[Coin-rpx] InnoCentive model for "problem repository" (?)

Tue Apr 4 12:21:15 EDT 2006

Check out this link 

http://www.innocentive.com
InnoCentive® is an exciting web-based community matching top scientists to 
relevant R&D challenges facing leading companies from around the globe. We 
provide a powerful online forum enabling major companies to reward 
scientific innovation through financial incentives
And here's the article that brought it to my attention.
Robin

UNDER NEW MANAGEMENT
Money and Business/Financial Desk; SECT3
Here's an Idea: Let Everyone Have Ideas 
By WILLIAM C. TAYLOR 
1367 words
26 March 2006
The New York Times
Late Edition - Final
3
English
Copyright 2006 The New York Times Company. All Rights Reserved.
LIKE many top executives, James R. Lavoie and Joseph M. Marino keep a 
close eye on the stock market. But the two men, co-founders of 
Rite-Solutions, a software company that builds advanced -- and highly 
classified -- command-and-control systems for the Navy, don't worry much 
about Nasdaq or the New York Stock Exchange. 
Instead, they focus on an internal market where any employee can propose 
that the company acquire a new technology, enter a new business or make an 
efficiency improvement. These proposals become stocks, complete with 
ticker symbols, discussion lists and e-mail alerts. Employees buy or sell 
the stocks, and prices change to reflect the sentiments of the company's 
engineers, computer scientists and project managers -- as well as its 
marketers, accountants and even the receptionist. 
''We're the founders, but we're far from the smartest people here,'' Mr. 
Lavoie, the chief executive, said during an interview at Rite-Solutions' 
headquarters outside Newport, R.I. ''At most companies, especially 
technology companies, the most brilliant insights tend to come from people 
other than senior management. So we created a marketplace to harvest 
collective genius.'' 
That's a refreshing dose of humility from a successful C.E.O. with decades 
of experience in his field. (Mr. Lavoie, 59, is a Vietnam War veteran and 
an accomplished engineer who has devoted his career to military-oriented 
technologies.) 
Most companies operate under the assumption that big ideas come from a few 
big brains: the inspired founder, the eccentric inventor, the visionary 
boss. But there's a fine line between individual genius and know-it-all 
arrogance. What happens when rivals become so numerous, when technologies 
move so quickly, that no corporate honcho can think of everything? Then 
it's time to invent a less top-down approach to innovation, to make it 
everybody's business to come up with great ideas. 
That's a key lesson behind the rise of open source technology, most 
notably Linux. A ragtag army of programmers organized into groups, wrote 
computer code, made the code available for anyone to revise and, by 
competing and cooperating in a global community, reshaped the market for 
software. The brilliance of Linux as a model of innovation is that it is 
powered by the grass-roots brilliance of the thousands of programmers who 
created it. 
According to Tim O'Reilly, the founder and chief executive of O'Reilly 
Media, the computer book publisher, and an evangelist for open source 
technologies, creativity is no longer about which companies have the most 
visionary executives, but who has the most compelling ''architecture of 
participation.'' That is, which companies make it easy, interesting and 
rewarding for a wide range of contributors to offer ideas, solve problems 
and improve products? 
At Rite-Solutions, the architecture of participation is both businesslike 
and playful. Fifty-five stocks are listed on the company's internal 
market, which is called Mutual Fun. Each stock comes with a detailed 
description -- called an expect-us, as opposed to a prospectus -- and 
begins trading at a price of $10. Every employee gets $10,000 in ''opinion 
money'' to allocate among the offerings, and employees signal their 
enthusiasm by investing in a stock and, better yet, volunteering to work 
on the project. Volunteers share in the proceeds, in the form of real 
money, if the stock becomes a product or delivers savings. 
Mr. Marino, 57, president of Rite-Solutions, says the market, which began 
in January 2005, has already paid big dividends. One of the earliest 
stocks (ticker symbol: VIEW) was a proposal to apply three-dimensional 
visualization technology, akin to video games, to help sailors and 
domestic-security personnel practice making decisions in emergency 
situations. Initially, Mr. Marino was unenthusiastic about the idea -- 
''I'm not a joystick jockey'' -- but support among employees was 
overwhelming. Today, that product line, called Rite-View, accounts for 30 
percent of total sales. 
''Would this have happened if it were just up to the guys at the top?'' 
Mr. Marino asked. ''Absolutely not. But we could not ignore the fact that 
so many people were rallying around the idea. This system removes the 
terrible burden of us always having to be right.'' 
Another virtue of the stock market, Mr. Lavoie added, is that it finds 
good ideas from unlikely sources. Among Rite-Solutions' core technologies 
are pattern-recognition algorithms used in military applications, as well 
as for electronic gambling systems at casinos, a big market for the 
company. A member of the administrative staff, with no technical 
expertise, thought that this technology might also be used in educational 
settings, to create an entertaining way for students to learn history or 
math. 
She started a stock called Win/Play/Learn (symbol: WPL), which attracted a 
rush of investment from engineers eager to turn her idea into a product. 
Their enthusiasm led to meetings with Hasbro, up the road in Pawtucket, 
and Rite-Solutions won a contract to help it build its VuGo multimedia 
system, introduced last Christmas. 
Mr. Lavoie called this innovation an example of the ''quiet genius'' that 
goes untapped inside most organizations. ''We would have never connected 
those dots,'' he said. ''But one employee floated an idea, lots of 
employees got passionate about it and that led to a new line of 
business.'' 
The next frontier is to tap the quiet genius that exists outside 
organizations -- to attract innovations from people who are prepared to 
work with a company, even if they don't work for it. An intriguing case in 
point is InnoCentive, a virtual research and development lab through which 
major corporations invite scientists and engineers worldwide to contribute 
ideas and solve problems they haven't been able to crack themselves. 
InnoCentive, based in Andover, Mass., is literally a marketplace of ideas. 
It has signed up more than 30 blue-chip companies, including Procter & 
Gamble, Boeing and DuPont, whose research labs are groaning under the 
weight of unsolved problems and unfinished projects. It has also signed up 
more than 90,000 biologists, chemists and other professionals from more 
than 175 countries. These ''solvers'' compete to meet thorny technical 
challenges posted by ''seeker'' companies. Each challenge has a detailed 
scientific description, a deadline and an award, which can run as high as 
$100,000. 
''We are talking about the democratization of science,'' said Alpheus 
Bingham, who spent 28 years as a scientist and senior research executive 
at Eli Lilly & Company before becoming the president and chief executive 
of InnoCentive. ''What happens when you open your company to thousands and 
thousands of minds, each of them with a totally different set of life 
experiences?'' 
InnoCentive, founded as an independent start-up by Lilly in 2001, has an 
impressive record. It can point to a long list of valuable scientific 
ideas that have arrived, with surprising speed, from faraway places. In 
addition to the United States, the top countries for solvers are China, 
India and Russia. 
Last month, InnoCentive attracted a $9 million infusion of venture capital 
to accelerate its growth. ''There is a 'collective mind' out there,'' Dr. 
Bingham said. ''The question for companies is, what fraction of it can you 
access?'' 
That remains an unanswered question at many companies, whose leaders 
continue to rely on their own brainpower as the key source of ideas. But 
there's evidence that more and more top executives are recognizing the 
limits of their individual genius. 
Back at Rite-Solutions, for example, one of the most valuable stocks on 
Mutual Fun is the stock market itself (symbol: STK). So many executives 
from other companies have asked to study the system that a team championed 
the idea of licensing it as a product -- another unexpected opportunity. 
''There's nothing wrong with experience,'' said Mr. Marino, the company's 
president. ''The problem is when experience gets in the way of innovation. 
As founders, the one thing we know is that we don't know all the 
answers.'' 
Drawing (Drawing by James Yang) 
William C. Taylor is a co-founder and founding editor of Fast Company 
magazine. He lives in Wellesley, Mass.

----------------------------------------------------------------------------------
Robin Lougee-Heimer
IBM TJ Watson Research Center
1101 Kitchawan Road, Yorktown Heights, NY 10598
ph: 914-945-3032   fax: 914-945-3434 
robinlh at us.ibm.com
http://www.coin-or.org

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