Open Innovation & Crowdsourcing Flashcards

Which governance structure is most critical for a successful open innovation consortium among competitors?

Answer: Clear IP ownership agreements, contribution rules, and antitrust safeguards established before launch

Consortia among competitors require robust pre-agreed governance covering IP rights, contribution expectations, and compliance with antitrust law to function effectively.

What is the 'broadcast search' approach in open innovation?

Answer: Posting a problem widely to attract solutions from an undefined, large audience

Broadcast search, studied by Lakhani et al., involves posting a problem to a large, diverse audience to leverage the probability that someone outside the firm has already solved it.

In measuring open innovation ROI, which indicator best captures the value of externally sourced ideas that were commercialized?

Answer: Revenue or cost savings attributable to externally sourced innovations

Tracking revenue generated or costs saved from externally sourced and commercialized innovations directly measures the business impact of the open innovation investment.

A company uses a prediction market internally to forecast which of several innovations will succeed. What is the key advantage of this approach?

Answer: It aggregates distributed knowledge from across the organization into a probabilistic forecast

Prediction markets leverage the wisdom of crowds within an organization to surface dispersed knowledge and produce probability-weighted forecasts superior to individual expert judgment alone.

Which of the following scenarios illustrates 'coupled open innovation' most accurately?

Answer: Two competing firms form a joint venture to develop a shared technology standard

Coupled open innovation involves bidirectional collaboration—such as a joint venture—where both inbound and outbound knowledge flows occur between partnering organizations.

When designing a crowdsourcing challenge, why is it important to clearly define 'evaluation criteria' before launching?

Answer: To ensure submissions are aligned with organizational needs and can be objectively assessed

Pre-defined evaluation criteria align solver efforts with organizational goals and enable fair, objective assessment, reducing bias and increasing the likelihood of finding actionable solutions.

Which of the following best describes the role of 'lead users' in open innovation?

Answer: Advanced users who face needs ahead of the market and often develop their own solutions

Lead users, a concept from Eric von Hippel, are at the leading edge of market trends and develop innovations to solve their own problems, making them valuable co-innovators.