Mapping the Impact of Social Media for Innovation


Facebook, YouTube, Instagram, Wikis, Twitter – Social media (SM) are everywhere. Those websites and applications allow the creation and exchange of user-generated content in a community setting (Kaplan & Haenlein, 2010). The users are not only private people, but also companies are exploring SM as a tool for commercial success. Next to outbound marketing, SM are also applied to enhance business interactions as part of the innovation and product development process (Kenly & Poston, 2011). However, so far new product development (NPD) through social media channels can only be observed anecdotally. Specialized consultancies also jump on the train and offer their services to get a piece of the pie (Accenture Interactive, 2017). But how nourishing is this pie?

The impact of SM on innovation performance was investigated in a study by Roberts, Piller and Lüttgens (2016). The analysis of 186 companies contributed to a better understanding of the dynamics between SM activities and NPD performance. The idea to use SM for innovation and NPD purposes is not novel. However, their study reveals some surprising results:

  • Gathering information from SM channels can lead to higher performance, but only when embedded in complementary, formalized processes. A defined structure and sequence for the flow of activities provides control, helps to reduce uncertainty and mitigates risk.
  • The relationship between SM usage and innovation performance is not entirely positive. An extremely broad application of SM results in a negative performance effect for all kind of innovation projects.
  • The relationship between seeking market-related and technology-related information in the open innovation context is complementary. Leveraging this dependency has a significant positive effect on NPD performance.
  • SM is better suited for gathering need information than for accessing solution information. Depending on the information needed, the explicit SM channels (forums, social networks, blogs, wikis etc.) differ.

These findings imply the positivity of SM for a firm’s innovation performance. But I personally doubt its large-scale effectiveness. After having screened the literature for mentioned best-practice examples, there are enormous differences between companies in how they leverage and exploit benefits of SM usage for innovative efforts. The involvement of customers into new product creations for consumer goods rather resembles the characteristics of a marketing or market research tools. Haribo asked its fan base to vote on new flavors for a special edition during the 2014 soccer world cup. Home-appliances manufacturer Liebherr invited its customers to participate in a fridge-design competition. In contrast to that, I found technology-oriented companies, like NASA, or IBM in collaboration with Topcoder, to give their followers far more influential power by posting demanding challenges. This is surprising, because the study stated SM to be more suitable for gathering needs than (technical) solutions. So, is there a difference between industries concerning the successful integration of SM in NPD? Are technology companies simply more knowledgeable in utilizing SM? Or are their users simply identifying more with the product and thus engaging in NPD processes? The multitude of questions call for a further investigation of the results in relation to different industries and specific firm capabilities in dealing with SM. Hence, up to now how nourishing and likely this cake for businesses and consultancies is, might still be questionable and has to be answered for individual initiatives specifically.

 


References

Accenture Interactive (2017). Social Media: Optimization to Harness Innovation. Retrieved February 15, 2017, from https://www.accenture.com/us-en/insight-social-media-optimization-harness-innovation-summary

Kaplan, A. M., & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business horizons53(1), 59-68.

Kenly, A., & Poston, B. (2011). Social Media and Product Innovation: Early Adopters Reaping Benefits amidst Challenge and Uncertainty. In A Kalypso White Paper. Kalypso.

Roberts, D. L., Piller, F. T., & Lüttgens, D. (2016). Mapping the Impact of Social Media for Innovation: The Role of Social Media in Explaining Innovation Performance in the PDMA Comparative Performance Assessment Study. Journal of Product Innovation Management33(S1), 117-135.

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