Social Media Product Development Innovation - Reading Response 3

In Groundswell: Wining in a World Transformed by Social Technologies (2008) Charlene Li and Josh Bernoff describe potential opportunities and challenges for companies embracing social media customer interaction for product development and operational transformation.

 

Opportunities include;

 

·         Decreased time to market generated by quick customer input.

·         Increased innovation and product/feature iterations based on rapid feedback

·         Access to innovative ideas outside of the company.

·         Continuous improvement provided by your customer base

·         Decreased political infighting; For instance customer feedback plays a moderating role between marketing and engineering

 

Challenges include;

 

·         How to handle and disseminate negative feedback

·         How to itemize and prioritize a blizzard of ideas

·         Unforeseen transformation of internal company dynamics and politics; The flip side of decreased political infighting is the need for organizational development to address the new dynamic

·         Consideration of your customer base that are not creators of internet content lacking a voice

 

Given the fact that customers are already rating, reviewing, complaining and praising your company it makes sense to join the conversation and embrace the best ideas. If a company strategically and tactically listens, talks to and energizes their customers they will discover an “open channel” which can yield unexpected ingenuity.

 

General Electric’s  Ecoimagination challenge is an example of utilizing customer interaction to transform the product development process. The challenge is a $200 MM experiment with GE and Venture Capital partners where “businesses, entrepreneurs, innovators and students share their best ideas on how to build the next-generation power grid.”  The challenge focuses on three technologies; Renewable energy, Grid efficiency and Eco-homes. Interested parties are encouraged to submit ideas and vote on promising projects with the goal of transforming the way energy is consumed. Selected applicants are offered the opportunity to develop a commercial relationship with GE including;

 

·         Investment: the $200 million capital pledge of GE and its partners will be invested globally into promising start-ups and ideas

·         Validation: evaluation of entrant’s business strategy through in-depth discussions with GE‘s technical and commercial teams

·         Distribution: exploration of partnership opportunities with GE to scale a business and create global reach

·         Development: leveraging of GE‘s technical infrastructure and GE Global Research Centers to accelerate technology and product development

·         Growth: exploration of opportunities for utilizing existing GE customer relationships for your go-to-market strategy



The effort has received praise from many reviewers. The Corporate Responsibility Blog asserted that the “project has shown that GE realized that occasionally the best ideas may come from outside a large corporation and may originate from smaller entities or even individuals who are equally invested in sustainability and innovation. The challenge has proven so successful that GE made the program a permanent part of its corporate structure (Transformation).”

 

The Harvard Business Review Harvard Business Review indicated that this innovative project has met with great success. Challenge winners have ranged from fairly developed cleantech companies to very small startups. HBR stated three reasons for the success of the challenge;

 

·        Investment from a large company can help a startup across the “Valley of 
         Death”—the enormous difference between the seed funding required to start a
         business and the capital-intensive investment required to see infrastructure-scale
         businesses through to established success.
 

·        Rethinking our energy infrastructure benefits from entrepreneurial, outside
         thinking.
 

·        In creating a community of excited entrepreneurs GE fosters innovation beyond 
         just finding and funding it. Innovators find each other, share ideas, and
         improve the concepts (the essence of embracing social media idea generation).

 

GE is tapping the power of Social Media to generate innovative ideas from outside the organization by encouraging like-minded individuals and organizations to connect, share and continuously improve product development.

 

 

The ability to harness social media generated customer idea generation is not limited to multi-national conglomerates like GE. Non-profit agencies are also able to tap into the groundswell innovation multiplier.  Hopelab's   Ruckus Nation is a successful example. Hopelab’s mission is to “combine rigorous research with innovative solutions to improve the health and quality of life of young people with chronic illness.” Ruckus Nation is an effort aimed at childhood obesity. According to the Ruckus Nation web site;

 

·         Sedentary behavior is harming the health and quality of life of young people

·         Regardless of weight, physical activity improves health

·         Physical activity improves mental and physical well being

·         Physical activity levels often decrease significantly in the tween years ¹

The Ruckus Nation team sought ideas from the global web community for products to get children moving. They received 400 entries from 37 countries including 41 US states with 6 ideas resulting in patent applications. They conducted in depth interviews with tweens to understand drivers and barriers to physical activity. They conducted game testing with research participation to inform product development. One of the ideas was the seed for a web site and activity tracker called Zamree. The site was created by programming and psychology experts with input from children the ultimate end users. The web site lets kids cheer on their friends and see minute by minute activity. Kids can earn Pointz which can be used to buy actual products or donate to charities, a popular choice.

Zamree has generated real world successes. (Washington Post Article) A study of 448 middle-school-aged children using the Zamzee monitors was reported this past September. It found that kids with access to the Web site (and those Pointz) got an average of 45 minutes more moderate-to-vigorous physical activity per week than kids in the control group. And that change was sustained over a six-month. Additionally, Ruckus research determined that obese children who visited the site improved physical activity by 59%.

Hopelab’s success led to a partnership with Cygna healthcare and has been supported by the Robert Wood Johnson Foundation. The company has received $9 MM in venture capital funding. It was featured in an article in Fast Company and in CNET in a review of video games.

Hopelab is also embracing the idea generation power of social media to tap creativity outside of the organization.