The beauty of crowdsourcing


Last week, I spoke with Paul Arnold, a seasoned business writer and BBC alumnus. The topic of our conversation was crowdsourcing: how companies use it and why they’re often disappointed with the results of their crowdsourcing campaigns. The full text of the interview can be found here; a few (edited) excerpts follow.

  1. (Why do your clients turn to open innovation?)

There are a few reasons why companies go for open innovation. Firstly, they realize they don’t have internal expertise or experience. That’s the most obvious consideration. The second consideration is that some companies, especially those with some exposure to open innovation through crowdsourcing, realize that there is a diversity of solutions. Sure, they can go to their experts, but not only is it actually more expensive to pay for experts, but there is a limited amount of experts you can talk to, and they are almost always aligned with you. So basically you are asking them what you already know.

The beauty of crowdsourcing is that you are completely agnostic to a solution that may come. It could be completely unexpected. I know cases where companies hired consultants to analyze solutions they were getting through crowdsourcing. They were smart enough to realize that they were onto something very valuable, but the ideas were so novel to them that they couldn’t understand them. And there was no other way to get these solutions except through crowdsourcing. The companies would never have gone to this source, because they didn’t know this source existed.

  1. (Why is crowdsourcing still the least used open innovation tool despite the fact that it’s actually very good?)

Crowdsourcing is damn simple, because it only has two components to it. It is a question and a crowd, and that’s it. The major problem, in my experience, is with the question. Unfortunately, not every problem can be put to crowdsourcing and even if you have the right problem you need to formulate it in such a way that it becomes solvable by crowdsourcing. And many organizations do a very bad job of that. Very often, they try to solve a problem in one giant leap. But experience shows that you have to split your problem into chunks and solve them separately or in parallel. Not only is this more efficient, but it’s actually faster, because when you fail (to solve a problem in one giant leap) you have to start again.

  1. (In your“Are We Faking Innovation? article you highlighted a surprising survey on innovation where 85% of respondents said that innovation is important to their companies, but 72% had no understanding of what innovation meant to them. Is this something you have come across often?)

Amazingly, it happens all the time. I had a client and spoke with two of their research directors who were working for the same department. When I asked them to give me a definition of what innovation meant for them–in terms of market share, expected revenues, time horizons and things like that–they gave me vastly different responses. And those two were people who had a budget to fund innovation projects under them.

Now, I’m a great fan of diversity, but in some cases, diversity of opinions is not welcome. In fact, it’s not diversity; it’s a lack of an overall corporate oversight. At one point I advocated that companies should write an Innovation Charter, and some people said: well it’s just a piece of paper and everyone is sick and tired of these “mission statements.” Sure, I understand this complaint, but my point is that in very many companies, there is no common language of innovation. So it’s not surprising that people don’t know what innovation means for their particular company.

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About Eugene Ivanov

Eugene Ivanov is the Founder of (WoC)2, an innovation consultancy that helps organizations extract maximum value from the wisdom of crowds by coordinated use of internal and external crowdsourcing.
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