Originally published 20 June 2012
Innovation is the life blood of businesses large and small. Without the ability to innovate with new products and services, or adapt existing ones to suit changing markets, the business will simply stagnate.
So how is innovation enabled in the social business model? The Internet of course has been the catalyst for one the most potent forms of innovation – disruptive innovation – across a variety of industries. However, for businesses exploring how to integrate social practices and technologies, I don’t believe it is possible to actively make innovation happen. Instead you need to concentrate on creating the right conditions for it to emerge and flourish in its own right.
The essential requirement is openness. In simple terms, social technology provides a means for different groups inside and outside the organisation – from employees to customers – to input into the business.
A great example of openness in practice is SmartOcean – an ocean technologies innovation cluster in Ireland. Launched in 2010, the initiative brings together expertise in marine science and technology with the aim of establishing Ireland as a leader in the development of products and services for the global marine sector. Currently there are over 50 companies from a variety of disciplines involved, all collaborating to develop new marine technologies in areas ranging from renewable energy to environmental monitoring.
To establish the conditions for open innovation to flourish, creating an environment where people are confident and motivated to share and collaborate on the development of ideas must be the foundation. But this front-end innovation is only part of the story; businesses also need the back-end workflows and systems in place to manage the outputs of the creative process and turn them into revenue streams. This is one of the great opportunities of the social business – in an integrated, collaborative environment an idea could emerge from IT, Sales, Marketing, Customer Support, HR, Communications, specialist Business Units, or of course from someone outside of the organisation.
Take Quirky for example. This firm is taking social principles and applying them to manufacturing. Based in New York, its design studio houses a small factory complete with a whole range of equipment, including 3D printers, a laser cutter, milling machines and a spray-painting booth. From here, Quirky is able to produce a couple of new consumer products every week, with the help of a growing online community. The process begins with an idea submitted by a would-be inventor. If enough people like the idea by voting on Facebook and the website, then Quirky’s product development team will manufacture a prototype. Community members can then contribute reviews of the product online, helping to refine the design, packaging, marketing and pricing. Quirky then looks for suitable manufacturers to scale production if the prototype is well-received. Initially the product will be sold on Quirky’s website. This is then expanded to retail chains if demand grows. As the product establishes a customer base, revenue is shared between Quirky, the inventor and others who have helped in the process.
By using its community as a sounding board, Quirky can quickly establish if there is a market for a product and set the right price before committing itself to a major production run with a large-scale manufacturer. The speed with which they can source ideas, turn them into designs, test them for robustness and produce a prototype with confidence is hard to match. And it’s the firm’s open approach to innovation that’s crucial to making this possible.
The experiences of SmartOcean and Quirky in very different industries and environments go to show that by having the right processes and technology infrastructure in place, it’s possible for people inside and outside the organisation to connect and make innovation happen. Taken as a whole it’s a complex challenge, but in a truly integrated environment it becomes possible for ideas to emerge that can be transformed into successful products or services.