Revelers in Lafayette Park across from the White House on election night.

Lost in the euphoria and the recent news headlines of the election of our first African American to the Office of the US Presidency is the recognition of a major strategy that guided the Obama Campaign through the primaries and now the Presidential Election.

It was joked and ridiculed at the Republican Convention.  But no one is laughing now.

Community organization won this election.   In fact, it transformed politics in this country forever.

A bottom up strategy giving average Americans a “direct” opportunity to “contribute” their energy, passion, talent and yes MONEY.

Obama won by giving the keys to the inmates in the asylum.

Thousands of unpaid volunteers who never participated in politics previously destroyed two well-heeled political brands (Clinton and McCain) on their way to the White House.

Only in America.  And here is the lesson for associations.

While much of this vaunted Obama machine was web-based featuring tools for e-commerce, social networking, and community organizing,  the lesser known neighborhood volunteer efforts run precinct by precinct made this campaign personal to millions.

Obama used community-centered politics to drive his campaign.

Just like InnoCentive, Ninesigma, ArtistShare, Open Architecture Network, and many others featured on these pages.

The research evidence proves that community-centered strategies that give end users freedom to create and drive innovation boost product and service growth.

Here’s a salute to our new President.  And one more for those brave enough to let the inmates co-create the future in your own associations.

McKinsey Quarterly offers some interesting observations on a host of key business trends that are being driven by the influence of technology like Web 2.0. Given the recent discussions, more food for thought.

These trends fall within three broad areas of business activity: managing relationships, managing capital and assets, and leveraging information in new ways.

I want to highlight the first and third in this post. Much of what os.a is all about relates to these MQ Trends.

You can find McKinsey entire article here.

Managing Relationships

Distributing co-creation

Technology now allows companies to delegate substantial control to outsiders–co-creation–in essence by outsourcing innovation to business partners that work together in networks. By distributing innovation through the value chain, companies may reduce their costs and usher new products to market faster by eliminating the bottlenecks that come with total control.

os.a Examples: New businesses created around networks versus traditional management hierachy

Using consumers as innovators

Consumers also co-create with companies… But the differences between the way companies co-create with partners, on the one hand, and with customers, on the other, are so marked that the consumer side is really a separate trend. These differences include the nature and range of the interactions, the economics of making them work, and the management challenges associated with them.

os.a Examples: Tapping end users to “co-create” content, product or services

Tapping into a world of talent

As more and more sophisticated work takes place interactively online and new collaboration and communications tools emerge, companies can outsource increasingly specialized aspects of their work and still maintain organizational coherence. Much as technology permits them to decentralize innovation through networks or customers, it also allows them to parcel out more work to specialists, free agents, and talent networks.

os.a Examples: Extracting more value from interactions

Technology tools that promote tacit interactions, such as wikis, virtual team environments, and videoconferencing, may become no less ubiquitous than computers are now. As companies learn to use these tools, they will develop managerial innovations–smarter and faster ways for individuals and teams to create value through interactions–that will be difficult for their rivals to replicate.

os.a Examples: Ride the LongTail , Web 2.0 Adoption by Companies by Global Region

Leveraging information in new ways

Putting more science into management

Leading players are exploiting this information explosion with a diverse set of management techniques. Google fosters innovation through an internal market: employees submit ideas, and other employees decide if an idea is worth pursuing or if they would be willing to work on it full-time. Intel integrates a “prediction market” with regular short-term forecasting processes to build more accurate and less volatile estimates of demand.

os.a Examples: Prediction markets for associations

Thanks to all for attending our session and for Moshe Pritsker, PhD from JoVE and Chuck Davis from InnoCentive for coming to the ASAE and Center AGM in San Diego this year.

Here are our slides from the session titled, “Associations Next Crowdsourcing the Creation of Value.”

Note: Session was recorded by ASAE & Center so you can play them together from here.

Session Introduction provided by Jeff De Cagna of Principled Innovation.

Peter & Chuck’s presentation (download and view in slide mode)

Moshe’s presentation (download and view in slide mode)

Samples of previous posts

What is crowdfunding?

Crowdsourcing news

Crowdsourcing publishing

McKinsey study suports co-creation (e.g. crowdsourcing) practices

Having the courage to adapt your models of engagement

“Father of co-creation” speaks out

Tiny company with 12,000 customer product development community

Lots more by going to the right hand margin under “product co-creation.”

Thanks to all for attending our session and for Chuck Davis from InnoCentive for coming to the ASAE and Center AGM in San Diego this year.

Here are our slides from the session titled, “Associations Next: Using Open Business Models to Create New Value.”

Note: Session was recorded by ASAE & Center so you can play them together from here.

Session Introduction provided by Jeff De Cagna of Principled Innovation.

Peter’s presentation (downloads should be played in slide mode)

Chuck’s presentation (no downloads permitted)

Previous Related Posts

HBR’s take on the importance of openness in innovation

More background on open business models applied to associations

InnoCentive’s business model explored – TV interview

Make sure to review the posts and links of open innovation research from McKinsey, Forrester,etc as well as more examples of open business models from the column on the main page of os.a.

If you are a devotee of TED’s videos you know that this event has has some amazing presentations. I have been jealously watching them for years since the event was started by Richard Saul Wurman. But I always wondered whether people walk away from such an inspiring event and feel a little frustrated as the enthusiasm runs through their fingers like so much sand without marshaling that emotion into real projects.

This year TED looks like they are fixing that problem by bolting on a crowdsourcing attendee experience using a new software product called Kluster.

Watch this video to see how they plan to do it. (Click on image)

Over the 72 hours of TED, they plan to use the power of the audience and the rapid-prototyping system and software to develop a tangible product. And we can all join the party. You can sign up here.

Good luck guys.

For decades we operated closed systems controlling who designed, delivered and received the credit from standards to best practices to industry guidelines. To some members and observers it was seen as a kind of feudal system.You can almost envision a castle surrounded by a moat with kings and queens, dukes and duchess, knights and serfs. A cultural of entitlement reigned as IP protection systems safeguarded all who served the system inside the walls.

Kind of like this…

Today many IMO’s are tracking the slow trend of negative growth in membership as older players retire or change careers while student members “vote” with their feet as upon graduation they never take their expected place as young professional members around the roundtable.

Why?

Could it be they see a closed system that does not relate to their own views about career, profession and group interaction? Do they perceive a sense of distrust among the “chosen” or “entitled” class? Is the system stacked against those who prefer to pursue ideas and outcomes rather than to follow older “pay your dues” methods that keep power with those with tenure? Or is it a lack of imagination? A lack of recognition in how new generations want to interact, collaborate, and achieve?

Forrester Research conducted a fascinating study on how different generations use the Internet. It may hold part of the answer to these questions. And whoever is in charge of “due diligence” better study up.

Running from left to right in columns are the generations from the NetGeneration/Millenials (the largest – those under 22 years), Gen Y, Gen X, two groups of Boomers, and Seniors. The rows represent different types of ways people prefer to use the Internet. From top to bottom they represent preferences of engagement from the most (the lean forwards) to the least (the lean backs). Turns out just like different styles of learning, people have different preferences for online activity.

What is critical to appreciate is how from old to new you can see the tremendous change in how people prefer to create, consume and collaborate. As you might expect, the older you are the least likely you are to be active online. I saw this first hand in many board rooms and among established experts in the ICT industry who amazingly were totally ignorant of how the world is changing despite their expertise and credentials.

This slide is super critical to appreciate. If you are segmenting your customers be sure to include generational segmentation as you examine product design and delivery or governance models. You ignore the coming shift at your own peril.

Here is an interesting example of what I mean.This Millenial plays video games. He hates Sony’s new product so much that he created his own “video of complaint” and posted to YouTube…1.8 million views later I found it last summer. Today that number is over 3 million.

This couldn’t have been done ten years ago by one person with an idea and a PC. And would have cost $100,000.This video is an illustration of the expertise, passion, knowledge and creativity that “lives beyond the walls” of your closed system.

Do your due diligence…. Examine new models…. Embrace more open systems …. Or become marginalized slowly like the air running out of a balloon.

MPI PEC North America in Houston is a good place for me to return to the blog with a presentation on how key MegaTrends affect associations and their events. I presented along with my UK colleague Vanessa Cotton of ExCel in London.

Here is the session overview:

MegaTrends

• Global Economy
• Demographic Shifts
• Science and Technology Advancements
• Sustainability
• Open vs Closed System

Association Trends

• Global Strategy
• Standard Product Development
• Business Metrics & Measures
• Customer Attention Deficit
• ISO Credible Sources
• Customer Experience Management
• Regionalization (Planning/Infrastructure)
• Hot Regions

Association Meeting Trends

• Alliance and partnership development – ongoing conf business (co-branding, outreach, BD, sponsor channels)
• Product development process – event business strategy, end user integration
• Customer “value add” experience design – mapping before, during and after experiences
• Digitizing and monetizing conference content – taking face 2 face content and distributing it more widely

This version does not contain builds and embedded video.

“This is a very important book on a very important topic by two of the world’s foremost authorities in innovation. It bears the hallmark of great business writing. The authors do not sell a one-size fits-all prescription for every company’s innovation problems. Rather, they offer different roadmaps that can be tailored to each company’s situation. This is what makes their work so broadly useful.”

Clayton M. Christensen, Harvard Business School

That’s a pretty good plug from a pretty credible source of management innovation. If we as associations hope to be around in a significant way for the future of our members, we need to understand how “open innovation” can be practiced within our current business models, operating cultures, and the means we use to deliver value to our stakeholders. os.a is pleased to welcome Dr. Satish Nambisan, Associate Professor, Technology Management & Strategy, Lally School of Management & Technology. An acclaimed researcher, thought-leader, and consultant his work encompasses the fields of technology and innovation management, and includes technology strategy, product development, strategic alliances, and inter-firm networks. Through his articles in publications such as Harvard Business Review, MIT Sloan Management Review, Academy of Management Review, and Management Science, he continues to influence both research and practice in the above areas. He has been recognized for his research with awards and grants from several organizations including the IBM Center for Business of Government, Ernst & Young, and the National Science Foundation.

Together with his colleague Mohanbir Sawhney, McCormick Tribune Professor of Technology and the Director of the Center for Research in Technology & Innovation at the Kellogg School of Management, Northwestern University, they co-wrote a fascinating look at network-centric innovation networks and how to create them entitled “The Global Brain.”

A Conversation with Satish Nambisan

os.a:

Satish, thank you for taking the time to visit with me today.  Please share what motivated you to write this book and the previous research you have done on open innovation practices.

Satish:

In the last few years, much has been written about the need for organizations to open up their innovation processes and to ‘look outside’ for innovation. However, despite all the hype, most companies don’t seem to have any clue how to actually go about it – except perhaps to imitate the much-touted examples of a P&G or an IBM. There’s an enormous gap between awareness and execution as far as external sourcing of innovation is concerned. And, my goal in this book has been to help companies close that gap.

In this book, I argue that a ‘one size fits all’ approach’ is not going to work – every firm needs to find its own roadmap for harnessing the “Global Brain” – the creative potential of the world outside its four walls. There are many different approaches and models for network-centric innovation. We show how large firms can bring a method to the madness by identifying four very different models for network-centric innovation, and by identifying the approaches that work best for a specific firm, based on its business context.

os.a:

You mention in your book that the Global Brain “reflects both the global scope and the inter-connectedness of a company’s external innovation partners” who contribute both industry or subject matter expertise and creativity. You go on to say, “to innovate more effectively, you must harness powerful new sources of creativity from both inside and outside your company.”

How would the four defining principles of network-centric innovation in your book (shared goals, shared “world-view”, social knowledge creation, and architecture of participation) help associations adapt their closed models to become more open and innovative?

Satish:

Well, in the context of associations, the primary network partners for innovation are their members themselves. So associations, first, need to develop a shared set of innovation goals and objectives with their membership – establishing such a shared innovation agenda will be a gradual process. They also need to ensure that there is shared situational awareness – everybody needs to be able to see the same picture and this requires a good communication infrastructure. Innovation or new knowledge is created through interactions, i.e. the social aspect of knowledge creation. So associations need to facilitate continued dialog among their members – such dialog becomes the context for ideas to emerge and evolve. Finally, how will the members share in the rewards from contributing their innovative ideas? – So associations need to specify mechanisms for the entire community to benefit from the innovation.

os.a:

In my own studies, I know of only one association (Australian Industry Group) that developed a member service based on an open business model or another (American Health Information Management Association) that created a massive communities of practice that drives substantial member value.

Has your research ever studied any associations who developed a successful network-centric strategy? Why do you think companies (who until recently never felt the need for creating and promoting community as a system for product or service management) have suddenly leapfrogged associations to create vibrant, even passionate communities?

Satish:

I have not studied associations per se. However, I have examined service-based companies, some of which have very similar business models. And much of the concepts discussed in my book apply very well to the association context.

Most companies have discovered that their customers are perhaps their best innovators. Companies such as Ducati, Microsoft, Sony, etc. have all established customer communities and implemented network-centric innovation initiatives to source innovative ideas from their customers. I have a new article forthcoming in the MIT Sloan Management Review (Winter 2008 issue) on the topic of customer communities for innovation.

os.a:

Associations play a critical role in our society. But we seem stuck in old ways. What can you suggest to association executives on how to develop their own network-centric innovation networks? Of the four major approaches you discuss, is there a model that might fit associations better?

Satish:

I am not quite ready to state that any one model would be most appropriate for all associations. Given that different associations would have different goals and different governance structures, one needs to carefully examine the contextual characteristics before deciding on a network-centric approach. Indeed, that is central message from my book – one size doesn’t fit all. And, I bet that is true for associations as it is true in the cost of most other industries and companies.

os.a : In your book you talk about the “execution gap.” What do you mean?

Satish:

To be successful in network-centric innovation, one need to get beyond just awareness of concepts like open market innovation, crowdsourcing, etc. Companies need to be able to do three things: First, understand the landscape of network-centric innovation (what are the alternate models). Next, they need to situate themselves in that landscape – taking into consideration their particular industry/market/product/service characteristics – and decide which type of network model and which specific role is appropriate for them. Once you know the innovation role in the network, you can identify and build the capabilities or competencies that would be needed to execute that role.

os.a:

The cultures you mention in your book the “not-invented-here” (NIH) and the “we-know-everything” (WKE) syndrome is common among associations. How should associations manage the cultural shift needed to overcome this thinking among their volunteer leadership and staff? How to engage the great unwashed rank and file member or non member subject matter experts as one adapts existing peer review models?

Satish:

Such a cultural shift requires the commitment and continued support of the senior management. There is no easy way out here – it takes time, it takes resources, and it is bound to be painful to many. So one needs patience as well as a clear vision of the goals and of the potential benefits from the networked approach. Better alignment of the incentives of all the network partners (including the rank and file membership) can also help in this regard. Establishing online discussion forums and other open forums can enhance the transparency and thereby appeal to a wider set of the membership to get engaged in the collaborative innovation process.

os.a:

You talk about “developing a deeper understanding of the various innovation opportunities that exist and relating them to the firm’s own unique innovation context.” That resonates very much with me. I look at InnoCentive and contrast their model with a traditional hundred year old technical society. The former has created an open business model that let’s researchers around the world pursue their passion for chemistry and get paid for it while driving faster and cheaper product innovation. Meanwhile, the old traditional technical society focuses on the back end research – peer review publishing and misses the opportunity to expand the value chain of their members in the practice of doing the research.

How can associations avoid missing such opportunities for innovation?

Satish:

I hope my book will help in this regard! The key objective of the book is to help organizations – including associations – not miss such opportunities for innovation. A good understanding of the network-centric innovation landscape can help them evaluate the potential opportunities and implement the most appropriate approach.

os.a:

What are the organizational competencies needed to be successful in a network-centric world?

Satish:

I have described three broad categories of capabilities in my book. Good leadership is very important – leaders who can ‘build the faith’ of the organization in such network-centric initiatives. Equally important is a relevant set of mature processes to manage and coordinate the innovation and an appropriate technological infrastructure. You also need to be able to measure what you are achieving – so an appropriate portfolio of success metrics is also required.

os.a

This blog has featured InnoCentive, NineSigma, InnovationXchange, SellaBand, ArtistShare and others including companies who use online communities to drive innovative product design and delivery like Nike, Minnesota Public Radio, Gannett, and tiny Slim Devices. Do you have some favorites?

Satish:

I don’t have any favorites. I think at this stage many of the companies are still experimenting with the different approaches and models and finding out how they can use each of those innovation intermediaries that you mentioned.

os.a:

It seems like we are approaching a radical new age. One that will be driven by openness. What is the collective potential effect of open innovation?

Satish:

The ‘global brain’ presents a lot of innovation opportunities for companies. However, there are also contexts where such external collaboration may not be warranted. And so, the ‘local brain’ (internal R&D efforts) is also equally important. It complements the global brain – and together can drive innovation in radically new ways.

A new report from Northwestern University’s Media Management Center offers further lessons on how open innovation is playing out in the media marketplace. Required reading…

“Running While the Earth Shakes: Creating an Innovation Strategy to Win in the Digital Age,” chronicles what 36 outstanding media company leaders believe it takes to be nimble, to innovate, and to provide transformative leadership for media companies today, as they compete for the hearts, minds, attention and pocketbooks of readers, listeners and viewers.

Click here to download the full report.

Written by innovation expert and consultant Annette Moser-Wellman, it draws on interviews with a diverse group of leaders from both traditional media companies, such as Washington Post, Meredith and CBS, and “emerging” media companies that sometimes don’t consider themselves part of the news media, from Google and Twitter to Major League Baseball.Here is a sample….

News media organizations must become portfolio entrepreneurs.

Portfolio entrepreneurs are those who have the ability to create and manage many different businesses at the same time. Portfolio entrepreneurs identify emerging needs and fill them, over and over. They are able to create businesses quickly and are prepared win and yet, they recognize the possibility of failure. To think and behave like portfolio entrepreneurs, news companies must put risk and speed at the center of the corporate altar. This means simultaneously developing multiple new business concepts, focusing on exploiting nascent opportunities and being willing to lose and right away try something else again.

Here is a great example of the LongTail to convey the power of your membership value to stakeholders. And it’s free.You just need a compelling story and value proposition. As posted previously, anyone can develop their own private label YouTube channel to promote a cause, product, etc. Here are the folks at InnoCentive again with a great and oh so appropriate story especially for our friends on San Francisco bay.

And follow this interesting thread of marketing folks discussing their practice of using YouTube as a marketing vehicle.