Practical strategies for leveraging social media for open innovation
New research examines how social media empowers businesses to unlock innovation potential through open collaboration and crowdsourcing
In today’s fast-paced business environment, innovation is critical. Social media has emerged as a powerful tool for open innovation, enabling firms to tap into external knowledge and engage with stakeholders. Many firms around the world successfully leverage social media for open innovation for tangible business benefit.
For example, LEGO has utilised social media to foster open innovation through its LEGO Ideas platform. This platform invites LEGO enthusiasts worldwide to submit their own designs for new LEGO sets. Once submitted, these designs are shared on the platform, where community members can vote for their favourites. When a design receives 10,000 votes, it becomes eligible for review by the LEGO Review Board, which assesses the feasibility of turning the idea into an official LEGO product. Social media plays a crucial role in this process. LEGO uses platforms such as Facebook, Twitter, and Instagram to promote new submissions and encourage the community to participate in voting and discussion. These platforms are leveraged to create buzz around promising ideas, share updates, and highlight successful projects.
The benefits of LEGO’s use of social media in the process are manifold. First, it enables LEGO to tap into a vast pool of creativity and enthusiasm from its global fan base. By sourcing ideas directly from their customers, LEGO ensures that new products resonate with market demand. Additionally, this crowdsourcing strategy significantly reduces the cost and risk associated with traditional R&D. Successful products like the LEGO Women of NASA, the LEGO Ghostbusters Ecto-1, and the LEGO Ship in a Bottle originated from fan submissions, demonstrating the power of leveraging user-generated content for innovation. Furthermore, the recognition and rewards given to contributors foster a sense of ownership and loyalty among fans, strengthening LEGO’s community and brand loyalty.
“LEGO is a great example of open innovation,” said Emmanuel Josserand, Professor of Management at UNSW Business School. “They use the insight from their customers to build the products their customers want. But they don’t do it by testing designs that have been conceived by their team in Denmark. They just ask their customers to ideate for them.”
While this might seem simple, Prof. Josserand said that for many companies (especially the most secretive ones) it is still a challenge – and a radical shift to open their gates to their clients, their suppliers or even their competitors. “To do so, social media based platforms are essential, as they open a unique space of communication with stakeholders,” he said.
The transformative potential of social media in innovation
The LEGO Ideas platform is a case in point of recent research conducted by Prof. Josserand together with Pierre-Jean Barlatier, Associate Professor at EDHEC Business School, Jan Hohberger, Associate Professor at ESADE Business School, and Anne-Laure Mention, Professor at RMIT University. In their paper, Configurations of social media-enabled strategies for open innovation, firm performance, and their barriers to adoption, published in the Journal of Product Innovation Management, the researchers presented practical strategies for open innovation through social media.
Based on a comprehensive study of 337 firms across eight countries, the research methodology involved a configurational analysis, examining how social media activities, organisational innovation seekers, and potential innovation providers interact across different stages of the innovation process. “It all started with discussions we were having with executive teams globally when discussing innovation,” said Prof. Josserand.
“We felt that many executives had the intuition that social media could really contribute to innovation, in a way that could radically change the way we could innovate. But at the time, and I think it is still the case now, they really didn’t know how to approach it in practice. So, we decided to study what was happening in different sectors and countries, and to create a study that would help us define best practices. We knew that social media had an incredible potential for open innovation and we really wanted to help businesses unleash this potential.”
One of the key research findings was that businesses often struggle with the effective adoption of social media for innovation due to several barriers. Organisational barriers such as misalignment of internal policies and a lack of recognition of the value provided by social media are common. Behavioural barriers like a lack of training and perceived time consumption also hinder effective use of social media. The research observed that “firms recognise the need to be active on social media but struggle to do so effectively in a way that contributes to business performance.”
Technological barriers, including difficulties in identifying the right tools and extracting relevant information, further complicate the process. Intellectual property and privacy concerns also pose significant challenges, particularly fears of information leaks and imitation. “A culture of secrecy is the biggest barrier to open innovation, and that is why many companies are still not very good at it,” said Prof. Josserand.
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“Some executives just don’t see it, but the early adopters do. When that happens, the potential is staggering. All of a sudden, your company becomes the centre of their ecosystem, bringing together all stakeholders into an innovative melting pot. That can create a pathway for them to become the architects of ecosystem innovation and to lead the next wave of disruption.”
Strategic approaches to overcoming barriers
Addressing these barriers requires a nuanced approach. The study identified four distinct strategies for social media-enabled open innovation: marketing semi-open innovators, cross-department semi-open innovators, cross-department full-process semi-open innovators, and broad adopters open innovators. Each strategy has its own set of trade-offs regarding investment requirements, adoption barriers, and performance outcomes.
Marketing semi-open innovators focus primarily on using social media within the marketing department, leveraging direct exchanges with clients and information broadcasting to generate ideas and support commercialisation efforts. This approach is easier to adopt but offers limited performance benefits. Cross-department semi-open innovators expand social media use across multiple departments, including R&D and sales. This broader approach enhances idea generation and collaboration but requires more extensive coordination and resource allocation.
Cross-department full-process semi-open innovators integrate social media into all stages of the innovation process, from idea generation to commercialisation. This comprehensive strategy yields higher innovation outcomes but demands significant investment in technology and training. Broad adopters open innovators embrace social media extensively across all departments and stages of innovation.
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While this approach offers the highest performance benefits, it also faces the greatest barriers to adoption, requiring substantial resources and a robust strategy to manage diverse inputs and ensure effective communication. The study found that “selective approaches, along with greater adoption leading to greater benefits, are shown to be more rewarding than a middle way that spreads things too thin.”
“In a nutshell, you don’t want to get stuck in the middle. If you company is not ready, you should then limit your social media use to classic communication use,” said Prof. Josserand. “Post things, enrol influencers and limit your scope to shaping your social media image. If the executive team is ready to adopt social media enabled innovation, it has to be a real commitment. It might be that you have to change the culture to allow for the type of communication openness that is required.”
How social media drives innovation in GE Garages project
A practical example of this can be found at General Electric (GE), which has strategically utilised social media to engage a broader audience for its innovation initiatives. One notable example is the GE Garages project, which combines physical workshops with social media outreach to promote advanced manufacturing techniques and tools. GE Garages events are held in various locations and feature hands-on experiences with technologies like 3D printing, laser cutting, and CNC milling.
GE leverages social media platforms such as Facebook, Twitter, LinkedIn, and YouTube to promote these events, share content, and engage with participants. For instance, Facebook and Twitter are used to announce upcoming workshops, provide live updates, and engage with followers through Q&A sessions and discussions. LinkedIn is utilised to connect with professionals and industry experts, facilitating networking and collaboration. YouTube plays a critical role in sharing video content from the workshops, including tutorials, success stories, and highlights of innovative projects.
By integrating social media into the GE Garages project, GE significantly broadens its reach, attracting a diverse audience that includes students, entrepreneurs, and hobbyists. The interactive nature of social media allows GE to create a collaborative community around its innovation efforts. Participants are also encouraged to share their experiences online, using dedicated hashtags and participating in livestreams, which helps to amplify the project’s impact and reach.
The benefits of using social media in this context are substantial. Social media platforms help GE to gather fresh ideas and feedback on new technologies, providing valuable insights that can drive innovation. This engagement also enhances GE’s brand image as a leader in advanced manufacturing and innovation. By fostering a sense of community and collaboration, GE Garages not only inspires the next generation of innovators but also strengthens GE’s connections with potential customers, partners, and thought leaders in the industry.
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“In the case of GE, it is really about creating a community of practice that places the company and its brand at the heart of an innovative ecosystem. So, when we think about LEGO and GE, we can see the breadth of possibilities,” said Prof. Josserand. In both cases he said there is a radical openness, and a desire to position the company at the centre of the knowledge exchanges that are necessary for open innovation.
“Some companies will do that mainly with customers, as in the case of LEGO, while others will engage a broader ensemble of stakeholders, as in the case of GE. It is also possible to combine both, work on the future products with clients and engage in the future of technologies with suppliers and competitors. While collaboration and co-opetition are not new, social media has brought it to the next level,” he said.
Key takeaways for business professionals
There are a number of important implications and insights for business professionals in the research when it comes to aligning social media strategies with organisational competencies and strategic intent. Selective approaches that focus on specific stages of the innovation process can be more effective than a broad, unfocused strategy. Managers should also prioritise internal alignment and training to overcome organisational and behavioural barriers. “Managers are encouraged to contemplate their organisational competencies, capabilities, and their strategic intent when drafting social media strategies for open innovation,” the researchers state in the paper.
Firms should also consider starting with a pilot project to test the waters of social media-driven innovation. This can help identify potential hurdles and opportunities without committing extensive resources upfront. By beginning with a focused approach, such as using social media for idea generation or customer feedback, firms can gradually expand their efforts based on initial successes and learnings.
Additionally, it is essential for companies to foster a culture that supports innovation and collaboration. This involves training employees on the effective use of social media tools and creating an environment where ideas can be freely shared and developed. Firms must also establish clear guidelines and policies to manage social media activities, ensuring that they align with overall business goals and maintain data security and privacy standards.
Another practical takeaway is the need for cross-functional teams. By involving various departments in the innovation process, firms can leverage diverse perspectives and expertise, leading to more robust and innovative solutions. The study indicates that firms with cross-departmental collaboration see higher performance benefits from their social media initiatives.
Finally, companies should continuously monitor and evaluate their social media strategies. This involves tracking key performance indicators (KPIs) related to innovation outcomes, economic benefits, and communication improvements. Regular assessments allow firms to adjust their strategies based on what is working and what is not, ensuring that social media efforts remain aligned with business objectives.
“Our research shows that there is still an untapped potential for innovation through social media. It also demonstrates, and even if we know it, it is easy to forget, that tech is far from being a panacea. The most important is the clarity of the strategic intent and the care taken to align the strategy and the culture. It might take time to reach the level of openness of LEGO or GE, but it is worth it,” Prof. Josserand concluded.
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Four steps to driving open innovation through social media
- Resource allocation: Firms should align their social media strategies with their resource capabilities. For example, marketing-focused strategies may require less investment compared to full-process or broad adoption strategies.
- Strategic alignment: Aligning social media-enabled innovation strategies with overall business goals is crucial. Firms should ensure that their innovation activities support their strategic objectives.
- Customised approach: There is no one-size-fits-all strategy. Firms need to tailor their social media use to their specific needs and capabilities, considering the trade-offs between ease of adoption and potential performance benefits.
- Continuous evaluation: Regularly assessing the impact of social media strategies on innovation performance helps firms make necessary adjustments and optimise their approach.