In contrast with free ideation where the mass crowd of solvers is empowered to bring in their ideas with little or no direction –as many companies have approached open innovation with rather bad results-, the most effective method to deliver real solutions to the seekers is challenge driven innovation. As aforementioned, this method consists of formulating specific and actionable problems or opportunities, to better focus the innovation efforts of potential solvers to a real solution that can eventually be implemented.

The open innovation platform is to be managed by a pool of Project Managers (PM) in charge of dealing with the Innovation challenges. Every time a public or private stakeholder (seeker) wants to open a challenge, a PM is assigned to the challenge and follows a series of steps:

  • The PM works with the Seeker in the formulation and definition of the challenge.
  • Once the challenge is defined, the Seeker has to set the prize or prizes for the winning solutions. There may be many prizes of different amount to take advantage of many ideas and encourage more participation.
  • The PM has to define with the Seeker the terms of agreement to be offered in the tender.
  • Beyond the registered innovators in the platform, the PM should search for more innovators outside the platform, especially when the challenge requires specific expertise which is rather scarce or nonexistent among the registered innovators.
  • Once all potential innovators have been invited to participate to the challenge, these have to submit their solution by the specified deadline, complying with the stated requirements.
  • When submitting the solutions, the PM screens them all to ensure that they all meet the requirements established by the Seeker, prior to deliver them to the Seeker.
  • Then, the Seeker may decide which solutions are suitable and award as many as he considers, or none at all if any solution is good enough.
  • In the case of discarded solutions, the Seeker has signed an agreement upon which he cannot use the non-awarded ideas without permission of the Solver. To guarantee the accomplishment of this agreement, a pool of Innovation controllers are empowered to carry out Innovation audits on the “Seeker companies” to make sure that such ideas are not used.

Regarding intellectual property (IP) transfer, there are many possible options to regard:

  • IP may be fully transferred to the Seeker, especially when the reward is according to it.
  • IP may be transferred under a non-exclusive license to the Seeker, if the reward is too low.

This issue is to depend also on the nature of the assignment, taking into account that some innovations are only applicable to one case, because of the uniqueness of the Seeker or because the job is tailored for the Seeker, such as a graphic design.

The funding of the platform may come from two complementary sources:

  • Brokering commission for every challenge managed to be paid by the Seeker.
  • Sponsorship by many industry stakeholders, including the government.

The platform should engage a vast range of shareholders within the industry, encompassing private businesses, educational institutions, governments and even non-profit organizations.

How do you thing that this operational system could be improved?

Posted by Jordi Pera

Jordi Pera is an economist passionate about tourism, strategy, marketing, sustainability, business modelling and open innovation. He has international experience in marketing, intelligence research, strategy planning, business model innovation and lecturing, having developed most of his career in the tourism industry. Jordi is keen on tackling innovation and strategy challenges that require imagination, entail thoughtful analysis and are to be solved with creative solutions.

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