Index
A
“a new way to...” archetype, 105–106
accessing talent, potential of open innovation in, 40–42
Action stage (CEO’s journey), 207
adapting CDE Playbook, 192–193
ALS (Amyotrophic Lateral Sclerosis) research case study, 193–197
Ansari X PRIZE, 195
Applied Analytical, 96
Apps for Healthy Kids, 217
Arbesman, Harvey, 196
archetypes 105
“a new way to...,” 105–106
“directed stumbling,” 104–105
“explore problem solving space,” 106–107
“fix MY house,” 107–108
“follow the directions,” 103–104
“regulated recipe,” 103
terminology for, 100–101
“under the radar,” 102–103
assembly and integration in CDI (Challenge Driven Innovation), 50
Asthmapolis, 217
B
Bass, Gary, 216
Bedilion, Tod, 75
behavioral change, preparation for CDE, 188
Bell Labs, 12
Bentham, Jeremy, 31
BHAGs (Big Hairy Audacious Goals), 175
Blockbuster, 212
Blur: The Speed of Change in the Connected Economy (Davis and Meyer), 41, 52
Board of Directors, commitment of, 165–169
planning and budgeting, 166–168
securing, 168–169
Bonabeau, Eric, 109
Bradin, David, 82
broadcast search 74
characteristics of the crowd, 77–81
serendipity and challenge presentation, 82–86
tear gas example, 81–82
in Long Tail concept, 74–77
OSRI (Oil Spill Recovery Institute) case study, 86–89
Brown, John Seely, 35–36
budgeting, CEO commitment to, 166–168
Built to Last (Collins and Porras), 175
bureaucratic form, 141–142
business, purpose of, 211
business development, preparation for CDE, 187
business evolution, 203–204
business models in Challenge Driven Enterprises, 128–131
business strategy 144
Challenge Driven Enterprise (CDE) as, 144–147
virtualizing, 172–175
focusing the strategy, 174
guiding principles, establishing, 172–173
modeling long–term shareholder value, 174–175
C
Cainer, Stuart, 161
Campbell, Joseph, 199, 204–205
CDE (Challenge Driven Enterprise), 2, 117–118
as business strategy, 144–147
CEO conundrum, 155–157
components of, 128–129
corporate culture in, 147–151
difficulty in achieving, 134–135
importance of becoming, 211–212
importance of pursuing, 157–158
leadership legacy, 213–214
open business models in, 129–131
Open Government Initiative case study, 214–218
organizational culture in, 133
Procter & Gamble case study, 135–138
role of leadership in, 153–155
talent management in, 132–133, 151–152
changing nature of work, 152–153
TopCoder case study, 158–161
CDE Playbook, 164–165
adapting, 192–193
Board of Directors and CEO commitment, 165–169
planning and budgeting, 166–168
securing, 168–169
CDE task force, 178–183
collaboration opportunities, 182
communications from, 182–183
coordination by, 179–181
installing leader of, 178–179
prioritizing reengineering opportunities, 181
enablers and partners, 189–192
institutionalization of CDE, 191–192
in methodology and training, 189–190
open innovation companies, 190–191
establishing mandate, 175–178
communication of, 177–178
cultural change, 177
involving senior leadership, 176
preparation of organization, 183–187
behavioral change, 188
business development, 187
compensation and incentive systems, 187–188
HR, 187
management systems, 183–184
problem–solving skills, 185
R&D, 186
recognition systems, 188
structural barriers to adoption, 184–185
promoting early trials, 169–172
challenge events, organizing, 169
evaluating impact of, 171
successes of, 172
virtualizing business strategy, 172–175
focusing the strategy, 174
guiding principles, establishing, 172–173
modeling long–term shareholder value, 174–175
CDE task force, 178–183
collaboration opportunities, 182
communications from, 182–183
coordination by, 179–181
installing leader of, 178–179
prioritizing reengineering opportunities, 181
CDI (Challenge Driven Innovation), 2, 48
stages of, 49–52
CEO conundrum, 155–157
CEOs, commitment of, 165–169 See also leadership
planning and budgeting, 166–168
securing, 168–169
challenge culture in Challenge Driven Enterprises, 129, 133
Challenge Driven Enterprise (CDE), 2, 117–118
as business strategy, 144–147
CEO conundrum, 155–157
components of, 128–129
corporate culture in, 147–151
difficulty in achieving, 134–135
importance of becoming, 211–212
importance of pursuing, 157–158
leadership legacy, 213–214
open business models in, 129–131
Open Government Initiative case study, 214–218
organizational culture in, 133
Procter & Gamble case study, 135–138
role of leadership in, 153–155
talent management in, 132–133, 151–152
changing nature of work, 152–153
TopCoder case study, 158–161
Challenge Driven Innovation (CDI), 2, 48
stages of, 49–52
challenge presentation, serendipity and, 82–86
Challenges 119
defined, 119–120
defining the problem, 122–124
examples of, 120
inducements for, 126
organizing events around, 169
organizing work via, 124–126
as strategy tool, 127–128
change 210
commitment by leadership, 210
evolutionary versus revolutionary, 33–34
channel distribution in CDI (Challenge Driven Innovation), 50
channels 105
archetypes 105
“a new way to...,” 105–106
“directed stumbling,” 104–105
“explore problem solving space,” 106–107
“fix MY house,” 107–108
“follow the directions,” 103–104
“regulated recipe,” 103
terminology for, 100–101
“under the radar,” 102–103
defined, 92
selecting
constraints on, 92–94
Eli Lilly case study, 110–113
research on, 108–109
tools for, 94–95
types of
consulting, 99
CRO (contract research organization), 96
crowdsourcing ideation, 97
crowdsourcing reduction to practice, 98
e–RFP (electronic request for proposals), 96
internal, 96
joint ventures, 99
off–shoring, 97
right of first refusal, 99
university contracts, 98
chat rooms 29
expert help desks versus, 29
problem solving in, 28–30
Churchill, Winston, 117
Circuit City, 212
Clark, Kim, 48
Cleveland, Harlan, 53
COGS (cost of goods sold), 32
collaboration opportunities, 182
commitment to change by leadership, 210
communication 177
of CDE mandate, 177–178
from CDE task force, 182–183
in corporate culture change, 150–151
compensation systems, preparation for CDE, 187–188
Competing in a Flat World: Building Enterprises for a Borderless World (Fung and Wind), 36, 52
competition in innovation, 11
globalization and, 25–26
problem solving versus question asking, 17
Competitive Strategy (Porter), 144
confidentiality, defined, 103 See also secrecy
Connect + Develop (Procter & Gamble case study), 135–138, 146
consulting, as innovation channel, 99
contract research organization (CRO), 96
coordination by CDE task force, 179–181
corporate culture, changing, 147–151
corporate strategy, Challenges in, 127–128
corporations 33
evolutionary versus revolutionary change, 33–34
formation of
transaction costs and vertical disintegration, 23–25
transaction costs and vertical integration, 22–23
cost of goods sold (COGS), 32
Covance Labs, 96
Cragin, Bruce, 64
Crainer, Stuart, 76
CRO (contract research organization), 96
ALS research case study, 193–197
characteristics of the crowd, 77–81
serendipity and challenge presentation, 82–86
tear gas example, 81–82
finding stars metaphor, 78–79
in Long Tail concept, 74–77
of ideation, 97
OSRI (Oil Spill Recovery Institute) case study, 86–89
of reduction to practice, 98
Crowdsourcing (Howe), 160
cultural change in CDE mandate, 177
culture of corporation
in Challenge Driven Enterprises, 129, 133
changing, 147–151
D
Darwin, Charles, 203
Davis, John, 88
Decision stage (CEO’s journey), 207
defining problems, 122–124
Deming, W. Edwards, 150
Democratizing Innovation (von Hippel), 26, 73
“directed stumbling” archetype, 104–105
dissection in CDI (Challenge Driven Innovation), 49
distributed innovation, 12
diversity 77
in crowdsourcing, 77–78
open innovation in, 42
in portfolio balancing, 6
problem–solving and, 43–44
in Long Tail concept, 72–77
rational compromise in, 42
Drucker, Peter, 21, 34, 139, 211
Durchslag, Scott, 36
E
e–business, 191
e–RFP (electronic request for proposal), 96
early trials, promoting, 169–172
challenge events, organizing, 169
evaluating impact of, 171
successes of, 172
economic theory, utilitarian economics, 30–31
80/20 rule, 54
electronic request for proposal (e–RFP), 96
Eli Lilly and Company, xxi, 42, 137, 160
case study, 110–113
emergency response systems, 217
employee recruitment strategy, open innovation and, 40–42
employment diversity, open innovation in, 42 See also diversity
empowerment for corporate culture change, 150–151
enablers, selecting, 189–192
institutionalization of CDE, 191–192
in methodology and training, 189–190
open innovation companies, 190–191
errors 8
false positives versus false negatives, 8–9
rationalizing innovation failure, 10
evaluating pilot program impact, 171
evaluation/confirmation in CDI (Challenge Driven Innovation), 50
evolution of business, 203–204
evolutionary change, revolutionary change versus, 33–34
expert help desks, chat rooms versus, 29
experts, defining and hiring, 69–72
exploitation, exploration versus, 13–15
exploration, exploitation versus, 13–15
“explore problem solving space” archetype, 106–107
external resources in open innovation framework, 54–57
F
false negatives, 8–9
false positives, 8–9
Fannie Mae, 212
Faraday, Michael, 41
filtering in CDI (Challenge Driven Innovation), 49
finding stars metaphor, 78–79
FIPCo (fully integrated pharmaceutical company), 110–113
FIPNet (fully integrated pharmaceutical network), 110–113
“fix MY house” archetype, 107–108
focusing the business strategy, 174
Fogarty, Jennifer, 65
“follow the directions” archetype, 103–104
Ford Motor Company, 153
framework for innovation, 39–40
CDI (Challenge Driven Innovation), 48
stages of, 49–52
future of work, 52–54
innovation marketplaces, 46
internal versus external resources, 54–57
NASA example, 62–65
not–for–profit organizations in, 57–58
pharmaceutical research example, 58–62
potential of, 40–42
problem–solving diversity, 43–44
rational compromise, 42
risk sharing, 44–46
stage–gate process versus, 47–48
framework for transformation 164 See CDE Playbook
Free Agent Nation (Pink), 152
future of work, 52–54
The Future of Work (Malone), 33, 53
fuzzy 101
defined, 101
“directed stumbling” archetype, 104–105
G
General Electric, 139
Gerson–Lehrman, 16
globalization, competition and, 25–26
Globalization 3.0, 53
Goldcorp, 43–44
Good to Great (Collins), 144
Google Answers, 16
gross profit margin, 32
guiding principles, establishing, 172–173
H
Hagel, John, 35–36
help desks, chat rooms versus, 29
Hemingway, Ernest, 34
hero’s journey, leadership as, 204–210
Action stage, 207
Decision stage, 207
Realization stage, 206
Resolve stage, 208
Vision stage, 206–207
The Hero’s Journey (Campbell), 204–205
Herrold, Charles, 35
Hiero, 82–85
hiring experts, 69–72
history of organizational forms, 141–144
HR (human resources) department
in Challenge Driven Enterprises, 132–133
preparation for CDE, 187
Hughes, Jack, 159
Huston, Larry, 136
I
IBM, 209–210
IBM 2008 Global CEO Study, 140
idea gathering in CDI (Challenge Driven Innovation), 49
ideation, crowdsourcing of, 97
Immelt, Jeffrey, 139
incentive systems, preparation for CDE, 187–188
inducements for Challenges, 126
innomediators, 13
innovation 4
defined, 4
preparation for CDE, 186
innovation channels
archetypes
“a new way to...,” 105–106
“directed stumbling,” 104–105
“explore problem solving space,” 106–107
“fix MY house,” 107–108
“follow the directions,” 103–104
“regulated recipe,” 103
terminology for, 100–101
“under the radar,” 102–103
defined, 92
selecting
constraints on, 92–94
Eli Lilly case study, 110–113
research on, 108–109
tools for, 94–95
types of
consulting, 99
CRO (contract research organization), 96
crowdsourcing ideation, 97
crowdsourcing reduction to practice, 98
e–RFP (electronic request for proposals), 96
internal, 96
joint ventures, 99
off–shoring, 97
right of first refusal, 99
university contracts, 98
innovation competition, 11
problem solving versus question asking, 17
innovation marketplaces, 46
innovation process, managing, 3–5 See also value creation
exploration versus exploitation, 13–15
false positives versus false negatives, 8–9
meta–innovation, 15–16
open innovation and portfolio management, 11–13
Prize Philanthropy, 16
rationalizing failure, 10
innovation terminology, xxii
institutionalization of CDE, 191–192
internal innovation channel, 96
internal resources in open innovation framework, 54–57
J
Jacobs, Garry, 53
Jeppeson, Lars, 75
Johnson, Peter, 112
joint ventures, 99
Joy, Bill, 40
judgment 105
“a new way to...” archetype, 105–106
defined, 100
“directed stumbling” archetype, 104–105
“explore problem solving space” archetype, 106–107
“fix MY house” archetype, 107–108
K
Kennedy, John F., 124
Kremer, Avi, 193–197
L
Lafley, A.G., 136, 139, 146, 157, 209
Lakhani, Karim, xxii, 75, 80, 122
launch in CDI (Challenge Driven Innovation), 50
lead users, 26–27
in Long Tail concept, 74
leadership 203
in business evolution, 203–204
of CDE task force, 178–179
CEO conundrum, 155–157
commitment to change, 210
in corporate culture changes, 149–150
as hero’s journey, 204–210
Action stage, 207
Decision stage, 207
Realization stage, 206
Resolve stage, 208
Vision stage, 206–207
legacy of, 213–214
Open Government Initiative case study, 214–218
role in Challenge Driven Enterprise (CDE), 153–155
senior leadership, involving in CDE mandate, 176
Lechleiter, John C., 110
Lee, Everett, 160
legacy of leadership, 213–214
Leitner, Melanie, 196
case study (value creation), 35–37
Lilly xxi See Eli Lilly and Company
Lindbergh, Charles, 120
local 101
defined, 101
“fix MY house” archetype, 107–108
Lohse, Peter, 75
Long Tail concept 74
broadcast search in, 74–77
characteristics of the crowd, 77–81
serendipity and challenge presentation, 82–86
tear gas example, 81–82
experts, defining and hiring, 69–72
explained, 67–68
finding stars metaphor, 78–79
OSRI (Oil Spill Recovery Institute) case study, 86–89
untapped potential in, 72–74
long–term shareholder value, modeling, 174–175
Longitude Prize, 120
Lou Gehrig’s disease research case study, 193–197
M
Malone, Thomas, 30, 33, 53, 76
management systems, preparation for CDE, 183–184
managing innovation process, 3–5
exploration versus exploitation, 13–15
false positives versus false negatives, 8–9
meta–innovation, 15–16
open innovation and portfolio management, 11–13
Prize Philanthropy, 16
rationalizing failure, 10
mandate, establishing CDE as, 175–178
communication of, 177–178
cultural change, 177
involving senior leadership, 176
marginality in crowdsourcing, 80
McEwen, Rob, 43
McLaughlin, Neil, 80
Mechanical Turk, 16
Mendel, Gregor, 40
meta–innovation, 15–16
methodology, adopting, 189–190
metrics 166
CEO commitment to, 166–168
productivity metrics, value creation and, 31–33
Mill, John Stuart, 31
Miller, Ellen, 216
motives in economic theory, 30–31
N
NASA case study in open innovation framework, 62–65
Nathan’s Battle, 61
nature of work, changing, 152–153
network form, 143 See also CDE (Challenge Driven Enterprise)
network orchestration, Li and Fung case study, 35–37
NineSigma, 137
not–for–profit organizations in open innovation framework, 57–58
O
Obama, Barack, 149, 155, 213–218
Obama, Michelle, 217
off–shoring, 97
Oil Spill Recovery Institute (OSRI) case study, 86–89
open business models in Challenge Driven Enterprises, 128–131
Open Government Initiative case study, 214–218
open innovation xxi
defined, xxi
framework for, 39–40
CDI (Challenge Driven Innovation), 48–52
future of work, 52–54
innovation marketplaces, 46
internal versus external resources, 54–57
NASA example, 62–65
not–for–profit organizations in, 57–58
pharmaceutical research example, 58–62
potential of, 40–42
problem–solving diversity, 43–44
rational compromise, 42
risk sharing, 44–46
stage–gate process versus, 47–48
meta–innovation and, 15–16
portfolio management and, 11–13
open innovation companies, partnering with, 190–191
open source movement in value creation, 27–28
open source software, 16
“Optimal Marginality” (McLaughlin), 80
orchestration, Li and Fung case study, 35–37
organization, preparing for CDE, 183–187
behavioral change, 188
business development, 187
compensation and incentive systems, 187–188
HR, 187
management systems, 183–184
problem–solving skills, 185
R&D, 186
recognition systems, 188
structural barriers to adoption, 184–185
organizational culture in Challenge Driven Enterprises, 129, 133
organizational forms, history of, 141–144
organizing 169
challenge events, 169
work via Challenges, 124–126
Ortiz Prize, 120
OSRI (Oil Spill Recovery Institute) case study, 86–89
outsourcing, off–shoring versus, 97
P
P&G case study, 135–138
partners, selecting, 189–192
institutionalization of CDE, 191–192
in methodology and training, 189–190
open innovation companies, 190–191
Pegau, Scott, 88
Petersen, Josh, 67
pharmaceutical research example in open innovation framework, 58–62
pilot programs, promoting, 169–172
challenge events, organizing, 169
evaluating impact of, 171
successes of, 172
Pink, Daniel, 152
planning, CEO commitment to, 166–168
playbook 164 See CDE Playbook
Porras, Jerry, 175
Porter, Michael, 144
portfolio management, open innovation and, 11–13
portfolios 5
false positives versus false negatives, 8–9
power functions 67
explained, 67–68
self similarity in, 74
precise 105
“a new way to...” archetype, 105–106
defined, 101
“explore problem solving space” archetype, 106–107
“fix MY house” archetype, 107–108
preparation for CDE, 183–187
behavioral change, 188
business development, 187
compensation and incentive systems, 187–188
HR, 187
management systems, 183–184
problem–solving skills, 185
R&D, 186
recognition systems, 188
structural barriers to adoption, 184–185
prioritizing reengineering opportunities, 181
Prize Philanthropy, 16
Prize4Life case study, 193–197
Probion Analysis, 96
problem–solving capability
characteristics of the crowd, 77–81
serendipity and challenge presentation, 82–86
tear gas example, 81–82
OSRI (Oil Spill Recovery Institute) case study, 86–89
problem–solving diversity, 43–44
in Long Tail concept, 72–77
problem–solving in chat rooms, 28–30
problem–solving innovation, 16
Prize Philanthropy, 16
question–asking realization versus, 17
problem–solving skills, developing, 185
problems, defining, 122–124
Procter & Gamble, 139, 146, 209
case study, 135–138
productivity metrics, value creation and, 31–33
promoting early trials, 169–172
challenge events, organizing, 169
evaluating impact of, 171
successes of, 172
Q
question–asking realization, problem–solving innovation versus, 17
R
R&D, preparation for CDE, 186
randomness, need for, 13–15
rationalizing innovation failure, 10
Realization stage (CEO’s journey), 206
recipe 100
defined, 100
“follow the directions” archetype, 103–104
“regulated recipe” archetype, 103
recognition systems, preparation for CDE, 188
reduction to practice, crowdsourcing of, 98
reengineering opportunities, prioritizing, 181
regulated 100
defined, 100
“follow the directions” archetype, 103–104
“regulated recipe” archetype, 103
“regulated recipe” archetype, 103
Resolve stage (CEO’s journey), 208
revolutionary change, evolutionary change versus, 33–34
rewards for Challenges, 126
right of first refusal, 99
risk 105
“a new way to...” archetype, 105–106
“explore problem–solving space” archetype, 106–107
“fix MY house” archetype, 107–108
in portfolio balancing, 7
risk–sharing, open innovation and, 42–46
risky, defined, 101
Roche Diagnostics, 75
Rutkove, Seward, 197
S
Sakkab, Nabil, 136
Salmons, Joshua, 216
Sawhney, Mohanbir, 13
secrecy 100
defined, 100
under the radar’ archetype, 102–103
securing CEO commitment, 168–169
selecting innovation channels
“a new way to...” archetype, 105–106
archetype terminology, 100–101
constraints on, 92–94
consulting, 99
CRO (contract research organization), 96
crowdsourcing ideation, 97
crowdsourcing reduction to practice, 98
“directed stumbling” archetype, 104–105
e–RFP (electronic request for proposals), 96
Eli Lilly case study, 110–113
“explore problem–solving space” archetype, 106–107
“fix MY house” archetype, 107–108
“follow the directions” archetype, 103–104
internal channel, 96
joint ventures, 99
off–shoring, 97
“regulated recipe” archetype, 103
research on, 108–109
right of first refusal, 99
tools for, 94–95
“under the radar” archetype, 102–103
university contracts, 98
self similarity in power functions, 74
senior leadership, involving in CDE mandate, 176 See also CEOs; leadership
serendipity in crowdsourcing, 80
challenge presentation and, 82–86
tear gas example, 81–82
Shapiro, Stephen, 122
shareholder value, modeling, 174–175
Shirky, Clay, 67
solution surface, defined, 101
space searches metaphor, 78–79
stage–gate process, 47–48
Standage, Tom, 16
stars metaphor, 78–79
Stevenson, Cheryl, 88
strategy tools, Challenges as, 127–128
structural barriers to adoption, addressing, 184–185
successes of pilot programs, promoting, 172
The Sun Also Rises (Hemingway), 34
T
talent management in Challenge Driven Enterprise (CDE), 128, 132–133, 151–152
changing nature of work, 152–153
Tapscott, Don, 28
task force 178 See CDE task force
tear gas example (serendipity), 81–82
terminology of open innovation, xxii
TopCoder case study, 158–161
training, establishing, 189–190
transaction costs
vertical disintegration and, 23–25
vertical integration and, 22–23
transformation 144
of business strategy, 144–147
CEO conundrum, 155–157
of corporate culture, 147–151
framework for 164 See CDE Playbook
importance of pursuing, 157–158
role of leadership in, 153–155
of talent management, 151–152
changing nature of work, 152–153
U
“under the radar” archetype, 102–103
university contracts, 98
utilitarian economics, 30–31
value creation, 21
evolutionary versus revolutionary change, 33–34
globalization and competition, 25–26
lead users, 26–27
Li and Fung case study, 35–37
open source movement, 27–28
problem solving in chat rooms, 28–30
productivity metrics and, 31–33
transaction costs and vertical integration, 22–23
utilitarian economics, 30–31
V
vertical disintegration, 23–25
Verganti, Roberto, 109
vertical disintegration, transaction costs and, 23–25
vertical integration, transaction costs and, 22–23
Virtual USA, 217
virtualizing business strategy, 172–175
focusing the strategy, 174
guiding principles, establishing, 172–173
modeling long–term shareholder value, 174–175
Vision stage (CEO’s journey), 206–207
von Hippel, Eric, 26, 30, 73, 109
W
Wandless, Tom, 45
Welch, Jack, 139
Who Says Elephants Can’t Dance (Gerstner), 210
Wikinomics (Tapscott and Williams), 28
Wikipedia, 39
Williams, Anthony, 28
work, organizing via Challenges, 124–126
workplace, future of, 52–54
The World Is Flat (Friedman), 25, 53
Y
Yet2.com, 137
YourEncore, 137