An Open Innovation Dilemma Update

May 2, 2008  

On Wednesday I posted an open innovation dilemma.  In summary, as I created my short-list of logos developed using an open innovation approach, certain designers decided to “build on” (plagiarize?) the concepts I liked.  Although this resulted in an improved design, it also presented an ethical dilemma.  Only one designer can be awarded the prize.

This spurred an interesting email exchange between me and a friend/business colleague, Mary Sandro.  (be sure to read the previous post first)

Mary:  What would make it really fair is if the submitters could only see their work and none of the other submissions. 

Me: Well, that would stifle innovation.  Building on the ideas of others is the source of great innovation. 

Mary: I would argue they should be getting their inspiration to create something new, innovate, not an inspiration to copy and tweak.  How creative is the second guy?  Could you really hire him in a stand-alone relationship? 

Me: That raises an interesting point.  I am not hiring someone on how creative they are.  I am hiring them because of the results they can deliver.  If they are not creative in developing the initial concept but can tweak something to perfection, then that is valuable to me.  I am interested in the final product.

Mary: As a creativity and innovation expert who increases profits for businesses, what would you advise your clients to do?  Which guy should they go with?

Me:  Ah, that is a good question!  If this were truly a one-time deal and I never wanted to use open innovation again for anything, then maybe I would take the final design that I liked most.  This would maximize the returns from that one transaction.  However, if I ever hope to do open innovation again, that would be a bad move.  Good businesses are built on relationships, not transactions.  Maximizing the return on one “transaction” may have a detrimental impact on long-term relationships.  Therefore, I would take the design of the first person, but still give something to the second person for their tweaks.  To do this, I would also set up the competition with those rules clearly right up front.  Big fee for original concept, but money given for improvements.  Everyone wins.  This encourages building on the designs of others.

Mary: Good answer!  I’d buy that.  Pun intended.

Footnote:  I hired the guy who did the original concept.  In the end, most people preferred that design, so the ethical issue was moot.  But it makes for interesting discussion.  In a compensation driven innovation environment, how to you ethically reward innovation?

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