2019 STATE OF CROWDSOURCED INNOVATION

IDEASCALE WHITE PAPER

In 2016, research firm, Innosight, made a daring prediction – most Fortune 500 companies will only spend fourteen years on the Fortune 500 list . When S&P was tracking the Fortune 1

500 in 1965, a company’s average lifespan on the list was 33 years. By 1990, that lifespan had shrunk to 20 years. Now, the Fortune 500 lifecycle is forecast to be 14 years by the year 2026.

Some researchers are pleased with this trend in spite of the volatility it presents. The trend demonstrates our economy’s ability to continuously innovate, provide new solutions, and improve overall. But it also presents a challenge to innovators at organizations of all sizes: “look to your horizon or risk irrelevance in the next ten years.” One might say it is the idea age – when seizing on the right concept will keep your company alive. And failing to acknowledge your next great idea could mean that your company will fade into distant memory along with other ancestors like American Motors, Studebaker, Zenith Electronics and many, many others.

It is one of the greatest surprises to us in the innovation management industry that it is not necessarily an organization’s ideas (or lack of them) that necessitate an innovation management program. A surprising finding in our most recent crowdsourced innovation survey noted that the number one reason that innovators seek an idea management solution is because what they need most is a shared place for those ideas. Secondary reasons include the need to increase transparency, reduce redundancies, and align an organization’s activities. In fact, not a single respondent selected the response that they “didn't have enough new ideas.”

This surprising result only underlines something that all leading innovation practitioners have known for a long time – what defines an innovative company is not necessarily their ability to generate ideas, but their ability to deliver on great ideas. The 2019 Crowdsourced Innovation Report showcases best practices that will help a company improve their idea delivery capabilities and provide benchmarks against which to measure innovation success.

Anthony, Scott D. Patrick Viguerie, and Andrew Waldeck. “Corporate Longevity: Turbulence Ahead for Large 1

Organizations.” Innosight. August 2016. https://www.innosight.com/wp-content/uploads/2016/08/Corporate-Longevity-2016-Final.pdf

The Crowdsourced Innovation Report

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More and more organizations have a dedicated innovation department . 38% of our customers have a dedicated innovation function (beyond that it’s a mix; some are in Communications, some in HR, some in IT, some in Product… it depends on the goals). But interesting to note that the percentage of customers with a dedicated innovation discipline continues to grow year over year.

Most organizations look to their employees for new ideas. 72% of IdeaScale customers are crowdsourcing ideas from their employees. The boldest are collaborating with partners, customers, and the public.

What Does Crowdsourced Innovation Management Look Like?

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Employees Customers

Partners

Public

Participation levels vary, but a good participation benchmark is about 25% of your invited crowd. 55% of our customers can achieve at least this.

Product and process are the key innovation areas. The Global Innovation Management Institute identifies five main domains of innovation (business model, production, offering, delivery, and market). IdeaScale customers are working on improving performance in all of those areas and more.

Innovators are starting to focus their efforts beyond core innovation. In 2012, the Harvard Business Review conducted a study of companies across a variety of sectors to find out the balance of their innovation portfolio. What they found was that companies that allocated about 70% of their innovation activity to core initiatives, 20% to adjacent ones, and 10% to transformational ones achieved a return on investment directly inverse to those investments. In our survey of innovators, we found a very similar ratio with 45% of all activities focusing on core innovation, 32% focusing on adjacent innovation initiatives and 23% are working on transformative innovation. The most interesting takeaway from this is that the biggest shift in these numbers is more attention being focused on adjacent and transformational innovation than in our 2017 report. Spend time developing a process that surfaces good ideas to decision makers with

influence. In an assessment of our most successful customers (those who stated that they had met or exceeded all of their innovation goals), 81% said that they did have a formal process for idea management, but only 30% had a dedicated budget for implementing ideas. How is it possible that they successfully achieved their goals without any budget? They were experts at taking institutional energy and using it to influence leaders who already had budget.

Create a system for innovation recognition. The most common incentive used by all IdeaScale innovators is recognition (36%). If you’re looking at only our most successful customers, however, 75% of them are using at least recognition as well as a mix of other incentives. When managing a crowdsourced innovation program, recognition and celebration of wins is absolutely imperative.

Best Practices

AdjacentTransformational

Core

Reflect your organization in idea evaluation criteria. The most common way to measure the value or relevance of an idea is against organizational objectives; 38% use this as their decision-making criteria. Take those shared targets, mission, and values and translate them into a system for idea measurement that becomes the shared language for innovation.

Most innovation teams aren’t training their workforce in innovation (55% report less than 10% of their workforce trained) – this is a huge opportunity to optimize these programs. Especially considering the

findings from the latest Accenture study that show that 62% of firms that are leading in innovation grow the capabilities of senior leadership to oversee innovation-led change compared to 51% of other companies.

Innovation must be reflected in individual KPIs. For most innovation practitioners, the fundamental obstacle blocking innovation is lack of time (17%). Innovation managers need to prove the test case value of these programs and leverage that success to hire dedicated resources who can work on these programs full time. Alternatively, KPIs can be adjusted to include innovation. Individuals who have traditionally been measured by some other metric (hitting sales targets, design sprints completed, etc) need to have innovation KPIs integrated into their jobs in order to define how they manage their time.

In an emerging industry, understanding metrics and developing new leadership skills are the key innovator priorities. According to our survey, innovation professionals are looking to develop their skills in metrics and ROI, innovation leadership skills, engagement strategies, and implementation strategies.

It’s not about launching every idea, it’s finding the best, most actionable ideas. For the majority of our customers (nearly 80%), less than 25% of submitted ideas reach the

implementation stage. Admittedly, this rate is higher in our most successful customers, but 25% is a good starting point as an implementation benchmark.

Most of our customers measure program success by the number of implemented ideas. Others measure innovation inputs (ideas gathered or votes and comments) and some measure end results (like employee satisfaction or dollars saved or earned). However, when looking at our top innovators (those consistently delivering on ideas that make a financial impact at their organization), the shared characteristic is their commitment to measuring program efficacy in some way so that they can influence their goals.

Crowdsourced innovation management programs should move fast. 78% of innovators take less than a year to launch a new idea on average.

Finally, it’s possible to estimate the rough value of each contributing member in a crowdsourced innovation community. The average value of a community members’ ideas in a successful idea management program is a little over $1,200.

Prioritize Process. Oftentimes, innovation practitioners want a templated funnel that they can use as for their idea process. Some

innovators use design thinking, some use Six Sigma, some create a completely bespoke funnel that only makes sense at their organization. However, there is no “best” process that has yet emerged. Instead successful processes are defined by their ability to swiftly and transparently match a good idea to influential resources in a way that mirrors the way decisions are actually made at a company.

Align Organizational KPIs to Innovation. Many people are administrating or participating in innovation programs alongside other duties and workplace expectations. Innovation is always going to be seen as ancillary whenever an individual’s success metrics don’t include innovation. To change this perception, start to work with leadership, HR, and individuals to shift targets to include innovation metrics.

Measure & Report on Innovation Programs. Organizations that are generating significant cost savings and developing substantial new lines of revenue all have one key best practice in common: they measure the outcomes of their programs. Doing this one thing will create a virtuous cycle that drives all other innovation metrics: engagement, innovation professional development, and more. It will also help to overcome key obstacles as programs with demonstrable value will win head count more easily, gain organizational air time for their communications, and generally level up their innovation culture. After all, PwC reported that “93 percent of business executives believe that organic growth through innovation will drive the greater proportion of their revenue growth.” Be prepared to demonstrate that connection.

Ready to launch your own program? Learn more at ideascale.com.

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The average value of a community’ members’

ideas in a successful idea management program is

over $1,200.