The Global Brain: Your Roadmap for Innovating Faster and Smarter in a Networked World

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9780132339513: The Global Brain: Your Roadmap for Innovating Faster and Smarter in a Networked World

All the talk about "open innovation" and externally-focused innovation assumes that "one size fits all" in terms of what network-centric innovation is and how companies should harness external creativity. But the reality is that there is no one right way to master this tool. For instance, loosely governed community-based innovation projects are a very different animal from tightly-orchestrated development projects driven by a large firm. As the landscape of network-centric innovation becomes more diverse and more confusing, there is a desperate need to structure the landscape to better understand different models for network-centric innovation. This book brings clarity to the confusion. Further, it argues that managers cannot rely on anecdotal success stories they read about in the press to implement a network-centric innovation strategy. They need rigorous and analytical advice on what role their company should play in an innovation network, what capabilities they need to create, and how they need to prepare their organization for this significant shift in the innovation approach. This book offers a practical and detailed roadmap for planning and implementing an externally-focused innovation strategy.

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About the Author:

Satish Nambisan is a professor of technology management and strategy at the Lally School of Management, Rensselaer Polytechnic Institute in Troy, New York. He is a globally recognized researcher and thoughtleader in the areas of innovation management and technology strategy, and his recent research work has focused on customer co-innovation, network-centric innovation, and IT-enabled product development. His research has been published in premier management journals such as

Harvard Business Review, MIT Sloan Management Review, Management Science, and Academy of Management Review. Through

his consulting work and executive lectures, Satish has helped many companies in the United States, Singapore, and India in managing innovation and product development. Prior to joining the academia, Satish held executive positions at the consumer-products giant Unilever Plc. in Mumbai, India. More details about his research and consulting are available at www.satish-nambisan.com.

Mohanbir Sawhney is the McCormick Tribune Professor of Technology and the Director of the Center for Research in Technology & Innovation at the Kellogg School of Management, Northwestern University. He is a widely published expert in the areas of innovation, marketing, and strategy. He has authored several influential articles in publications like the Harvard Business Review and the MIT Sloan Management Review. His contributions to the literature on innovation include concepts like mediated innovation, community-centric innovation, and collaborative innovation with customers in a networked world. He consults with and advises dozens of Global 2000 companies around the world. This is his fourth book.

 

Excerpt. © Reprinted by permission. All rights reserved.:

Introduction

Introduction

Innovation is critical for profitable growth. In their search for innovative ideas and technologies, companies are realizing the importance of reaching out to customers, partners, suppliers, amateur inventors, academic researchers, scientists, innovation brokers, and a host of other external entities that together constitute the Global Brain—the vast creative potential that lies beyond the boundaries of the firm. Terms such as communities of creation, innovation networks, open market innovation, and crowdsourcing are being used to refer to the future of innovation in a connected world. The promise of such network-centric innovation approaches is resonating in the executive suites of large corporations. A recent survey of CEOs found that the need to expand the innovation horizon by looking beyond the four walls of the company is at the top of the CEO agenda.1 However, most executives feel that they don't know how to reach the Promised Land. Our conversations with senior executives charged with innovation initiatives suggest that they struggle with a question of singular importance, "How should we really go about harnessing the creative power of the Global Brain to enhance our growth and performance?"

Recent examples from companies such as P&G, IBM, Boeing, and Apple illustrate that externally focused innovation can take many forms. There are many different entities that companies can reach out to and many different types of relationships and networks they can create to harness innovative ideas. Questions abound: What are the different approaches to harnessing external networks for innovation? Which approach is best for our firm? What kinds of innovation projects lend themselves well for these approaches? What role should our firm play in our innovation network? To answer these questions, managers need a good understanding of the emerging landscape of network-centric innovation. Only with a good view of the landscape will they be able to identify the opportunities that network-centric innovation presents.

Beyond the identification of opportunities lie additional questions managers need to ask in exploiting the opportunities. What organizational capabilities do we need? How should our innovation network be designed? What benefits can we expect and how do we measure these benefits? What are the potential risks of opening up innovation? Is there a danger that we could lose control over our innovation initiatives? How should we protect our intellectual property? How should we define success?

We wrote this book to answer these two sets of questions in a practical and direct way so that companies—both large and small—can explore as well as exploit the power of the Global Brain. We hope to take you on a journey that begins with an awareness of the nature and potential of network-centric innovation to a destination where you will be able to implement a network-centric innovation strategy for your firm.

Throughout this book we will use both these terms: Global Brain to describe the diverse set of external players that constitute the innovation network for the companies; Network-centric innovation to describe the underlying principles of collaborative innovation in such a context.

How this Book Came About

Both of the authors have been students of innovation for several years. Ever since the Internet gained critical mass and firms started to realize the power of networks and communities, we have been particularly interested in understanding the nature and the implications of distributed innovation, community-based innovation, and innovation networks.

Satish had studied "Virtual Customer Environments" and the role customers play in supporting and enhancing companies' innovation efforts.2 Mohan had written about the emerging phenomenon of "Communities of Creation" in different contexts and examined their promise as a way of organizing commercial innovation initiatives.3 Our work had also focused on new types of innovation intermediaries—or "Innomediaries" as Mohan calls them4—that link companies with external networks and communities.

A common theme in our research was our interest in the concept of distributed innovation—innovation initiatives that are spread across a diverse network of partners. In the summer of 2005, we participated in a research symposium on distributed innovation organized as part of the Annual Academy of Management Meeting held in Hawaii. While enjoying the sun and the beaches, we began a conversation on the growing importance of innovation networks and communities of creation. Both of us were convinced about the promise and the potential of innovation initiatives centered on such networks of individual inventors, customers, and partners. We believed, based on early evidence from the software and automotive industries, that innovation could be made far more efficient, effective, and speedy if firms could harness all the talent and ideas that lie outside their boundaries. But we suspected that, despite all the hype about the innovative power of external networks, managers had very limited guidance for implementing such network-centric innovation initiatives. We decided to explore this hunch further, to see whether we could make a contribution in this area.

Our vehicle for this exploration was the Kellogg Innovation Network (KIN)—a forum for senior innovation managers of large companies—affiliated with the Center for Research in Innovation and Technology that Mohan directs at the Kellogg School of Management. The KIN is an excellent example of the power of the Global Brain in action. It consists of senior executives from a hand-selected group of leading companies who come together in a collaborative forum to exchange ideas and best practices related to innovation. The research agenda for the KIN emerges from dialogue, discussion, and debate among the members. We initiated conversations with senior managers from KIN member companies such as Motorola, DuPont, IBM, Kraft, and Cargill. We presented our ideas on network-centric innovation in KIN seminars, and our discussions revealed that our hunch was accurate. Most managers indicated that they were very excited and enthusiastic about the opportunities posed by external innovation networks and communities, but were less convinced about their own capabilities to implement such initiatives that involve reaching out to external networks successfully. And all the media hype and buzz about open innovation, open source software, social networking, and Internet-based innovation wasn't helping. There was a lot of heat and dust, but very little enlightenment when it came to execution-related issues.

A survey of senior managers conducted by the management consulting company, Bain & Co., in 2005 supports our observation. A majority (73%) of the survey respondents agreed that companies "can dramatically boost their innovation by collaborating with outsiders," but they simultaneously expressed "deep dissatisfaction with (their) knowledge about appropriate strategies, practices, and tools" for executing such network-centric innovation.5

For companies to be successful in making the shift from firm-centric innovation to network-centric innovation, managers need to progress beyond a basic awareness of the potential. They need to understand the landscape of network-centric innovation. Next, they need to know the strategies and best practices that are relevant to their business context. We felt that there was a need for a book that would help managers to take these two important steps so they could harness the unbounded creative potential that lies outside their four walls.

After we decided to embark on the book project, we began with an extensive review of the academic literature as well as practitioner-oriented articles and books in the area of innovation management and networks. This review provided the background material for developing our frameworks and concepts. Next, we identified a number of companies that were leaders in externally focused innovation. These companies ranged from...

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