How Open Innovation Increases Consumer Value

How Open Innovation Increases Consumer ValueToday’s most innovative companies recognize that it is not unique technology or features alone that drive winning innovations, but the value and impact that those innovations contribute to their customers. Just as marketers must now engage in intimate social media conversations with consumers, R&D must utilize new methods & processes, operating closer to their end user than ever before. By leveraging Open Innovation throughout each phase of the development process enterprises can ensure that their output is relevant and authentic, thereby de-risking projects and increasing the likelihood of market success.

Value has traditionally been a vague metric only spoken about in marketing and sales meetings. Even when product developers engage directly with consumers, the focus is on features, attributes and usability, not value. And often a customer can’t even anticipate the value of a product they haven’t experienced (think of the iphone). So how can today’s enterprise ensure its output delivers the desired value, when often even the customer can’t foresee it? When Open Innovation is fully integrated into the process value becomes a natural bi-product.

This unique concept is a direct result of the modern New Product Development (NPD) process becoming one of successful work distribution & integration, rather than traditional research and development. Through Open Innovation product developers are able to source technology and collaborate in parallel with multiple partners, each offering only a piece of a total solution. Each partner is on the forefront of their particular discipline, ensuring a tight focus on only the most relevant and applicable solutions. Even more interestingly, outside talent almost always comes from a smaller environment than it is being sought. As such, it is by nature closer to the end-user or market, virtually guaranteeing a more relevant and authentic result.

Fast Company magazine recently named Nike the most innovative company of 2013, largely based upon a revolutionary new fitness monitoring bracelet called the FuelBand. The FuelBand has helped transform Nike from an apparel manufacturer to a technology, data and services company integrated into their consumers daily lifestyle. Despite a company culture embedded in secrecy, to pull off such a successful and disruptive innovation Nike’s R&D team recognized immediately that they needed to engage outside resources in every phase of development. Nike simply could not acquire all the aspects of expertise required, and get the product to market quickly, without utilizing Open Innovation. Nike simply could not acquire all the aspects of expertise required, and get the product to market quickly, without utilizing Open Innovation.

The FuelBand project was super-confidential, but outside design firms were engaged to develop and hone concepts. Engineering firms were consulted to ensure the right technologies were embedded. Digital marketing agency R/GA developed the interactive consumer experience and services. Nike’s own team managed all the units of work that had been distributed to external channels. On the back end, Nike and its partners would integrate all the pieces into a product that Nike could have never developed as quickly or impactfully in-house.

As Nike discovered, there’s a depth of energy, purity and passion found only in reaching outside. Whether it’s design, technology, materials, manufacturing, or digital experience – relevance and authenticity is ensured by engaging those on the forefront of each discipline. It is found through delving into the core & underbelly of each, and engaging those minds and talents you would not normally have access to. The end result is the commercialization of innovative products and services which connect deeply with your customers and deliver unmatched value.

image credit: insider.nike.com

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Eric Seibold is Director, Business Innovation at InnoCentive where he specializes in helping clients strategically integrate Open Innovation and crowdsourcing into their ecosystem.  For five years prior, Eric was second-in-command at a New York based innovation firm where he worked with category leaders like Coca-Cola, HP, and Whirlpool to successfully extend brands and launch new products. This combined experience gives Eric a unique perspective, having consulted with Fortune 500 clients in every stage of the innovation process – from insights & ideation through commercialization.

This entry was posted in Consumer Innovation, Digital, Innovation, Open Innovation, People & Skills, Processes & Tools and tagged , , , , , , . Bookmark the permalink.

4 Responses to How Open Innovation Increases Consumer Value

  1. jj says:

    Really interesting, thanks ​!

    Given your interest, I think you’ll be very much interested in this list of emerging Open Innovation research:
    http://www.openinnovation.eu/07-05-2013/768/

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