submitting and roughly classifying new ideas (as, for example, product ideas or organizational ideas or process ideas), then inviting community members to review and rank these proposals, along whatever criteria the Induct’s customers think are important. The system comes pre-programmed with a number of innovation types and a unique set of criteria for each type—but as Burns and Johansen demonstrated for me, it’s easy to add new types and new criteria.
The companies Johansen interviewed also said they needed help after the ideation and evaluation stages, when it came time to actually pick ideas that deserved to be commercialized and then get them to market. So the Innovation Community portal also has customizable flowcharts and task lists to help teams stay focused during the implementation part of a project. If a company subscribes to a particular school of quality management—say, Six Sigma—they can easily add in what Burns calls “subroutines” to match their own strategy or process. The software also offers an “Idea Portfolio” or dashboard screen where managers can see how many ideas are being evaluated and developed, and how each is faring.
A key part of Induct’s own business strategy, according to Burns, was to design the tool to appeal to consultants as well as companies. “We understand how to bring out very good software, but we don’t have PhD’s in innovation,” he says. “The way we’d work is we’d go to a partner—a big consulting company or a boutique firm that’s expert in innovation, like a McKinsey, an Accenture, or a Booz Allen—and we’d approach the end user jointly. Then they can go in and determine what’s the right innovation process for a department or a company, and rather than delivering their analysis using three-ring binders and PowerPoints, they can deliver an actual, working innovation management platform.”
Induct hasn’t announced any actual consulting partnerships, but Burns says such relationships are going to be a major part of the company’s distribution strategy—which will save it from having to hire a large direct sales force, the way FAST had to.
But in most other respects, Burns says, Induct is being patterned directly after FAST. That includes its roots in a small team of Norwegian software engineers, its sales strategy (“close some big ‘lighthouse’ accounts in Norway and then leverage those accounts to take it to the U.S. market”), and its financing (all from Norwegian venture capital firms, private-equity firms, and friends and family, although Burns himself has invested as well).
But does Induct have a shot at the same kind of spectacular exit that FAST achieved? It’s too early to tell. “My feeling is that this market for open innovation is at the same stage now that the market for corporate search was at 10 years ago,” says Burns. “It’s gone from the ‘phenomenon’ stage—which means no revenue—to a market that’s in its infancy.” The hope is that Induct will grow to the point that it attracts a suitor. But it might take time—FAST was 11 years old when Microsoft came calling.
And the buyer probably won’t be Microsoft this time. “A large consultancy, an Oracle, an IBM Global Services, and other companies out there might see potential revenue in this type of thing,” Burns says. “But first we’re going to solve the problem of getting this to the point that it has the revenues and market share for someone to be interested in.”
