When you read the original (and, in my opinion, still the best) definition of crowdsourcing proposed by Jeff Howe in 2006–“the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call”—you get an impression that crowdsourcing is always something that is external to an organization.

Indeed, the focus of public attention has traditionally been on external crowdsourcing campaigns, such as NASA’s open innovation contracts or the contest launched by BP in the wake of the 2010 oil spill in the Gulf of Mexico.

Hidden from the spotlight—and almost completely ignored by the academics and business writers–is so-called internal crowdsourcing, crowdsourcing conducted within the legal boundaries of an organization that harnesses the “collective wisdom” of the organization’s own employees. Yet a growing body of business cases shows that organizations have begun successfully using “inside” crowds to solve technical and business problems (“top-down” crowdsourcing), generate new product and service ideas (“bottom-up” crowdsourcing) or forecast internal and external outcomes and trends (prediction markets).

A recent article in MIT SMR is a testament that business periodicals have finally started paying attention to internal crowdsourcing too. A joint team of academics and business executives have summarized the results of a four-year research project that studied how organizations in different industries were using internal crowdsourcing. Here, I’d like to offer some comments, based on my own experience in running internal crowdsourcing campaigns, on the authors’ observations and practical recommendations.

First of all, I completely agree with the authors that running internal crowdsourcing campaigns requires well-defined process and carefully chosen technological platform; it’s also critical to establish a flexible system of incentives, which rewards not only submitters of “good” ideas, but also employees who contributed to the ultimate success of the campaign by commenting on and refining other people’s ideas. I also fully support the authors’ emphasis on the importance of transparency with regards to the results of the completed crowdsourcing campaign and, especially, on dealing with employees whose ideas/solutions had not been selected for further development.

I, however, don’t share the authors’ tacit assertion that running “competitive” campaigns (that is, the ones with selected “winners”) hurts collaboration and, therefore, is intrinsically counterproductive. In my experience, the reward system should first and foremost reflect the existing organizational culture. For instance, rewarding only a few top individual performers sits quite well with the cultural values of many U.S. companies. In contrast, European managers often cringe at the “winner takes all” (or, as they call it, “American”) approach; they prefer to award teams instead of individuals and spread rewards among larger number of the participants.

Nor do I agree with the authors’ claim that it’s universally beneficial when submitters of the best ideas are placed in charge of their implementation—in part, as a reward for submitting them in the first place. Proposing ideas or solutions and implementing them often require different sets of skills–and not every individual possesses all of them. The decision on who will be implementing a selected proposal should be made solely based on strategic business considerations, and not dictated by the (often arbitrary) rules of the reward and recognition system.

I’d also question the authors’ recommendation to preferentially use technological platforms that facilitate shared development of solutions; I’m afraid that they’re confusing crowdsourcing with brainstorming. I’ve covered this topic in the past and will only mention here that crowdsourcing (whether internal or external) can only realize its full potential when the participants are capable of providing their input independently of each other. In this case, a crowdsourcing campaign may result in a completely unexpected, even unorthodox, solution. I’ve nothing against brainstorming—it’s a powerful problem-solving tool—but one has to remember that it almost always ends up with a consensus solution—or, worse, a solution pushed forward by a vocal minority.

The authors are absolutely right when they point out that internal crowdsourcing brings value to organizations well above the intellectual input it produces. (I was making similar point recently.) When asking employees to submit ideas and solutions, the senior management sends a message that it values their views and opinions and considers them equal partners in fulfilling organizational objectives.

I was thus surprised with the authors’ recommendation to run internal crowdsourcing campaigns while keeping anonymity of the participants. The authors base this recommendation on the notion that “[p]roviding a psychologically safe environment leads to greater employee participation and collaboration, resulting in more effective innovations.” They further argue that by hiding their organizational identity, employees will feel safer when making their contributions.

Although I fully agree (and wrote about this before) that a psychologically safe environment is crucial for innovation, the proposed anonymity defies the very objective of running internal crowdsourcing campaigns: giving the employees the sense of participation, engagement and ownership of the organization’s future. Besides, if employees feel unsafe to openly share their views with the rest of the organization, this organization has a problem, a problem that can’t be solved by just hiding someone’s identity.

The last point of disagreement has to do with the authors’ complaint that organizations often run internal crowdsourcing campaigns focused on short-term improvements. The authors believe that, quite to the contrary, organizations should “encourage employees to keep their focus on long-term opportunities.”

The authors appear to simply misinterpret what crowdsourcing is. Crowdsourcing is, first and foremost, an innovation tool—and, as such, it can be applied to a wide variety of business objectives. Some of these objectives are of short-term nature while others do represent long-term opportunities; however, all of them must be subordinated to a larger innovation strategy. (I don’t want to go too deep here, but mentioning such important concepts as 3-Horizon Model of Innovation and Integrative Innovation Management would be very relevant in this context.) Depending on a particular part of the overall innovation strategy, an appropriate innovation tool needs to be selected. Not the other way around.

p.s. You can read the latest issue of my monthly newsletter on crowdsourcing here: http://mailchi.mp/a15981c4278a/a-flash-of-wisdom-the-power-of-internal-crowds. To subscribe to the newsletter, go to http://eepurl.com/cE40az.

Image was provided by Tatiana Ivanov