Reward Programs and Innovation Success

Loyalty programs, just in the retail space have grown exponentially over the last 5 years. Research reports in 2014 showed the average loyalty programs per household in the US was a whopping – 22. So the questions now is, what makes reward programs so popular? Can innovation succeed through such loyalty and reward programs? Looking at the Starbucks, Barnes & Noble’s trend, you would acknowledge innovation, munificence, and a very thorough understanding of customer needs, as the drivers behind their customer loyalty success.

However, does generosity as entities in themselves in form of direct cash backs, discount cards, fancy accessories and luxury getaways drive innovation? Probably not, but make it a systems approach, with one factor driving the other and open the idea to a large target audience, and you might have just hit the sweet spot of innovation and success.

Rewards and loyalty programs stimulate and encourage people to innovate, collaborate, learn and share their expertise on a subject. So understanding when and how to reward your end user is key. In fact, it is the end user who gives several new innovative ideas and as we mentioned in our previous post, Gamification is one such mechanism.

To make rewards and loyalty programs innovative it’s imperative these should be in alignment with the strategic objectives of the firm. Creation of new initiatives to help unlock the current problems or find the next best idea is one example. The selection of an idea based on common criteria and then funding of the idea in order to make it a reality would perhaps work. Another possibility is the formulation of new workshops to brainstorm and conceptualize new ideas. This would help identify top potential with innovation thinking capabilities and allow them to grow with the organisation.

Open innovation has a distinct characteristic that most people innovating or helping here are not money driven if they have a market competitive pay package. They are happier and motivated if they feel valued, recognized and have an opportunity to learn and share knowledge. Our Enterprise innovation suite helps in a unique way here, monitoring all users dynamically and providing analytics on all user and system activity. Creating leaderboards and templates for campaign and loyalty programs helps with recognition, encouraging communication, builds trust and creating an interactive innovation community.

The purpose is to share ideas and solutions openly. This increases the possibility of having disruptive ideas and rethink reward programs. As a consequence employers and contributors are acknowledged at the same time. Rewards and recognition stat from the ideation process, and should be carried over the entire innovation lifecycle all the way to the implementation of idea if it happens. The idea is to garner support and generate the “hype” for participation in future campaigns.

Finally, rewards and recognition together help promote innovation through meaningful contributions. Rewards provide the means and recognition provides the platform for a sustained innovative culture. Such programs send a strong and clear message to customers, employees and the network involved that their contributions valued thereby bringing results for the innovation initiative.

The Role of Open Innovation in Building Smarter Cities

The world has come a long way from a mainly rural and agrarian society just a century ago. Today, over half of the world’s population lives in urban areas. According to the World Health Organization, up to 70% of the world’s population will be living in cities by 2050. If you’re reading this, chances are, you live in a city yourself. Each day you probably face first world issues like poor connectivity, traffic jams, long queues and crowded public spaces. The lesser privileged urban population faces more basic issues like access to food, water, sanitation and living spaces. Our cities and urban population have indeed grown at a rapid pace over the last 50 years or so. Yet even with the major advances in technology during the same period, we have not quite managed to effectively provide for the needs of the large urban population.

The Cities Get Smarter

In order to truly make progress on this front, it is important to understand that cities and urban areas are complex ecosystems that require sustainable development initiatives to provide quality of life to citizens. Over the last decade, with the spread of technology and the encompassing power of the internet, many cities are looking towards technology and innovation to create a modern infrastructure that fuels sustainable economic growth for cities, while ensuring quality of life for residents through wise management of natural resources.

Smart Cities, as they are called, work to create smarter communities that are information rich and interconnected by effectively leveraging technologies such as the ubiquitous smartphone, wearable devices and others, to ensure smooth and efficient functioning. It’s not all futuristic. Some cities have already started exploring these options. A study by IHS Technology reported 21 smart cities in 2013, and the number is expected to quadruple by 2025. The global spending on smart cities is expected to be $40 billion annually by 2016.

Open Innovation: Driving the Growth of Smart Cities

Open and collaborative innovation has emerged as the key driving factor behind the growth of smart cities. As many cities and municipal corporations have found out, a top down, central planning approach to public governance has its limitations. In addition, the increasingly complex landscape of technologies, data, applications and business models that is emerging in a connected world poses a challenge for most city authorities.

Experts believe that a bottom-up, collaborative, people driven, innovation model is better suited to drive technology advances towards smarter cities.

Smart Cities and Collaborative Innovation Across the Globe

Boyd Cohen’s popular list of the top 10 smartest cities on the planet shows a global distribution across the Americas, Europe and Asia. While the American approach towards smart cities has been more focused towards specific, single functional areas like transport and mobility, Europe has been experimenting with leveraging open innovation methodologies in its smart cities initiatives, across all major areas in the public sector.

The Open Cities Project is one such initiative that attempts to bring open innovation into the public sector and governance. It is a 30 month project that will attempt to leverage existing collaborative tools and platforms such as Crowd sourcing, Fiber to Home, Open Sensor Networks and others across 7 major European cities. Future Internet is another European public-private partnership program geared towards fostering innovation, development and adoption of internet enabled technologies and their application for smart infrastructure and business processes. Forbes summarizes how major US cities are leveraging technology to become ‘smarter’.

An Introduction To Innovation

Innovation is a natural tendency of the human mind to thrive on variety, regardless of the activity involved. All the man-made changes that the world has witnessed are a result of this tendency to look for something different. The urge to try something else is a prominent human characteristic. When properly directed, this urge can have results that enhance the quality of an activity. A positive outcome of this urge to be different is called innovation. There is no end to the new ideas in the world, but when these ideas create value, it becomes innovation. Often enough, it is the application of existing knowledge in a different manner that stands out as an innovative idea. Usually, one idea gives birth to the next and new technologies, processes and methods come into being. Being innovative involves a lot of risks. Only a person who is willing to go out on limb is capable of being innovative. Good ideas are of no use unless they are implemented, and implementation in a new way always attracts criticism. It is only by being optimistic in the face of odds that an individual stands a chance of achieving something unique.

At times, innovation is done by taking an existing idea, concept or product and improving upon it. However what is more remarkable is to be able to think beyond what already exists, and coming up with a brand new concept. Mankind has come this far by riding on the benefits of innovative ideas through the ages. It is the problems that people encounter that cause a solution to be sought. Of course there have always been the gifted few who can go beyond the mundane and come up with brilliant visions. Great scientific inventions that we now take for granted are products of the innovative ideas of great minds.