CEO of InnoCentive Dwayne Spradlin’s model for inducing “solvers” around the world to work on your problems

Question: How does an open innovation company work with its partners?

Dwayne Spradlin: What InnoCentive does is we’ve got a network today of almost 180,000, what we call solvers from around the world, 200 plus countries, 60% of them have masters and PhDs. They have backgrounds in everything from aerospace engineering to civil engineering, chemists to doctors. And they’re available to work in problems.

To answer your question, in our style of innovation, it’s not about managing the workforce, we do that via the model we engage in for the enterprise. So, if the enterprise has been able to identify effectively that it needs a new kind of a material for a product it wants to take the market, and it’s been unable to develop that material, what it will do is it will work with InnoCentive, or another party, and develop what we call a problem statement.

That problem statement is a well-defined need and success criterion coupled with an inducement, call it a prize. So for $50,000 if anybody in the world can solve this problem for me, for $50,000, I’ll take that intellectual property and gladly pay you the prize. This is a really important model because what it changes the question from how do you manage your global workforce of smart, intelligent, creative people to, how do I get everybody in the world who’s capable, ready, willing and able to work in this kind of a problem going to work in a problem for me. And I really only want to pay for success.

So this prize-based or inducement-based model turns out to be incredibly powerful.

Recorded on: June 3, 2009.