Crowdsourcing Is Not Always Open Innovation: Lesson from PepsiCo

We need to be careful about defining open innovation as this can have different meanings for different companies in different situations.

Personally, I like to describe open innovation as a process in which a company bridges internal and external resources and act on the opportunities identified in this process. I also believe that it only becomes open innovation when the external input is significant and thus beyond simple idea generation from external resources in the early phases.

My take on this is quite broad compared to other definitions and so far the companies I talk and work with have found it flexible enough for them to accept it.

Open innovation covers many other terms and crowdsourcing is definitely one of them. However, this is not necessarily the same thing and in a nice little article on PepsiCo and their leadership position on the use of social media tools by Paloma Vasquez is a good example.

In the article, Vasquez mentioned a couple of thought starters given by Bonin Bough, Global Director of Digital and Social Media at PepsiCo including these two:

• Crowdsourcing product development via Dewmocracy resulted in the most successful limited time offers (LTOs) ever – PepsiCo will launch a second round of this campaign

• The real-time conversations taking place in the social media and digital space offer the richest resource for consumer insights and innovation – but require a process by which to monitor

Crowdsourcing and social media are potentially strong tools for innovation. However, some innovation leaders and others with an interest in open innovation have a tendency to confuse such initiatives with open innovation.

Neither Vasquez nor Bough do so in the article, but the case described is just such a case many others could get wrong. In my opinion, this deflates the value of open innovation.

Don’t make that mistake : – )