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Idea Management: How Companies Can

Leverage their Communities to Drive Innovation
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Idea Management: How Companies Can
Leverage their Communities to Drive Innovation
Executive Summary
Despite the high importance organizations
place on innovation, all too many executives
find themselves dissatisfied with their orga-
nizations ability to innovate. Formal rewards
systems help encourage innovation by tying
financial incentives to employee perfor-
mance, but they tend to reward only the star
performers.
Leading organizations must still find a way
to filter the thousands of ideas to iden-
tify the ones most likely to succeed in the
marketplace. Existing social software tools
only scratch the surface. They may facilitate
discussions and brainstorming but provide
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no structure for moving those ideas towards
fruition.
Idea management software pulls together
the best of social software tools into a
comprehensive platform that encourages
sustained idea creation and participation.
Users are motivated to contribute ideas or
provide feedback on ideas by being able to
accrue virtual currency based on the value
of the contribution or feedback. Algorithms
calculate the value of a contribution, much
like Google’s PageRank calculates a page’s
popularity. The more valuable the contribu-
tion, the more currency a participant or team
earns. This currency can then be redeemed
at the company store or even be integrated
with existing enterprise systems where pos-
sible.
Business leaders may object that users
already spend too much time online and not
enough time at their jobs. In fact, idea man-
agement software encourages responsible
online behavior by tagging all user actions
with a distinct identity and by structuring
conversations accordingly.
In the end, idea management platforms
represent the culmination of social software
evolution -- an integrated suite of tools
structured to promote idea generation and
creation. Your community is the heart of
innovation – combining that with the right
set of tools creates a new source for idea
creation leading to better decision making
and bottom line growth. 
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Gartner Says 66 Introduction
Percent of Global In 1917, a young cotton buyer from J&J
1000 Organizations named Spencer Silver noticed that his new
bride kept cutting her fingers as she cooked
Will Have Formal
in the kitchen. The thick bandages Silver
Technology Innovation
would wrap around the wounds proved too
Processes by 2010 bulky for her work so he affixed small pieces
of sterile gauze to strips of surgical tape,
putting down a band of crinoline to keep
the tape from sticking, and then re-rolled
the tape for his wife to use as needed. He
showed his invention to the Johnsons, who
didn’t think much of it at first, but they
were intrigued when he explained that she
could now apply the bandage herself. At
first Silver’s bandage-laden surgical tape
failed in the market, but by the time Silver
died in 1961, J&J had a $30 million business
and one of the most heralded brands in the
world: Band-Aids.
What CEO or business leader wouldn’t want
inspired employees like Spencer Silver? Yet
all too often those employees go unnoticed
or untapped. Often there’s little or no incen-
tive for employees to contribute winning
ideas. Even when they do contribute ideas,
organizations struggle to identify the best
ideas out of the thousands of suggestions
that inundate the corporate suggestion box.
Innovation management platforms enable
companies to harness the creative engine
within their organization through incen-
tives that encourage new ideas, tools for
developing those ideas, and algorithms for
measuring the success and importance of
those ideas. For the first time, companies
can reward individuals for even the smallest
contributions made to the company. Post a
better blog, and see a correspondingly bet-
ter reward. Add a more insightful comment,
earn more cash. Tying reward to contribu-
tion turns idea generation from an abstract
process into a concrete value with a tangible
payoff.
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Such reward systems lead to sound business
ideas. In a study of 300 business executives,
Intermind LLC, a management consultancy,
found that those with a formal reward sys-
tem in place were nearly 25 percent more
likely to point to projects with substantial or
significant ROI results. Projects with a better
ROI lead to a better bottom line -- particu-
larly if one of those projects turns out to be a
plastic strip and a bit of gauze known around
the world.
The Drive for Innovation
With current economic climate and global
competition, innovation is more important
than ever for today’s enterprises. Yet all too
often nurturing a culture of innovation runs
aground on the lack of employee motivation
within large companies. This is the Inter-
net generation, after all, a group raised on
Facebook and MySpace, where the personal
brand has become the mantra and one
that’s seen e-commerce outstrip retail sales
in 2007 by 15 percentage points. Without
a rewards system in place, there’s little to
motivate employees to conceive of new prod-
ucts or create the kinds of innovations that
could transform their organizations.
When they are motivated, such as through
bonuses based on project success, the
rewards may only come months after the
completion of any one step in the project.
For a generation hooked on twitter and SMS,
video and IM, delaying rewards won’t prove
as effective as finding a way to reward indi-
viduals immediately.
Even with reward systems, enterprises must
still find the means to sort through the thou-
sands of ideas that employees will suggest.
Dividing those ideas amongst committees
to evaluate, fails to tap into the collective
intelligence of the entire organization and
allows for personal bias. An idea that one
committee might back could be refuted by
experts in other parts of the organization,
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“You can only win the for example. The same goes in reverse, as
well. Ideas rejected by one committee in fact
‘war’ with ideas, not
might have garnered significant support from
with spending cuts.” the organization.
- Klaus Kleinfeld Such an approach will also likely fail to tap
the full extent of the strengths of today’s
workforce. Inter-discipline studies and in-
terests are increasingly common amongst
college graduates. Computer science gradu-
ates with secondary degrees in anthropology,
engineers with hobbies in video production
and design. The number of college gradu-
ates with double majors has grown three
times faster over the past decade than the
number of college graduates. The most
appropriate individuals for a given project
team or to evaluate the prospect of an idea
may surprise you. It is most likely not only
the ones in the official capacities within the
organization.
Social software tools can help here, but only
to an extent. Blogs and Wikis are too free-
form and unstructured to capture consensus
or differentiate between the best and worst
ideas. Surveys can help filter ideas to an
extent, but simply counting votes via popluar
opinion is a poor way to measure the value
of anything within an organization. Differ-
ent individuals have different strengths and
to be most effective the measure of a given
idea should account for those differences.
What’s more, there’s nothing implicit in a
survey that encourages individuals to think
deeply about their answers and as such will
not deliver best quality answers.
Prediction markets, which enable employees
to “invest” virtual currency in answers to
questions, provide a better measure of the
community’s consensus. However, prediction
markets for idea generation and are only ef-
fective for a select set of ideas.
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Innovation Management Platforms
Innovation management platforms blend
the strengths of all these social software
tools with various feedback mechanisms to
encourage idea generation and tap group
consensus. The result isn’t just a dynamic
exchange of ideas, but one that identifies the
ideas most likely to succeed in the market.
Instead of submitting new ideas into a closed
suggestion box, ideas are treated like new
ventures submitted to an open market. Each
idea includes a description of the proposal
and any other pertinent information. Within
the forum, employees can discuss and rank
the idea.
The ideas progress through a series of stag-
es. In the first stage, they may just need to
collect popular support. In the second stage,
they may need to garner expert support
within the organization covering the technol-
ogy, marketing and business requirements.
In the final round, the ideas are promoted
into a market place where individuals can
invest virtual currency in the ideas. As inter-
est in the idea grows and employees invest
in the idea, the price of that idea increases.
Ultimately, the best ideas are those with the
highest prices. In the end, organizations
have a ranked list not just of popular ideas,
but the ideas the company’s community
thinks has the best chance of success in the
market.
Purchase Criteria for Innovation Man-
agement Platforms
When evaluating Innovation Management
Platform, there are a number of factors that
differentiate platforms optimized for today’s
enterprise:
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A comprehensive set of tools – No one social
networking tool is sufficient for gathering the
information needed to drive an innovation
pipeline. Innovation management platforms
must incorporate a diverse range of feedback
mechanisms so organizations can gather the
right information from their employees.
An accurate measure of the value of the
contributions – Innovation platforms must
provide the underlying algorithms to identify
the best of the contributions. The algorithms
should be able to consolidate consensus
into a common rating for the entire group
accounting for not just the popularity of an
idea, but also the quality of support for that
idea.
Rewards contributions – Employees will only
be encouraged to contribute new ideas if
there’s an incentive for them to do so. Inno-
vation management platforms should be able
to track the contributions individuals make
and reward them for those contributions.
Rewards should be in accordance with the
automatic idea graduation
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value of the contributions to the organization
and should be able to be converted into cash
prizes or other forms of tangible compensa-
tion. Finally, the software should be able to
allow for a virtual store that lets employees
exchange virtual currency for products in the
company store.
Encourages participation– Soliciting contribu-
tions from users is never easy particularly
when those users are fitting in contribu-
tions amongst their other duties. Innova-
tion management platforms must provide a
structure that encourages users to contribute
new ideas and to continue participating in
the community even after introducing those
ideas. At the same time, it must be easy to
use, providing numerous summary charts,
icons, and general user metaphor that will?
Automatically promotes the best ideas –
Inovation management platforms need to
be able to graduate the best ideas within
the platform. There should be a structure
in place that ensuresideas meet the neces-
sary business, technological, and marketing
criteria to succeed in the relevant markets.
Together with set business processes; the al-
gorithms rely on multi-dimensional measure-
ments from frequency, volume, timing and
trust to automate idea graduation through
set stages.
Identifies the best contributors in the or-
ganization – Who are the most productive
employees in your organization? Not just
the ones who contribute the most volume,
but the ones who the organization views as
providing the greatest value to the organiza-
tion. The innovation management platform
should be able to identify the organization’s
most valuable contributors and designate
them as such.
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“Innovation is the Customizable to match your organization’s
requirements – Each organization is unique
specific instrument
and the requirements for defining success-
of entrepreneurship. ful ideas within the organization are unique.
The act that endows Organizations should be able to adjust the
definitions of a successful project to ad-
resources with a new
just the needs of the organization. Having
capacity to create multiple criteria that are configurable helps
wealth.” ensure success in different industries and
companies. By allowing each organization
- Peter Drucker
the ability to fine tune specific parameters
allows for higher levels of success.
The Spigit Solution
Spigit’s InnovationSpigit meets these criteria
by providing a complete social productivity
platform that uses gaming theory to engage
users, a range of social software tools to
share information, and multi-dimensional
algorithms to evaluate contributions and
identify good ideas.
incentives and rewards
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Spigit integrates commonly understood social
networking practices with advanced feedback
mechanisms, weighted reputation, and an
incentive and rewards system allowing an
organization to engage its staff and custom-
ers to find the truly break through ideas. In-
novationSpigit does this through seven core
innovations:
• Idea Trading Markets Plus – Innova-
tionSpigit provides a number of feedback
mechanisms that allow companies to channel
community feedback into different aspects
of idea evolution to solve auxiliary problems
and tasks associated with idea fulfillment
and refinement. Contests provide a means
of soliciting and evaluating solutions in a
fashion that is less intensive and formal
than core contribution methods. Prediction
markets can be used to judge the probability
of and validate assumptions underlying an
idea. Surveys provide a mechanism to gauge
prediction markets
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customer interests and preferences. Spigit’s
Idea Trading allows community members
to ‘invest’ in ideas that they believe have
a strong probability of success. In addition
to popular opinion rankings and weighted
rankings based on reputation, Spigit provides
an exchange to buy and sell ideas that have
successfully emerged to the final stage. By
using this as a final measurement – compa-
nies can use an efficient market – one where
employees, customers and/or partners place
their reputations and currency on the line to
choose what they believe is the best choice.
Spigit continues to introduce new modules
that effectively support the contribution
process and provide additional diversity and
objectivity to results.
• Currency and Asset Management – Valu-
able contribution is rewarded with virtual
currency. This currency can then be used
to invest in prediction markets, idea trading
markets or granted to another community
member. An important distinction of the
Spigit currency management system is the
role based influences and entitlements
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correlation of Reputation to currency; this
enables Spigit to reward quality contribu-
tion and not just quantity contribution. This
methodology ensures that not only will mem-
bers contribute actively, but will be cognizant
of the value those contributions. As with the
entire Spigit platform; our high level of con-
figurability, combined with the Spigit Com-
munity Management best practices, allows
for successful implementation across all seg-
ments, business cultures and environments.
• Incentives and Rewards – The ability to In-
cent and Reward your Community is both an
important element of a successful program;
and, built-in throughout the Spigit solution.
Spigit enables the recognition of both Game
Changing innovation as well as the equally
important Incremental Innovations. Spigit
Incentive and Reward features range from
Recognition, to access to higher levels of
functionality, to Role Graduation, all the way
to traditional Incentive and Reward principles
like a fully integrated Company Store where
your community members can exchange
currency earned in the platform for goods
and services of your choice – things includ-
ing Team Lunches, A Day with an Executive,
Company Hats, or other commercial goods.
The flexibility of the Reward system allows
you to Incent and reward you productive
community members throughout the innova-
tion process, maintaining interest and col-
laboration, in addition to the more traditional
yearend, or project end, recognition..
• Automated Idea Graduation - Effectively
filtering ideas is critical when select-ing a
subset of the best contributions from a pool
of content that is exponentially larger. Spigit
allows you to selectively leverage a multi-
tude of indicators, apply weightings to these
indicators based on relative importance, and
performs continuous analysis to allow highly
relevant ideas to advance in the process,
with little manual intervention or an overly
complex structure.
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• Role-Based Influences & Entitlements
- Populist technologies that rely solely on
the “quantity” of votes to make choices
completely fail to leverage individuals with
subject matter expertise and responsibilities.
Spigit’s ranking algorithms allow enterprises
to control the degree of influence exerted
by individuals based on their position within
their company, domain expertise, and other
measures of importance. Spigit also rec-
ognizes the need to segment community
discussions to provide focus and control ac-
cess to sensitive information. In addition to
supporting the traditional role-based security
model, Spigit also allows associate reputa-
tion levels to each role. Companies can use
this feature to create ranking methods that
range from truly democratic to fully managed
in a top-down manner.
advanced analytics and trend analysis
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• Reputation Weighted Analysis, Buzz and
Frequency - In evaluating and ranking con-
tributions, most current solutions only take
into account simple popularity and consen-
sus, which can be useful in some instances
but not others. When looking to make a
completely informed decision, it is often
more prudent to consider a multi-dimen-
sional approach, weighing various factors in
the evaluation process. To rank ideas, Spigit
captures and analyzes a multitude of vari-
ables, including several factors that reflect
reputation, buzz and frequency, where the
effective weight of selected variables can be
modified to more heavily impact the results.
Spigit then uses a progression of algorithms
that calculate expertise to optimize the value
of individual contributions, quantify weighted
consensus, measure relevant conversations
and buzz, and in aggregate produce a fun-
damental value that is an effective measure
for ranking individual ideas and content. By
using a multi-dimensional approach, Spigit is
able to go far beyond popular vote, produc-
ing results that are more reflective of the
overall pulse of the community.
• Advanced Analytics & Trend Analysis –
Enterprise communities must be monitored
carefully to effectively channel participant
inputs towards your business goals. Spigit’s
analytics engine helps you identify and
measure community value, spot trends,
identify hot spots and hot users, reputation
gainers and losers, key customers’ requests,
and many other leading indicators. Simply
put if you are not using Spigit you are not
leveraging the scale of your organization and
enabling all of your key assets – your people.
To learn how you can unleash innovation
within your organization, contact us for an
evaluation licenseof the InnovationSpigit
platform at 925.297.2611 or email us at
sales@Spigit.com and you too might just find
a few Spencer Silvers in your midst.