In the summer of 2014, 20 brave souls set out on an uncertain mission to change the way their company, GE Appliances, innovates. After seeing multiple attempts to redefine innovation for the company, outsiders had little reason to believe that this attempt would amount to anything more than the next corporate fad.
Yet within 15 months, this group had developed, launched and sold a smart refrigerator, a smart cooktop, a microkitchen (an entire suite of appliances in 6 linear feet), an open platform for appliance developers, an autofilling pitcher kit for refrigerators, a countertop nugget ice maker, and a half dozen other new products—and this was just the beginning.
FirstBuild, GE Appliances’ innovation hub, has since achieved the unthinkable. Now an indispensable part GE Appliances’ R&D strategy, FirstBuild launches around a dozen products per year and covers its costs by selling the products it creates. Oh, and did I mention that the whole R&D space is open to the public, and that FirstBuild actively solicits designs from the community?
Why has this been successful? Well, instead of tweaking the existing product development process, we built our innovation system one piece at a time—reusing some conventional elements, throwing out some others, and adding some entirely new bits that just weren’t available when companies started shipping at scale several decades ago.
In the process of reinventing innovation, we stumbled upon some pretty interesting trends which I believe will define the next wave of corporate innovation. Corporate innovators of the future are:
- Prolific. Corporate innovation is rare. In the future, innovation will be common.
- Inclusive. Today, corporations keep ideas within the four walls of an R&D facility. In the future, they will embrace communities and innovate in the open.
- Fast. Today, it takes years to get products to market. In the future, products will launch in months.
Future implication 1: Prolific product launch
“We just don’t have any great product ideas,” said no R&D leader ever.
You’ve heard a term for someone who applies entrepreneurial principles within a corporation: intrapreneur. This moniker must cease to exist. Why? Because all developers, marketers, salespeople, and product managers should incorporate entrepreneurship into their daily work. Today’s intrapreneurial tactics will become tomorrow’s standard business practices.
There is one vital principle upon which all entrepreneurial efforts rely: Show your work. The ultimate manifestation of this principle is launching product. There is a reason you’ve never heard anyone in your company say, “We just don’t have any great product ideas.” In the corporate world, ideas abound. Infinitely more scarce, however, is the will to launch products.
Every R&D leader I’ve ever met has pitched ideas, built prototypes, and yearned to launch products. Their people are passionate about products. They are desperate to see their ideas in the hands of users and customers. In nearly all cases, a whole lot of great product ideas fail to make the cut. Why not let engineers and marketers do what they dream of doing: launch products!
Be prolific. Let 1000 flowers bloom. FirstBuild’s team of 20 launched 12 products in 15 months. Imagine what your people could do if they were empowered at an individual level to launch products they believe in. Employees who are afforded real autonomy become a powerful force for innovation.
Of course, if you're going to be prolific, you'll have to change a few other things...
Future implication 2: Co-creation
Crowdfunding and crowdsourcing are not just for scrappy entrepreneurs. They are the fundamental tools that generate and validate innovative products.
For the last century, companies have taken an exclusive approach to innovation: The firm gets exclusive rights to all intellectual property created by an exclusive group called employees. The firm often then gives exclusive access to a limited set of customers who get to decide whether to purchase.
This model works well in an economy with minimal networking capability. Firms, employees, and customers rely on durable relationships to protect their value streams. The connectivity of the twenty-first century has paved the way for better opportunities.
Employees need no longer rely exclusively on their primary employers for a salary. Employers need no longer rely exclusively on employees to generate intellectual property. And companies can sell products directly to consumers, forging a valuable feedback loop for validating new products.
Moving from highly-concentrated business practices to distributed practices, like crowdsourcing of ideas and crowdfunding of new products, can be uncomfortable to companies that like to feel they are in control. The truth is, real innovation rarely occurs in controlled environments.
Companies must rather create an environment where creativity can flourish, but that also agressively pursues opportunities. Let me offer you a real life example.
A Nugget of Innovation Wisdom
In March of 2015, FirstBuild was looking for the next product to launch. Our online community had been buzzing about nugget ice, a popular type of ice that crumbles when chewed. Nugget ice machines were bulky and unaffordable. Our community wanted a machine they could fit on their countertop. We immediately launched a design challenge, and within 3 weeks paid a grand prize to a designer in Mexico, who imagined a clear ice bucket that was a handy showcase for the prized nugget ice.
By August of that year, FirstBuild had built exactly one prototype, had launched a campaign on crowdfunding site Indiegogo, and had racked up nearly 7,000 orders for a total of $2.7 million. The speed in both design and validation of the Opal Nugget Ice Maker would have been impossible to imagine just 10 years ago, but crowdsourcing and crowdfunding made it possible.
This process has become standard operating procedure for FirstBuild, and crowdsourcing/crowdfunding have since been adopted by a variety of household names, from Hasbro to Heineken.
Future Implication 3: Speed Over Secrecy
How long does it REALLY take you to get a product to market?
How long does it take for products to make it to market today? 18 months? 2 years?
Allow me to clarify: Let’s define time-to-market as the duration from moment of conception to the moment the product is first offered for sale.
Now, how long does it REALLY take for products to make it to market today? 4 years? A decade?
Redefining time to market in this way casts an illuminating light on how we have been launching products for ages. Time-to-market isn’t just the time for developing, testing, manufacturing, and distributing. Have you ever considered how long your company sits on good ideas, waiting for the right time to set the more tangible process of product development in motion?
Once you commit to being open, speed to market is practically inevitable. The collective imagination of a creative community may be the key to unlocking a major challenge in engineering or design—and it can happen fast.
Openness affords the opportunity of offering products for sale before they are even available. This may sound crazy to you, but it is part and parcel of the VC world, where both software and hardware are validated through crowdfunding before any major dollars are invested. When startups talk about “getting out of the building,” they do so for a reason. You need to know if your ideas are any good, and you can’t do that by sheltering them.
The Future is Up to You
This compelling version of the future is real, and it’s happening right now. But it won’t happen for you unless you act. Drop me a line at email@example.com if you would like to talk more about how open innovation and rapid validation can change the way your company innovates.