Internal Resources vs. Open Innovation

Now that we are six weeks in to the oil spill in the Gulf, I wonder how much longer we have to wait for BP to come up with a solution that will actually solve the thousands of gallons of oil that are streaming into the ocean on a daily basis?  It seems as if every day goes by and yet another attempt seemingly fails. 

Of course, it’s easy to look at BP’s ineptitude and dismiss it as an issue your company would never face.  And, of course, unless you drill for oil deep under the sea, you won’t.  But you may face a similar situation- a new, unfamiliar problem that requires a solution fast.  That happens in business all the time- especially in the world of innovation.

The question is whether BP is better suited to fix this leak using only their internal resources or if they should turn to people outside the company to help them?  Clearly this is a problem where BP’s expertise in finding oil, refining and transporting it won’t help them a whole lot. While I’m sure they have plenty of smart engineers who work there, I’m sure none have ever faced a problem like this. 

So should you rely on a small internal team to generate ideas for you or are you better off opening the opportunity to thousands of people?  The idea of open innovation has received a lot of press in recent years, most notably from P&G in the CPG world.  The issue many companies have is that it’s a time consuming process.  When you ask for ideas, you get plenty of really bad ones from “armchair quarterbacks” who have no relevant expertise and spend all of 5 minutes developing their idea.  However you often get a few “gems” that hold considerable promise.

Open innovation comes down to technology and process.  How do you filter through the hundreds or thousands of ideas to find the best in an efficient way?  Companies are developing new online tools to help you communicate with consumers- in some cases even qualifying people to become a member of a group that you can present a problem to that requires a solution.

So while BP does look ridiculous and the stories of human and animal lives ruined will be with us for many months and years, think about how whether your company is better off using only internal resources to face your toughest problems or whether you need to figure out how to use open innovation to add horsepower to your innovation efforts.