InnoCentive is now Wazoku.

Open for Business: Breaking Down Open Innovation Biases

By Henry Crabtree

Posted on

In a November 6th 2022 article, the European Business Review explained how open innovation and crowdsourcing can be seen as a cure-all until the ideas become too unfamiliar, a mindset that can see many innovations being dropped before their success. In this blog, we relate how Oguz A. Acar suggests breaking down the biases that promote this kind of thinking.

 

Open innovation can be a victim of its own success. The most innovative ideas are usually the most transformational, bringing the best results for companies brave enough to follow them. However, this level of out-there innovation often prompts conservatism and cold feet from interested organizations.

According to Wazoku research, large organizations only consistently activate 0.05% of their workforce in problem solving. To leave big, company-defining problems to a handful of internal stakeholders to solve is a problem. When organizations make their first steps into open innovation, often they will receive a wide range of feasible or promising solutions – but don’t use any of them. Three key biases stand in the way of converting these ideas into tangible impact.

Systemic biases

Oguz A. Acar’s research in the last 10 years suggests that the reason why many companies abandon open innovation lies in systemic biases around the potential success of external ideas. He breaks these biases up into three points, around positivity, familiarity, and proximity.

Positivity:

Research across multiple areas has shown that the content of a message often affects how it is received. Readers tend to experience a negativity bias. This gives greater weight to negative information rather than anything positive, or even neutral. However, Acar’s research with Johanna Brunneder shows that – with open innovation – the opposite is true. Using a study of 257 ideas on a crowdsourcing platform – like our Challenge Center that the Wazoku Crowd uses to solve problems around the world – the pair researched idea success versus the positivity of its content.

Idea evaluators were focusing attention primarily on positive words/ideas. This result held when the team controlled for independent ratings, comments, and likes. This research shows that open innovation decisions can often be derailed by the language of ideas, rather than their quantitative innovative potential.

“Idea novelty promotes acceptance up to a point; however, when an idea is too unfamiliar its chances of being accepted drop significantly.”
// Oguz A. Acar – Professor at King’s Business School, King’s College London, and Research Affiliate at Harvard’s Laboratory for Innovation Science

Familiarity:

Why would a company engage in open innovation? One might think that businesses are searching for truly novel ideas and insights, unfamiliar to their teams, networks, and industry. Following that logic, the research should show that the most innovative ideas would be the ones that companies would opt for.

This is not the case. In a study of 1,000 ideas, when ideas were too unfamiliar, the chances of acceptance plummeted. This trend towards the familiar and the moderate suggests a conservative attitude that does not match the limitless potential and opportunities provided by open innovation.

Proximity:

Acar also raises an interesting point about the perceived differences in expertise between internal teams and external innovators. This is despite the evidence that shows that external ideas can and have outperformed internal ones. This was the case in a performance assessment at Muji for the Research in Marketing Journal by Nishikawa, Schreier, and Ogawa.

During research and interviews, Acar detected that there is a bias towards external ideas, but that it shrinks depending on the ‘expertise distance’ from the idea creator. What this means in practice is, if the internal employee believes the difference in expertise between them and the external person to be small or large, there are feelings of threat. When small this can be around identity (impostor syndrome) and job security. When the gulf is large then the employee reverts this and questions the outsiders’ credibility.

However, when the expertise distance is moderate, employees are much more welcome to external input and ideas. Perhaps this is because they feel secure in their role, their talents, and believe in the relative fit of the idea.

Breaking the biases

So how can we break these biases?

  • Slow down evaluators before they make their decisions. Provide them with a clear set of criteria to judge against. Wazoku allows for multiple evaluators on our platform, sets up criteria when the open innovation Challenge is posted, and allows for evaluation against these.
  • Promote teams of diverse evaluators, rather than individuals. Use a ‘devil’s advocate’ to confront perceived bias in evaluation decisions. Wazoku removes all personal characteristics of an idea creator before the idea is sent to evaluators to see.
  • Tackle the underlying drivers of biases, with awareness videos/seminars. Instill a culture that tolerates uncertainty. Wazoku helps to promote a culture of innovation in our customers’ businesses, instilling a belief in the power of ideas: no matter where they come from.

By Henry Crabtree

Wazoku's Community Marketing Manager, Henry is also a life-long Manchester United fan - but we still love him, regardless. When he's not cheering the Reds on, he's working his way through an extensive reading list. Need a book recommendation? He's your man!