Design of innovation ecosystem for Yahoo!

Abstract

Yahoo needs to continuously innovate to remain highly relevant to the Internet users worldwide. The biggest challenges in Internet industry are fast changing customer preferences and the pace of technology evanescence. Since it is almost impossible to predict which trends will be successful in future in this industry, Yahoo needs to keep itself engaged in all possible directions to avoid missing opportunities. Relying on just in-house R and D is an insufficient way to meet this challenge. Yahoo should embrace open innovation approach to be agile in this fast changing business environment. This work studied open innovation concepts and 32 such programmes across industries - technology, FMCG, food, energy, media etc. to propose a framework for designing an innovation ecosystem. The framework is based on 5 design principles and 8 design elements. Based on the framework, the key recommendations for Yahoo are as following 1. Mindset change from closed innovation to open innovation 2. A portfolio of programs, with each catering to different objectives. The programs recommended are a. Y! Partner: for one-on-one engagement with organizations and experts b. Y! Prize: to engage with students and amateur developers for getting solutions to specific problems and business ideas c. Y! Research: to engage academic institutions and research centres for basic research d. Y! Community: to get feedback from lead users and get large number of incremental innovations e. Y! Start: to closely track the start-up community for new business models and successful ideas f. Y! Center: an umbrella program to support other programs 3. Funding, program management and go-to-market designs to ensure unbridled flow from ideation to commercialization 4. Balancing act to stay focused on top needs 5. Metrics for goals setting, performance evaluation and continuous improvement