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Creating Value At The Crossroads Of Marketing And R&D

It is natural for customers to want products from the “coolest,” most innovative companies and that’s putting pressure on marketing executives like never before. A perfect storm of factors is turning up the heat — shorter product development cycles, explosion of technologies like Internet of Things, and unseen competition from around the globe.

The same forces are also pushing Marketing and R&D together to give their brands a competitive edge. For the first time, many are partnering on Open Innovation (OI), a strategy designed for speedy breakthroughs into the market, much before competitors have a chance to blink.

If you’re familiar with Innovation Contests and Grand Challenges, then you most probably have had an introduction to OI. Through open innovation, organizations reach beyond their walls, geographies and industries to share their needs with a global network of scientific and technical experts. Often within weeks, they discover new technologies or intellectual property that they can incorporate into their R&D. Reaching outside not only brings unexpected solutions to their problems, but expands the audience of individuals thinking about their organization and the needs it can meet.

Who would have thought, for example, that research to develop a better osteoporosis drug could lead to a tasty, lower salt potato chip? Who could have envisioned that the combustion capabilities used in construction could provide an entirely new experience with traditional candles? This is the “managed serendipity” that happens routinely with OI.

Today, we’re all part of a sharing economy, with millions of technical experts, prospects, customers and influencers within easy reach. When strategic marketing works hand-in-hand with R&D to open up technical needs to this global community, it aligns two disciplines and benefits both. R&D develops a direct connection to new innovators with fresh perspectives while marketing advances its products faster and increases visibility and equity for the brand.

All of this sounds good in principle, but is it easy to align strategic marketing and R&D in a sustainable, efficient manner? The answer is yes, and we’re seeing it in action every day.

Innovation contests can help both B2B and B2C companies to fill gaps in internal know-how, and accelerate the achievement of their most important strategic goals. In essence, an innovation contest is when a company defines a technical need and attaches a prize to motivate innovators to respond with solutions that can be acquired, co-developed or licensed.

A recent innovation contest conducted by GE illustrates the benefits for both marketing and R&D. The company was searching for an attractive, ergonomic rotary handle accessory for a molded case circuit breaker.  The contest homepage promoted the prize for the five winning solutions ($10,000 each), and provided details on exactly what the company was seeking, along with a timeline.

Once the winners were selected, GE announced them in the press and online. The company was able to tap into solution providers whose expertise was as varied as the ideas they submitted:  An industrial designer from Frankfurt, Germany; a toy and consumer product designer from Connecticut; a design consultancy based in Sydney, Australia; a spacecraft and robotics R&D engineer in New York City and a cross-functional team of architects, engineers and designers in Milan.  By the end of the challenge, a community of solution providers, customers and GE innovation and marketing managers had been unified around the development of what was a fresh new approach to a simple switch.

Another example of an innovation contest that generated excitement for the brand is the recent Cool Ship Technologies Contest, sponsored by The Hershey Company and administered by NineSigma. The objective of the contest was to find technologies to keep chocolate from melting in shipment during the hot months of the year. The ultimate goal was to develop a system affordable enough to be used year-round as standard packaging.

This was a great topic for an innovation contest because everyone understands the problem of melted chocolate. Potential solution providers could easily see how their technology might or might not be a good fit. By sponsoring the contest, Hershey also reaped additional benefits beyond technical solutions. The contest promoted awareness for the Hershey brand and signaled to others that Hershey is part of the larger group of companies and organizations that practice OI. The contest recently closed to submissions. Phase 1 winners will be announced mid-April 2016 and they will receive $10,000 for prototype development and proceed to Phase 2. The Phase 2 participants will vie for an additional $25,000 in funding and may have the opportunity to further collaborate with Hershey to develop the proposed solutions.

Conducting an innovation contest requires a structured process that includes:

  1. A blended team from both R&D and marketing with established goals and metrics.
  2. A well-articulated call for submissions that clarifies what you’re looking for and any performance specifications that must be met.
  3. A timeline that establishes milestones within the project, which may have multiple phases.
  4. Transparent judging criteria and processes.
  5. A dual technical and marketing outreach program that engages experts as well as broader stakeholders around the project’s mission.
  6. A prize strategy that entices solution providers and demonstrates the sponsor’s commitment to selecting winners and winning solutions.

One benefit of the process is the breakdown of barriers between traditionally separate divisions — marketing and R&D. That’s something most marketers never thought could happen. But after all, OI is about expecting—and embracing—the unexpected.

3 Comments

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  1. Well what i see is that OI has not just a means of finding a faster and cheaper solutions for bigger companies but also an opportunity for freelancers, sartup’s and small businesses to not just make money but also an opportunity to get recognized on a global platform and increase their clientele.
    With the rise of IoT, OI is becoming more crucial for companies as they are competing in market to produce better products than one an other. Tesla is leader in electric car technology and others are racing behind it, for them to catch up with Tesla then have to resort to OI as Ford did by opening access to their electric vehicle patent portfolio.

  2. The growth of open innovation is undeniable. Right from up and coming startups to well established companies, one can find several examples of organizations participating in this practice. But OI works only when the problem is such that the general public can easily identify and relate with.
    The case can be made that open innovation greatly helps reduce R&D costs and drive out-of-the-box thinking, but without monetary rewards / compensations (which smallers companies cannot afford), open innovation is a practice best left to the big players.
    Successful OI contests can lead to not just new and/or developed products, but marketing and publicity avenues as well. Coca-Cola, Microsoft and Samsung among others have successfully managed to tap into this resource.

  3. Well long before open innovation, there were/are ways through which companies can improve their r&d and and bring in new technology. However the concept of open source maybe limited to those companies have excelled in their product and form the base foundation for future technologies. Open innovation strikes as more welcoming and uniting effort for different research groups from around the globe. And a great way of marketing too.

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