Spurring Innovation Through Competitions

Rather than seeking in-house solutions to problems, companies are increasingly turning to contests to generate many diverse ideas.

BY ALAN MACCORMACK, FIONA MURRAY AND ERIKA WAGNER

EVEN THE MOST SUCCESSFUL companies have trouble developing breakthroughs. R&D road maps, as helpful as they can be at accelerating progress in known areas, are not particularly effective at spotting new opportunities outside a company’s experience base. Resource allocation mechanisms tend to be biased in favor of innovations that reinforce existing business models. Executives obsess about tying R&D tightly to production and grounding new ideas in reality. And marketing groups often focus on the needs of current customers instead ...