Why don’t more companies run open challenges to solve problems?

Amazon.com is only the latest company to expose a problem it is grappling with and ask for outside help. Its Picking Challenge, wrapping up this month, invites participants to design robots and accompanying control software that can grab products from a shelf and place them into a box. Success would help Amazon drive down costs and increase efficiency in its distribution centers around the world.

Companies like Netflix, GE, and Philips have run similar challenges in recent years. But why aren’t we seeing many other Fortune 500 companies follow suit?

Harvard Business School professor Karim Lakhani says that the biggest barrier may be that internal company “experts” don’t believe that “some kid in Indonesia will solve a hard problem they have been struggling with” — and they don’t want to be proven wrong. Lakhani says that today, there is much more supply of academic and entrepreneurial brainpower willing to pitch in on challenges than there is “demand” of companies asking for help. (Well worth a read is Lakhani’s 2013 article on “Using Open Innovation to Identify the Best Ideas.”)

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