A Performance Paradox: Why Is Crowdsourcing So Seldom Used?

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Call it a performance paradox: while being an effective innovation tool, crowdsourcing is seldom used by organizations. A fresh example of this paradox came in the recent Gartner 2016 CIO Agenda Report (highlighted in a June 27, 2016 Forbes article). The Report showed that although crowdsourcing was the most impactful among ten digital innovation platforms, it was actually the least used (by fewer than 10% of surveyed businesses).

The Gartner Report finding might be the latest, but hardly the only indication that crowdsourcing is slow to become a major innovation tool. A 2013 study by Henry Chesbrough and Sabine Brunswicker looked at specific open innovation tools used by large companies in Europe and the U.S. The study showed that the most popular approaches were customer co-creation and informal networking, while crowdsourcing (along with using open innovation intermediaries) was considered the least important.

The Chesbrough and Brunswicker study echoes yet another report by Robert Cooper and Scott Edgett published back in 2008. Cooper and Edgett reviewed techniques that 160 companies used for product innovation, more specifically, at the front (‘ideation’) end of the product innovation process. They found that the most popular methods were customer visits and focus groups. In contrast, crowdsourcing was unpopular and perceived ineffective.

It thus appears that crowdsourcing still doesn’t find its proper place in the corporate innovation toolbox, and the situation doesn’t seem to be getting better over time.

What’s going on? I think that the roots of the performance paradox lie in the superficial simplicity of crowdsourcing as an innovation tool. At first glance, in order to run a crowdsourcing campaign you need only two things: a question to ask the crowd and a crowd to answer this question. And here the problems begin. First, as any crowdsourcing practitioner would tell you, formulating a ‘question’ to crowdsource requires careful deconstruction of the underlying technological or business problem, something that many organizations are actually quite bad at.

And then, there is a ‘crowd’, an audience you assemble to broadcast your question to. You either build your own crowd, a process requiring time and patience, or you ‘rent’ a crowd by hiring an appropriate open innovation intermediary. And here one encounters another hurdle: there are so many different commercially available crowdsourcing platforms–some estimates put this number at around 200 worldwide–that just navigating this crowded marketplace is a daunting job. Besides, the stakes are high: choosing ‘wrong’ platform will likely doom your crowdsourcing campaign to failure.

So I don’t see any easy way to make crowdsourcing performing at the top of its potential any time soon. A lot of work needs to be done on educating companies how to use crowdsourcing effectively. Again, two questions are critical here: how to choose the problem to crowdsource and how you assemble effective crowd (embedded in the latter is a question about appropriate digital platform). I’m going to address these questions in my future posts.

Image credit: “In the Crowd” by Francesca Bifulco (http://www.mymodernmet.com/profiles/blogs/francesca-bifulco-in-the-crowd)

 

About Eugene Ivanov

Eugene Ivanov is a PMI-certified Innovation Management Consultant who helps organizations increase the efficiency of their internal and external innovation programs.
This entry was posted in Crowdsourcing and tagged , , , , , , , , , , , . Bookmark the permalink.

5 Responses to A Performance Paradox: Why Is Crowdsourcing So Seldom Used?

  1. Allan Ryan says:

    Crowd sourcing has a problem of definition of a crowd. Great results for open innovation are coming from enterprise social networks or intelligent communities. Look to http://www.optimice.com.au for inspiration.

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