6 Nov 06

A number of readers have written over the last several weeks noting that many tools to improve innovation performance have a long, and mostly successful, history. 

For example, innovation contests are not new; in fact, they’ve been successful in contributing to some of the most dramatic technological advances of the last century.  After I wrote an Update on the innovation contest called the Netflix Prize, Parker Neal of Tapestry Networks responded with the following comment:

“In 1919, a gentleman named Raymond Orteig offered a prize of $25,000 to the first person who could fly an airplane non-stop between New York and Paris. The Wright Brothers had left the earth 16 years earlier, but flight hadn’t grown rapidly … Orteig thought it was time for that to change.”

Why is this man smiling?

          Charles Lindbergh wasn’t the first pilot to attempt the transatlantic flight, although he was the first to succeed.  As Parker Neal continues:

“Hubert Julian, Rene Fonck, Charles Nungesser, Francois Coli and others tried and failed. Nine teams in total spent around $400,000 to try and win a prize that was 1/16th of that amount (hardly cost effective).  But Lindbergh succeeded. He promptly became a national hero. Air flight took off. The value of aviation companies skyrocketed. And on 16 June 1927, Lindbergh collected the $25,000 prize personally from Orteig.  Look at how happy Orteig is to part with his money!”

One of my Babson colleagues, Professor Jay Rao, argues that many of the approaches that make for effective innovation can be traced back over 100 years, to Thomas Edison’s “invention factory” located in Menlo Park, New Jersey in the 1880s.  Professor Rao describes an approach used by Edison back then that was:

·        Open and collaborative;

·        Team-based

·        Prototype-intensive

·        Iterative and incremental, extending on prior knowledge.

Open and Collaborative Innovation - 1880

Edison was incredibly successful in generating new ideas using his invention factory approach.  As Prof Rao points out, this high degree of success came with an even higher rate of failure.  While Edison’s inventions were responsible for at least 20 major commercial breakthroughs, from the stock ticker to the motion picture camera, he had over 1000 patents in his career.  Measured this way, his success rate for major innovations was about two percent.  And that’s not even counting the work that failed in the lab, and didn’t result in any patents at all!

Are there any successful approaches to innovation that are truly new?  I’d nominate the increasing prevalence of open innovation approaches as something that is a unique feature of the early twenty-first century.

If Thomas Edison were to re-establish his invention factory today, we might expect him to use a more open model in the early stages of development.  He could use the internet to find contributors from all over the world to solve his technical problems, while a hundred years ago, he had to build up all these technical capabilities in-house.  After that, though, our modern Thomas Edison’s invention factory might be quite similar to the old one in Menlo Park.  Although it would probably be located in Korea or India. 

More Information:

1. My recent update on the Netflix Prize is here.
2. Parker Neal is a member of Tapestry Networks.  Their website is here.
3. Jay Rao is a Professor at Babson College.  His bio is here.
4. For more on open innovation, see Henry Chesbrough’s book, Open Innovation, published by HBS Press in 2003.
5. Perhaps the closest modern equivalent to an Invention Factory is Samsung’s Value Innovation Program (VIP) Center in Suwon, S. Korea.  For more on that, from BusinessWeek of 3 July 06, go here.