Innovation is Required to Be Competitive
According to the 2019 Crowdsourced Innovation Report, a company has an average lifespan of 33 years in the Fortune 500 in 1965. Since then, that number has continuously fallen to a lifespan of 20 years in 1990 and is expected to fall to 14 years by 2026. This means that companies need to continuously innovate if they want to remain competitive in the market. Companies that do not do this are vulnerable to being removed from the Fortune 500 and possibly going bankrupt! With the rise of social media such as Facebook, Twitter, Slack, and LinkedIn, people can easily share information around the world instantly.
Companies that have ways to access crucial information will have the advantage over companies that find out about information late. Therefore, it is imperative then that companies crowdsource as much relevant information as possible, whether it is from their employees or even the public to improve their processes and gain market share. Otherwise, corporations such as Amazon and Netflix can bankrupt giant conglomerates that do not innovate like Sears and Blockbuster. Sears and Blockbuster were seen as nearly invincible at the time. In fact, Netflix crowdsourced its innovation process by paying 1 million dollars to the people who figured out how to improve its recommendation algorithm from 2006 to 2009.
Creating a Concrete Innovation System Helps Firms Get Ahead
From IdeaScale’s survey in the 2019 crowdsourced innovation report, we find that there is a large opportunity for growth if innovation teams are properly trained in innovation. In fact, 55% report less than 10% of their workforce trained! If everyone on these teams has some form of training even minor training, then these firms can jump ahead of their competitors! Some companies such as Tesla take this even further. Corporate hierarchy is basically nonexistent; CEO Elon Musk familiarizes himself with every step of the innovation process and isn’t afraid of getting his hands dirty.
This makes him very accessible for his employees to share new ideas with him. It is no wonder that Tesla is one of the biggest pioneers in innovation! Another obstacle that companies need to face is tracking their innovation progress with their unique KPIs. Fortunately, if these obstacles can be overcome, 78% of companies that have a crowdsourced innovation management program take less than a year to launch a new idea on average!
The Hardest Aspects of Crowdsourced Innovation are Participation and Accountability
So your company has a crowdsourced innovation management program in place — great! However, there is one major obstacle that companies have to overcome even if they purchase crowdsourced innovation tools like IdeaScale. How does your company acquire people to participate in the innovation processes and help the company grow? That is the biggest challenge that every company has to face. Fortunately, NASA found that the leading incentive for employees to participate in their challenges is managerial recognition, not monetary rewards! The NASA innovation team then sends an email to the managers of the people who won the innovation challenge to recognize these exceptional individuals. Your company can do something similar.
Another issue that companies need to overcome is accountability throughout the innovation process. If nobody is responsible for allocating resources or executing the innovation idea, then it makes things difficult for crowdsourced innovation management companies. Such as IdeaScale to deliver value or for employees to delay implementing the idea until it is forgotten.
Fortunately, your crowdsourced innovation management can be made easier with IdeaScale. Request a demo today!