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Business Report

Harvesting Business Ideas from Inside and Out

Medtronic taps social networking and crowdsourcing to find innovation in unexpected places.

Medtronic, the world’s largest medical-device maker, has created devices to stimulate the brain and the heart, pump drugs, monitor blood sugar, repair valves, and stabilize the spine. The company needs a constant influx of new ideas to improve its products, and these ideas traditionally come from physicians.

Mike Hess, Medtronic’s vice president of innovative excellence.

To hone these ideas, Medtronic increasingly employs social-networking technologies within the company and also solicits solutions from inventors around the world. “We are now trying to use new technologies to tap sources of ideas outside of the regular landscape,” says Mike Hess, the company’s vice president of innovative excellence.

The underpinning for Medtronic’s internal social-networking platform is Microsoft’s SharePoint software, a tool that helps users set up websites and manage documents. “But we’ve made it more usable and social,” says Hess.

Materials scientists and engineers working in different states and countries—the company employs about 5,000 scientists and engineers in R&D across the globe—pose questions to one another and find out if another group has already grappled with a particular problem, he says.

The company has developed community pages centered on specific topics, similar to fan pages on Facebook. “When new people come into the organization or a project area, they have some knowledge to tap into,” he says. “For example, we use lots of materials in different medical products that have different characteristics. We are using social networking to make information about those materials more systematic.”  Hess declined to provide examples of resulting product innovations.

“Companies tend to specialize, focusing people with specific expertise together, and that can create silos of information,” says Henry Chesbrough, faculty director of the Garwood Center for Corporate Innovation at the Haas School of Business at the University of California, Berkeley. “By opening up inside a company, you increase the flow of knowledge from one area to another. Medtronic began in cardiac pacemakers, but they are now developing devices that work in the brain. Lots of things learned in the cardiac division might be beneficial in the nervous system.”

Chesbrough adds that wiki-like and social-networking tools are slowly changing the hierarchy within organizations. “In traditional companies, knowledge is hoarded and protected within a particular group as a source of power within that organization,” he says. But with these tools, “everyone is an equal. It deconstructs the natural organizational hierarchy to a more level playing field.”

To tap expertise outside the company, Medtronic uses a tool called Innocentive, an open innovation network in which companies anonymously outline specific challenges or technical problems they want to solve. People around the world then submit bids, and the company can decide whether it wants to option the proffered technology.

Medtronic has been using the innovation platform for about a year and half. “We have several thousands of people involved, from Siberia, Africa, and Eastern Europe—places where we don’t have a substantial interaction with the technical community,” says Hess. “It’s an invigorating process to see ideas coming in from people outside the medical-device community and in other parts of the world.”

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The world’s most innovative companies are using technology to move faster and more decisively than their competitors. They are mining data on their operations and their customers, letting their employees do inexpensive experiments, and using business software to get sprawling organizations working together. We’ll explore the industries that are most in need of fast innovation and examine new ways of doing business, with case studies and interviews from around the world.

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