Motivating individuals to contribute to firms’ non-pecuniary open innovation goals

Abstract

Open innovation (OI) is an important phenomenon in a global marketplace where knowledge is distributed and individual firms no longer have a monopoly on the best talent. As firms increasingly search for innovative external ideas and solutions, an obvious problem is how to source high-quality contributions externally. A more specific problem is how firms motivate in-bound, non-pecuniary contributions for important activities like customer co-creation, where market-based transactions are not appropriate. A proliferation of papers on OI highlights the need for an integrative review about what motivates individuals to contribute ideas for free, and how firms can use this knowledge to achieve their OI goals. This paper presents a review of the disparate studies on the motivation of individuals to participate in open innovation without immediate monetary gain. We identify 11 distinct individual motivational factors, and find that many initially intrinsic motivations are linked to payoffs for contributors that only accrue with time - something we term ‘delayed-pecuniary motivation’. We use our findings to build a framework that illustrates the importance of this temporal view of OI motivations and we suggest interventions to engage contributors for different kinds of innovation problems.

Introduction

Open innovation (OI) has become a key part of innovation practice for many firms. Inbound approaches like crowdsourcing (using the creativity of crowds to find ideas and solutions) are now used widely (Schemmann et al., 2016). For example, IBM's annual Call For Code Challenge now involves over 400,000 developers across 179 countries (Bowles, 2020). New firms, like NineSigma, are finding a niche as intermediaries by connecting firms with problems to knowledgeable crowds to find novel solutions. In 2016 alone, NineSigma organized innovation contests worth over USD25 million a year (PRNewswire 2016).

Firms increasingly adopt OI approaches because they contribute to performance and competitive advantage. For example, OI has been shown to help firms rapidly reconfigure their resources and capabilities when facing economic disruption (Ahn et al., 2018) or help them gain a competitive edge in dynamic markets like software (Alexy et al., 2016). OI helps achieve these ends because it enables the purposeful flow of knowledge from outside individuals and organizations to create the conditions for superior innovation outcomes, such as new products and services (Chesbrough 2017).

As firms embrace the power of the crowd, an obvious problem is how to motivate individuals to engage meaningfully (Kohler et al., 2011), particularly when firms are not paying for their ideas (i.e. non-pecuniary inbound OI, as per Dahlander and Gann (2010)). For instance, while the low cost of crowdsourcing is appealing as an approach to find new ideas and solutions, firms often achieve lacklustre results because of low engagement, high rates of contributor turnover, and underperforming ideas (Acar 2019; Kavaliova et al., 2016).

Another problem that firms face in soliciting non-pecuniary contributions is that this type of feedback is critical to the co-creation of new products and services. For example, firms struggle to adequately source enough co-creators to help examine the practicality of prototypes or develop product extensions (Chesbrough and Di Minin 2014). They must balance this type of engagement against the free-rider problem of benefitting from innovation without bearing the cost (Tokarchuk et al., 2012). This is an important innovation problem because market-based mechanisms are not appropriate to facilitate such knowledge flows (Chesbrough and Di Minin 2014) and yet they have been proven to be critical to achieving commercialization goals (Harhoff et al., 2003; Henkel et al., 2014).

With firms increasingly adopting inbound non-pecuniary OI to power idea generation, co-creation and commercialization, the need to understand how to motivate individuals to engage in these important activities are properly more pressing than ever. Particularly noteworthy is understanding how to strike a balance between soliciting high-quality contributions while minimizing costs and maximizing chances of longer-term innovation success at the firm level. The latter is especially important for firms who do not have adequate resources to fund a pecuniary OI program. There is also evidence that motivated individuals, especially those with high levels of intrinsic motivation, are more likely to contribute creative solutions to problems (Amabile 1988). Accordingly, this paper seeks to answer the following question: How can firms better motivate non-pecuniary OI contributions?

To address this question, we conduct a systematic literature review and thematic analysis of OI research with a specific lens on individual motivation to develop a comprehensive framework of individuals' motivations in non-pecuniary open innovation. We build on previous reviews that investigated open innovation in general (Randhawa et al., 2016), in specific contexts such as small business (Hossain and Kauranen, 2016), but also more specifically those who examined the process of inbound open innovation (West and Bogers, 2014). Our study finds 11 motivational factors for individuals and offers a framework for OI motivation in this setting. Our analysis leads us to argue that pure altruistic forms of OI are rare. Instead, individuals engage in what we term ‘delayed pecuniary motivation’: initially intrinsic motivations of engagement, which, given enough time, ultimately result in either a direct or indirect economic payoff. We also recognize from the analysis that individuals' motivations change over time. This leads us to suggest strategies for firms to best engage individuals depending on their motivational state, and how different motivational stages can be leveraged to maximize the benefit to the firm depending on the innovation problem they are trying to resolve through the OI process.

The remainder of this paper is structured as follows. We first present the theoretical underpinnings of OI, explaining why firms participate in non-pecuniary open innovation. Then we explore motivational theories that explain why individuals participate, before we describe the methodology and the results of our analysis—a brief synopsis of the 11 motivational factors we found. With these factors, we develop a framework to understand their temporality (linkages to later, pecuniary motivations) and then explore how these motivations and their temporal aspects can be leveraged to help firms solve specific types of OI challenges. We conclude with limitations and future research.