Wisdom Of The Crowd On Innovation For Businesses

The strength of the community is its diversity, but it lacks cohesiveness. Source; Innovation observer

It is no doubt that innovation drives growth in any business.

To answer the most vexing question on successful innovation for business, crowds are becoming the partner of choice.

Safaricom, for instance, has turned to large numbers of its users and developers to propel growth by advertising, marketing and even creation of new platforms such as Blaze to enhance its products. Despite a growing list of success stories, only a few companies in Africa have managed to use crowds effectively- or much at all.

Managers remain understandably cautious. Pushing problems out to vast groups of strangers seems risky and even unnatural, particularly to companies and businesses built on internal innovation. How for example can a company protect its intellectual property?  isn’t integrating a crowdsourced solution into corporate operations an administrative nightmare? What about the costs involved?

Crowdsourcing innovation creates new kinds of inventors. Source: nwirc.com

These concerns are all reasonable, they include risk, but excluding crowdsourcing from the corporate innovation toolkit means losing an opportunity. The main reason companies resist crowds is that managers don’t clearly understand what kinds of problems a crowd really can handle better and how to manage the process. Businesses should acknowledge that crowds are moving into mainstream; even if they don’t take advantage of these competitors will certainly do.

Crowds offer incentives that other companies find difficult to match. Companies that operate on traditional incentives- salary and bonuses-and employees have clearly delineated roles and specific responsibilities discourage them from seeking challenges outside their purview. but crowds are often more cost-effective per output or worker than traditional company solutions.

Crowdsourcing as a way to deal with innovative solutions has existed in one form or another for decades. Communities of innovators have helped kick-start entire industries, including personal computing. The difference lies in technology. Over the past decade, tools for development, design, and collaboration have radically transformed; they’re getting more powerful and easier to use all the time, even as prices plummet. At least as important, online crowdsourcing platforms have become much more sophisticated, making it even simpler to manage, support, and meditate among distributed workers. In essence, crowds have become a fixed institution available on demand. Having determined that you face a challenge especially in incorporating sustainability into the business’ strategy, you must figure out how to work with the crowd. Crowdsourcing generally takes one of four distinct forms, contest, collaborative community, complementary, labour market- each is suited to solve different problems.

Contests have cracked down some of the toughest business challenges. Source; Ennomotive

The most straightforward way to engage crows is to create a contest. The company identifies a problem and offers a cash prize and broadcasts an invitation to submit solutions. Contests have cracked down some of the toughest business challenges. contests work well when it’s not obvious what combination of skills or even which technical approach will lead to the best solution for a problem. Running a contest is akin to running a series of independent experiments in which, ideally, we can see some variations in outcomes. Therefore, of the four forms of crowdsourcing, contests are most useful for problems that would benefit from experimentation and multiple solutions.

The strength of the community is its diversity, but it lacks cohesiveness. Companies create cohesion with structures and systems that align values. They hire employees for ‘fit’ and collocate them so that they can interact directly, become socialized, and share a culture. Moreover, employees gain specific experience and knowledge in the narrow fields where the company focuses. A crowd, in contrast, may draw participants from around the globe- from varying companies, domains, and industries.

Consider Wikipedia. In less than a decade the internet-based encyclopedia has disrupted the reference world and demonstrated the value of large scale, highly diverse collaboration within a new organizational model. Wikipedia uses an automated process to coordinate and aggregate the crowd’s edits and keep track of all changes. The size of the Wikipedia crowd, with multiple people typically examining any given article, ensures thorough monitoring of content quality.

Wikipedia shows that collaborative communities are most effective when they tackle projects whose orchestration is relatively simple. Crowd collaboration relies on extensive task modularization, standardize routines, and technology to facilitate coordination. Norms, knowledge sharing, teams, and leadership emerge to deal with what little decision making and coordination are required, but these structures are much closer looser than the ones found in most companies. Organizations can assemble their communities, but doing so may be difficult and time – consuming, especially when resources must be dedicated to curating the platforms.

Crowd powered Innovation enables a market for goods or services to be built on your core product or technology effectively transforming that product into a platform that generates complementary innovations.

To be sure, crowds aren’t always the best way to create complementary products. They make sense only when a great number and variety of complements is important. Otherwise, a few partners or even an internal organization will better serve the goal. We don’t need thousands upon thousands of tennis ball developers.


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