The Impact of Social Media on Open Innovation
IdeaConnection Interview with Stefan Lindegaard, author, speaker and strategic advisor focused on open innovation
In the second part of this two-part interview series Stefan Lindegaard discusses the intersection of social media and open innovation. It's also the subject of his forthcoming e-book, Social Media for Corporate Innovators and Entrepreneurs.
Social media and open innovation, is it a good marriage?
Oh yes, they are becoming inseparable. And the reason why relates to the fact that the two are linked by the need for interactions between people both inside and outside an organization. Interaction and involvement are key elements for both open innovation and social media. What I've seen with open innovation is that we have people who are doing a pretty good job of setting up the physical networks. For example, some big companies have several hundred innovation partners with 20-30 of those being more important than others. So they're very good at managing those relationships, that's what they've been practising for the last five years with open innovation, but the next challenge, the next two challenges are: how can you make this happen in the virtual world? How can you make this happen in settings where it can happen in communities?
More and more innovation is going to happen in communities, and that's going to be driven by social media and social media tools and services. And companies have very little idea of how to make this happen. One important distinction here is that when you go and look at portals like Procter and Gamble's Connect + Develop it's very much about the company itself and their products and their needs, but what needs to change is that it's going to be much more about the innovation community itself.
How does social media support open innovation?
I believe that social media offers five key aspects that support open innovation:
- Better interaction with customers, consumers and other partners that goes beyond from one company to other companies; it's going from one to many, to many to many.
- Idea generation and feedback loops for the ideas that are being developed.
- Business intelligence that helps you better understand your ecosystem.
- Identification of new people who can assist in your innovation efforts.
- Branding, promotion and marketing of innovation outcomes as well as corporate innovation capabilities.
Many social media skeptics do not see much value in this today. This is fair enough as it is indeed hard to find good cases and evidence on such efforts, but please remember that we are still in the very early phases on this intersection of social media tools and open innovation. I ask everyone to look two years ahead. This is where things will really start to fall into place as we all get more experience with tools and services that continue to develop at a fast pace and in directions that are hard to foresee.
If you are a corporate innovation leader, I urge you to not only look two years ahead, but also to be the visionary in your company as well as in your industry. Expose your employees and your external stakeholders to social media and learn as you go. Yes, there will be initiatives that do not work and you might feel you are the only one playing in the sandbox, but others will join. You will adapt and the experiences gained can bring competitive advantages in the short, mid and long-term.
If companies can successfully bring their physical networks and communities successfully into the virtual world and start making innovation happen based on that it's going to occur even faster and it's going to bring in even more diversity.
What success stories are you seeing?
We're seeing some interesting successes in how companies have used social media to drive open innovation. I like the example of Ecomagination from GE, and how they had a high degree of social media interaction. They used YouTube, blogs, communities, Twitter; all kind of mechanisms. Some worked better than others, but not only did they manage to get a tremendous buzz on their initiatives here, but they also learned so much about what's going to be valuable in which situations. That's a challenge with social media, there's not just one approach here; for example you can't just have a LinkedIn network. You need to have five or six different kinds of tools and services and you need to understand they have their purposes, their strengths and weaknesses according to different scenarios. And that means you are going to have a very complex situation where you need to find the right match in order to serve your needs the best way. I like to see what different companies are doing with their communities.
Another example that springs to mind is to look at a community site like IngenuityWorking.com, which is run by Psion, a maker of rugged mobile computers that was recently acquired by Motorola. They have created a community that not only showcases their innovation assets and needs, it also enables an entire ecosystem to discuss innovation and exchange ideas. What if two companies connect here, come up with a great idea and then want Psion to be involved?
This could lead to an unforeseen opportunity for Psion and since it comes from unexpected sources, it might even have a disruptive potential. Psion has created a system in which they've got the conditions and the environment for disruptive innovation in place. However, this is only at the early stages – the front end of innovation – as Psion still needs to have processes in place to turn such ideas into revenues.
What are some of the challenges that could affect take-up?
We're just at the end of the beginning of seeing how to use social media for business purposes and even earlier for innovation purposes.
The challenge is also that many people in many industries don't even know how to use social media, but it's getting a lot of traction now, a lot of attention; we are only getting started. I believe that a few years from now you're not going to be the only guy in the sandbox playing with these; you're going to have more people coming in. And the more people you have coming into this sandbox, the more interesting it is going to get.
But you can get value out of this already today, and that's even beyond the value of just getting the lessons first. You can get better interactions and you can get lots of business intelligence using social media today and that business intelligence can be used to develop new products and services. You can reach out to people you've never thought of before and get better access to that knowledge.
And just imagine five to ten years from now what the world is going to look like. Everyone is going to have a smartphone, and since everyone is going to have a smartphone, everyone can get access to new kinds of information so mobility is going to be another huge factor in terms of how to use social media. It's not going to be computer based it's going to be based on the mobility factor.
It's going to be scary; it's going to be interesting to see where it's going to go.
One of the issues to accept is that you cannot keep up with everything, the change is happening so fast, developments are happening so fast.
So one of the biggest challenges in this complex world of social media opportunities is how can we choose the right mix of social media tools and services that can help our innovation efforts? That's going to be one of the key questions.
Too much rapid change could scare people away?
You have a catch-22 in that people who don't really buy into this don't invest any time to understand how social media works. But the problem is if you don't invest the time you'll never see the opportunities.
If anything perhaps they should start looking at the stats about social media take up and usage?
I agree with you because this is a mega trend that is unstoppable, this is where it's all heading, so why not just get on board. And the other thing about communities is that the whole world is already one big community – look at Facebook it already has almost one billion users so people are already connected. The challenge is how can we build sub communities that can be tapped into.
Your book Social Media for Corporate Innovators and Entrepreneurs: Add Power to Your Innovation Efforts is a timely contribution to help companies capitalise on social media and open innovation. What are some of the key take-home points?
Principally that:
- Open innovation via social media requires a multi-target approach with many touch-points to your innovation community, your innovation ecosystem, and customers and users.
- Social media is growing at an unprecedented pace and we can expect new platforms to continue emerging. Companies of all sizes need to start working on the intersection of social media and open innovation now in order to reap future benefits.
- Now is the time to become the visionary leader in your company and in your industry when it comes to navigating the intersection of open innovation and social media.
- To get started, ask yourself how many important innovation partners you have within your corporate umbrella, what value could these partners bring to your company if they were able to interact with each other, and how you can make this happen.