around these types of efforts, Benson said. First, there is a large community of unemployed and under-employed people cut loose by the recession; second, companies are downsizing, often slashing strategic departments; and last, the growing acceptance of online collaborative tools has made C-level executives more open to this approach.
Also, companies are looking for low-risk revenue right now. With IX, if there are no results there is also no cash paid out, and participants may be corporations looking for ways to develop existing technology and patents. “I met with the chief technology officer of HP Canada and a big part of his job is looking through the vault at all their patents and technology…and dusting them off to see if they’re relevant today,” Benson said.
As such, the gold itself isn’t the trick, he said. It’s what you do with it. “The real gold nugget is understanding what is possible before anyone else does and then actually doing something with it.”
How the Innovation Exchange works
Adapted from http://bit.ly/15hZvx
Step 1: Brief creation
IX and a sponsor organization develop a challenge brief that details the problem or issue to be tackled.
Step 2: Review
Innovators from around the world review the brief. If interested, they can form or join a team.
Step 3: Collaboration
Innovators collaborate on a solution to the challenge.
Step 4: Submission
Once crafted, the team submits its idea.
Step 5: Evaluation
Innovator submissions are evaluated.
Step 6: Selection
The sponsor selects a winner and a success fee is paid.
