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Social media and developing an open innovation culture

When it comes to new product development the old ways of working will hold you back, says Khaleel Malik.

Companies are increasingly using social media applications to directly collaborate with customers, suppliers, and research organisations in order to advance new product development.

At the same time the proliferation of these applications has corresponded with the emergence of an ‘open innovation’ culture in which firms now tend to integrate new ideas from several external sources.

However these converging trends bring huge challenges. For instance, how do companies go about prioritising which actions they should engage with in this new world of open innovation? How do they apply new knowledge to existing customers as well as potentially new ones? And how do they deal with the internal cultural shift that is required in order to both share and embrace knowledge from external sources?

All of this can be a particular challenge for SMEs, many of which do well precisely because they have stayed small and niche. So how do you persuade them of the merits of open innovation?

Leveraging external knowledge

Despite the growing importance of using social media to leverage external knowledge for new product development in innovation, few studies have actually examined what companies need to be doing to actually achieve this.

These were precisely the issues that were explored in a recent paper I co-authored which set out to understand precisely which capabilities are important in order to leverage external knowledge for new product development using social media.

In particular we interviewed a number of executives working in the FMCG (Fast Moving Consumer Goods) sector, an industry where building new capabilities to capture knowledge via social media is essential for quickly making sense of unexpected trends in a very fast-changing environment.


Our findings reveal that the use of social media is an ongoing process of experimenting with new technologies. But our results suggest that FMCG companies should consider developing specific capabilities to help effectively acquire external knowledge.

Firstly, they should recruit staff who are specialists in social media (similar to internal R&D specialists) to acquire external knowledge. Secondly, they could consider setting up an independent department for social media knowledge acquisition. And thirdly, they should encourage an open innovation culture.

What is essential throughout this whole process is that managers must focus on strengthening their firm’s internal capabilities. Indeed, our paper discusses how firms need to change their core competencies, otherwise they are at serious risk of being held back.

Case study

Consumer products group Unilever, with whom I have been working with on a number of related studies, provides a useful case study in this context. In particular, the company is currently using the in-house capability of some of its new product development staff to predict consumer trends and new product ingredients for specific regions of the world.

Staff are acquiring massive volumes of social networking data (which can reach more than 200 million data points in one analysis) with the aid of some advanced analytics tools in order for it to be analysed by data scientists and social analysis experts.

The outcome is a list of trending ingredients and emerging demand spaces, which can then be further analysed by the company’s marketing and R&D teams to use as an input to the innovation funnel. Successful innovations coming out of this process have already provided higher incremental turnover and consumer traction, which was partly enabled by the company’s ability to acquire external knowledge via social media.


New product development is inherently a messy and time-consuming process. Some ideas will work while others won’t. But it is how you organise what might be the credible ideas that is so important.

That’s why in today’s fast-moving world you need individuals who can move fast around social media. Organisations simply cannot afford not to engage with this agenda, otherwise they will simply be left behind.

Sometimes the subjective nature of external knowledge acquired might not make it easy to engage with and use specifically for new product development. However, the investment in resources to acquire external insights via social media might give firms an opportunity to capture the bigger picture. Hence enabling the acquisition of a richer, and sometimes unanticipated body of new insights that might be useful to explore in the future, if not today.

Blog posts give the views of the author, and are not necessarily those of Alliance Manchester Business School and The University of Manchester.

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