[Ip-health] FT: The benefits of giving prizes
thiru at keionline.org
Thu May 5 05:54:42 PDT 2011
The benefits of giving prizes
Published: May 4 2011 11:23 | Last updated: May 4 2011 11:23
A.G. Lafley, the inspirational former CEO of P&G, was a noted advocate for what he called “connect and develop” alongside traditional R&D. In a Harvard Business Review article in March 2006, two P&G executives described how they “estimated that for every P&G researcher there were 200 scientists or engineers elsewhere in the world who were just as good – a total of perhaps 1.5m people whose talents we could potentially use.”
Such thinking has influenced product development at pharmaceutical and technology companies and illustrates the benefit of tapping into extended networks beyond the walls of a single company.
However, simply being open to ideas from outside isn’t enough on its own. The use of prizes can help lure the best thinking out into the open. As the Financial Times noted in December: “inducement prizes have the potential to shine. Supplementing direct grants, patents and simple competitive pressures, they can refresh parts of the innovation system that other incentives cannot reach.”
A multimillion dollar industry has grown up around the idea of prize-giving from the non-profit X Prize Foundation to private companies such as InnoCentive in the US and OmniCompete in the UK.
Vineet Nayar, CEO of HCL Technologies, which has revenues of $3.3bn, and author of Employees First, Customers Second, told me: “Small experiments with ideas could give us rich returns. Crowd-sourcing ideas from the best young brains in the world who have not been ‘brainwashed’ with our current ways is one such experiment.”
Nayar added: “This contest was all about one key tenet of the ‘employees first, customers second’ philosophy we have adopted at HCL: shifting the responsibility for driving change from the traditional custodians – the management – into the hands of the real force behind lasting change – the employees.”
Leadingview at tapestrynetworks.com
The writer is a partner at Tapestry Networks, a professioal services firm.
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