the not wanted solutions of open innovation

(1)

A Work Project, presented as part of the requirements for the Award of a Master’s Degree in Management from the NOVA – School of Business and Economics

THE NOT WANTED SOLUTIONS OF OPEN INNOVATION

HOW CROWSOURCING PLATFORMS MAY REDUCE THE PERCENTAGE OF UNSUCCESSFUL PROJECTS

VIRGINIA ZAVOIANNI 34653

A Project carried out under the supervision of: Prof. LEID ZEJNILOVIC

(2)

Abstract

While crowdsourcing exists in some form for centuries, it came to prominence in the past two decades with seamless and affordable access to the internet. Today, crowds are a respectable innovation partner for many organizations across the globe. Their status is driven by Innomediaries, platforms with crowd-powered problem-solving strategy at their core, that connect organizations seeking solutions with networks of outside experts through so-called ‘challenges’ launched on their platforms. Although largely successful in problem-solving, for a fraction of challenges, once a solution emerges it becomes “unwanted” by the Seekers. There is a lack of knowledge explaining such situations and how to deal with them. This Work Project intends to fill this gap.

Keywords: Open Innovation, Crowdsourcing, Innomediaries, Platforms

Glossary

INNOMEDIARIES: Innovation intermediaries, companies using intermediated services in each of the phases of the seekers’ external knowledge searching

SEEKERS: Companies, government agencies, and nonprofit organizations with business and R&D problems that need solutions for their business problems

SOLVERS: Solution’s providers such as academics, students, PhDs, consultants, retirees which supply innovative solutions to organizations’ problems and needs

This work used infrastructure and resources funded by Fundação para a Ciência e a Tecnologia (UID/ECO/00124/2013, UID/ECO/00124/2019 and Social Sciences DataLab, Project 22209), POR Lisboa (LISBOA-01-0145-FEDER-007722 and Social Sciences DataLab, Project 22209) and POR Norte (Social Sciences DataLab, Project 22209).

(4)

2

1. Introduction

“There will always be someone smarter outside of your team or organization; getting a diverse range of fresh perspectives is key to effective problem solving, and asking the right question in the right way is critical to eliciting the answers you need.” Alpheus Bingham, InnoCentive Founder and President

Companies tend to work in existing ecosystems even though the digitalization implies to broaden their networks and secure the business for the future. However, identifying risks of disruption and future growth paths requires a certain degree of agility, speed and exhaustiveness and mastering all the knowledge and technology available today results difficult even to high performing companies. For this reason, it is critical to optimize all types of resources available to cope with the speed and complexity of a digitalized world in which companies must fit in. The crowdsourcing phenomenon allows innovative solutions and ideas to be found outside the companies resulting in an increased value that goes beyond the core knowledge and implies the collaboration with more innovative players. “Find” and “connect” are keywords to make innovation happens. Innomediaries provide the network, tools and support for the innovative potential of this connected world, previously distributed in an unsearchable crowd, to be fully realized. In doing so, Innomediaries encourage the growth of both Seekers and Solvers because of the win-win scenario in which adding value to one side fosters growth on the other. When companies open their boundaries and think more global, the world becomes their lab and the platform a simple innovation intermediary.

1.1 Background: InoCrowd and The Research Idea

It’s January 2020 and Soraya Gadit, the founder and CEO of InoCrowd reflects on her company’s success. The Portuguese start-up born in 2011 boasts a 95% success rate with a

(5)

3 network of more than 1.6 million of Solvers worldwide. The numbers speak for themselves and InoCrowd’s reputation has never been as good as today. Giants from diverse industries rely on InoCrowd to have their problems solved, trusting the quality of the solutions presented as well as the average resolution time of five weeks. Nevertheless, Ms. Gadit is concerned about reducing the costs and time dedicated to those companies that, at the very end of the process, decide to not implement the solution(s) presented by InoCrowd’s pool of Solvers. Maintaining the company’s reliability means hiring outside experts to re-analyze the Solvers’ solutions and attest to their quality and this is no longer bearable. The CEO is aware that reaching a 100% success rate would mean somehow posting on the platform challenges relatively easy to tackle and yet the company is striving to reduce as much as possible the percentage of unsuccessful cases. Moreover, previous open innovation literature has prioritized studies of the organizational structure only at the company level (Dahlander and Gann 2010; Foss et al. 2011) poorly focusing on the projects’ likelihood and reasons of success. This work contributes to the state of research by providing a complete perspective that considers the processes and operations of crowdsourcing platforms to highlight common pathways and find critical areas. InoCrowd highlighted one of the aspects of the Open Innovation phenomenon that has not yet extensively analyzed by the academic community. The qualitative research approach allows the comparison of several Innomediaries in order to identify a framework which characterize their business models and leads suggestions for organizational interventions to overcome critical instances occurring in these stages and decrease the percentage of unsuccessful projects.

1.2 The Research Question

The research question guiding the entire work is expressed in the following queries: are there any recognizable patterns? Is thus possible to identify common pathways and solve or at least

(6)

4 decrease the unsuccessful projects? How can companies avoid pitfalls in the intermediation process?

2. Theoretical Background

This section presents a literature review in the field of Innovation Management, specifically Open Innovation approaches. Among these, particular attention is paid to the crowdsourcing process, origin and advantages. This is followed by a brief description of the roles of Solvers, Seekers and Innomediaries. This section concludes with a discussion about academic literature limitations and related challenges.

2.1 Open Innovation

In the past, academic literature has applied the term Open Innovation to distinguish an innovation process that works as an open search and solution method between numerous players beyond traditional organizational and technical boundaries (Chesbrough 2006; Dahlander and Gann 2010). On a management perspective, Open Innovation provides a set of several techniques and practices which help innovating companies to discover and adopt external knowledge. Since this knowledge is broadly and publicly distributed, many companies have opened up their R&D units to exploit the expertise of external crowds and existing knowledge from various fields (Laursen and Salter 2006). When companies focus on a bounded solution to solve their innovation challenges, they only employ the most obvious rather than the most valuable of all possibilities (Appendix 1). Alternatively, getting access to the knowledge of relevant external parties has been proved to break the disadvantageous biases of local search-based problem-solving strategies (Jeppesen and Lakhani 2010) and allow companies to implement the most innovative of all possibilities.

(7)

5 2.2 The Crowdsourcing Process

Crowdsourcing has existed for centuries, the only difference is that with the digital age its diffusion has been unstoppable. The crowdsourcing applications show the infinite value of tapping into the external knowledge and “wisdom of the crowd”, although for decades this topic has not received the attention deserved. The turning point arrived in June 2006 when the article “Rise of Crowdsourcing” by Wired’s Jeff Howe adopted the term crowdsourcing for the very first time. At that moment, considering the increased popularity of e-commerce and mobile technologies in the era of the consumer, crowdsourcing started to revolutionize every industry innovative enough to adopt it. In 2010, Jeppesen and Lakhani referred to this process as a broadcast quest, while Afuah and Tucci (2012) used the expression ‘‘tournament-based crowdsourcing’’ to explain the search for ideas and solutions to tangible development challenges in the form of innovation contests. However, despite the rise of approvals, only a few studies have distinguished and classified the different approaches used to open up the firms’ boundaries and employ knowledge from external sources (Dahlander and Gann 2010) approaches such as ideation contests, co-creation toolkits, developer communities, or tournament-based crowdsourcing. Although the majority of Open Innovation practices rely on the crowdsourcing principle (Afuah and Tucci 2012; Howe 2006; Lakhani and Panetta 2007) these tend to vary significantly because of the nature of knowledge transferred and the stakeholders involved in the process. The idea behind the crowdsourcing process is to facilitate new systems of distributed, crowdsourcing-based problem solving instead of relying on traditional practices such as innovation partnership or contract research (Reichwald and Piller 2009). However, not every company is prepared to effectively exploit the benefits of the crowdsourcing method (Appendix 2). Up-to-date literature has highlighted how firms necessitate specific processes and internal capabilities to effectively embrace this opportunity (Bianchi 2011; Dahlander and Gann 2010; Foss 2011). As Boudreau and Lakhani point out, it

(8)

6 is likely that managers remain quite cautious when they have to rely on external resources and especially when these are represented by a group of strangers, they perceive the crowdsourcing to be risky and unsuitable. And yet the future of crowdsourcing depends on how creative, bold and innovative companies, governments and people seek to be.

2.3 Innovation Intermediaries, Seekers and Solvers

To understand the role of Innomediaries like InoCrowd, NineSigma and InnoCentive, it is convenient to differentiate between crowd-powered problem solving and conventional approaches (Appendix 5). If traditional companies are relatively well-coordinated environments addressing problems to specialized canals, crowds are characterized by a certain degree of decentralization (Boudreau and Lakhani 2013). The so-called Innomediaries, in the specific case crowdsourcing platforms, expose problems faced by companies to a wide range of individuals coming from different areas of expertise and thus characterized by diverse skills and knowledge. The success of this method comes from the potential of reaching a scale that largely exceeds any company’s capacity. These platforms connect Seekers, the companies and organizations facing a crucial challenge difficult to solve in-house with Solvers, outside experts that freely decide to work on the challenge and come up with a solution. Innomediaries are purely intermediaries between Seekers and Solvers helping the first to describe a key problem in the simplest way possible and launching it in form of an open call to the network of external Solvers (Afuah and Tucci 2012; Spradlin 2012). The latter analyzes the challenge posted online and decide whether to invest time and efforts in solving and submitting a solution proposal (Appendix 4). The participation requires the Solvers to follow a series of rules such as, the strict time-span to submit the proposal and a list of requirements stated by the Seeker which need to be fully addressed. Ultimately, it is the Seeker deciding among the proposals received whether to implement the solution or not. In case the solution is approved, the Platform makes

(9)

7 sure that IP rights and eventually anonymity clauses are protected and finally facilitate the negotiation between the two parties. Overall, the role of the Innomediaries is to facilitate the entire process of transferring knowledge by applying this broadcast search system as a service to connect solution-seeking companies and external Solvers (Feitler 2012) profiting from the most popular of the open innovation tools: the crowdsourcing phenomenon.

2.4 Study Limitations and Challenges Ahead

Nowadays, Open Innovation is applied in quite all industries but only a few authors have shared classification schemes to add structure to the growing sphere of innovation intermediaries (Howells 2006; Lopez-Vega 2009; Diener and Piller 2013). Jeppesen and Lakhani agreed that the success of these Innomediaries is highly dependent on the capability to strengthen the connection between Seekers and Solvers by providing the essential tools on the platform. Other studies have shown high effectiveness in the context of technical problem-solving, in 2012 Afuah and Tucci discussed that depending on the challenge’s nature, tournament-based crowdsourcing can result in a more effective problem-solving approach compared to in-house R&D. From the Solvers’ perspective, Jeppesen and Lakhani observed that the more is the gap between the Solver’s area of expertise and the challenge domain, the higher is the likelihood of success. For the first time in 2008, Terwiesch and Xu analyzed the contests’ award structure, covering an essential element of the Innomediaries’ business model. They found out that the size of the Solvers’ network affects the outcome of the contest and increasing the size of the Solvers community results in a trade-off between the heterogeneity of solutions, considering only the proposals of higher quality, and each Solver’s problem-solving effort. However, during the interaction with the Innomediary, the Seeker might disclose sensitive information about the firm’s asset such as competitive advantages and future development plans. This phenomenon is called “Arrow’s information paradox” (Arrow 1962) describing firms forced

(10)

8 to reveal information in seeking a solution which must conceal the company’s technological weaknesses from potential competitors. In collaborating with the Intermediary, Seekers need to recognize which area(s) lacks problem-solving capacity and this may disturb the company’s R&D units that have to acknowledge that “outside people are smarter than us” (Spradlin 2012). This perceived risk might cause internal resistance when it comes to open up the company’s boundaries and could lead the Seeker to deny the presence of the knowledge externally identified. Although all the aforementioned analyses are useful to correlate the likelihood of a project's success with the type of challenge and the size of the Solver's network, studies in this regard are still scarce. There is still a lack of information explaining the reasons why many solutions are not implemented by the Seekers although all the predefined requirements are addressed. Therefore, the research goal is to close this gap by mapping out each stage of the intermediation process and identify which one lacks efficiency. The contribution is therefore twofold: identifying critical conditions which may occur from the initiation phase to the solutions’ presentation and extracting recommendations to decrease the percentage of unsuccessful projects by optimizing the intermediation process.

3. Methodology

This section illustrates the research design. While the first paragraph shows the different steps that were considered to gather deeper insights into the crowdsourcing platforms business and the related method to collect and analyze data, the second part discusses the research limitations and delineates possible topics for future research.

3.1 Data Collection and Analysis

Considering the poor academic literature about Innomediaries, the present research is mostly exploratory. The nature and contemporaneousness of the phenomenon suggest the adoption of

(11)

9 a more qualitative approach to get a deeper understanding of the underlying determinants of projects success and failure (Darke 1998; Yin 2008). To strengthen the methodological rigor of the study, a cross-case analysis is advised as useful to understand the factors (Eisenhardt 1991; Numagami 1998) influencing the intermediation process. The analysis of multiple case studies is considered appropriate when the context requires the implementation or review of systems and practices (Miles and Huberman 1994; Shakir 2002). In 2005, Van Aken distinguished two types of multiple case studies methods to collect data: the first one is based on developing case studies in itinere while the second focuses more on extracting information directly from the cases. The present research applied the latter approach through which optimal practices to solve managerial problems are deduced and rules inducted and clarified. Also, to identify common pathways among Innomediaries, a comparable sampling strategy has been employed (Curtis 2000) to firstly map and then propose managerial interventions to reduce the risk of delivering unsuccessful projects. To what extent the choice of the companies analyzed, while InoCrowd has been selected because of the professional relationship with the CEO Soraya Gadit as well as its growing reputation in Portugal, InnoCentive and NineSigma represent two American pioneers of the crowdsourcing phenomenon (Appendix 7). Moreover, since the use of multiple sources of data is fundamental in qualitative research (Maxwell 1996), the data were collected from different sources such as documents, websites, meetings and emails. Five semi-structured interviews were conducted with Innomediaries members, including managers and technical experts. Also, two external participants have been interviewed by email: one of the top Solvers of the American pioneer InnoCentive and a former Seeker of InoCrowd (Appendix 8). To present a flexible framework, the semi-structured interviews were organized around the six-stages of the crowdsourcing process to maintaining a broader focus while gathering as many details as possible. On the other hand, the Solver and Seeker were asked to respond to more specific queries to compare their opposite position in the

(12)

10 process. Considering the different hierarchical positions of the respondents, not all questions were addressed in every interview but rather adapted to their specific level of expertise. All interviews have been conducted in English and to ensure a certain degree of reliability, the transcriptions were recorded and reexamined by extrapolating information that appeared to define repeatable patterns, as well as, opportunities and challenges related to the project's outcome. The content has been analyzed through a directed technique (Hsieh and Shannon 2015) which means that the analysis started with consistent research findings as guidance for initial codes. The key findings deriving from the three Innomediaries and the insights gathered from all experts have been grouped to display a holistic overview and better recognize common pathways (Appendix 8).

3.2 Limitations

The relationship between Innomediaries and Seekers is often characterized by non-disclosure agreements. This characteristic unavoidably hinders a complete analysis of all players participating in the process. Indeed, the data collected do not include Solvers that have refused to implement the solution proposed by the Innomediaries.

4. Findings

This section depicts the framework that commonly characterizes the Innomediaries Business Model. For instance, after having gathered insights from several experts, a six-stage

framework has been developed to describe the intermediation process structure. First, the classification of the six-stages and critical instances occurring in these are introduced, followed by respective findings.

(13)

11 4.1 A Six-stages Framework

The classification of the six-stages framework enables the identification of possible pitfalls of the process and related organizational interventions to overcome these.

Stage I: Initiation. During the first stage of the intermediation process there are two possible scenarios: on one hand, the company seeking solutions actively contact the Innomediary to explain which is the problem they would like to solve; on the other, it is the Innomediary reaching out to companies which can become potential Seekers asking them whether there is a challenge that the platform could help tackling. It is crucial to acknowledge as the different Innomediaries’ power, in terms of reputation, highly influences the first stage of the process. This step is critical particularly in the second scenario where a successful collaboration mainly depends on the Innovation Manager’s persuasiveness in explaining and somehow convincing the client to rely on the platform. To some extent, the person in charge of this first stage takes the role of a salesman. The more the company is known and has completed successful projects with well-known clients, the easier it is to attract new Seekers.

Stage II: Contract negotiation. The contact owner which is the person who first identified the potential Seeker prepares the contract with the help of the legal department of the Innomediary. Usually, the contract refers to an upfront payment for the publication of the challenge on the website and subsequent payments to view the solutions and acquire IP rights on the selected one. However, the amount of the different payments varies depending on the Innomediary although the contract remains the same: once the contract is signed, the client officially becomes a Seeker.

Stage III: Framing phase. This phase entails the collaboration of one or more experts of the Innomediary with the Seeker company. The problem and the specific requirements necessary for the solution(s) to be considered valid are therefore identified during this step. Later on, the Innomediary has the task of simplifying the problem's description in order to be easily

(14)

12

understood by as many Solvers as possible. The framing phase is therefore considered to be vital for the success of the process as it is the first instrument to attract potential Solvers. Stage IV: Open call. During this stage, the Innomediary handles the majority of the work. The challenge is launched on the platform in the form of an open call and users have the chance to register as Solvers to view the challenges available and decide whether among these there is a specific call more appealing to them. Depending on the Innomediary, there are several channels to contact the experts and ask for further specifications in order to gather information and feedback on any issues coming up during this stage. Additionally, for specific challenges, Solvers have the possibility to work in teams, although the majority of the requests ask for individual works.

Stage V: Evaluation of responses. Major peculiarities between Innomediaries arise in this phase. Indeed, before presenting the solutions to the Seeker, there could be either an internal team of experts evaluating the solutions submitted or external professionals specifically hired to evaluate the proposals and ensure their quality, objectivity and validity.

Stage VI: Presentation of solutions. The solutions which address all requirements stated in the beginning by the Solver are presented to the Seeker. The latter decides among the solutions which one best fits the company and acquire IP rights. Finally, the Solver wins a cash prize for submitting the winning solution and in rare cases where the anonymity clause is voluntarily dismissed by the Seeker, direct collaboration is established between the Seeker and Solver.

4.2 Results

Stage I: Initiation. While InnoCentive and NineSigma, the two biggest innovation intermediaries, boast a strong brand image both in the US and worldwide and thus expect Seekers to contact them, InoCrowd actively research for potential companies to become Seekers. In both cases, a so-called Innovation Manager acts as the process promoter responsible

(15)

13

for the Platform-Seeker relationship which in the case of InoCrowd is almost always represented by the CEO Soraya Gadit. InoCrowd experts confirmed the rarity of the event where companies contact the Innomediary in the first place. This seems to happen only when companies already know InoCrowd for other reasons.

Stage II: Contract Negotiation. The so-called “contact owner” presents to the Seeker specific conditions regarding the timing, non-disclosure agreement, and related payments to view and acquire the selected solution. The three Innomediaries are characterized by similar contracts although the payment amounts are higher for the American Innomediaries NineSigma and InnoCentive.

Stage III: Framing Phase. One of the main differences between the American pioneers and InoCrowd regards this phase. Since the pioneers are directly contacted by the companies, they already have a broader idea of the problem to solve and therefore the process of describing the challenge and its requirements is faster compared to InoCrowd. The latter offers instead eight hours of free consultancy where experts analyse several problems potentially solvable by the platform and develop the challenge's description accordingly.

Stage IV: Open Call. A former Solver of InnoCentive and one of the Seekers of InoCrowd confirmed that in both cases there has been communication between them and the Innomediaries. In the first case, the American Solver has been contacted by InnoCentive in the middle of the process to develop further analysis related to the first draft that he submitted. In the case of InoCrowd, the Seeker confirmed that he was contacted by the CEO Soraya Gadit three times after the challenge was launched online to clarify a few doubts that Solvers were having during the process.

Stage V: Evaluation of Responses. Soraya Gadit, Founder and CEO of InoCrowd explained how the evaluation of responses works. Most of the time, the internal team of experts develop a sort of grid to check whether all requirements have been addressed by the Solvers, specifying

(16)

14

the solutions’ degree of precision and ease of implementation. However, there are particular circumstances in which the InoCrowd hires external specialists to verify which of the solutions best meet the criteria indicated by the Seeker.

Stage VI: Presentation of Solutions. The Co-founder and Chairman of InnoCentive specified that the cases in which all requirements are addressed and yet the Seeker is not satisfied with any of the solutions are rare. If this happens, it is probably due to a misalignment of expectations and not the quality of the answers submitted by the Solvers.

5. Opportunities and Challenges

To gain a deeper understanding of opportunities and challenges that crowdsourcing platforms like InoCrowd face along their journey of becoming well-established players like InnoCentive and NineSigma, different experts were interviewed. Considering the six-stages of the intermediation process, the insights have been grouped to understand whether additional steps or intervention to existing ones can positively influence the projects' outcomes (Appendix 6).

5.1 Marketing Investment to raise awareness about Innomediaries

The “wisdom of crowds” is generally applied to boost sales, increase revenues and enhance companies' offline and online visibility. The recent increment of the use of crowdsourcing has brought a larger number of people, especially in the ideation and production phase, to customize products and services through co-creation tactics. Technology has made this involvement extremely fast, active and powerful. However, it is interesting to notice how marketing campaigns can also bring value to Innomediaries by raising awareness about their existence and applications. While Innomediaries like NineSigma and InnoCentive rely on a well-recognized reputation resulting from being the industry's pioneers, smaller Innomediaries like InoCrowd should acknowledge the consequence of marketing campaigns and that their

(17)

15 reputation is strictly related to the projects' outcome. Open Innovation is part of a relatively young discipline and many companies do not yet recognize crowdsourcing as a strategy able to add value. Some companies even believe that relying on Open Innovation would mean the extinction of the Innovation Managers' role. Traditionally, companies not capable of dealing with certain business problems in their in-house department prefer to rely on consulting companies rather than Innomediaries. The companies that decide to collaborate with Innomediaries already acknowledge the existence of internal issues and therefore, the first interaction between the Seeker and the Innomediary runs smoother since the challenge is already identified and the Innomediary starts immediately to frame it properly. InoCrowd almost always works to find companies to become potential Seekers meaning that it first contacts and then explains its business model to the Seekers and only after it starts the collaboration with them. To sum up, a remarkable marketing/ branding campaign aimed at raising awareness about the successful usage of crowdsourcing could change the sort of a project from its very beginning. The stronger is the Innomediaries reputation, the smoothest it is the collaboration with Seekers.

5.2 Analysis of the Solvers Risk Factors

An interesting insight emerged from the interviews with the experts concerns the reliability of the Seekers. It is quite hard for Innomediaries to predict whether Seekers are trustworthy or not especially because this problem tends to arise at the very last stage of the collaboration. For a company seeking solutions, it is very convenient to start the collaboration with the Innomediary, analyze the answers submitted by the Solvers and only after having checked all proposals, stand back. Despite the specificity of this problem, InoCrowd still considers these as unsuccessful projects. There could be two ways of dealing with this bias: either changing the structure of the actual payments or completing a Solvers Risks Checklist before starting

(18)

16 any collaborations. In the first case, InoCrowd could schedule a different payment system aimed at minimizing the risk of exposing the solutions before receiving the right compensation. The cost of acquiring the final solution could be marginally reduced and transferred on a new payment required before the final presentation. Also, to not compromise the relationship between the Seeker and the Innomediary, the latter could simply show the preview of all solutions instead of the whole work and then required the right compensation to fully examined the selected solutions. The second approach focuses instead on the analysis of the Seekers Risk Factors to predict their ethical behaviors and avoid unreliable partnerships. The checklist should also evaluate the Seeker's readiness to handle this Open Innovation approach and help to identify potential problems by scoring the Seeker's reliability. Instead of completing the checklist individually, the Innomediary could organize a meeting with all the managers of the Seeker and complete it together to be sure that all managers are fully aware of the project.

5.3 Meeting with all the Solver’s project responsible

The strategic success of companies also depends on the effective flow of information measured through transparency and coordination so that ideas, decisions and results are effectively communicated to everyone, and particularly to those entitled to make final decisions. However, companies often tend to manage initiatives and challenges related to specific departments only and exclusively within these departments hindering the information to flow. During the first interaction with InoCrowd, it is common to expect only one member of the Seeker company to attend the meeting. While it may not seem the Innomediary's concern to make sure that all Seeker decision-making members are aware of the project and agree on the collaboration, there is the urgent need to pay more attention to the risks arising from miscommunications. The main obstacle usually emerges in the final step of the intermediation process when the solutions submitted by the Solvers are presented to the Seeker. If the Seeker managers have different

(19)

17 opinions about the project, the last step of the intermediation process is inevitably affected. For example, when the finance team considers the cost of acquiring the solution too high compared to the benefits deriving from it, the management disagrees on the final proposals or the solution is considered valid by some members but too risky by others, the project would result in an unsuccessful one. The Innovation manager may also be the one hindering the solution's implementation because afraid of being somehow replaced. It might be advantageous to gather all managers of the Seeker company during the meeting preceding the launch of the challenge to lower the risk of misrepresentation. The Innomediary would be more secure that whoever is in charge of the Seeker's decision-making process is fully aware of what is going on to avoid split-second decisions that are not strictly related to the quality and feasibility of the final solutions. By organizing the meeting with all the board members of the Seeker before launching the challenge on the platform, potential misunderstandings could be reduced through the identification of scope borders and KPIs. Seekers often imagine that certain types of solutions resulting from the challenge would include specific aspects even though, without clearly mention these aspects, it results quite unlikely. Meeting with all decision-making members would allow the Innomediary to discuss potential outcomes arising from the launch of the challenge on the platform. In this way, the Innomediary could frame the challenge accordingly and supports Solvers to mention these specific aspects in their proposals (Appendix 6).

5.4 Expectations vs Reality

When Innomediaries contact the Seeker to solve any of their internal problems on the platform, the probability of failure is higher than the case in which the Seeker identifies the problem in the first place and only then decides to exploit crowdsourcing through the collaboration with an Innomediary. If there is a problem in the alignment of the Seeker's expectations while defining the challenges and its conditions, the Innomediary may have difficulties during the

(20)

18 last stage in identifying the solutions received that address the expectations of the Seeker. In other words, the Seekers are often not fully aware of what it would entail solving the identified challenge which means that there could be cases of solutions very different from the Seeker’s initial expectations. Despite the differences in quality among the solutions submitted by the Solvers, it is quite unlike that the quality of the ones selected in the end does not meet certain standards. Besides, the majority of the challenges concern very analytical problems with data and numbers and thus, their solutions imply straightforward processes. This aspect seems to suggest that the cause of some projects’ failure does not concern either the quality of the submissions or potential misunderstandings between the Seekers’ needs and the Solvers’ interpretation. The problem may instead rely on the definition of these requirements. The Seeker may list a few conditions for the solutions to be considered valid without effectively thinking of which types of answers would eventually result from these. Despite the number of variables influencing the Solvers’ ideas and thus solutions submitted, when the Innomediaries receive the first drafts from their pool of Solvers, they could potentially group the main points touched by the solutions and show them to the Seeker. In this way, the latter could immediately point out which ideas seem to follow more appropriate reasoning given the challenge and which instead may convey different results. In doing so, the Innomediary could also target Solvers who seem to be shifting their focus on problems not strictly related to the challenge and point them in the right direction since there would still be some time to optimize their proposals. This managerial intervention might help the Innomediary to present to the Seeker solutions that not only address all requirements stated in the beginning but also their expectations.

5.5 Implementation of the Solutions

NineSigma, one of the crowdsourcing pioneers, highlighted that the problem often does not concern the intermediation process itself but rather the implementation of the proposed

(21)

19 solutions. In other words, Seekers may underestimate the effort to integrate new partners or solutions when working with Innomediaries and for this reason, the execution part may be the reason behind their final refusals. As a result, NineSigma is evolving to adopt a combined consultancy and advisory role. If all Innomediaries would follow this example, they could insist on the fact that unlike traditional consultancy companies they offer the possibility to help the Seeker both to find a solution and to implement it. Therefore, together with the Solvers network that characterizes this innovative Open Innovation approach, Innomediaries' competitive advantage would be the implementation process of the solutions rather than just their presentation. Similar consideration has been made not only by the co-founder and CSO of NineSigma but also by the former top Solver of InnoCentive, the main competitor of NineSigma in the United States. The latter suggested the option to form a Solvers network once the solution has been identified and to offer their services on a fee-for-service or hourly basis to the Seeker to assist its in-house R&D team. In this way, instead of acting as an individual problem-solver, there could be an official team of consultants, which offers different world-class expertise as a team when it comes to implementing the solution. Besides, since confidentiality is a major concern for Seekers, working with a select group of Solvers and rigorous non-disclosure agreements could offer Innomediaries an additional revenue stream. This could also provoke a more direct interaction between the Seeker and the Solver meaning that ideas would flow more easily and result in many more implemented solutions.

(22)

20

6. Conclusion

This last section marks the conclusion of the empirical research. Contributions and managerial implications are presented (Appendix 6), followed by the study limitations and further research.

6.1 Contributions and Implications

The scope of this thesis is to investigate which are the reasons behind unsuccessful projects carried out by Innomediaries. The main focus has been on a particular Open Innovation application: crowdsourcing platforms. The study conducted has considered the intermediation process and examined the interaction between Innomediaries on one side and Seekers and Solvers on the other. A deeper understanding of the crowdsourcing method has been adopted to first identify possible organizational and procedural obstacles and finally present potential managerial interventions to optimize the intermediation process. Besides, the research previously conducted on Open Innovation and crowdsourcing methods has analyzed only corporate structures capable of implementing this type of innovation, neglecting the fact that this discipline and its applications are relatively young. For this reason, the possible implications behind the success of the projects have poorly been studied. The present analysis took into consideration all the players in the sector: Innomediaries, Seekers and Solvers. It is interesting to notice how each expert that has been consulted underlined diverse pitfalls of the process and accordingly, suggested specific intervention strategies. The analysis reveals that despite the framing phase is a crucial aspect of the process and therefore requires special attention both from Innomediaries and Seekers, this is not the step which mainly affects the outcome. The analysis shows proof that InoCrowd, that is the smallest Innomediaries among the others, recognized a few obstacles in almost every stage of the intermediation process. It can be concluded that the crowdsourcing applications, and particularly Innomediaries, are a

(23)

21

much more complex business due to the Open Innovation discipline which is remarkably influenced by several and often unpredictable variables. This said, several ways to overcome the identified obstacles have been considered and five opportunities have been presented as potential strategies to reduce the percentage of unsuccessful projects. While some of these recommendations refer to existing stages of the intermediation process, others propose new steps that could eventually be implemented to optimize the six-stages process. Among these managerial interventions, the possibility to schedule a meeting in which all managers of the Seeker company are present somehow encompasses some of the other recommendations and therefore addresses more than one concerns. The Innomediary would have the possibility to discuss the potential outcomes of the challenge and better understand the Seeker's expectations while ensuring its reliability and trustworthiness (Appendix 6). The implementation of this new step in the process it is not the only possible organizational intervention to support Innomediaries although it could be helpful for smaller players like InoCrowd to reduce the percentage of unsuccessful projects. In conclusion, the present study extends the academic literature on Open Innovation and crowdsourcing from two sides:

1. By identifying the obstacles related to different steps of the crowdsourcing process, the analysis recognizes those factors that can negatively influence the implementation of the solutions received and therefore the success of the Innomediaries. Thus, adding to the present literature that instead focused exclusively on the advantages of crowdsourcing applications, an overview of the actual implementation of these applications.

2. This paper considers methods and operations that characterize the intermediation process focusing on the project level and the interaction of the Innomediary with the Seekers and Solvers. This expand the existing literature on Open Innovation that instead

(24)

22

focuses on organizational alignment and performance at a company level only (Tranekjer and Sondergaard 2013).

By showing that crowdsourcing projects are not always an immediate success and instead require time to be effectively implemented, the research shows that Innomediaries and especially Seekers need to invest many internal resources to fully take advantage of the benefits of Open Innovation. The lost final payment and the lower success rate of the platform, as the CEO of InoCrowd Soraya Gadit points out, are among the negative aspects deriving from the collaborations with the unreliable Seekers. At the same time, one may argue that with a proper estimation of the initial payment that covers the platforms’ costs until the final delivery, the platform manager may still want such challenges. The benefits that should be considered include extra content online in the form of the new challenges to the community, increased visibility, potential expansion of its online community, platform staff training, and Solvers and Seekers’ engagement. By weighing potential benefits and losses, the platform manager may design the level of strictness of the requirements in the negotiation phase to guarantee or not the implementation.

6.2 Limitations and Further Research

Considering the qualitative nature of the study, although valuable, the findings should not be generalized to other settings since the three intermediaries do not constitute a representative sample. The rigorous qualitative analysis of the Innomediaries and their business models serves as a solid basis for future qualitative studies aimed at empirically testing and extending these results. For instance, by considering a larger number of Innomediaries, Seekers, and Solvers, the results of the research would be more reliable. However, the main limitation in this research is the absence of Seeker companies among the respondents which decided not to implement the solutions received. As a consequence, several factors remain unaddressed and thus

(25)

23

influence the results of the research question. The more companies engage in crowdsourcing through Innomediaries, the greater would be the research opportunities to study this area in the future. It will be interesting to investigate how crowdsourcing platforms will presumably shape the consulting industry by challenging their traditional business models and offering a faster and cheaper option to those companies seeking solutions. Despite these limitations, the analysis contributes to a better understanding of crowdsourcing platform management practices.

(26)

24

7. References

Afuah, Allan, Tucci Christopher L. 2012. “Crowdsourcing as a solution to distant search.” Academic of Management Review. 37(3):355–375.

Arrow, K. 1962. "Economic Welfare and the Allocation of Resources for Invention.” The Rate and Direction of Inventive Activity: Economic and Social Factors, ed. H.M. Groves, National Bureau Committee for Economic Research. Cambridge, MA, pp. 609-626.

Baraneck, Vladimir. 2011. “Integrated Could Framework and Social Management or Crowdsourcing the easy way.” Capgemini.

Bianchi, Mattia, Cavaliere A., Chiaroni Davide, Frattini Federico, and Chiesa Vittorio. 2011. “Organisational modes for open innovation in the bio-pharmaceutical industry: an exploratory analysis.” Technovation. 31(1):22–33.

Boudreau, Kevin J., Lacetera Nicola, Lakhani Karim R. 2013. “Incentives and problem uncertainty in innovation contests: an empirical analysis.” Management Science. 57(5):843–863. doi:10.1287/mnsc.1110.1322.

Chesbrough, Henry. 2006. “Open business models - how to thrive in the new innovation landscape.” Harvard Business School Publishing. Cambridge.

Chesbrough, Henry, Vanhaverbeke Wim and West Joel. 2014. “New frontiers in open innovation.” Oxford University Press.

Curtis, S., Gesler W., Smith G. and Washburn S. 2000. “Approaches to sampling and case selection in qualitative research.” Social Science & Medicine. 50:1001–1014.

Dahlander, Linus, Gann David M. 2010. “How open is open innovation?” Research Policy. 39(6):699–709.

Darke, Peta, Shanks Graeme, Broadbent M. 1998. “Successfully completing case study research: rigour, relevance and pragmatism.” Information System Journal. 8(4):273– 289.

Diener, Kathleen, Piller Frank. 2013. “The market for open innovation.” 2nd edition, Lulu Publishing: Raleigh. USA.

Eisenhardt, KM. 1991. “Better stories and better constructs: the case for rigor and comparative logic.” Academic Management Review. 16(3):620–627.

Feitler, D, van Beelen D, Kielstra H, Taylor P. 2012. “Global network platform evaluation within a large multi-national company.” The Proceedings of the XXIII ISPIM

conference. Barcelona.

Foss, Nicolai J., Laursen Keld, Pedersen Torben. 2011. “Linking customer interaction and innovation: the mediating role of new organizational practices.” Organization Science. 22(4):980–999. doi:10.1287/orsc.1100.0584.

Howe, Jeff. 2006. “The rise of crowdsourcing.” Wired Magazine. 14(6):176–183. Howells, Jeremy. 2006. “Intermediation and the role of intermediaries in innovation.”

Research Policy. 35(5):715–728.

Hsieh, Hsiu-Fang, and Sarah E. Shannon. 2015. “Three Approaches to Qualitative Content Analysis.” Nordic Journal of Digital Literacy 2015 (1): 29–42.

(27)

25 Jeppesen, Lars B., Lakhani Karim R. 2010. “Marginality and problem-solving effectiveness

in broadcast search.” Organization Science. 21(5):1016–1033.

Lakhani, Karim R., Boudreau Kevin J. 2009. “How to manage outside innovation.” MIT Sloan Management Review.

Lakhani, Karim R., Panetta JA. 2007. “The principles of distributed innovation.” Innovation Technology Governance Globalization. 2(3):97–112.

Laursen, Keld, Salter Ammon. 2006. “Open for innovation: the role of openness in explaining innovation performance among U.K. manufacturing firms.” Strategic Management Journal. (27):131–150.

Lopez-Vega, H. 2009. “How demand-driven technological systems of innovation work? The role of intermediary organizations.” Proceedings of the DRUID-DIME academy Winter 2009 conference. Aalborg.

Maxwell, Joseph A. 1996. “Qualitative research design: an interactive approach.” Sage Publication. Thousand Oaks.

Miles, Matthew B., Huberman A.M. 1994. “Qualitative data analysis: an expanded sourcebook.” Sage Publication. Thousand Oaks.

Numagami, T. 1998. “The infeasibility of invariant laws in management studies: a reflective dialogue in defense of case studies.” Organization Science. 9(1):1–15.

Reichwald, Ralf, Piller Frank. 2009. “Interaktive Wertschopfung: Open Innovation,

Individualisierung und neue Formen der Arbeitsteilung.” 2nd edn. Gabler, Wiesbaden. Shakir, Maha. 2002. “The selection of case studies: strategies and applications to IS

implementation.” Research Letters in the Information and Mathematical Science. 3(1):191–198.

Spradlin, Dwayne. 2012. “Are you solving the right problem? Asking the right questions is crucial.” Harvard Business Review. 90(9):84–10.

Terwiesch, Christian, Xu Yi. 2008. “Innovation contests, open innovation, and multiagent problem solving.” Management Science. 54(9):1529–1543.

Tranekjer T, Søndergaard H. 2013. “Sources of innovation, their combinations and strengths—benefits at the NPD project level.” International Journal of Technology Management. 61(3/4):205–236.

Yin, Robert K. 2008. “Case study research design and method.” 4th edition, Sage Publication, Thousand Oaks.

(28)

26

8. Appendix

Appendix 1: Closed vs Open Innovation (Adapted from Chesbrough, 2014)

(29)

27 Appendix 3: Traditional vs Crowdsourcing Collaboration (Adapted from Vladimir 2011)

(30)

28 Appendix 5: Traditional Sourcing vs Crowdsourcing (Adapted from Boudreau and Lakhani, 2013)

(31)

29 Appendix 7: InnoCentive, NineSigma and InoCrowd (own representation)

Appendix 8: List of details on the interviews, the interview guide, and full transcription

List of details on the interviews

Company Respondent Role Date of Interview Length of Interview InoCrowd Soraya Gadit CEO and Founder of

InoCrowd

28.01.20 43 minutes InoCrowd Rita Melo Responsible of the

Seekers of InoCrowd

13.04.20 41 minutes InoCrowd Joana Amaral Responsible of the

Framing Phase at InoCrowd

15.04.20 25 minutes

InnoCentive Alpheus Bingham Co-Founder and Chairman of InnoCentive

17.02.20 Email

NineSigma Patrick Ferran Co-President and CSO of NineSigma

18.02.20 Email InoCrowd Tome Canas Former Seeker

representing The Navigator

13.04.20 Email

InnoCentive David Bradin Former Solver of InnoCentive

(32)

30 Interview Questions Guide: InoCrowd CEO and Founder

Goal Questions

Understanding of the business and Identification of the Research Question

When you think about InoCrowd’s success and future, I am sure that you also consider the actual challenges which are slowing and affecting the company’s business model. Could you list these problems? Why do you consider this issue as the most critical challenge that InoCrowd faces? Do you think that perhaps Solvers do not address all requirements stated and agreed in the beginning by the Seeker?

How do you decide whether a solution is applicable or not?

Interview Questions Guide: InoCrowd Experts

Goal Topic/ Coding Category Questions

Background of interviewee Company Role What is your role in the company? Innomediaries opportunities and

challenges for value generation and capturing

Customer Relationship Which opportunities and challenges bring new customer?

How do Seekers influence the intermediation process?

Managerial Interventions Do you face challenges or barriers in the intermediation process?

Which step(s) of the intermediation process lacks efficiency in your opinion?

Outlook Company development What do you think could help InoCrowd decreasing the unsuccessful projects?

Interview Questions Guide: InnoCentive and NineSigma

Topic/ Coding Category Questions Framework Innomediaries opportunities and challenges for value

generation and capturing

What do you think is the reason why sometimes Seekers are not satisfied with the solutions provided although these solutions address all the challenge’s requirements stated in the beginning?

Managerial Interventions Do you believe that the Innomediary business model could be nevertheless optimized to reduce the percentage of these "unsuccessful" cases or do you think it does not depend on it?

(33)

31

Which step(s) of the intermediation process is the most crucial and delicate to deliver a winning solution to the Seekers?

Interview Questions Guide: Seeker of InoCrowd and Solver of InnoCentive Topic/ Coding Category Questions Framework for

the Seeker

Questions Framework for the Seeker

Framing Phase Was the InoCrowd team helpful in formulating the challenge? If so, how did they help to describe the challenge so that it was understandable by as many solvers as possible?

Do you think the challenge was described so as to be understood even by non-expert solvers? What would you recommend to improving it?

Requirements Together with the

description of the challenge, were the specific

requirements to be addressed (for the solution to be acceptable) simply listed? Or did the InoCrowd team collaborate closely with the company to fully understand and formulate these too?

Were the requirements to be addressed for the solution to be acceptable only listed or did the InnoCentive team provide you with detailed instructions?

Double-Check What do you think could help InoCrowd decreasing the unsuccessful projects?

From the moment the challenge was launched on the platform to the moment the solution(s) was delivered, have you been in contact with InnoCentive team? If so, how have they helped you?

Solutions Do you think that the solution(s) presented by InoCrowd perfectly addressed all requirements stated in the beginning by the company?

Do you think that the solution you delivered perfectly met all the requirements listed by the Seeker?

Implementation of the Solution When the company decided to implement the solution, did the Solver and/ or InoCrowd helped in the implementation process?

When the Seeker decided to implement your solution, did you and/ or InnoCentive participated in the

implementation process? Tips and Advice From the Seeker's point of

view, what would you suggest to optimizing the process?

From the Solver’s point of view, what would you recommend to optimizing the process and minimize the risk that the solutions are not accepted?

(34)

32 Interview Transcription

InoCrowd: Soraya Gadit, CEO and Founder of InoCrowd (43 Minutes)

V: When you think about InoCrowd’s success and future, I am sure that you also consider the actual challenges which are slowing and affecting the company’s business model? Could you list these problems?

S: Despite the promising success rate of the company, namely 95%, I am concerned about the numbers of Seekers that, at the end of the process, are not satisfied with the Solvers’ proposal and therefore decide to not implement the solution(s) provided by InoCrowd.

V: Could you specify the percentage of Seekers who refuse to implement your final solution? S: Offhand, I would say the percentage is around 10-15%.

V: To understand better, although I am aware of the strict process behind the formulation of the solutions, do you think that perhaps solvers do not address all requirements stated and agreed in the beginning by the Seeker?

S: I am perfectly aware that, sometimes, challenges can be quite hard to solve, but the

process implemented by InoCrowd is such that all the requirements specified in the challenge by the Seeker have to be perfectly addressed by the Solvers before they can submit any solution. In the first place, I make sure that solutions which are not perfectly addressing each request of the Seeker are not taken into consideration as potential ones.

V: As CEO of InoCrowd, how do you decide whether a solution is applicable or not? S: InoCrowd has a team working on this. As a matter of fact, the greater effort concerns the framing phase. For instance, before agreeing on the list of requirements to be addressed, we work with the Seeker to simplify the description of the challenge in order for Solvers to have a clear idea of the problem, constraints and requests. Therefore, when a solution is refused by the Seeker, I find it quite surprising particularly if you consider that before presenting our solutions, we meticulously evaluate their quality and that they respect all requirements. V: It sounds like an unavoidable aspect of the process due to a large number of Seekers and the variety of challenges. Why do you consider this issue as the most critical challenge that InoCrowd faces?

S: My goal is to reduce the 10-15% percentage as much as possible not because I want to reach 100% success rate but because I want to decrease the costs and extra time needed in these kinds of situations. To make an example, if the Solver is not happy with a solution, I personally go through all the best solutions submitted by our pool of Solvers, I analyze and compare the best proposals and make sure each one respects the requirements. Recently, a coffee company refused the final solutions proposed by InoCrowd. For this reason, I have decided to hire a Portuguese engineer - quite costly - to double-check the solutions and their validity to ultimately prove whether it is true that none of them fit the Seeker expectations.

(35)

33 The real threat is that this entire process, inevitably involving extra resources, automatically affects the whole company.

V: Can you tell me which percentage you aim to reach when decreasing these cases? S: From 5 to maximum 10% of unsuccessful cases.

V: Perhaps, instead of focusing on decreasing the number of unsuccessful cases, InoCrowd might implement a more cost-effective way to deal with it?

S: I agree. I am looking for a method to minimize the percentage of “unhappy companies”, for instance, by optimizing the initial steps of the procedure to be sure that all the

requirements are even more specific and clear or by improving the algorithm which shows the solvers that the requirements are fulfilled. Also, it could be effective to benchmark other companies that rely on the crowdsourcing system - also from different industries - to analyse their business model and understand how they keep the percentage of “failure” as low as possible.

V: Thank you very much Soraya. I might ask you to interview someone from your team to better understand the steps of the intermediation process.

(36)

34 InoCrowd: Rita Melo, Responsible of the Seekers of InoCrowd (41 min)

V: Bom Dia Rita, thank you for your time. I’d like to ask you a few questions about your experience at InoCrowd. I have already explained to you the topic of my research but feel free to ask me further information if it could help.

R: Thank you Virginia, I will. To start, I have joined InoCrowd on the 17th of February, therefore my experience with the company is limited although the way InoCrowd works is quite easy to understand and I hope our conversation will be helpful for your research. As a matter of fact, Soraya hired me together with other new people to better managed different functions.

V: I see. To begin, I’d like to know more about the process structure and how it is organized. If this helps, I can guide you by asking you a few questions related to each step of the process in order to have a sort of framework. For instance, does InoCrowd has different teams which take care of the different stages such as, the initiation stage, the contract stipulation and so on?

R: First of all, I believe it is fundamental to tell you that something has recently changed. Indeed, until the end of February everything was working in a certain way but after the new hires, everyone has started to taking care of Seekers or Solvers specifically and exclusively in order to not create confusion. This said, the first step of the process implemented by

InoCrowd regards reaching out new potential Seekers through available data and the web since you cannot do it any other ways without violating deals and non-disclosure conditions. Any member could do this first step by identifying the company and scheduling a meeting. V: Before you continue, I would like to ask you whether InoCrowd is always looking for potential Seekers or if these Seeker are also reaching out contacting you?

R: It happens, but I can tell you it is very rare. Usually, InoCrowd actively researches in Portugal and elsewhere potential companies to become Seekers. But before I have arrived, Soraya was attending all meetings personally although this was not very efficient since she was running from one meeting to the other and still taking care of so many other aspects. Before the Covid-19, I was often attending the meetings with her or I was sent to represent the company in order to save her some time. After the first meeting, the person in contact with the client usually sends him specific material which also includes a brief presentation that explains how InoCrowd works. After this, there is the contract phase, it is the so-called contract owner which close up the deal, meaning the team member who found the Seeker in the first place. Meanwhile, something has changed. Today, specific team members are in charge of dealing with Solvers while others are taking care of the Seekers as I have just mentioned. These people focusing on the Seekers are seen as Business Developers and they are accompanying Soraya to all the following meeting with the Seekers. Indeed, it is crucial to establish personal relationships with them. During these meeting, we explain InoCrowd and its business model presenting successful stories. Hopefully, we managed to convince them to rely on InoCrowd to solve their challenges.

V: Interesting. During these first meetings with the Seeker, do you also talk about specific requirements that the Solver necessitates in order for the final solutions to be considered as valid? Do you have a team checking on these conditions?

(37)

35 R: It is very rare. The thing is that we are in the first place looking for Seekers, therefore, we work together with them to identify the challenge. They often do not know what they need, therefore, it is quite hard for them to identify a list of requirements. Sometimes they

implicitly think that the solutions will include certain aspects but without clearly mention these aspects it becomes quite difficult. In the first meeting, the client has an idea about the challenge but they do not even know how InoCrowd works so we strive to facilitate as much as possible the explanation of our business model. On the other side, it helps us to define the challenge in an easy way. Imagine you are the CEO of a big company, you do not always know what the company exactly needs and it makes difficult to identify the problem. Sometimes it is also difficult to accept that you do have a problem to solve.

We tend to explain that the aim is identifying the challenge. We usually spend about 8 hours of free work to do it. Then, we present which are the possible challenges to launch on the platform. Meanwhile, we have time to understand which typology of challenge will be needed, more analytical or technological. This is where my colleague Joana will help you. V: Once you launch the challenge on the platform, is there any contact between the Solvers and InoCrowd? For instance, do Solvers ask for further information about the challenge? R: Indeed, you have a communication line on our platform. If you register as a Solver, you have access to a bot chat that you can use to ask further information and clarifications and InoCrowd will then send the questions to the Seeker. We help in the process of getting more solutions in the sense that the people working with the Solvers always check what they are doing, if they have access to entire information, if they face technical problems, if they meet time constraints, and so on.

V: When the solutions are ready to be presented, who is the one deciding whether a solution is efficient and meet all requirements?

R: Soraya evaluates the solutions by preparing an evaluation grid with all the proposals. She does this with support of experts from different industries able to analyze the solutions in detail. But what is interesting is that many time you deal with the administration of the Seeker company because they know what’s going on and then they find the challenge (for instance the problem is in the production line). But when the answers come the operational person is happy but the management not, because it takes time or is expensive and so on. V: What you are trying to say is that the problem could come from the Seeker itself since most of the time they do not have an organic approach. This is a very good point.

R: It is also tough to handle because we see the operational team ready to launch the challenge but then when they talk with their superior they do not come back to us. The discrepancy in opinions regarding innovations in companies.

V: You have said that InoCrowd is looking for companies to become Seekers. Do you think it could be conducted an analysis that compares projects carried out with Seekers which were contacted by InoCrowd and Seekers that instead spontaneously contact you? Perhaps the reason why sometimes there are unsuccessful projects comes from the fact that Seekers agree to work with InoCrowd but they did not even think about an actual problem to solve and therefore it makes difficult for them to identify or forecast the specific requirements. R: Indeed, you might be right. But I assure you, it is not common that companies contact us

(38)

36 to launch challenges on InoCrowd’s platform. Besides, open innovation means something great but it is also quite new especially in Portugal where so many companies did not pay attention to Innovation until a few years ago and among these, the majority still prefer to have a small team inside their companies to take care of innovation projects. However, today these R&D teams are reaching out to us, it is a paradox but still very rare. Normally the best meeting is the one in which the Seeker may already have an idea about what they want. V: In your personal opinion, what do you think is the critical factor influencing the outcome of the unsuccessful projects?

R: I think you have a problem with the alignment of expectations while defining the challenges itself and its conditions. You may also have a problem with the identification of the solutions that actually address the real expectations, in other words, often Seekers are not fully aware of what it would entail to solve the problem. You have very specific expectations vs reality issues. Instead, I do not believe the cause comes from the quality of the solutions submitted or potential misunderstanding between the Seeker’s need and the Solvers

interpretation because we are talking about very analytical problems with data and numbers and Solvers deliver solutions that lead exactly to the numbers asked by the Seeker. The problem may rely on the definition of the requirements, Seekers think about the requirements to list without thinking about which kind of solutions this would bring in the end.