There’s been much attention recently given to social networking and collaboration as it applies to the business process of innovation. It’s fueled by a growing crop of companies that are adopting a more open innovation model and inviting their communities of customers, partners and employees to participate in the process of sharing ideas, discussing them and voting on their favorites.

The potential benefits to a company can be huge:

• Greater alignment with customers
• Faster product development cycles
• Reduced R&D costs

Dell’s Ideastorm and Starbuck’s “My Starbucks Idea” are two well-publicized examples of online customer communities designed to foster collaboration around new product ideas. Both of these brands have successfully grown web sites with hundreds of thousands of participants and ideas. So, when given the platform to speak up, people are more than willing to participate.

Sounds like a windfall, right? Build a community site and poof you’re the next great innovative company…not so fast…

Social networking alone isn’t innovation management. Ideation is an important step, but it is just the front-end of the innovation funnel. This growing trend of online idea sharing is exciting but it’s raising some questions into how to best apply the valuable (but unstructured) input from customer communities and social networks into the complex product development process:

• Are the most popular ideas the most lucrative ones for the company to pursue?
• If misapplied, can the wisdom of crowds actually lead an organization to the wrong decision?
• Does the input from the community site replace traditional R&D?
• How can internal product teams effectively connect the ideas and feedback from the community to the other downstream steps of the product planning and development process?

Here’s a recent article that highlights some of the challenges:
http://www.innovationtools.com/Articles/EnterpriseDetails.asp?a=332

Our opinion: Whereas the focus recently has been on the creation of customer communities, we believe the focus now will naturally shift to solving the bigger challenge of how to best manage this new channel of customer input and apply it to the internal process of developing new products. The companies that get this right will be the ones that realize the greatest financial benefits.

What’s your opinion? Post a comment and let us know your thoughts.