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Cultivating open innovation: Seeding, feeding and weeding

Hagel, Brown and Davison
John Hagel III, John Seely Brown, and Lang Davison of the Deloitte Center for the Edge have a passion for communicating world-changing ideas in ways that get executives to change what they do and realize significant performance benefits. Their books include The Power of Pull, The Only Sustainable Edge, Out of the Box, Net Worth, and Net Gain.

Open innovation is in the air. However, when executives pursue efforts to connect beyond the boundaries of the firm, they tend to focus on short-term, relatively narrow problem-solving efforts, as in the examples most often cited for open innovation - InnoCentive, the Goldcorp Challenge and the Netflix Prize.

Unfortunately, most executives are still thinking too narrowly about this opportunity. They are missing an important leadership opportunity to accelerate and shape the emergence of much more robust performance improvement environments. The real opportunity is to connect diverse participants and encourage them to engage in sustained performance improvement initiatives that help to build trust-based relationships.

SAP's experience with the Software Developer Network (SDN) illustrates the opportunity for and benefits of shaping the evolution of an environment from short-term transactions around narrow problems to sustained interactions around challenging performance issues.

The Software Developer Network started as an online forum that helped software programmers get quick resolution of specific programming problems. The SDN encouraged rapid adoption because it addressed real problems in programmers' day-to-day jobs and did not demand a lot from them; all they had to do was register once and begin posting problems. The initial positive experience was soon reinforced when programmers discovered that their problems were quickly solved and that their productivity significantly improved. This encouraged them to keep returning and investing more time in the network.

SAP realized that many participants got satisfaction from solving difficult programming problems and were motivated to build their reputations for problem-solving. As a result, SAP developed richer reputation mechanisms to give more visibility, recognition and rewards to the problem solvers. It also created various levels of accomplishment that motivated contributors to want to advance more rapidly to the next level and gave them frequent positive feedback for their efforts.

It soon became clear that participants wanted to interact with each other around shared interests, rather than just on solving specific problems. SAP enhanced its online discussion forums and cultivated an array of offline, face-to-face conferences and meetings where people could build more sustained relationships, shaped in part by the online reputations which helped participants find others with complementary interests and expertise.

As these relationships blossomed, participants began to form virtual teams around new programming initiatives, and SAP responded by building out more collaborative work-spaces where these emerging teams could work together on a sustained basis to develop new products and service offerings. The Enterprise Social Media Experiment (ESME) team is just one example of the type of high-performing teams that started evolving on the SDN. The ESME team sprung from a conversation between members who were interested in applying the concepts behind Twitter (which at that point lacked security and was not searchable or convertible to wiki) to business enterprise problems.

Using the network's reputation mechanisms to gauge each other's interests and capabilities, they formed a team comprised of a broad range of technical and business skills from many geographies to develop an entry for the DemoJam competition at SAP's TechEd conference. Not only did the ESME team create a product in less than three months with only part-time resources, through this project they built trusted relationships and may work together, formally or informally, in the future.

This evolutionary pattern, from narrow problem-solving to reputation-building to relationship-building to sustained collaboration is not unique to SAP. In fact, this pattern is playing out across a diverse set of arenas including InnoCentive (scientific research) and ccMixter (digital music mixing).

We are seeing the emergence of powerful creation spaces that have the potential to transform the diminishing returns that characterize most business activity today (as described by Boston Consulting Group's famous experience curve) into the increasing returns of sustained performance improvement. What we see is the opportunity for leaders to shape and encourage the evolution of these creation spaces, an opportunity that we describe more fully in our book, The Power of Pull. This can become a significant and sustainable source of strategic advantage.

Leaders who understand this potential, and the evolutionary path leading to it, can help to accelerate their companies toward collaborative growth and innovation by deploying the tools and governance structures that support these creation spaces.

We are not recommending that executives set to work right now trying to anticipate exactly how creation spaces will work and developing detailed blueprints in advance. These are not environments where blueprints and directives work. But executives can implement tools and management approaches that will help to accelerate the evolutionary path described above.

Low barriers to entry, short-term and tangible value, robust reputation mechanisms, multiple performance levels, clear and rapid performance feedback, shared work-spaces that encourage teams to form and collaborate, and easy-to-search interaction archives: these are the kinds of tools and approaches that have helped to foster emerging creation spaces. Executives can then analyze how people are interacting in these environments and make adjustments to encourage performance-driven relationships.

So, rather than issuing directives, we suggest that leaders develop a clear sense of the longer term opportunity and then nurture the initiatives that will help to accelerate movement towards it; seeding, feeding and weeding to cultivate the opportunity.

By John Hagel III, John Seely Brown and Lang Davison

 |  July 27, 2010; 10:57 AM ET |  Category:  Business Leadership Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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Nice article, the key is to have your internal house in order and have "Total" Innovation down pat "within" before you even consider Open Innovation. Are you applying all ten imperatives on how to Create and Sustain Innovation, Robert's Rules of Innovation first, Open Innovation second.

Posted by: InnovationCoach | July 28, 2010 1:19 AM

Hi John, John and Lang,

Excellent article. Small clarification:
"It soon became clear that participants wanted to interact with each other around shared interests, rather than just on solving specific problems. SAP enhanced its online discussion forums and cultivated an array of offline, face-to-face conferences and meetings"

I was one of a handful of people that started SDN and grew into the role of being responsible for the vibrancy of the community.

Our goal and focus was always to bring out the passion in the community. We realized, that for a community to really gel you need to bring them together at least once every year.

This is why we created the SDN meets Labs, that developed into the super successful SAP Inside Tracks now happening all over the world typically organized by SAP's most passionate community influencers the SAP Mentors: http://sapmentors.sap.com

The original drive behind the face to face meetings was the realization that this will give an enormous boost to the vibrancy of our community.

I wrote down 9 more tips on how to create an engaging community at this post: http://finnern.com/2010/02/07/focus_on_passion/

Hope these tips helps you to build your own passionate community, Mark.

Posted by: Finnern | July 27, 2010 5:56 PM

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