How Companies Use Crowdsourcing

Monday Jul 6th 2009 by Steve Andriole
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Crowdsourcing is project-driven outsourcing that makes a lot of sense in these tough economic times.

There’s no reason to believe we know everything. Because we don’t.

I’m disgusted with the not-invented-here syndrome and even angrier about companies that really believe that the competition is slow, stupid and lazy. Because we’re so good – and so smart, they’re so bad.

Oh, and we dress better, too.

The fact is that most companies stumble along a path to prosperity over which they have relatively little control. Of course companies need to make stuff or provide services that people want to buy. They also need to innovate enough to keep their brands in-play.

But when all’s said and done, companies need to keep learning – from whomever they can.

Technologists are no different. In fact, they need to learn more stuff faster than their counterparts in the kitty litter business. How can the learning net be cast as wide as possible? Who controls these things? We do.

Given that training budgets are just about gone these days, what’s the learning strategy? Given that very few companies are hiring “nice to have” professionals on a whim – the way they did five years ago – there’s a need for a strategy around problem-solving beyond your in-house gurus.

One idea that comes to mind is crowdsourcing. For those who have not yet discovered the joys of crowdsourcing, let’s explore why extending your brain to the Web makes intellectual and financial sense.

Crowdsourcing assumes that there’s brainpower on the Web that can be leveraged on to your problems in some creative, cost-effective ways. (The cost-effective part is especially important these days.)

Crowdsourcing is an alternative technology acquisition model whose costs can be closely managed. In fact, business cases can be used to define crowdsourcing opportunities. For example, if a $100 ROI is necessary for a project to be successful, then crowdsourcing fees can be set accordingly.

This pricing model places control in the hands of the companies that post the problems – and set the fees – and protects them from the project scope creep that always results in “adjustments” to the budget.

Other crowdsourcing projects are more process-driven. Brand management, new product effectiveness, customer service and even personal reputation management are also crowdsourcing targets.

Here the outcome is not a specific problem solution but information, opinion and insight valuable to marketers, product developers and customer service representatives, insight that can be interpreted as positive or negative sentiment.

So what are some of the options? First, there are the venerable Innocentive and Nine Sigma sites.

These sites let you post tough problems for smart people on the Web to solve. Like hired guns, they work for fees. If they don’t solve the problem, they don’t get paid. Therefore they’re motivated.

The companies that post problems only pay for success. If your company invests in research and development (R&D), it’s time to go to the Web for help. Why in the world would you not at least pilot R&D crowdsourcing?

What else can the crowd do for you?

There are all kinds of problems that the crowd can help you solve and information it can help you gather and interpret. IdeaScale, for example, can help you organize feedback from the crowd regarding old and new products, concepts and service, among other areas. Ideascale organizes the process on your behalf and interprets the feedback.

In fact, there are lots of vendors that help you listen to the crowd, such as Radian6, Umbria, BuzzMetrics and ListenLogic. These companies, especially ListenLogic, facilitate crowdsourcing with business intelligence (BI).

New ideas about products can also be vetted through Cambrian House, along with other sites designed to stimulate discussions around innovation, process improvement and even talent management. They’ve also developed a crowdsourcing engine that can be used for a variety of applications.

Next Page: More crowdsourcing options

You don’t have to go into the Web for ideas. If you’re paranoid about strangers, you can tap into the expertise of relative strangers – like your employee population. Companies like Imaginatik can help you leverage the intelligence of all your employees regardless of their location or job function. This approach essentially distributes and manages the digital suggestion box.

What’s the point? We’re not that smart and could use some help from time to time to solve tough problems.

There’s a continuum of familiarity that defines comfort for many companies. “Relative strangers” who work for the company – but have never met – form one crowd, while “perfect strangers” who live and work on the Web, form another crowd.

Some companies experiment with internal crowd- sourcing. While this can be effective, it’s a little contradictory or at least sub-optimal, since crowdsourcing, by definition, is the most effective with large crowds. Nevertheless, internal crowdsourcing is a good place to start.

Some years back there was a lot of discussion about the “free-agent nation,” where individual contributors would rent themselves for specific tasks. They charged an hourly rate (in most cases) to solve discrete, well-bounded problems posted by individuals or corporations.

Crowdsourcing is an extension of this process but involves proactive problem posting by the companies looking (anywhere) for help. Crowdsourcing brings problems directly to the crowd, to 21st century “free agents.”

Companies that already rely heavily upon part-time – so called “1099” – employees should love the crowdsourcing model because it’s conceptually very similar to the idea of employing professionals-by-the-task.

It’s also similar to on-demand problem solving, since demand defines opportunities (and compensation). Crowdsourcing is project-driven outsourcing that in these tough economic times makes a lot of sense – even if you think you know it all. Give it a try.

ALSO SEE: Stop the Drivel: The 'Really Perfect' Tech Exec

AND: Tech Execs: Can We Stop the Stupidity?

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