How to Implement Challenge-Driven Innovation

Delivering on the Promise: An interview with David Ritter [link]

Interviewee David Ritter is the Chief Technology Officer at  InnoCentive . “Since 2001, InnoCentive has helped corporate, government, and non-profit organizations to better innovate through crowdsourcing, strategic consulting services and internal Software-as-a-Service offerings. The company built the first global Web community for open innovation.” [Link]. Some of Innocentive’s clients include Procter & Gamble, SAP, Eli Lilly and Company, SCA, GlobalGiving and the Rockefeller Foundation. David oversees product management, R&D, and IT operations functions.

Main Points:

  • “Open innovation is a way to efficiently take advantage of resources irrespective of where they may be.” [Ritter, 4:00]
  • Successful innovation is not deploying innovation projects or events.  Successful innovation is developing long-term and sustainable innovation capabilities within your company.
  • Idea management platforms and social media tools require clear and concise problem statements, incentives and systematic implementation to successfully drive innovation.


In this  interview by Custom Solutions Group’s Bill Laberis, InnoCentive’s CTO David Ritter shares his experiences with the successes, failures, and best practices of companies turning to IT as an engine of innovation. David argues that while social media, groupware and intranets provide useful platforms for collaboration, without systematic implementation, incentives, and clear and concise problem statements that include solution criteria, these tools are doomed to fail.

David states that social media platforms and suggestion boxes mechanisms often provide such a wide range and volume of ideas that  management and facilitators have trouble organizing and sifting through the data. As a result, the initial and wave of enthusiastic submissions fizzles out as ideas are not addressed or put on the shelf. David repeats throughout the interview, that the “if you build it, they will come” mantra does not work. Providing an open forum where ideas are arbitrarily tossed around does not work. Management must use a challenge-driven approach to clearly define an issue at hand and reward a solution that meets the criterion accordingly. David states that when clear, goal oriented, discussions are developed around specific problems, the utilization of tools like SharePoint and Jive have been successful in pushing innovation forward.

So what exactly is this challenge-driven innovation, how do we implement it?

Challenge driven innovation is the process of:

  1. Identifying the problems that really matter to your company
  2. Formulating these problems into well stated and concise challenge statements
  3. Organizing collaboration around your statements
  4. Providing rewards and incentives for participation
  5. Celebrating your successes
  6. Tracking your results

“This process of challenge driven innovation gives your social network something meaningful to do.  That transforms it from an interesting place to a compelling business value driver.” [Ritter, 10:42]

Effective challenge statements:

  • Are in question form
  • Clearly define the problem
  • Clearly define the characteristics of a solution
  • Provide a clear set of solution criteria and parameters for success
  • Inform the solvers the value that a successful solution will bring to the company

Throughout the interview it is stressed that failing to leverage clear challenge statements may stifle your companies innovation more than not setting up a system. This is based off of the assumption that failure to achieve results may discourage future solvers participation, and make it harder to secure future investment.

“Challenges are powerful because they allow and enable collaboration and they contain a rich set of information. A good challenge has enough information in it to guide the problem solvers and allow them to focus their energy. Versus casting a large net and saying, ‘give us your ideas.’ ” [Ritter, 13:51]

The three incentives

Along with a strong challenge statements, incentives are a key drivers of innovation.  David lists three primary types of incentives:

  • Personal satisfaction of helping the organization solve a tough problem, of helping a colleague.
  • Peer recognition; celebrating that someone has made a meaningful contribution is something that a good challenge-driven process will capture. Be sure to publicize the successes.
  • Concrete rewards; cash, ability to participate in company sponsored event, visibility within department,  development of one’s career.

Challenge owners are essential

For every challenge statement, it is imperative you distinguish an individual in your company as a challenge owner who will take ownership and responsibility of this statement. Participants want to know that their efforts will not be buried within a server somewhere; they want a face to associate with the challenge. A challenge owner assures participants that when they submit an idea, someone is receiving it and implementing it.

A challenge owner is “someone who is going to receive solutions, evaluate solutions, give feedback on solutions. That person will actually implement those things, so challenges have a home.” [Ritter, 14:14]

Document your solutions

Publicizing the successes is a requirement for peer recognition incentives. When your employees understand how solutions are applied, a positive feedback loop develops which encourages future participation.

Proper challenge documentation also allows solutions to become part of your company’s knowledge base. This allows you to later look up the solution, understand what happened, and see the financial impact of the innovation downstream.

Along with your qualitative data, it is essential that consistent quantitative metrics are documented. Make sure the following questions are answered in your report:

  • What was the solution?
  • How many people participated?
  • Are people getting engaged?
  • To what extent is the problem solved?
  • How was the solution applied?

Additional takeaways

  • For highlighting ideas that address challenge problems, voting systems are double-edged swords. Voting must to be very configurable so it can be turned on and off and viewing access can be controlled.
  • Participants find it hard to justify allocating their time to submit solutions. Your collaborative space and platform must be incredibly simple and easy to use. For solver’s to dedicate time they must know where their time will come from, what is in it for them, how they will be compensated, and what the incentives are. Participants need to understand that often, little comments and feedback lead to solution breakthroughs.
  • Fill your collaboration spaces with boundary objects. Boundary objects are “rich artifact[s] in product development that allows people from different backgrounds, experiences, and skill-sets to engage around the same problem, and to meaningfully exchange ideas and knowledge and transform the solution that taps their diversity and diverse perspectives.
  • Challenges must be marketed internally. Utilize tools like employee skills databases, that allows you to pair employees with specific skill sets to corresponding challenges.

Mentionable Quotes:

“Open innovation, is about tapping all of the resources at your disposal to help you solve problems. These resources may be local, they may be part your employee population, they may be external, they may be part of your supply chain, there may be resources in other companies, in your customer base, in your partners, in your consultants, and in the global solver community.” [Ritter, 3:25)

“Social networks like Sharepoint of Jive or even their predecessors like Notes give people a great place to talk, but they don’t really give them anything specific to talk about. What we find is that organizations that focus on the problems that really matter, that are able to organize and leverage and engage their communities in discussions around specific problems, and use these collaboration tools to drive these discussions forward in a systematic way really produce specific results. ” [Ritter, 10:04]

“The time required to formulate the problem, publish it on the network, get the results back is minimal. And, the time required for the participants, the problem solvers,  to interact with this problem, to discover it, and identify and make their contribution is also minimal because typlically your tapping things that people already know. you are discovering a uniquely prepared mind. Someone that forever reason in their background had insight into this particular problem.” [Ritter, 24:51]

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