Partnership Development for Hilton Hotels

Published Feb-15-10

Breakthrough:
An open innovation solution to help Hilton Hotels develop its business.

Company:
Hilton Hotels

The Story:

There is a popular and ever increasing trend amongst businesses to turn away from high-priced consultants, and their own in house teams and instead embrace open innovation contests.

Hilton Hotels is continually thinking about how to reinvigorate its brand and enhance its appeal to customers. Since 2004 the hotel chain has been involved in the Innovation Challenge MBA Competition, the world’s largest business innovation contest.

Every year companies are invited to pose questions and challenges to be answered by business students from around the globe. This enables them to have some of their toughest real-world problems solved by the brightest young brains in business.

The contest is run by Idea Crossing, a company that designs and produces open innovation competitions as a means for organizations to find new concepts and fresh perspectives.

Framing the Questions

Hilton worked with the knowledge broker to frame the questions it wanted answers to. It is a superlative way for the company to innovate. In return for a few thousand dollars prize money it receives a batch of new ideas and concepts. Its only tasks are to design the challenge, await the results, adjudicate, and adopt the best solutions. This represents a small fraction of the cost and time they would have otherwise spent on research and development.

Important Insights

Hilton executives in common with other business leaders keep details of the intellectual property they pick up at these competitions confidential. But they do acknowledge that they have adopted a range of good ideas. These include a raft of creative proposals to help it promote a stronger service culture amongst its employees.

"It gave us the important insight that, in order to market a service culture from the inside out, we need to bring a human connection to it with a face and personality," said marketing executive Kirk Thompson to CNNMoney.com.

Other strong ideas that have won favor with the hotel chain include a proposal to allow guests to customize their rooms.


Contest Winners

In 2006 the Innovation Challenge competition was won by a group of MBA students from McGill University in Canada. They were awarded $20,000 for creating business solutions for Hilton Hotels and DaimlerChrysler.

Hilton had posed the question: what kinds of partnerships does the hotel chain need to cultivate in order to grow the business? The winning solution bowled over the panel of judges but remains confidential as it contains proprietary information.

Jeff Diskin, senior vice president, Hilton brand management, had this to say about the company’s forays into open innovation "We continue to be impressed by the quality, originality and relevance of the ideas presented by the Innovation Challenge teams, many of which have a significant potential to enhance the way we shape the Hilton guest and Hilton team member experience."

Innovation Enablers

Competitions are great innovation enablers and the most successful ideas
come out of teams or individuals thinking laterally about seemingly ordinary questions.

Stephen Liguori, an executive with GE Money understands why some companies may be reluctant to engage with open innovation but as he told one interviewer it’s vital for survival. “Turning your business innovation process over to outsiders scares the crap out of most business leaders because it challenges the power base of individuals within the company. But that's exactly what needs to happen for a company to grow and change with the times."

Next Story »