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Solving R&D Puzzles from the Outside: A Lesson from Open Source Software

Posted on June 14, 2007

I am regular reader of the Harvard Business Review magazine. In fact, it is the one magazine that I read cover to cover each month. If you don’t currently read it and you’re a business/management/strategy junkie like me you need to start. End of plug…

The May 2007 issue had a bunch of great stuff in it as expected but one of the smaller articles in the beginning of the magazine (the Forethought section for the HBR readers out there) was particularly intriguing. It focused on how companies could work with outsiders to solve their R&D issues.

The parallel they based the argument on was that of open source software. The open source movement has shown that opening up technical issues to a broad crowd of people can yield top notch solutions so why not apply it to other issues?

The article mentioned a company called InnoCentive based in Andover, Massachusetts that helps companies to “outsource” their R&D issues. InnoCentive posts corporate R&D problems to a group of outsiders who will attempt to solve them and then the solutions are passed onto the companies and InnoCentive pays the problem solvers.

One of the stats mentioned in the article that I found pretty important was this: In 30% of cases problems that could not be solved by experienced corporate researchers were solved by non-employees in the InnoCentive network. This just goes to show that an outside eye (and mind) can really be useful.

In terms of implementing a system for outside help in your business the authors of the article recommend you keep three things in mind:

1. Problems should be broadcast to people in various fields. People in other fields can sometimes apply what they know from their field in an interesting and innovative way to another field.

2. Prizes are necessary but not sufficient. People will do things just to get the satisfaction of solving a tough problem although if they are helping big corporations they will still expect some form of monetary compensation.

3. Insiders are still important. Even if the insiders can’t solve the problem they are still crucial when it comes to figuring out which problems should be brought in front of outsiders and which solutions the outsiders come up with will work best.

So the next time you’re having trouble solving a problem inside your company you should think about taking a page from the open source software book and look to the outside for help.

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