The Incentive to Innovate conference hosted by X Prize Foundation and British Telecom was held at the UN headquarters in New York June 8-9, 2009
Enjoyed two days of open exchange around the role of inducement prizes to foster innovation, solve problems, and develop new sources of business value. Brought together by X Prize Foundation folks and British Telecom, Incentive to Innovate was packed with excellent panels and interesting folks w/a range of backgrounds – industry, non-profit, gov, academic etc.
Important to say off the bat is that one of the features I enjoyed most were the “break-out” discussions (NTS: need better physical setting), in particular one conversation centered on using prizes to address poverty and other development-related challenges. While the “product” of these conversations was centered on defining new competition space, they did surface interesting tensions and dynamics in approaches. One in our group was how you involve the beneficiaries in these competitions directly, so we break the mold of Northern winners, Southern venues. No solid answers, but I think Grameen offers a good, if “high burden” model of getting people out into the field – in this case to host conversations, sort of bridge the “customer-solver-inventor” gap.
Among those I found most helpful in applying their experiences to the Global Challenge:
- Peter Diamandis, X Prize: Define the challenge in terms of measurables – specific. Think about not just producing a product, but catalyzing an entire industry.
- Filippo Passolini, Proctor & Gamble: Don’t orchestrate – create a context for self-organization.
- Paul Jansen, McKinsey & Co: Be prepared to support winners with follow-up eg getting innovations to market is an entirely different proposition.
- Rob McEwen, US Gold and Marthin de Beer, CISCO: Have a plan for internal resistance and addressing organization culture.
Continue reading ‘Gleanings from X Prize/I2I’
McKinsey and Company recently put out a significant report on prizes as incentives to innovate which is quite good, and very accessible. The report, And the Winner Is, offers a view of the current landscape of prizes and competitions for innovation and provides good insight in good practice. To follow are some notes.
Prizes to incentivize innovation are going through a renaissance – they’re calling these “philanthropic prizes.” Interestingly, find that, “prizes are a unique and powerful tool that should be in the basic toolkit of many of today’s philanthropists.” Some benefits of the “prize inducement” model are:
- Identify new levels of excellence
- Encourage specific innovations
- Change wider perceptions
- Improve performance of communities of problem solvers
- Build the skills of individuals
- Mobilize new talent and capital
Some promising practices identified in the report include:
- Philanthropist matching a clear goal with a large group of potential problem solvers who are willing to absorb some risk.
- Start with a clearly define aspiration for society benefit which can be translated into prize objectives that are specific, motivational, actionable, results-focused and time bound.
- A good prize will invest significant resources into its design, specifying the competitor pool, rules and award attributes.
- An effective prize process is at least as important as the prize design, which will attract candidates, manage the competition, celebrate winners, and publicize the effort.
- A good sponsor will invest significant resources in post-prize activities that convert the awards result into long-term societal benefits.
Continue reading ‘McKinsey Report on Prizes and Innovation’
Thanks to Erika W. at X Prize, am reading a recent paper by Liam Brunt (University of Lausanne), Josh Lerner (Harvard) and Tom Nichols (Harvard) which examines a 19th century data set to discern insight into whether prize-awards are a useful mechanism to encourage innovation. The answer seems to be yes.
- Metric. The number of contestants the prize competition attracts.
- Entry fees. Discourage spurrious entrants.
- Money and medals. Used as substitutes, gold medal having largest entrant effect.
- Diffusion. Shows drew popular interest, spread of technical knowledge.
- Patents. Prize winners much more likely to patent after show than non. Interestingly, doubling of monetary award increases patent activity 6-7 percent in the technical area in the year of the show, while a gold medal has a 33 percent effect.
- Lead time. Providing longer lead times to inventors raised the number of entrants.
The paper concludes that, among other things, that the monetary awards covered only about one third of the costs of implements and machinery exhibited. More potent was the exposure from the show and “society’s mark of approval.”