Whom Should Firms Attract to Open Innovation Platforms? The Role of Knowledge Diversity and Motivation
Introduction
As the Internet offers global accessibility and facilitates communication and interaction between contributors for a comparatively low cost, it has become one of the major drivers for new forms of inbound openness (e.g. Afuah, 2003, Verona et al., 2006). Firms are increasingly engaging in ‘crowdsourcing’, i.e. outsourcing the function of idea generation to large groups of external contributors who are often unknown or undefined (Howe, 2008, Kozinets et al., 2008, Surowiecki, 2005). One viable approach for firms using the crowd as a source of innovation is to disclose the innovation-related problems they face via open innovation platforms on the Internet (Jeppesen and Lakhani, 2010, Sawhney et al., 2003). In these virtual environments, external experts or users are invited to contribute to solving predefined innovation challenges. The purpose of this study is to advance the understanding of the individual level factors that explain the performance of volunteers who submit new product or service ideas to open projects on Internet-based platforms. More specifically, we concentrate on the roles of motivation and knowledge as determinants of the quality of such individual contributions.
In terms of motives, prior empirical work has provided descriptive findings on how contributors to open projects and user communities rate the importance of different motivational dimensions (Hars and Ou, 2002, Hertel et al., 2003, Lakhani and Wolf, 2005). Nonetheless some motives, although substantial from the contributors’ perspective, may only be weakly associated with contribution performance (Roberts et al., 2006). This study therefore addresses the question of how extrinsic desire for monetary rewards and intrinsic enjoyment of contributing relate to the quality of contributions that individuals make to innovation challenges that are broadcast on the Internet. With respect to individual knowledge, it has often been proposed that the diverse knowledge held by external actors is a key success factor in crowdsourcing (Kozinets et al., 2008, Rosenkopf and Nerkar, 2001, Stuart and Podolny, 1996), and it is surprising that the existing body of literature offers fairly limited empirical evidence on this notion. We build on the few studies that provide support for the critical role of (marginal) knowledge and investigate how contributors’ knowledge diversity relates to their performance in submitting proposals to open innovation projects (Jeppesen and Lakhani, 2010, Jeppesen and Laursen, 2009). We extend existing empirical evidence about the relationship between individual factors and the innovation-related performance of firm-external problem solvers in four ways. First, while most studies tend to investigate the characteristics of users working in communities on self-selected problems, this research is based on a field study of individuals who react to predefined problem statements broadcast by firms to an unknown and unrestricted audience. The choice of this unique empirical setting (no user-initiated community, mix of users and non-users, predefined innovation challenges) fits with product and service firms’ growing interest in virtual knowledge brokering and broadcast search (Ebner et al., 2009, Pisano and Verganti, 2008). Second, the few studies that seek to explain the performance of voluntary contributors to virtual innovation development projects have concentrated on investigating either motives or knowledge-related variables, while this study addresses and answers the question as to how these factors are interrelated as antecedents to contribution performance. Third, by conducting this study in a competition-like setting, where successful contributors can expect to receive predefined monetary prizes, this research contributes findings to the well-established ‘crowding-out’ theory of the interaction between intrinsic and extrinsic motivation. A large number of experimental studies in organizational psychology have shown that, under certain conditions, extrinsic incentives undermine intrinsic motivation (Osterloh and Frey, 2000), and this field study tests whether this trade-off also pertains in the virtual environment of open innovation platforms. Fourth, most studies investigating the participation levels and the performance of community participants rely on self-reported measures (e.g. Füller, 2006, Hertel et al., 2003, Luthiger and Jungwirth, 2007). To avoid the risk of a common method bias, this research uses different sources of information to measure the model’s exogenous and endogenous variables. Specifically, we conducted a survey to obtain data on respondents’ motivation and knowledge diversity, but collected our data on participants’ contributions to innovation projects via server log file analysis and the content analysis of more than 1,400 of their postings. By coding the contributions according to their novelty for the solution development process and their relevance to the end solution, this study provides rich and differentiated findings on individual contribution performance. Our empirical setting is the online commercial innovation platform Atizo, which was created by a Swiss start-up company, and which operates - in the same way as InnoCentive - as a knowledge broker between firms aiming to broadcast innovation challenges and a group of external contributors posting solution elements to those challenges (Jeppesen and Lakhani, 2010, Verona et al., 2006).
This article starts with a discussion of the study’s conceptual background, after which we derive a research model to examine variables that explain the number and quality of participants’ contributions to predefined innovation challenges. We then test the research model through survey and server data obtained from Atizo, and finally we discuss our empirical findings and describe their practical implications.
Section snippets
Conceptual background: open innovation, crowdsourcing, innovation communities and open innovation platforms
In dynamic and technology-based industries, innovations are rarely generated and commercialized in isolation, even by major players (Chesbrough, 2003, Chesbrough and Appleyard, 2007). Given fundamental technology and business changes (e.g. converging technologies, colliding markets, employee mobility, etc.), maintaining relationships with different types of external contributors seems to be indispensable to staying ahead of the competition (Chesbrough et al., 2006, Dahlander and Wallin, 2006).
Hypotheses
With regard to contributors’ motivations, the focus of this study is on two forces activating their goal-directed behavior – the extrinsic desire for monetary rewards and the intrinsic enjoyment of contributing – while in terms of their abilities, our research investigates knowledge diversity as an asset required to recombine knowledge elements for innovation. In explaining individual contribution performance for the specific innovation platform context, we rely on organizational behavior
Empirical setting: the Atizo innovation platform
The empirical setting of this study is the Atizo innovation platform, which, like InnoCentive, acts as a virtual knowledge broker between firms seeking support to solve innovation challenges, and skilled external contributors willing to contribute to solving those challenges (Jeppesen and Lakhani, 2010, Sawhney et al., 2003, Verona et al., 2006). Founded in late 2007, Atizo now employs nine people: in spring 2010, it acquired 1 million Swiss francs of venture capital to accelerate its
Results
We applied partial least squares (PLS) structural equation analysis (Chin, 1998) to test our model hypotheses. PLS is a variance-based approach that basically conducts a series of ordinary least square regressions in order to reduce the residual variance and to maximize the explained variance of the dependent variables by the independent variables (Chin, 1998, Fornell and Bookstein, 1982). It is particularly appropriate in contexts which feature non-normal distributions or small sample sizes,
Discussion
This study builds on motivational and cognitive theories to examine intrapersonal factors explaining the performance of contributors to open innovation platforms. Drawing on a unique set of data that combines two complementary data sources (survey data of contributors and content analysis of their postings), we investigated what kind of motivational and knowledge attributes might explain participants’ contribution behavior. In terms of intrinsic motivation, several studies on the motives of
Practical implications
Open innovation platforms such as Atizo offer a great opportunity for firms to access valuable knowledge from external actors for the creation of innovations. Within only nine weeks, and with the help of over a hundred frequent posters, Atizo platform participants produced at least one prizewinning solution proposal for each of the ten challenges in our sample. One proposal was even based on a tested and functioning prototype. Our results indicate that organizations aiming to benefit from
Acknowledgements
The authors thank the journal’s editor and its anonymous reviewers for their constructive suggestions.
Karsten Frey is a research associate and Ph.D. candidate at the Institute of Information Systems, Chair of Information Management, at the University of Bern, Switzerland. He graduated in business administration from the University of Lüneburg, Germany and concurrently obtained a Master’s degree in business and economics from the University of Karlstad, Sweden. His research interests focus on factors influencing the success of open innovation communities, and he has published in Creativity and
References (116)
Inequity in social exchange
- et al.
Prediction of goal-directed behavior: attitudes, intentions, and perceived behavioral control
Journal of Experimental Social Psychology
(1986) - et al.
How user innovations become commercial products: a theoretical investigation and case study
Research Policy
(2006) - et al.
The role of justice in organizations: a meta-analysis
Organizational Behavior and Human Decision Processes
(2001) - et al.
How open is innovation?
Research Policy
(2010) - et al.
A man on the inside: unlocking communities as complementary assets
Research Policy
(2006) - et al.
How communities support innovative activities: An exploration of assistance and sharing among end-users
Research Policy
(2003) - et al.
Innovation creation by online basketball communities
Journal of Business Research
(2007) - et al.
The Meaning of Work and the Motivation to Work
Organizational Behavior and Human Performance
(1972) - et al.
Motivation of software developers in open source projects: an internet-based survey of contributors to the Linux Kernel
Research Policy
(2003)
Path-goal theory of leadership: lessons, legacy, and a reformulated theory
The Leadership Quarterly
The role of lead users in knowledge sharing
Research Policy
How open source software works: "free" user-to-user assistance
Research Policy
History of success and current context in problem solving
Cognitive Psychology
Characteristics of innovating users in a consumer goods field: An empirical study of sport-related product consumers
Technovation
User-innovators and "local" information: the case of mountain biking
Research Policy
The nature of lead users and measurement of leading edge status
Research Policy
Open source software development just another case of collective invention?
Research Policy
Redefining firm boundaries in the face of the internet: are firms really shrinking?
Academy of Management Review
What does a theory of creativity require?
Psychological Inquiry
Creativity in Context: Update to the Social Psychology of Creativity
How to kill creativity
Harvard Business Review
Open source software user communities: a study of participation in Linux user groups
Management Science
Users as innovators: a review, critique, and future research directions
Journal of management
Congregate cognitive maps: a unified dynamic theory of organization and strategy
The Journal of Management Studies
Theories of Learning
Comparing alternative conceptualizations of functional diversity in management teams: process and performance effects
Academy of Management Journal
Open Innovation: The New Imperative for Creating and Profiting from Technology
Open innovation and strategy
California Management Review
Open innovation: Researching a new paradigm
A partial least squares latent variable modeling approach for measuring interaction effects: Results from a Monte Carlo simulation study and an electronic-mail emotion/adoption study
Information Systems Research
The partial least squares approach to structural equation modeling
How to write up and report PLS analyses
A coefficient of agreement for nominal scales
Educational and Psychological Measurement
Statistical Power Analysis for the Behavioral Sciences
Absorptive capacity: a new perspective on learning and innovation
Administrative Science Quarterly
Beyond Boredom and Anxiety
FLOSS-US: The Free/Libre/Open Source Software Survey for 2003
Identifying quality, novel, and creative ideas: constructs and scales for idea evaluation
Journal of the Association for Information Systems
Intrinsic motivation, extrinsic reinforcement, and inequity
Journal of Personality and Social Psychology
A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation
Psychological Bulletin
Effects of externally mediated rewards on intrinsic motivation
Journal of Personality and Social Psychology
Community engineering for innovations: the ideas competition as a method to nurture a virtual community for innovations
R & D Management
Two structural equation models: LISREL and PLS applied to consumer exit-voice theory
Journal of Marketing Research
Evaluating structural equation models with unobservable variables and measurement error
Journal of Marketing Research
Finding commercially attractive user innovations: a test of lead-user theory
Journal of Product Innovation Management
Not Just for the Money: An Economic Theory of Personal Motivation
Why consumers engage in virtual new product developments initiated by producers
Advances in Consumer Research
Refining virtual co-creation from a consumer perspective
California management review
Cited by (233)
Idea generation performance in open innovation communities: The role of user interaction
2024, Information and ManagementMonetary rewards and self-selection in design crowdsourcing contests: Managing participation, contribution appropriateness, and winning trade-offs
2023, Technological Forecasting and Social ChangePhysician engagement in online medical teams: A multilevel investigation
2023, Journal of Business ResearchResource and supplier interaction in network innovation governance: The case of innovating at Unilever
2023, Journal of Business Research
Karsten Frey is a research associate and Ph.D. candidate at the Institute of Information Systems, Chair of Information Management, at the University of Bern, Switzerland. He graduated in business administration from the University of Lüneburg, Germany and concurrently obtained a Master’s degree in business and economics from the University of Karlstad, Sweden. His research interests focus on factors influencing the success of open innovation communities, and he has published in Creativity and Innovation Management and presented his research at various conferences. University of Bern, Institute of Information Systems, Engehaldenstrasse 8, CH-3012 Bern, Switzerland. phone: +41 31 631 4785 e-mail: [email protected].
Christian Lüthje heads the Institute of Marketing and Innovation at Hamburg University of Technology (TUHH). Before coming to TUHH in 2008, he was a tenured professor at the University of Marburg, Germany and at the University of Bern, Switzerland. He received his Ph.D. in Business Administration from the Ludwig Maximilian University in Munich. Christian Lüthje specializes in the areas of innovation marketing and customer-oriented product development and has expertise in several industries, particularly in medical technology and sports equipment. He has published in the Journal of Product Innovation Management, Research Policy, R&D Management and International Business Review. Hamburg University of Technology, Institute of Marketing and Innovation, Schwarzenbergstrasse 95, D-21073 Hamburg, Germany. phone: +49 40 42878 4515 e-mail: [email protected].
Simon Haag is a Ph.D. student at the Institute of Information Systems, Chair of Information Management, at the University of Bern. He studied business administration at the University of Bern and at the Stevens Institute of Technology, Hoboken, N.J., U.S.A. His research concentrates on communities as extensions of firms’ internal innovation processes and on project management, and he has presented the results of his studies at various conferences. Besides his research activities, Simon Haag works as a consultant in the areas of strategy development and implementation, innovation management and marketing. University of Bern, Institute of Information Systems, Engehaldenstrasse 8, CH-3012 Bern, Switzerland. phone: +41 31 631 4785 e-mail: [email protected].