Driving Innovation With Crowdsourcing Companies are using the wisdom of consumers to rapidly drive innovation, improve products and increase customer satisfaction.
By Michael Morton Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Technical innovation over the past few decades has been staggering. How people communicate is being transformed every few years by changes in computing, mobile devices and digital media.
Most of these innovations seem to have been sparked by individuals or small groups. HP, Apple and Facebook are often cited, but even within large organizations and the military, it's often the process of one person or a small team focusing on solving a particular problem that results in something revolutionary.
But a new strategy for innovation is taking shape. Companies ranging from digital media firms to consumer-packaged-goods concerns are using crowdsourcing to rapidly drive innovation, improve products and increase customer satisfaction. Using the crowdsourcing model, companies might break big-data projects into micro tasks that are then farmed out to the "crowd."
Related: Need a New Design? 5 Reasons to Crowdsource It.
While this may seem like a relatively new phenomenon, the idea of harnessing the power of the collective and the wisdom of crowds is extremely old. Science and academia have long relied on individuals making incremental additions to research, enabling the greater community to have access to an ever-growing knowledge base that can drive innovation. More recently, the development of open source software has proliferated, with many individuals making small contributions to a large project from which innovations arise that benefit the community.
Companies have used crowdsourcing in these ways: To create Black Crown, a new beer, Anheuser-Busch surveyed 25,000 consumers for feedback on 12 possible flavors developed at regional breweries and produced the top three varieties for limited distribution.
Through its open innovation project, Unilever invites consumers to contribute ideas for improving products or fashioning new ones. The company also publishes a list of challenges it wants help in solving.
Poptent, a digital media company, uses crowdsourcing to provide clients with access to a community of more than 50,000 video creators.
Related: Artfully Managing the Work of Your Creative Team -- But From a Distance
At my company, Dell Boomi, crowdsourcing is integral to the development strategy for the cloud-based application integration platform offered. By collecting data related to a subscriber's integration activity (without accessing or viewing any data from the customer's business processes), my team can gain deep insight into issues that cause problems and then use the aggregated and analyzed information to make improvements. (Customers can opt out from participating.)
The idea is that my company looks at a large number of user experiences and strategically decides which issues should be resolved first to benefit the greatest number of community members. This process of automatically and dynamically collecting information requires no effort from users but provides them with value. With this form of crowdsourcing, the greater the number of users and the longer they use the system, the greater the insight that can be gained.
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Some companies may not understand how to take advantage of crowdsourcing. But the ability to collect and analyze huge amounts of data from customers and employees -- whether directly or via statistics and software -- creates a vast strategic opportunity to experiment with ways to mine small, individual ideas to drive major innovation, problem solving, efficiency and cost savings.
While careless use of information can increase the risks associated with data protection and the company's reputation, a well-designed crowdsourcing program need not compromise an organization or violate regulations.
Do the same as for any IT or marketing initiative: Get a detailed plan in writing and get a buy-in from all information and data stakeholders, including the legal department. A mature IT solution will provide flexibility and proper controls for customers and other organizations for any data used for crowdsourcing scenarios.
Every business invests in the "crowd" in some way. Crowdsourcing is an opportunity to accelerate the return on that investment. The particular beauty of crowdsourcing is that the longer a company does it, the more data collected. And the more data gathered, the greater the potential benefit to the organization.
Here are some tips about how companies can use crowdsourcing for innovation:
Related: Inventing Made Easy: Go Straight to the (Crowd)Source
1. Be prepared for the deluge of data. Depending on the company's use case, the organization may suddenly be collecting huge volumes of data. Is the IT department prepared?
2. Have an analytics solution in place. Benefiting from all the collected information will likely require some form of analytics. Ensure that the analytics solution is up to the task.
3. Consider integrating multiple data sources. Determine whether it's necessary to integrate data from multiple sources (such as from the crowd and a customer-relationship management system), and select an integration solution with swift processing. A data integration project that takes months to complete may doom a crowdsourcing strategy before it starts.
4. Address security and compliance issues. Short-circuit any objections to the strategy by anticipating the needs of the data security, legal and compliance teams.
5. Make it about the customers. When asking customers or partners to participate in a crowdsourcing project, be clear about how they will benefit. Allow consumers to opt out, but be clear in explaining the benefits they will miss out on by not contributing.
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