Risks
For iQube to be a success, certain risks have to be taken into consideration and mitigated. As an organization that promotes innovation and socio-economic development in emerging economies through the engagement of youth through an innovation contest, the following are identified as risk factors: Access to finance (high-risk profile); Lack of non-financial support; Language and uniform regulations (recognized and regulated differently across countries); Managing intellectual property issues and other legal risks; Establishing an efficient internal structure; and Processing ideas efficiently.
1. Access to finance ' iQube is an organization that influences socio-economic development in emerging countries through thematic innovation contests which will be hosted in several countries. However, in order to achieve these objectives, iQube requires adequate funds to facilitate innovations and inventions. Just like any other social enterprise a high risk factor that poses as a major challenge is the difficulty in finding sufficient, appropriate and continuous funding. Unlike, a conventional business that can use its balance sheet and business plan to offer different combinations of risk and return to many different types of investors: equity investors, banks, bond funds, venture capitalists, and so on (Bugg-Levine et al, 2012). iQube faces the risk of over dependency on donors which might lead a tendency to shift the objectives of the organisation to match donor priorities.
2. Non-financial support: 'Non-financial support to social enterprises may include support in human resources, assistance with finance, management, systems and processes, routes to market, R&D, governance, legal issues, strategic advice and business planning, business model development and technical development' (Whitley, Darko and Howells, 2013). Since the organisation intends to extend its operation to global emerging economies, it would be highly cost intensive to set up operation points in all the regions. However, to operate smoothly and effectively, iQube requires support networks and infrastructure for suitable business development services.
3. Language and regulations (recognized and regulated differently across countries): The six official languages spoken across emerging countries include Arabic, English, French, Portuguese, Spanish and Swahili. Also laws and regulations for operating as a social enterprise are recognised and regulated differently across countries. iQube is proposing to host an innovation competition that will comprise of several emerging countries as a result barrier in language and uniformity in regulations would be difficult risk factors that need to be considered and mitigated. Therefore, iQube will require a sound-proof value system such that even if operations need to adapt to the constraints of certain countries, the core values of the organization remain intact.
4. Managing intellectual property issues and other legal risks:
One of the most complex and problematic risk factor for iQube is managing intellectual property. Contestants would be required to provide enough information to facilitate the iQube's understanding of the idea and its value while protecting key information vital to a successful patent. However, there is a high potential for dispute over intellectual property especially when the development of innovations is submitted by several contestants. Also there is a legal risk which is the potential for future disputes over the ownership of submitted intellectual property, especially if the received intellectual property is very similar to an existing research.
5. Establishing an efficient internal structure:
'Organisations can't merely launch an innovation completion and expect great ideas to start making their way up the product development pipeline' (Dyck, 2015). Without an internal structure in place, there would be no organized mechanism for accepting and acting upon solicited and/or unsolicited submissions, let alone monitoring the program and benchmarking performance. An innovation competition with a strong internal structure is one that: effectively solicits ideas; reviews ideas in a timely manner; makes decisions whether or not to pursue the submission just as efficiently; and communicates regularly with the contestants on the status of the submission.
6. Processing ideas efficiently: One measure of open innovation success is the quantity of ideas submitted. However, this success creates a big challenge when the sheer volume of ideas hinders the process of reviewing and making decisions in a timely manner. Without a strategy, disorganization can easily ensue and lead many receiving companies to set aside or completely abandon open innovation efforts.
7. Implementation and use of technology
The risks involved in operating as a knowledge sharing platform can be categorized into two in terms of the process involved in implementing the platform; and the process of adopting and use of the platform. (Benoit et al, 2011) (in Ruzic-Dimtrijivic, 2016). iQube's knowledge sharing platform is faced with risks such as: unauthorized learning, unauthorized sharing of sensitive knowledge, unauthorized use of knowledge asset, manipulation of knowledge asset and appropriation of knowledge asset
Mitigation Plans
After considering the various risk factors that pose as challenges to the success of iQube, it is also important to develop mitigation plans to reduce the effects of such risks.
1. To reduce the over dependence of iQube on donors for financial and non-financial support, it is necessary to consider strategic partnership with organizations to provide seed funding to innovative youths.
2. Having positioned to included global emerging economies, the online platform to collecting entries for the innovation competition and competition must be developed to meet lingual and regulatory criteria. The platform should be developed to have translators for the six official languages. Also a comprehensive study of the business laws and regulations of the proposed country will serve as guide in setting up the competition in such countries in order to reduce the risk of not adhering to regulations.
3. 'The fact that organisations needs enough information to make a decision on innovations, inventions and ideas submitted, while being cognizant of legal and confidentiality issues is a real issue' (Dyck, 2015). With this in mind, it's vital for iQube to design the competition platform to accept the proper information. The key to success is controlling the amount and type of information submitted to lessen the contestant's fears and limit iQube's litigation risk.
4. Automating the iQube competition platform would help prevent downstream litigation, control the costs and reduce potential liabilities by guiding contestants on what to disclose; what not to disclose; how to disclose information; and documenting the history of communications between contestants and iQube.
5. An efficient internal structure would provide a formal and uniform method to submit entries whilst ensuring that all entries start on equal footing within an organization (Dyck, 2015). The competition portal should be able to provide a broad array of information on the innovation competition and how it works. It should also discourage individuals from submitting confidential information through uncontrolled communications vehicles, such as emails, casually at trade conferences or directly via the Contact Us web page on the company's website, all of which may inadvertently expose iQube to legal risks.
6. iQube internal structure should also involve establishing and enforcing company procedures throughout the stages of the innovation competition. The process should establish pre-requisites for the contestants, such as technology focus (i.e., having a patent or patent-pending on a technology), or the acceptance of the receiving company's legal terms and conditions. According to E-Zassi (a leading provider of Open Innovation software that expands the reach of ideation initiatives while protecting the company's intellectual property rights), organisers of innovation competitions should use structured questions and answers to control the submitted content along with a business decision support format with automated comparative and analytical functions to guide decision making (Dyck, 2015).
7. The importance of being able to separate potential winners from losers as quickly as possible can't be understated. iQube's return on the innovation competition can be measured by the costs to process, identify and select those ideas. When entries are processed and identified more rapidly, time-to-market is reduced, increasing a company's open innovation return on innovation. Establishing strong evaluation criteria (such as regulatory burdens, market size and manufacturing requirements) and structured screening process is required to allow all solicited and unsolicited idea submissions to be filtered and managed for quality ideas to be acted upon quickly and efficiently
References
1. Ruzic-Dimtrijivic, L. (2016). Risk assessment of knowledge management system. [online] iiakm.org. Available at: http://www.iiakm.org/ojakm/articles/2015/volume3_2/OJAKM_Volume3_2pp114-126.pdf [Accessed 11 Mar. 2016]
2. Bugg-Levine, A., Kogut, B. and Kulatilaka, N. (2012). A New Approach to Funding Social Enterprises. [online] Harvard Business Review. Available at: https://hbr.org/2012/01/a-new-approach-to-funding-social-enterprises [Accessed 11 Mar. 2016]
3. Dees, G. and Anderson, B. (2004). Scaling Social Impact (SSIR). [online] Ssir.org. Available at: http://ssir.org/articles/entry/scaling_social_impact [Accessed 11 Mar. 2016].
4. Whitley, S., Darko, E. and Howells, G. (2013). Impact investing and beyond – Mapping support to social enterprises in emerging markets. [online] cbd.int. Available at: https://www.cbd.int/financial/privatesector/g-datasocialinvest-odi.pdf [Accessed 13 Mar. 2016].
5. Dyck, P. (2015). Overcoming the Challenges to Successful Open Innovation | Innovation Management. [online] Innovation Management. Available at: http://www.innovationmanagement.se/2015/03/03/overcoming-the-challenges-to-successful-open-innovation/ [Accessed 14 Mar. 2016].