Innovation Tournaments Can Be Great. Here’s How To Avoid a Flop.
Companies like crowdsourcing for ideas. Innovation tournaments helped Dell create rugged laptops for marine use and helped Lego concoct new toy themes. PepsiCo’s “Do Us a Flavor” tournament led to the creation of “cheesy garlic bread” chips and a brief 8% surge in sales.
But the tournaments don’t always go so swimmingly. (Side-eye to you, Boaty McBoatface.) Many fall short of what they hope to achieve.
In new research published in the Journal of Marketing, Maryland Smith’s P.K. Kannan, PhD alum Hyoryung Nam and two other co-authors explore how companies can structure innovation tournaments to drive meaningful results.
“Simply generating a high volume of ideas and sifting through them looking for gold is not the right approach,” the authors say. Dell, for example, launched its Idea Storm crowdsourcing initiative, generating more than 10,000 ideas from users around the world. It was overload. With so many submissions, tournament administrators struggled to filter and choose the most promising ones.
The study reveals the value in moving beyond volume in innovation tournaments, focusing instead on stimulating participants’ engagement and involvement. In their research, the authors ran a large managerial survey among innovation executives at 1,519 firms, of which 516 (or 33.95%) had already run an innovation tournament on an online platform.
The results, Kannan says, “were unequivocal.” Participation intensity, engagement and active involvement in the platform throughout the tournament, served as a critical driver of idea quality in innovation tournaments, far surpassing the effect of having a lot of ideas or a lot of ideators.
Firms hosting innovation tournaments should encourage ideators to revise and improve upon their ideas, Kannan says, by interacting with them and offering feedback. But what kind of feedback is best at keeping ideators engaged? The authors looked at that too.
They conducted two longitudinal experiments using a commercial innovation tournament platform, examining the causal effect of feedback type and timing on participation intensity.
“What we found went against prevailing wisdom,” Kannan says. Negative feedback (i.e., constructive criticism) was more effective in sustaining participation intensity than positive feedback and the “sandwich approach” (in which negative feedback was served between two slices of positive feedback) was not helpful.
In fact, in one experiment, 10.43% of participants on average who received negative feedback updated their ideas, while only 2.3% of participants who received positive feedback did so. They found that timing mattered, too. Early negative feedback increased participation intensity, but late negative feedback didn’t.
“We suggest,” Kannan says, “that participation intensity should become a behavior to monitor, a metric to report, and an outcome to incentivize.”
Read more: The study, “Tournaments to Crowdsource Innovation: The Role of Moderator Feedback and Participation Intensity,” by Nuno Camacho, Hyoryung Nam, P. K. Kannan and Stefan Stremersch, is published in the Journal of Marketing.