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Do Challenge Prizes Stimulate Creativity?


vickiVicki Purewal is a senior manager at Nesta, where she has led the design and delivery of a range of innovation programmes, including establishing Nesta’s Centre for Challenge Prizes in 2012. We spoke to her about how challenges stimulate creative thinking and accelerate innovation.

What is a Challenge?

A challenge is where a problem or goal is defined and then advertised openly. People respond by trying to put forward the best ideas or solutions, or by making the most progress towards, meeting or exceeding a specified goal. So challenges are usually competitive, but many are collaborative too – with competitors sharing ideas and even supporting each other.  Challenges usually use incentives – often cash and/or public profile, but it sometimes free expertise, a contract, access to networks or even a limited edition product.

Challenges come in many forms including competitions, challenge prizes (aka inducement prizes), hackathons, challenge funds.  The range of ways challenges are being designed and run is fast growing and evolving. The common thing is that they’re challenge-led. Beyond that they really vary. Perhaps the most critical differences are in what incentive is used (or incentives – there might several in one challenge) and what people have to achieve to win (they might need to have the best idea, the most effective working prototype, evidence of best results). Other variations include how specific the challenge is; how success is judged (by judges, users/consumers, the public, by deliberation and/or by testing) and how publicly the solutions are shared and developed.

Why do people respond to challenges?

For different reasons depending on their motivations. Incentives play an important part. Whether financial or non-financial, they can hook people in and give them a focus. But this is often alongside a more intrinsic motivation.

Ultimately most people care in some way about solving a particular challenge – because it relates to an issue that matters to them, because they want to prove that they can do it, or because they’re excited by seeing a new use for their knowledge or skills.

Is it always about the money – how important is the prestige of winning?

It’s not always about the money, and challenges don’t always have a cash prize. The prestige of winning and the sense of achievement can be more important.  Money isn’t the thing that sparks the best solutions – a relevant, exciting, well-defined challenge should do that.  The money can be an important hook, to help get publicity for the challenge, and critically for the winners it can help take an idea to the next level or partly reimburse the effort put in to achieving the goal.

What sort of challenges are most popular?

Challenges are generally popular at the moment, as part of a wider trend towards opening up innovation to encourage and invest in more and different sources of new ideas and products. I think we’re beginning to see some shift in interest from challenges that invite concepts to challenges that seek and reward new ideas that can be proven, at least to some extent, to work. The challenge (!) is in making these types of challenges work as they usually need more time and resources to be committed by both organisers and competitors, but they can yield more concrete results.

Is there an optimum length of time for a challenge?

Not really, but there are some considerations. You need to allow enough time to reach out to find entrants, to give those people a chance to respond well, and for you to be able to judge who’s been most successful. The time needed to do that will depend on what the challenge is and what you’re asking people to achieve. On the other hand you need to keep the momentum going, so don’t want to stretch the timetable unnecessarily. Ways to keep momentum going on a longer challenge include running it in stages (with the most promising ideas making it to the next stage), sharing the development of the solutions publicly, making announcements or offering interim prizes linked to progress.

How could a company take these insights and apply them internally?

  • Run a challenge to access latent staff ideas relevant to a business problem. This might be useful if you have a lot of staff.  The NHS challenges prizes are used to access ideas that already exist in relation to a specific issue, but aren’t well known and have the potential to scale throughout the organisation.
  • Open a business related challenge beyond the boundaries of the company. Nasa have been doing this regularly, through their Centennial challenges – for things like redesigning an astronaut glove – and their Tournament Lab, used to run regular data challenges.  Nasa aren’t alone – there are a growing number of companies doing this, including for example GSK and P&G.
  • Initiate or become a partner on a social or environmental challenge that is core or complementary to your goals – examples include the Orange ‘do some good’ competition, the Virgin Earth Challenge, the PETA in vitro chicken prize

Once you get thinking there are many ways to use challenges. Some companies, such as Facebook have even used challenges as part of their recruitment approach.

The most important thing to remember is to be very clear about what you’re trying to achieve and completely dedicated to selecting or designing your challenge around that.

What has been your most successful challenge and why?

The Big Green Challenge, which ran from 2007-2009 was the first of its kind, designed to find new CO2 reduction solutions based in UK communities. It attracted 355 entrants, with 1/3 not previously being involved in energy or the environment.  The 10 Finalists achieved between 10-46% CO2 reductions in their communities in just one year – the national average at that time being only 4%. We ran it in stages, supporting 100 groups to develop their outline ideas, before the Finalists’ year-long delivery period to test and judge their initial impact. It focused a lot of people around a common goal, found and supported new innovators and solutions, and had a impact on the issue.


 What would you most like to see a prize offered for?

For me the most worthwhile challenges are those that have a positive social or environmental goal, and that use incentives – perhaps also support – to move beyond great ideas to tangible results or progress related to the goal.

At Nesta we often talk with people who are planning and running challenges.  I’m pretty confident there are going to be many more exciting and important challenges launched on a range of topics, by a range of companies and organisations over the next couple of years.


To find out more, visit http://www.nesta.org.uk/areas_of_work/challengeprizes.


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