Article first published as How Crowdsourcing Can Enhance Innovation Performance on Forbes.com.
Disruption and digitization are changing the game for more and more industries, and more and more companies. As a result, traditional ways of approaching innovation are coming up short. What I’m beginning to see is that there’s a new way of practicing innovation being embraced by a growing number of companies, not just in tech. An important component of this new all enterprise approach is the use of crowdsourcing, the process of inviting ideas from groups – usually online — to solve a common problem.
Here are six ways organizations are using crowdsourcing to drive results:
1. Engage people across the enterprise.
Gallup surveys show that 50.8% of American workers are not engaged, while One in four are actively disengaged – and they want to disrupt meetings, cause chaos, and sabotage results.
Eighty six percent of crowdsourcing companies report that increasing employee engagement is one of their primary motivators, according to surveys by Spigit, an idea management software purveyor to industry. “Inviting ideas from employees at every level, about issues that affect everybody is a proven way of engaging the disengaged and kicking off a crowdsourcing program,” says Amy Millard, Spigit’s vice president of marketing.
Instead of passive “we want your feedback” electronic suggestion boxes, crowdsourcing experts now favor “campaigns” — limited duration contests that invite the crowd to submit ideas on a particular problem or question. Such engagement in turn creates opportunities to collaborate across departmental lines. It empowers people with a new means to effect change within the organization. Crowdsourcing campaigns often bring talented associates to the attention of management. They become a gateway to spreading innovation across the enterprise.
2. Cultivate a culture of innovation.
Hong Kong based Li & Fung is the world’s largest sourcing agent for Wal-Mart and hundreds of other retailers. With the rise of the Internet and e-commerce, the firm is facing market shifts that threaten to destabilize it. To focus on new ways of working, the company formed a five-person innovation unit with new mantra is “creating the supply chain of the future.”
“We challenged everybody everywhere with the question: what innovative product can you create to delight a customer,” says Lale Kesebi, chief communications officer and head of strategic engagement, for the company. “We did four week idea jams, both online and offline. We held one innovation week for our Grand Challenge winner and we did 14 one-hour brainstorm sessions on separate topics and we got over 600 ideas in four weeks. One submission was a simple redesign of a body brush for back cleaning. Another was a system for building sensors and digital maps that enable emergency response after natural disasters. That idea came from our team out of Turkey that was looking at how they might be able to find people after earthquakes, which was an issue that had impacted them. And we got so many more ideas it was incredible.”
3. Combat disruption with employee brainpower.
KPMG predicts that, within 25 years, the $200 billion auto industry could shrink to less than 40% of its current size. An Accenture report titled Banking 2020 notes that “disruptive fin-tech business models threaten up to 32% of banks revenue by 2020.” And so it goes in the age of disruption.
When we first started hearing about disruption 20 years ago, it was confined to a few industries, like disk drives. Today virtually every industry is susceptible. Brick and mortar retail is said to be at a tipping point as retailer after retailer closes stores, or slink into bankruptcy.
Often, when I’m on a speaking engagement, I put up a slide with logos of disrupted companies, such as Blockbuster or Blackberry or Nokia. No CEO wants to see their logo on this list. So if you’ve got a way to tap the brainpower of thousands of employees, there’s no reason it has to. There’s so much crowdsourcing has to offer those who are challenged with fighting back against disruptors. But you do need all hands on deck and this new tool is vital.
4. Invite customers to contribute ideas.
Denmark-based Lego Group uses crowdsourcing to solicit ideas from fans all over the world. While the company employs 180 designers, they know that among their many fans (some of whom are well beyond childhood) may lurk the company’s next blockbuster — if only they are receptive to customer ideas. Lego personnel review all idea submissions that garner 10,000 “likes” from site visitors. Lego customer contributors whose ideas get chosen to go into production receive 1% of their idea’s revenue.
Other organizations are crowd-sourcing for solutions to vexing technical problems or to discover winning algorithms (Netflix), while snack giant Lay’s, a division of Frito Lay, asks the crowd to suggest new chip flavors or even whole snack categories via its website. Visit Clorox Connects and you’ll see dozens of ideas submitted by Clorox consumers. Fact is, we’ve been crowdsourcing since the time of the Romans. What’s different today is the scale and scope of this new method of interacting with the wider world, and this dynamic will only grow in the years ahead.
5. Revamp new product development.
Polaris Industries, a Roseau, Minnesota-based manufacturer of ATVs, uses its crowdsourcing platform to discover and deliver breakthrough products that help it compete with Harley-Davidson. Before they began rethinking new product development, the company’s innovation approach was very much 2.0 and top-down.
Under the old approach, new product development was difficult for Polaris to discover unconventional ideas. And even when they did, the path to development was tortuous. Polaris had no way to predict the risk, value, or viability of an idea, which made it hard to secure executive sponsorship and budget for innovation projects. But when it turned to the crowd, Polaris achieved an 80% reduction in the time it takes to discover, assess, and execute new ideas, according to a Spigit white paper.
One byproduct of Polaris’ new approach has been the its three-wheel motorcycle called the Slingshot, and three other bestselling vehicles. Tapping the internal crowd has energized Polaris’ R&D process. It’s also reduced time-to-market dramatically – a distinct advantage in a highly competitive market.
6. Embrace new methods of driving growth through innovation.
My research study of the best practices of the world’s leading companies suggests they do five things amazingly well: 1) They make innovation a strategic leadership imperative, 2) they manage ideas as critical assets to future growth, 3) they collaborate with customers using a variety of customer insight tools, 4) they cultivate cultures of risk-taking and experimentation, and 5) they involve everyone in the enterprise.
This final factor may be the most significant. Creative, original, and impactful ideas can come from anywhere, notes Spigit’s 2017 Business Innovation Report. “When asked how often ideas selected for implementation are submitted by someone outside the group or business unit sponsoring the challenge, 24% of our customers say this happens more than half the time.”
Crowdsourcing’s most significant contribution may be that it breaks up monopolies in an organization, and readies it for fundamentally new approaches to coming up with ideas and bringing them to life. No department has a lock on ideas pertaining to its work product. The research and development group is no longer the only place where new technologies can originate. The human resources department is no longer the only place where morale and engagement can be nurtured. The marketing department is not the only place where customer experience improvements can originate. And the innovation department no longer has a monopoly on innovation.
Crowdsourcing is not a silver bullet. Organizations must focus the approach on real business challenges. Otherwise, ideas languish for lack of sponsorship. But its rise seems inevitable, given the inadequacy of traditional approaches and given the promise of applying the collective intelligence of the larger community to the opportunities at hand.