So. There was a fascinating article in a late 2009 Science Magazine (“innovation is more critical than ever”).

Oh.

No. I don’t make it a habit to read Science magazine. So don’t anyone worry I have completely lost it.

But.

I came across this article about maintaining innovations through collaboration and partnerships in the biotechnology and pharmaceutical industries (and having seen the P&G Innovations group in action I am always interested in innovations process and thinking).

I thought it was a nice article talking about collaboration in a highly intelligent employee based organization (I will get back to that).

Next.

There was a small article in the Economist 8/7 issue on innovation prizes.

Now. I am not a cash reward believer (tends to not create ongoing ideation as well as discourages emotional based behavior patterns) but in this case the Economist showcased a couple of thoughts that I believe are perfect with regard to the proper use of collaboration (and dollar reward mechanism).

The concept is outsourcing collaborative ideation opening up competition to non-industry knowledgeable individuals (I will get back to that).

Next (and lastly so I can get to the point of this post).

A book called “The Rational Optimist: How Prosperity Evolves.”

Now. I am not recommending this book. It is not for the faint of heart and it makes a Michener book read like People magazine. But. It does a nice job of addressing how innovations (lets call them biological, cultural & economic forces) can be aligned to enhance overall human progress.

Ok.

The bottom line is that innovations are the lifeblood of not only corporate success (or let’s say business/industry success) but also human success. Not just ‘comfort’ innovations but dwarf grain, penicillin, combustible engine type innovations.

Stuff that enhances true progress.

That is what innovation is all about.

Okay.

Let’s talk about innovation and collaboration (with the intent of discovery).

Hmmmmmmmmmmmmm … why did I add that last part?

Well. Collaboration when used improperly impedes discovery, it doesn’t enable discovery.

I have already written about this but I would suggest most companies today misuse collaboration to the extent that it wastes employee energy and resources and actually negatively affects morale (so basically they are killing their organizations thru an idea with the best intentions … yikes.).

Anyway.

Genentech.

Suffice it to say smart (if not frickin’ brilliant) employee base almost top to bottom.

Oh. And their top to bottom is pretty shallow in that they have a flat organization (makes sense … why do you need a huge hierarchy with brilliant people running around?).

Oops. Ok. And before any businesses owner starts looking at this and thinks “that’s it. Flatten the organization!” (gosh. When I typed that I thought of the old Thomas Dolby ‘she blinded me with science’ video … “Science!” … anyway) they need to understand Genentech is not, say, a Cisco or even a P&G. Those organizations thrive on multi levels (multiple levels of expertise and brain power working together … think of it as drones & stars).

Genentech does not and would not thrive in a hierarchal structure (they don’t have many drones). Plus. The majority are entrepreneurial ideators themselves as thinkers.

So. What does a brilliant employee base organization do to collaborate and come up with innovations? Well. They don’t put a group of these Einstein like people in a small padded brain storming room and have them play ideation games.

They go outside the organization and collaborate with partners or maybe even access collaboration opportunities through mergers or acquisitions.

In my words … they seek to not put two magnets side by side but rather take a magnet and start throwing some different outside objects at it to see what sticks.

To make another point. While the word “collaboration” is being used, at its core, ideas is an “individual” thing (meaning individuals tend to come up with innovative ideas all by their lonesome) and biotech companies empower individuals to ideate (simply create as much stimulus as possible through collaborative efforts so that the individual can ideate).

Oh.

And while I am not describing a creative (or advertising agency) the realities in these environments is exactly the same. Empower individuals to ideate. Multiple minds soften the sharp edges of an innovation.

Okay.

Moving on.

The innovation “prize” idea.

Let me start with the end on this idea as described by The Economist. The 7 winners of this $1mlllion prize (to be awarded to someone who designed an algorithm system to enhance online recommendations based on prior purchases) never met physically until they picked up the prize. They had collaborated online.

Let me repeat. They never met until they showed up to receive the prize.

So. Once again the collaboration was outside the “using” (or manufacturing/implementing) organization as well as it was a specific “here is the challenge” situation.

A one-off if I may use that term.

Now. I want to be careful here (as the Economist also cautioned). Innovations scenarios to me that work here are specific product enhancement innovations. Policy or “soft” innovations (if I may use that term) would seem to be a less attractive intent for this prize/reward system. This collaboration/prize concept is perfect for “solving oil spills” or “a car that gets 100mpg” or a “reusable space ship” or things that may seem slightly impossible and attract innovative thinkers outside the industry “box” who may approach the widget issue from a completely different point of view.

Lastly.

I threw in the book because it makes the point that innovations propel progress. Without innovations we (the people) kind of just chug along. Progressing but ambling down the progress road. Innovations (like some I have mentioned above) propel us forward. Like think leaps instead of steps. It would behoove us to have someone smarter than I and someone in a power position to be thinking about solving some of our progress issues (stumbling blocks) in this way.

Okay.

Hey. I know ongoing innovation is difficult. Mainly because great organizations exist on two levels. Continuity and discontinuity (and I believe people do also).

But only one is constant. Continuity. You need ongoing efficient coordinated alignment to bring all resources to bear in competitive environments. And yet you need steady (but interspersed) infusion of innovation (or discontinuity) to be successful.

One keeps you on the road. One keeps you from being stagnant.

Simply think OFF = ON. What do I mean?

When something previously deemed ‘emerging’ starts to invade the mainstream, or even better, is actually mimicked by it, new innovation opportunities abound. Case in point: the near-total triumph of the online revolution, which has the offline world more often than not playing second fiddle in everything from commerce to entertainment to politics.

So.

The idea of outsourcing collaboration is brilliant. Especially for one off specific challenges. And prizes insure innovative thinking toward solutions. And forward thinking innovative solutions propel progress.

(everyone should like that short paragraph)

One last point on innovations and collaboration (and why this outsourcing idea is a big idea).

Typically the most effective ideation focuses on the needs of “Lead End User” to Drive the innovation system at all phases of ideation. This principle is based on more than just the tired “the consumer is king” mantra.  It is a ruthless pursuit of Lead End Users, the consumers or customers who have legitimate change-agent DNA working in every aspect of their lives.  These change agents can truly help you morph and accelerate new ideas by maximizing lead end user input through early exposure to end benefit (or prototype) visual stimulus.  This seeing-is-selling visual stimulus is empowering to change agents, who often solve their unmet needs by developing their own product or service solutions.

The problem? (two of them)

1. internal organization collaboration will kill Lead End User ideas. Kill them so dead they will never come back.The ideas seem so impossible that within a group of collaborators there will be enough “unimaginative” people to clearly define it as a waste of time (as impossible). Collaboration kills here.

2. The process discussed above is often challenging and even scary to a company, because lead end users rarely reflect the current masses’ desires.  After all, lead end users are early adopters and reflect trendspotter characteristics. And, as with any trendspotter, the ideas uncovered can be unattractive at first glance because the market doesn’t yet exist. But that is the first step towards uncovering the big win new product innovation.

So. In the end real progress is maintained by innovative innovations (not all innovations are truly “spur on progress” innovative ideas.).

I do like the privatization of ideation (on some things). I caveat because (and it may sound like I am backpedaling) because I believe companies should be thoughtful and selective on any collaboration efforts. And then even more selective of what is solved in house versus the outhouse (ok, externally).

If managed correctly there are many ideas that can be generated internally within an organization. (Although not with a prize reward mechanism).

But.

Everyone should remember that great innovation progress is driven by (1) individuals with ideas and (2) reliance of outside resources to envision the impossible as possible.

Oh. And companies are not built for anything I have described in the immediate above as well as the process I described (or at least if they are they are the exception to the rule).

Why? Not only is it scary but the approach to capital budgeting and resource allocation at traditional companies is completely counter to nurturing and facilitating new ideas.  Multiple levels of in-grown management seek to protect the existing business model and ‘stay the course.’  In addition, new ideas are often forced to be synergistic to the current business.  Radical new ideas face a bureaucratic march of death up multiple organizational levels where a “no” at any point can kill the idea.  The key financial goal of this death march is to minimize the number of projects falling below a minimally acceptable rate of return.

In contrast, a typical VC incubator system is focused on insuring the big winner.  Resources are attracted to (not allocated against) the best ideas without any regard to protecting the status quo or forcing synergy.

Now that sounds a lot like what I have been writing about.

Outside collaboration.

Rewards to winning best ideas.

Set the specific challenges to have the “collaborative contests” over.

Start thinking this way and, by golly by gee, we are gonna have some progress my friends.