Prizes can spur all types of innovation and R&D, and the use of prize challenges to accelerate R&D is experiencing a boom. Many organizations and governments around the world are launching prizes to accelerate R&D, and it’s a tool used by the likes of Forbes, Coca-Cola, Toyota, NBC, Facebook, Shell, NextEra Energy, and NASA, to just name a few. While these major companies have teams of people to handle such activities, we thought we’d break down for everyone else the key elements of how to organise a successful prize challenge.
There are a growing number of organizations that can help you design and operate your prize challenge, such as HeroX. Though with the best will in the world, the platform(s) you talk to might offer solutions and a challenge format that suits them better than they suit you. Our aim for this article is to help you with some preparation before you start talking with them.
Prize challenges really are amazingly flexible and can bring benefits to a wide range of users. We’ve seen prize competitions range from generating ideas (e.g. on new products or services an organization can offer) to algorithms (e.g. for insurance companies updating their actuary tables), creative solutions (such as new commercials for consumer products or new company logos) to prizes for developing new technology (e.g. new manufacturing techniques or totally new products), plus many more categories.
A prize challenge structure: be ambitious though realistic
Many believe it is the only research tool where you can expect the unexpected. Prize challenges harness the knowledge and intellect of some great minds that exist outside any company’s formal research and development structure. Non-specialists have freedom to challenge industry conventions, and they can take risks with the solutions they offer because they don’t have an industry-related reputation or credibility to maintain, or a company salary to justify by being ‘reasonable.’
Be sure to define the challenge you are facing, not the solution you hope to receive. Leave it up to the participants to determine the solution they want to offer. At the same time, though, set clear and correct objectives at the start of the process so that you have firm foundations to shore up the later decision-making about which solution(s) to select. This way, however surprised you may be at what comes back from your prize challenge, you will be able to assess them against a pre-planned framework.
Or maybe you are assembling a judging panel to remove any personal biases from the process. Ensure everyone knows who will judge the solutions that are submitted.
Yet a successful prize challenge is one that does look possible to resolve. Trying to find an answer to an issue that has dogged your industry sector for years is unlikely to work. A successful prize challenge is one that sparks a response because it looks achievable. This may involve breaking down a large challenge in to smaller parts, each with their own prizes to incentivise involvement. This is also a very good approach if different parts of a prize challenge are particularly relevant to different types of people.
Make it worthwhile for people to compete for realistic prize(s). What are you offering them as incentives? They will be using their own time, and maybe other resources if you want to see some sort of a basic prototype or a functioning MVP (minimum viable product). Is a prize purse enough, or maybe one’s not even necessary at all? How about offering an investment in their company? Or a job with your company? Or testing in your labs?
Allow enough time consistent with the deliverables you have set. Ideas are quicker to submit than a prototype or an MVP. Though don’t allow so much time that people will delay a decision to take part and be involved. In that time, another prize challenge may catch their eye.
Don’t be shy about your prize challenge
Promotion is a huge component and a key element of ensuring the success of your crowdsourcing project. Even if it’s focused on an issue that millions of people care about, you likely won’t receive any practical submissions if no one has heard about it. Consider all and any of the following:
- Use social media advertising.
- Email relevant online publications and post on large online forum communities such as Reddit.
- When it’s allowed, attend in-person events: meeting people face-to-face to talk about your challenge is a great way to recruit potential innovators.
- Build a community if you might run a series of challenges, and be sure to keep them engaged: don’t just recruit them and forget about them until you want something.
- Host a webinar, and allow attendees to ask questions at the end in case there’s anything that is still unclear. You can post these questions into an FAQ section of your online challenge.
Choose the right crowd(s)
Internal challenges are great for breaking down silos, fostering collaboration, building new communities with an organization, and bringing in new ideas from other departments. Effective prizes could be anything exclusive though without (much of) a price tag: dinner with the CEO at their home, or the use of their car for a weekend sounds one up on simply offering a mention in the company newsletter.
External challenges, on the other hand, are great for augmenting the efforts of an R&D team by bringing in experience from specialist areas you do not have internally. NASA targeted origami experts for a challenge to design a foldaway radiation shield. Many of the prize challenge platforms have networks of highly qualified experts in all sorts of industry sectors who relish a challenge that involves them in something outside of their regular “day job” role.
A prize challenge can spur solutions from people with different cultural, religious and social backgrounds to those employed by a company. Do you want to restrict it to, for example, students, or startup entrepreneurs, or people in only certain countries (perhaps for Intellectual Property reasons)? It’s even a way to get ideas from people that a company would never dream – or dare – of employing!
An open innovation challenge is an opportunity, and a means, to arrive at significant innovative breakthroughs, rather than incremental improvements to an existing status quo. So go for a 10x rather than a +10% solution.