- What are competitions and prizes?
- How do competitions and prizes assist the innovation process?
- What do competitions and prizes involve?
- Common problems
- Desirable competition/prize features
- Further reading
An innovation competition or prize (also called a ‘point solution prize’) incites innovation by rewarding and honouring the person or group that develops a superior innovation in response to a given challenge. Empowering Change: Fostering Innovation in the Australian Public Service highlighted the competition or prize mechanism as an effective way for agencies to generate targeted solutions for particular problems they are facing.
In public sector innovation, the use of competitions and prizes to generate solutions are increasingly commonplace, due to a number of factors including the recognition of the need to tap into broader bodies of knowledge and the rise of technologies that make communicating and harnessing a 'solver' community easier and cheaper than previously. Perhaps the most compelling reason for the proliferation of competitions is that well designed/implemented prizes have been found to be effective in generating solutions for a number of problems.
The competition and prize mechanism works primarily (though not exclusively) at the front end of the innovation cycle. The generation and selection of ideas are key elements in the innovation process and the use of competitions and prizes can assist organisations in tapping into the creative potential of their staff and stakeholders to generate solutions. Effectively run, competitions and prizes help organisations to hone and filter ideas, so that the ideas which make it through to final selection have been rigorously assessed, mitigating the potential risk to an organisation. Crucially, competitions can also operate in the diffusion stage of the cycle, allowing a wider audience to share and discuss ideas and potentially improving them.
The following identifies how competitions and prizes can assist the innovation process.
- Idea generation (finding, adapting or creating the ideas) - Competitions can provide strong encouragement to put forward ideas and can help in the process of refining and iterating those ideas by allowing others to share their perspectives and input
- Idea selection (picking which ideas to use) - By subjecting ideas to competitive assessment, ideas are tested across equal parameters, allowing easier identification of those which will more effectively meet the desired goal
- Idea diffusion (spreading the ideas and the insights about them) - By recording the ideas and the resulting action other areas facing a similar or parallel issue may be better able to see potential solutions.
Operationally, competitions and prizes are closely related to ideas management systems, and for organisations looking to implement a competitive innovation process in a systematic way, they should consider this within their broader ideas management approach.
Innovation competitions can take a range of forms but in the public sector experience they have been typically organized as competitions in which participants are asked to solve a specific technological or operational challenge or meet targets before a deadline.
A prize sponsor may be an individual, a private organization, a government agency, or some combination of them. The prize participants or entrants can be organized as teams and may include internal staff or external stakeholders, companies, universities, or entrepreneurs.
One approach which can be effective for technical and scientific innovation, is to partner with a local university and invite students to submit solutions. This has the benefit of tapping into the creative expertise of young people as well as the possibility of identifying potential future employees. At the same time, you give university students the opportunity to work on real-world problems and get real-world feedback on their suggestions.
Another option open to agencies for filtering ideas is to use an innovation tournament. Because there are many ideas and only some of them are going to be appropriate, effective and feasible, one of the most valuable tools an agency can have is a means to filter and select ideas. In an innovation tournament, a mass of ideas is progressively filtered via a series of competitions to narrow down the potential opportunities. It is a means of trying to select the best ideas with the most potential.
Competitions have been used extensively in the public procurement environment, where the US Government in particular has utilised the competition/prize mechanism to spur technological achievement in its defence acquisition. More broadly, it can be used by organisations to procure solutions where the desired outcome can be clearly articulated and where the agency is comfortable with a more open-ended process than traditional procurements.
Innovation Competitions can involve:
- A means for soliciting ideas
- A means for capturing ideas
- A means for signalling key organisational priority areas
- Tools that allow people to build on submitted ideas
- Transparent mechanisms for idea selection
- Recognition of all those involved, not just the winners
The available evidence suggests that the competition/prize mechanism works best for opportunities or potential solutions, where contributors are invited to submit new ideas about how to tackle specific problems.
A focus on opportunities can bring to light new ideas that may tackle underlying problems or issues, but runs the risk that it may also bring to light ideas that are out of scope.
The following are some of the potential problems you should consider when thinking about introducing innovation competitions/prizes into your organisation.
- Parameters – it is not clear what limits and constraints the process is operating under. This can lead to unrealistic expectations about the range ideas to be considered or in scope. Equally, too narrow a focus may mean that potentially valuable ideas go unheard
- Filtering – the process does not assist filtering of ideas. No matter how good the ideas put forward, no organisation will have enough resources to implement every good idea – it needs to pick which are the best for it
- Selection and implementation – following on from filtering, the system should link to a decision-making process for choosing which ideas will be implemented. A risk is that a system is set up with no clear process for how ideas will be considered, how ideas that will be implemented will be chosen, or how the implementation of those ideas links into decisions about resources
- Low-participation – the process receives too few ideas or does not generate sufficient involvement. This may be due to a number of factors such as a lack of clarity about the process, or the extrinsic motivator is too low or high
- Management input - competitions give management much reduced input into the innovation process as the development of the solutions are left primarily to the participants. Whilst this is one of the primary advantages of competitions (the generation new solutions and processes that the agency may never have expected or conceived on its own), it could also risks signalling a loss of confidence in existing management and organisational capability.
The following features may assist in the running of an effective prize/competition.
- Definition - Defining the challenge in an accessible and engaging way is crucial to ensuring participant buy in
- Suitability of reward - Setting a prize reward must be balanced in a way that spurs competition and not long term disengagement
- Transparency - Simple and transparent competition rules
- Collaboration - By having a transparent forum, participants can see solutions that have been put forward that might have relevance to them and allow them to collaborate on ideas where there is a common problem or situation and to improve the ideas being put forward
- Strategic fit - The competition or prize must fit with the overall organisational goals
- Visibility - The announcement of winners must be a tangible sign of high level support for the process
- Mandate - A competition must contain an explicit purpose and clear high-level support.
- Inducement Prizes and Innovation Working Paper – a working paper by Liam Brunt, Josh Lerner and Tom Nicholas discussing the effect of prizes on innovation
- Memorandum for the Heads of Executive Departments and Agencies Executive Office of the President, Office of Management and Budget – a high level memorandum by Jeffrey Ziems providing guidance on the use of challenges and prizes to promote open government
- And the Winner is… Capturing the promise of philanthropic prizes – a research paper by McKinsey and Company looking at the use of prizes for social benefit.