What Do Numbers Say About Different Models of Innovation?

I’m not a fan ofimages the “idea generation” model of innovation. This approach, which I call “bottom-up,” puts the focus of innovation on ideas that are generated by employees on the ground and then channeled upwards to senior management. I think that the bottom-up approach is plagued with a numbers of serious flaws that I discussed here and here.

A plausible alternative to the bottom-up model of innovation is the “top-down” one, an approach that focuses on problems. In this model, a company’s leadership formulates problems that are strategic to the organization and then moves them downward for employees to find solutions to these problems. Again, I outlined the benefits of the top-down approach here and here.

Personal preferences notwithstanding, can we find any specific numbers pointing to a superior efficiency of one model over the other? Here is what I can offer and I strongly encourage anyone to challenge my numbers–or come up with their own.

Take InnoCentive, an open innovation service provider specializing in crowdsourcing. Its business model is a classic example of the top-down approach: InnoCentive’s clients post technical and/or business problems (“Challenges”) to the InnoCentive website, and a network of InnoCentive “Solvers” (365,000+ from nearly 200 countries) work on finding solutions to these problems. InnoCentive boasts up to 85% success rate of their Challenges.

Compare this to Dell’s Idea Storm, an external innovation portal designed to solicit open-ended ideas from consumer, a typical example of the bottom-up model of innovation. The opening page of Idea Storm tell us that of total 23,731 ideas submitted to the portal only 549 were implemented. That is slightly above 2%.

Sure, I understand the difference between soliciting ideas from outside a company vs. the company’s own employees–as I credit InnoCentive’s remarkable skills in formulating problems on behalf of its clients–and yet, the difference in the efficiency for both approaches is staggering.

That’s what numbers say.

Image credit: www.onlineastrologyconsultancy.com

 

About Eugene Ivanov

Eugene Ivanov is a PMI-certified Innovation Management Consultant who helps organizations increase the efficiency of their internal and external innovation programs.
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3 Responses to What Do Numbers Say About Different Models of Innovation?

  1. Pingback: 3 Ways to Improve the Efficiency of the “Idea Generation” Process |

  2. Pingback: Can we make crowdsourcing available to small companies? |

  3. Pingback: Are crowds stupid? |

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