Innovation is one of the main priorities of many companies around the world. Almost all CEOs surveyed by PWC in 2013 see innovation as their main focus or one of their priorities. But jump-starting innovation is a huge hurdle to overcome for most companies. A Booz & Company study shows that only a quarter of all businesses are effective at first. One of the main reasons why most innovation programs fail is due to the organizations dependency on internal innovators. Employees are overwhelmed with their current workloads or lack the skills to come up with innovative solutions. How can organizations overcome this barrier to innovation?
Well, what about getting solutions from the crowd? At first glance, the landscape of possibilities of working with the crowd may seem daunting, but the benefits outweigh the challenges. The scale and heterogeneity of the crowds offer such great incentives that companies find it difficult to match otherwise. The existing incentive culture and organizational structure, with rigidly defined roles and responsibilities, discourage employees from adopting the culture of innovation. Crowds, research shows, are energized by intrinsic motivations of the desire to experiment, learn, and add to their current skill set. The Linux operating system started on the same principle, was widely adopted, and many multi-billion dollar businesses were built alongside it.
The 4 steps to take advantage of the crowd are:
1. Post a challenge
2. Get innovative solutions from the crowd
3. Reward the best solution
4. Prototype the solution
post a challenge
The easiest way to engage a crowd is to post a challenge. The sponsor (company), also called a problem finder, identifies a specific problem, offers a prize, and broadcasts an invitation to problem solvers to submit solutions.
Get innovative solutions from the crowd
While a company may end up using just one of the solutions it receives, evaluating many submissions can provide insight into where the most innovative solution lies. In contrast, internal R&D can generate much less information and uncertainty as to whether a better solution can still be found.
Award the best solution
In crowdsourcing, crowds are primarily motivated by two goals: earn a reward and do work that makes them proud. The offer of a reward gives the problem solver that extra motivation to go the extra mile. Some rewards may cost money, while others are investments in time and effort.
Prototype the solution
The final step of crowd-based innovation is to prototype the solution that was selected from those that were submitted as part of the challenge. This is the most important and the most difficult of the 4 stages. In some cases, the companies that posted the challenge work on the prototype as they have the necessary resources to complete the prototype. This is often the case if the issue at hand is very company-owned. The other way is to take advantage of the crowd to complete the prototype.
As the perceived challenges of crowdsourcing are not as straightforward as it seems, there are some management-related hurdles in executing the challenges of crowdsourcing in the first place. Managers remain understandably cautious. Raising issues to a large group of outsiders seems risky and even unnatural, particularly for organizations based on internal innovation. There are issues related to intellectual property, plus integrating a crowdsourcing solution into a company’s innovation ecosystem could turn into a management nightmare. Second, identifying and articulating the problem is very important and difficult. The problem must then be “inferred” from the organization and translated so that it is immediately understandable to the community of problem solvers. It should also be “generalized” to avoid revealing sensitive proprietary or company details. That may involve breaking it down into multiple sub-problems and challenges. And finally, the challenge must be well organized and structured to generate solutions that the organization can feasibly implement.
