bingham.alph

Execute Challenge-Driven Innovation

Dr. Alpheus BinghamFounder and Member, Board of DirectorsSteven DomeckInnovation Manager, NASA Program

The Leadership Paradox

"To be a god, at least to be a creative one, one must relinquish control and embrace

uncertainty. Absolute control is absolutely boring. To birth the new, the unexpected, the truly novel - that is, to be genuinely surprised -

one must surrender the seat of power to the mob below. – Kevin Kelly -

Infinite players enjoy being surprised. Continuously running into something one didn't know will ensure that the game will go on. The meaning of the past changes

depending on what happens in the future.

– Carse --

LEADERSHIP

“The race is not always to the swift nor the victory to the strong; but that IS how

you bet.”

Power Function

We sold more books today that didn't sell at all yesterday than

we sold today of all the books that did sell yesterday.”

Josh Petersen – Amazon employee

Power Function

What is an expert?

Swift and the Strong

“Most of the smart people work somewhere else.”

-Bill Joy, Sun Microsystems-

Swift and the Strong: Work Someplace?

Swift and the Strong: Work Someplace?

Likelihood of solving a tractable domain-appropriate problemto be posed in the future.

Likelihood of solving a tractable domain-appropriate problemto be posed in the future.

“Most of the smart people work somewhere else.”

Likelihood of solving a tractable domain-appropriate problemto be posed in the future.

“Most of the smart people aren’t “smart”.”

We have learned some things..

• Chat rooms vs. “expert” help desks.– MAC slow crash– Nikon 24mm w/ D100

• Linux vs. Windows• Talk radio vs. reference librarian• Grad school observations• The Blogosphere• Wikis

Stock Market

Do you want the CEO to set the share price every morning?

InnoCentiveOperations

Seeker CompaniesSolvers

InnoCentive was an experiment in open innovation. It worked.

Proprietary and Confidential

InnoCentive Website

InnoCentiveOperations

Seeker CompaniesSolvers

The Net@Work

Proprietary and Confidential

Diversity

• Generates more approaches to challenge• Lateral thinking -- Approaches from outside

‘discipline’• Prior solutions• “AHA” effect (Archimedes in the tub)• Sets up options for downstream processing

(avoids “dangerous idea”)

• Build a solver community• Currently >135,000 registered solvers• Outreach: China, India, Russia, Kazakhstan,

Poland, Turkey, Israel

Spot Market• No bricks, no mortar, • No hires, no fires, • No term sheets, no lawyers, no contracts• Instant access -- Always on

• Does require use skills• Defined terms of engagement• Online solver agreement• Web-based Project rooms

Risk Management

• Community takes on the risk• Pay only for results, not efforts

• Bounty hunting business model• Diversify utilities

Where does solving power come from in a crowd?

The Three “-ities”

• Heterogeneity

• Marginality

• Serendipity

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Marginality

“Because individuals become socialized to the norms and beliefs of their fields and organizations, remaining at the margins while keeping up to date and actively pursuing access to resources offers those marginalized a different set of perspectives and heuristics than those at the core of the professional establishment.”

McLaughlin. 2001. Optimal Marginality: Innovation and orthodoxy in Fromm’s revision of psychoanalysis. The Sociological Quarterly. 42(2) 271-288.

Experience/Circumstance

Experience/Circumstance Skill/Training

Skill/Training

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Can you “find” Archimedes in his bathtub

“I was thinking about tear gas….”

The serendipity of ideas….

• 1000+ Challenges posted– 200-300 per yearlution

Challenge Model Success Challenge Model Success

• 500+ Awards to date– Solvers are from private sector,

academia, consulting, retirees, consultants, CROs, everywhere

– Average award size trending up – Many solutions in review/pending

• 35-40% Solve rate– Trending upward

Boeing, Airbus, Russian Space Program

NASA

HR Potential Home Astronomers Sprint Engineers Home Makers etc

Logic of Scarcity vs. the Logic of Abundance

Evaluation of the Open Innovation Pilot Program between NASA and InnoCentive, Inc.

Case Study

Pilot Goals

The intent of the NASA Open Innovation Pilot Program was to discover:

• The benefits of utilizing Open Innovation methodologies for NASA Challenge Owners

• The utility of Open Innovation tools to solve NASA Challenges

• The effectiveness of the Challenge-Driven Innovation platform

Report Methodology

• InnoCentive and the NASA Pilot Program team evaluated the results of seven pilot Challenges, – Surveyed over 2,900 solvers who participated in these

Challenges– Nineteen interviews took place with

• Eleven NASA personnel in three Centers • Eight solvers from four countries

Over 2,900 Solvers from 80 Countries Participated

Open Innovation Program Reach

NASA Johnson Space Center SLSD – SA

NASA Glenn Research Center NASA Langley

Research Center

NASA Pilot Challenges – Phase 1

Challenge Title - Center Area of Expertise

Proposals Submitted Award Details

Improved Barrier Layers … Keeping Food Fresh in Space - JSC

Material Sciences 22 One Partial

Award

Mechanism for a Compact Aerobic Resistive Exercise Device – JSC/GRC

Engineering 95 Fully Awarded

Data-Driven Forecasting of Solar Events - JSC Mathematics 11 Fully Awarded

Coordination of Sensor Swarms for Extraterrestrial Research - LARC

Theory / Biology 37 Three Partial

Awards

NASA Pilot Challenges – Phase 2

Challenge Title - Center Area of Expertise

Proposals Submitted Award Details

Medical Consumables Tracking - GRC Engineering 56 Three Partial

Awards

Augmenting the Exercise Experience - JSC Systems 18 One Partial

Award

Simple Microgravity Laundry System - JSC Engineering 108 One Partial

Award

Data-Driven Forecasting of Solar Events

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This NASA Challenge was looking for a method to predict the onset, intensity or duration of an SPE. Input was sought for techniques such as ensemble forecasting, multivariate statistics and Bayesian time-series analysis may be able to provide progress towards a solution.

The deliverable and technical requirements were the following: 1. Ability to predict SPE’s with greater than 2 sigma confidence better

than random events. 2. Detailed document carefully outlining the approach taken 3. An example application of the approach applied to real historical

data.4. Confidence limits of predictions for 5-10 historical SPEs.

Data-Driven Forecasting of Solar Events

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Bruce Cragin, academic background is in engineering and applied physics (B.S. Cornell, Ph.D. UCSD). Started his career as a research scientist specializing in waves and in plasma instabilities. In 1997 he changed careers to radio engineering, most recently, with Sprint Nextel Communications, provided the winning submission. “Though I hadn’t worked in the area of solar physics as such, I had thought a lot about the theory of magnetic reconnection.”

His Submission was fourteen pages of written explanation complete with the algorithm and data results. A supplementalExcel spreadsheet containing the validation and all referenceddata.

Data-Driven Forecasting of Solar Events

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NASA Challenge Owner Response

“The submission was very thorough. It addresses the challenge requirements and exceeds them with respect to forecast confidence and to random prediction. Questions posed back to the Solver were thoroughly addressed. This solution holds promise and the Seeker is highly interested in working with the Solver on potential implementation into an operational framework. It appears that the Solver is from within the Heliophysics community. This submission is approved.”

Dr. Dan Fry, Scientist, Space Radiation Analysis Group

Measurable Benefits Found

CDI Benefit Item Calculation

Awarded Solution ValueSummary of the acquired value of the awarded solutions

Diverse Solvers and Process ValueAccess to an expanded expert network

Pay only for Performance

Reduced Internal Resource Burden

Efficient process for Intellectual Property transfer

Promotes effective use of established resources

Qualitative Benefits Found

CDI Benefit Item Calculation

Identify Future CollaboratorsNew contacts and resources identified with winning solvers

Improved Research Process

Enhanced ability to frame research needs

Challenge definition skills

Fostering Cultural Change

Move from Not Invented Here to Proudly Found Elsewhere

Ability to fail fast

Lessons Learned – NASA Challenge Owners

• The concept that you can go outside of NASA and receive valuable information from non-related people has been validated.

• Because this method is so unique, the training and use of examples help the team to identify a challenge.

• Common problems experienced were Challenge owners wording their problem with a predisposed solution in mind.

• The Challenge Requirements should identify undesirable technologies. Avoid received solutions already known.

• Scheduling blocks of time for the evaluation team is critical as most of your time is spent on this task. (~60-80 hrs)

NASA Challenge Owner Feedback

• “The challenge owners and NASA evaluators have got to be as forward thinking and visionary as the submitters to an Open Innovation Challenge. We are a NASA group with NASA evaluation processes, if a submission does not look like a NASA answer, I am not sure it would be selected without forward thinking. This is mainly because it does not look like something we are already doing or familiar to us. It is more the culture of NASA that will change us to be more visionary.”Melvin Ferebee - Langley Challenge Owner

Lessons Learned – From Solver Survey

• Winning solutions and Solvers were found outside the traditional corporate workplace.

• NASA Solvers reported that their expertise is not directly within the challenge discipline; reinforcing the value of diversity.

• NASA Challenges resonate with more than one dimension of a Solver’s motivations and provide more stickiness.

• 98% of NASA Solvers would like to work on more NASA challenges in the future.

Questions

• Steve Domecksdomeck@innocentive.com

• Alph Binghamabingham@innocentive.com