In the 20th century, most traditional industrial corporations used closed innovation methods, where all the creation, selection and development of ideas happened behind closed doors. Firms under this paradigm hired the smartest people, valuable scientists, and invested more in research and development within the company boundaries. Innovation happened in a fairly linear fashion until the advancement of technology gave rise to the internet and other communication technologies.
These technologies brought new ideas to light, but they were just a commodity which did not create the new wave of change itself. The defining factor was the way people used these new technologies. It is said that when the mobile companies developed SMS, they had no idea what it was for. It was only after they gave it to the teenage users that they invented the use.
The internet really created the capacity for disruptive innovation to come alive when combined with passionate users, leading to an explosion of creative collaboration. Today, the majority of the big firms leverage ‘open innovation’ tools such as crowdsourcing, lead users and innovative intermediaries to explore new ideas. Globalisation, technological progress, the rise of mobility and easy availability of information are all enablers of the use of open innovation methods.
So what is ‘open innovation’?
The term ‘open innovation’ was initially coined by Henry Chesbourgh, and is described as “combining internal and external ideas as well as internal and external paths to market to advance the development of new technologies”.
Innovative ideas and new products are not the results of random inspiration and innate creativity, and most innovation today does not happen in closed meetings. In fact, innovation is a teachable skill. In the open innovation course offered by the Department of Management at the LSE, students are given the opportunity to develop the skills and techniques required to innovate in our interconnected and globalised world through projects undertaken in collaboration with major firms based in the UK.
This year, the projects were executed in collaboration with KPMG, Coca-Cola, Thames and Hudson, PricewaterhouseCoopers (PwC), IHS Markit, Barclay, Futerra and Duke Corporate Education. These companies brought us challenges that they wanted us to solve by applying open innovation. While KPMG’s challenge concerned their sales team, Coca Cola’s challenge involved their finance function. I got the opportunity to work with PwC, and the challenge that my team received related to the use of artificial intelligence and machine learning in the context of consulting firms.
We were given two weeks to understand the challenge, as well as get to grips with project and programme management. This equipped us to decide what tools we would use to solve the problem and the methodology to be deployed for the solution.
Solving the challenge
The consulting industry is on the cusp of major disruption due to advances in artificial intelligence and machine learning technology, and this change is happening faster than expected. Therefore, we had to not only understand the way these new technologies work, but also the workings of consulting firms and how these could be transformed.
We chose to use ‘intermediaries’ as the solution. An intermediary acts as a mediator between the client and the solvers of the problem. In this case, PwC was the client and new technologies and consultancy experts were the solvers. Our duty was to obtain insights from these experts and deliver the best solution to PwC.
We built a gamified intermediary platform (openinnovationproject.github.io/intermediary), where solvers could not only solve the challenge, but also acquire knowledge, material and other resources to help them in the task. To attract the solvers we ‘gamified’ the platform, by using incentives and game elements like scores, badges and prize to draw in participants.
We used email and specialised groups in social networking sites, such as LinkedIn, Facebook and Twitter, to distribute the link to the platform and get the attention of experts. To gain more understanding, we also contacted some experts and managers recommended by our professors through phone calls.
The winning expert picked up a £50 Amazon voucher and was given the contact of the consulting experts at PwC.
The end result
We had 2 months to solve the challenge and deliver our solution. To complete the project, we presented our solution to the client, and also told the story of our work to other companies. Based on our work, we hope our client and other companies will use the ideas we gathered throughout the project when innovating for the future.
My team and I gained real insight into the practice of applying open innovation, and also developed personal skills including self-management, teamwork, applying design thinking and building communication and interpersonal skills. We were privileged to work with the experts and interview them about their vision for the future of consultancy firms.
For me personally, this project was an opportunity to discover my abilities and test my creative thinking skills. Through working with my team, I was able to apply the knowledge that we had read in books on leadership and management. This taught me some valuable lessons: that trust and patience with my team members always pays; and that success came from focusing all our efforts and doing everything we could to achieve our group goal.
ABOUT THE AUTHOR
Sanjana Rathi is a student on the MSc Management of Information Systems and Digital Innovation in the Department of Management at LSE. Having done undergraduate studies in Computer Engineering and a Diploma in Cyber Law, she hopes to pursue a career in the field of Technology Policy and Management in the future.