Designing for Innovation through Competitive Collaboration

In a recent blog post by Intel’s Enterprise 2.0 manager Laurie Buczek, she reviewed her organization’s 2009 experience with social software. One item caught my eye:

My entire year has been a quest to find quantifiable ROI. I swear I have nightmares with the “Where’s the Beef” lady crackling out a “Where’s the ROI?!” In the fall, we ended a joint effort with finance to look under every stone and quantify what we could. Finance agreed- it ain’t easy. Where we did quickly find quantifiable business value during an ideation proof of concept. Ideas that are discovered and turned into action have produced dollarized return of business value.

What this illuminates is that idea management is a source of tangible ROI for Enterprise 2.0 initiatives. It also points out the importance of designing Enterprise 2.0 communities to optimize the innovation process.

At a conceptual level, there are two modes of engagement by participants in a community: collaboration and competition. Communities can be designed to elicit either of these behaviors, depending on the desired outcome. Care has to be taken, though, because a mismatch between desired outcomes and engagement modes will undermine the effort.

Competition Is a Double-Edged Sword for Innovation

The graphic below describes the spectrum of community engagement:

There are three modes here:

Collaboration: People coming together to contribute their knowledge and tasks to a common objective. The drivers of this activity can be altruistic sense of providing value, or the requirements of one’s job. The modern workplace demands collaboration.

Soft competition: Reputation is the basis for soft competition. Who’s delivering the most relevant ideas? Who’s providing the best insight? There are no limits to who can provide value, so it’s not a zero sum game. But there is a desire to “show well”. It’s good for the career, it’s good for the paycheck, it’s good for one’s satisfaction with the job.

Hard competition: This is the dog-eat-dog participation. It drives innovation, as people reach deeply to come out on top.

Let’s examine the right side of the spectrum: hard competition. Hard competition occurs when there is a zero sum game approach to innovation. A good example of this was the recent Netflix Prize contest, where teams submitted algorithms to improve movie recommendations. The winning team received $1 million, as well as the glory of coming out on top.

Competition is the lifeblood of market economies. It’s the hallmark of how careers are made. And it’s a driver of many of our daily activities.

But hard competition can exact a price on innovation inside organizations. It’s destructive to their innovation efforts. In a 2001 MIT Sloan research paper, How Communities Support Innovative Activities, Nikolaus Franke and Sonali Shah made this observation:

If an innovator believes that revealing innovation-related information will allow a rival to outperform him, the likelihood that the innovator will reveal this information will decrease unconditionally.

Creating a culture where employees hide ideas and knowledge from one another is the wrong direction for innovation. As we’ve noted before, exposure to a greater diversity of perspectives and knowledge increases the quality of ideas, leading to better innovation results. Causing employees to withhold their feedback will undermine an innovation program.

So competition is good for stirring the creative juices, but too much of it will harm innovation efforts. What’s needed is a different mindset for communities: competitive collaboration.

Competitive Collaboration

The #1 source of competitive motivation for employees will be the desire to see their company do well in the market. But recognize that employees are human, and there will be natural human tendencies toward individual and team competition. An organization can spend time trying to dampen those human characteristics, or it can integrate them into its collaborative process.

The key principle of competitive collaboration is this:

Recognize and reward people for contributions that help advance ideas as much as you do for people originating the ideas.

Channel the competitive energies of employees toward an ethos of helping one another. Three design principles are required for this:

• Enable the provision and visibility of feedback
• Recognize those who do it well
• Provide tangible incentives for collaborative behavior

Enable feedback: It will be hard for managers to stay on top of every contribution and interaction amongst employees. That’s why community feedback needs to be designed into the innovation process. The views of thousands of different employees are a foundational basis for determining the value of contributions.

A good example of this is W.L. Gore. W.L. Gore has institutionalized this feedback-on-collaboration philosophy. Employees’ compensation is based on how their peers rate them. Peer ratings reflect the quality and frequency of an employee’s contributions to the initiatives of others.

In online communities, a similar principle holds. Allow others to provide feedback on contributions. And perhaps just as important, ensure the feedback is visible. Visibility speaks to the competitive nature of people. In Spigit, reputation scores are real-time updates of how an employee is doing in terms of adding value to the innovation community.

Recognize those who collaborate well: Recognition of accomplishments is an incredibly valuable motivator of behaviors. Shining a light on those who do it well spurs others to examine their contributions and work to improve them. This competitive dynamic should be incorporated into the community, but care should be taken in what is highlighted.

Leaderboards are valuable for highlighting different types of collaboration. Publish a list of the most frequent contributors to the innovation community. It rewards collaborative behavior, and provides recognition for that work. Show who has the community-determined reputation scores. Those who contribute well are anchors for the community, and should be recognized as such.

With online communities, all interactions and contributions can be measured. Take advantage of this to recognize the collaborative behaviors you want.

Provide tangible incentives: Aside from the social incentive of public recognition, the awarding of tangible incentives has a powerful effect on community participation. This is an area where care must be taken in what is rewarded. Certainly there are some purists who believe there can be no tangible incentives. The UK’s Face Group takes this issue head-on in A Hybrid Model for Open Innovation:

The idea of rewarding the people involved in the co-creation project with incentives (cash or prizes) was seen by some as a deal-breaker: it “kills the magic of the collaboration” and outsmarts the “love” element in the motivation. But I think since most brands are nowhere near the idea of giving away their IP a
nd go opensource, it is fair and crucial to reward the people involved for their time and effort.

It also makes sense to remember that a big part of the opensource workforce is made of paid developers (just think about Mozilla) and I would argue that certainly they mustn’t love their job less because they get paid to work on something they consider a cause. So, I think cash doesn’t exclude love/glory/fun. As a matter of fact it probably multiplies the three of them. Or at least it would in my case (if it wasn’t clear enough already).

Their perspective is a good one. The opportunity to be rewarded for valuable collaboration efforts will result in many of the behaviors an organization seeks. Remember, employees will have the daily tasks and projects they need to deliver. Their paychecks depend on that. Providing tangible rewards for their contributions recognizes this reality.

When there are tangible rewards for participation, there will be those who will attempt to game the system. This is where a subtle measure can be employed to manage that. Assume employees earn points for every contribution. And points can be redeemed for tangible items (gift certificates, an extra day of PTO, lunch with a C-level executive, etc.).

Leverage the reputation score of the employee to determine how many points are earned for contributions. If the quality of contributions are high, as deemed by the community, a higher percentage of the potential points are awarded. If the employee is just posting contributions to earn points (e.g. “First!”), their reputation score suffers. And they earn lower and lower levels of participation points.

A self-correcting feedback loop. This is designed into every Spigit community.

Instill Soft Competition to Drive Collaboration

Competition is a valuable human behavior. It is a great motivator, and the basis for many accomplishments in our history. Rather than ignore this dynamic and expect purely altruistic motives, organizations are wise to work with it. Channel the competitive energies toward collaborative behaviors that drive innovation.

Employees are still competing. But they’re competing in a direction that aligns with the company’s objectives.

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(Cross-posted @ the Spigit Blog)