Volume 12 (2020): Issue 1 (May 2020)
Crowd Innovation: Hype or Help

All kinds of organizations have tapped into crowds to find individuals who can help them solve problems and develop innovations. Crowdsourcing makes it possible to attract a highly diverse audience that approaches innovation challenges from new angles. To develop groundbreaking innovations, companies are after exceptional ideas – and those are more likely to be found in large crowds rather than small internal groups. Furthermore, participants in crowd projects select the challenges they are really interested in themselves, due to which their motivation and engagement levels tend to be high. In collaborative crowdsourcing projects, new and better ideas can emerge when crowds share information freely, build on other ideas and are able to accumulate and recombine different concepts.

Despite these advantages there are risks: costs and effort might be underestimated, or organizations might fail to control their crowds. And the crowd can sometimes also be wrong. Managers need to carefully analyze which solutions they seek and whether their problems can be solved through crowdsourcing. Not all innovation needs are suitable for open innovation, but crowdsourcing can have remarkable success if applied wisely to the right challenges.

Crowdsourced tasks are very diverse – and so are platform types. They fall into four categories, each demanding different governance mechanisms. The main goal of microtasking crowdsourcing platforms is the scalable and time-efficient batch processing of highly repetitive tasks. Crowdsourcing platforms for information pooling aggregate contributions such as votes, opinions, assessments and forecasts through approaches such as averaging, summation, or visualization. Broadcast search platforms collect contributions to solve tasks in order to gain alternative insights and solutions from people outside the organization, and are particularly suited for solving challenging technical, analytical, scientific, or creative problems. Open collaboration platforms invite contributors to team up to jointly solve complex problems in cases where solutions require the integration of distributed knowledge and the skills of many contributors. Companies establishing crowdsourcing platforms of any type should continuously monitor and adjust their governance mechanisms. Quality and quantity of contributions, project runtime, or the effort for conducting the crowdsourcing project may be good starting points.

Crowds can be very effective, but that is not always the case. To actually render the usage of crowds effective, several factors need to be aligned: crowd composition, the right question at the right time, and the right analytic method applied to the responses. Specific skills are mandatory to tap into the creativity of a crowd, harness it effectively and transform it into offers that markets value.

The “DBAS” framework is recommended to successfully implement a crowd project. It consists of four stages, and in each phase some key questions need to be addressed. Each decision along the DBAS pathway matters and how you navigate each stage can either reinforce or undermine decisions made at the other stages. The right degree of innovativeness, listening to contributors and informing participants openly about the fate of rejected ideas are key success factors that require special attention. To continually improve the odds of success, crowdsourcing should best be treated as a continual iterative churn.

The gains from crowdsourcing can be high, but so can the risks. Contests may become a nightmare for the sponsoring organization if the innovators do not behave as planned. When contest managers act in undesirable ways from a participant’s perspective, community members might bash, shame or ridicule a company. To prevent “firestorms” – negative, often highly emotional posts in social media that are eagerly taken over by traditional media – project sponsors need to ensure fairness throughout the contest. The value of the price and the procedures for selecting winners must be fair and transparent – and companies need to stick to predefined rules. Organizations that succeed in keeping their community motivated might not only benefit from new ideas, but also from additional positive effects. Devoting time, skills and personal engagement to developing new ideas for a company favors intense relationships, and participants often become passionate brand followers. By communicating openly about their approach of open innovation, companies can also foster their innovative image.

While innovation contests have become very popular, the inclusion of crowds in the strategy process is less common. Some recent implementations are blogging, wikis, jams, ideation contests and community platforms or prediction markets. The most common goal of using crowds in strategy is to generate novel and unconventional ideas concerning a company’s strategic direction. Also, increasing internal participation and including employees on a larger scale can improve the implementation of a strategy. Other organizations state that by including a broader set of stakeholders, they can make the strategy formation process more transparent and comprehensible to the general public or their customers, which makes them able to increase external acceptance. On the other hand, the inclusion of larger audiences increases complexity, and involving employees makes it more difficult for managers to remain in control. Projects need to be well-conceived, well-planned and well-funded. Organizations need to remain flexible, learn from experiences and be ready to adjust tools and activities whenever necessary.

Social innovations, just as any other form of innovation, can benefit from crowd engagement. However, the enthusiasm for crowdsourcing social innovation has so far run ahead of its effects. Many platforms are stillborn and struggle with turning their promising projects into sustaining platforms. As opposed to commercial crowd innovations projects, additional obstacles need to be handled here. Social innovation tends to be more complex and typically involves an entire ecosystem with complementary partners. In addition, funding is usually more difficult as the impact of doing good on a communal level is hard to assess and therefore difficult to explain to investors or sponsors. To make social innovation successful, the innovation platform design needs to tackle these additional challenges. The governance and coordination of social innovation projects need to be designed thoughtfully. Organizations need to be prepared for several loops and some experimentation to balance value generation with the right structure and the right mix of participants, consumers and other platform partners.

Interview with Ryon Stewart, Challenge Coordinator at NASA’s Center of Excellence for Collaborative Innovation (CoECI)

NASA’s record of innovations is truly awesome. Every child knows about the first man on the moon and the space shuttle program, or marvels at images of outer space transmitted from NASA missions. It is less well-known that even the world-class engineers of NASA tap into the wisdom of crowds to solve their problems and devise groundbreaking solutions. In our interview, Ryon Stewart explains that innovation is less about a genius having a light-bulb idea while sitting at a desk and more about finding solutions that already exist – somehow, somewhere. Learn how NASA uses the power of crowds, why NASA’s workforce still won´t run out of work, and how even the bison at Yellowstone National Park contributed to problem-solving.

The development of new beverage concepts in close cooperation with consumers via crowdsourcing was a great success for Rivella AG overall, but the approach did not remain without certain difficulties and challenges. For example, when reviewing the more than 800 ideas, the Rivella innovation team observed that a very small group of users had put certain ideas in the foreground.

It is therefore advisable to take a closer look at outcomes and not just blindly trust a crowd. Another challenge of the crowdsourcing approach was the considerably increased management effort for the in-house innovation teams. Practice also showed that platform users in crowdsourcing projects are often attracted by ideas with a certain degree of originality and novelty. While finding truly new ideas is one of the main reasons for involving external crowds in the first place, Rivella noted that aspects such as feasibility, profitability and the strategic sense of an idea rather tend to remain on the sidelines in a typical process.