How to leverage the intelligence of the crowd to drive exponential change

Although the term crowdsourcing was coined in 2006, examples date back to the 18th century, from the study of moon movements in the creation of nautical tables, to the Oxford English Dictionary (in the development of the first dictionary), and the Meteorological Project at the Smithsonian (developing the first weather maps). These original examples of crowdsourcing were primarily focused on mechanical tasks, or those requiring significant (literal) manpower to accomplish, with data being transferred via mail and telegraph over very long periods of time.

Fast-forward to 2013, where digital platforms have replaced information received through mail and telegraph. Today, the rate at which data and ideas are collected, viewed, commented on and hacked is unprecedented, primarily as a result of the pace of technology innovation. With hundreds of platforms, ranging from corporate open innovation to niche platforms focused on specific industries or tasks, the value and success of individuals coming together to solve problems is well established, particularly in the world of tech start ups.

In our innovation work, we find that many organizations are bound up playing leapfrog – each quarter focused on jumping over and getting ahead of competitors. Most leverage open innovation platforms as glorified suggestion boxes, and overlook a tremendous opportunity to hack successful models to create sustainable strategies. Below are five ways to leverage the principles of crowdsourcing to create lasting impact within organizations.

1.     From optimization to innovation

2.     From customer service to customer experience

3.     From managing knowledge to collective intelligence

4.     From old money models to new money paradigms

5.     From corporate responsibility to community impact


 From optimization to innovation
Historically, process optimization has been a key to differentiation by way of quality and cost competitiveness, particularly in the context of manufacturing, technology, and other process-driven environments. Deming’s quality principles of continuous improvement, systems thinking and human psychology focused on the way materials and people flow and communicate to create high-quality product and deliver on service. In many organizations, creating and maintaining quality through established processes continues to be highly regarded, and is often, if not always, a leading key-performance indicator.

Now, contrast Deming’s principles with the objective of innovation – to create new, disruptive ideas that address the (sometimes articulated, often not) needs of customers, users, partners and employees. While Deming advocated change for the purpose of quality improvement, the idea of creative destruction — the entrance of new entrepreneurs in a market where established companies are entrenched— is a reality in today’s context. Developing innovation capabilities, and a protocol for deploying them, is fast becoming a key differentiator for organizations hoping to compete effectively.

So, how can collective intelligence facilitate this movement? One way is through multi-disciplinary ideation.

Multi-discipline ideation
Multi-discipline ideation brings diverse audiences together to identify problems and opportunities, and then break down current models and create new ones. Breadth of thinking across disciplines, coupled with depth of expertise, can spur innovation as ideas are surfaced, interpreted and analyzed in new, meaningful ways.

A great example in the world of education is the Global Challenge, an annual initiative hosted by the Massachusetts Institute of Technology. The event is a competition that sees students, alumni, faculty and community partners from around the world come together to solve important world challenges. The Global Challenge has produced solutions such as low-cost water purification, a writing device for the blind, health analysis/detection processes, and novel ways to deliver and access education, among others. The intellectual capital generated by these platforms is significant and was developed by teams with very different backgrounds that came together to solve these challenges.

Organizations can replicate this kind of thinking by bringing together high-performing, open-minded individuals across disciplines and departments to solve critical challenges for organizations. In our experience, this model is often supplemented by external stimuli – outside field experts, consumer research and foresight. The most successful organizations incorporate a mandate from the top and a commitment to implement in order to prove success.

From customer service to customer experience
Customers are the number one focus for any business. They are, above all else, the reason for being. Putting customers first, as people and not as an abstract idea or business objective, is a core strategy. I recently wrote about the comeback of the customer experience in a global innovation quarterly, where I talk about the need to differentiate product and service categories that are overpopulated and undifferentiated. The challenge for organizations today lies in creating the multi-touch-point relationship necessary to deliver on a meaningful experience across interactions. Each channel has the ability to strengthen or weaken that relationship.

The worst experiences can become embedded in a customer’s psyche, forever ruining a company’s reputation. Countless blogs and articles cover the best and worst of customer service. From my experience, the best customer experiences go beyond transactions and reach into the emotive subconscious through empathy and an understanding of expectations. When designed well, these moments build on each other, creating the positive feelings that turn customers into advocates.  

What better way to begin building a foundation for customer experience than building it with customers? In the world of customers, this is where co-creation comes in.

Co-creation
Co-creation is the act of building a product or service with customers and end users in an iterative manner. We use this method extensively at Idea Couture, collaborating with our clients’ customers, and internal and external stakeholders to build new products, services and processes. It’s just good business to work with those who are going to buy/use them.

My Starbucks Idea, is an example that moves customer feedback beyond a black-box suggestion queue. Tens of thousands of ideas from customers are shared transparently, along with a two-way dialogue between those customers and Starbucks employees. As far as corporate crowdsourcing platforms go, this is one of the most successful. There are three reasons for this success.

1. The mandate is simple – tell us how we can make your Starbucks experience better.
2. Starbucks employees are involved regularly.
3. Starbucks implements some of the ideas, creating an immediate connection with customers. There are some great ones out there now – ideas such as the splash stick and automated ordering.

This kind of dialogue is immensely valuable to an organization like Starbucks – allowing it to solicit great ideas from the field, and solidifying the customer relationship by responding to those ideas. In the current consumer context, transparency and action are two highly regarded attributes for any company

From managing knowledge to a collective intelligence
It may seem obvious that sharing and managing knowledge to enable a learning organization is critical for growth, particularly in environments of rapid change, seemingly annual corporate restructures and exponential technology innovation. But most organizations have a difficult time with this task.

The existing literature cites examples of “well managed knowledge” that takes the form of centralized databases, with well laid-out processes. While this may work in some contexts like R&D and manufacturing, the problem still remains that knowledge transfer among people, departments and operating companies, across time, is one of the biggest challenges facing corporations. There must be a better way of capturing, analyzing and storing information for future retrieval. We need to know what organizations can learn from platforms that have knowledge and information sharing in their DNA.

Citizen Journaling
Access to real-time information is critical. With Twitter as the platform for broadcast messaging and the rapid spreading of information, platforms like Ushahidi, which means “testimony” in Swahili, have been developed to help people view citizen-reported occurrences in a given region. Originally developed to map the violence in the 2008 Kenyan elections, the platform has since been used in other conflict and crisis zones to map pockets of violence, pinpoint a need for clean water and food, and surface other needs that require intervention in a particular context or situation.

So, what is the link between a Citizen Journaling platform and managing knowledge? They both endeavor to collect and map information, making sense of it in order to develop strategies and tactics to address. In the case of managing knowledge, it is more than just tagging and codifying the millions of pieces of data being generated in organizations from documents, presentations and reports on conversations and key decisions. It’s doing all of these things consistently over time along with layering on the “So what.”

It’s also critical to set up a system or structure that allows for ambient data collection. This is accomplished through distributed task management, the cornerstone of a crowdsourcing foundation.

Distributed task management
Distributed task management is the breaking up of large, tedious tasks into micro tasks scattered widely across populations around the world. A great example is reCaptcha – a free service that helps digitize books, newspapers and old-time radio shows. Each day, about 200 million people around the world use CAPTCHA to digitize something. Each digitization takes ten seconds. That is not a lot of time on an individual basis, but in aggregate these little puzzles consume more than 150,000 hours of work each day. Imagine if a single organization had decided to take this on – it would need to employ 18,750 employees working 8-hour days to accomplish the same effort.

Extend this simple idea to the task of capturing organizational data over time from key management decisions, from R&D initiatives to customer interactions. Creating the ability for employees to capture data explicitly – as well as tacitly — is a long-term strategy for smart organizations.

This ability is facilitated by yet another revolution – Big Data – which encompasses the challenges posed by large and complex data sets, including their capture, curation, storage, search, sharing, transfer, analysis, and visualization[9]. Organizations that can put into place structures to capture data and frameworks for analysis (a collective intelligence capability) can leapfrog competitors — who are still focused on the notion of simply managing knowledge.

From old-money models to new money paradigms
A common theme in every organization we work with is the annual budget cycle. Three to six months before the end of a fiscal year departments go, hat in hand, to centralized finance departments with their funding requests. This is often a lengthy and arduous process, requiring hundreds, if not thousands of hours of manpower to detail a budget and action plan. This traditional capital vs. expense-planning exercise is important for keeping the lights on. But, what if there was another way to find dollars for critical projects that have significant impact to customers?

Crowdfunding
Crowdfunding is the collective effort of individuals to support an initiative by pooling funds. Platforms like Kickstarter and Indiegogo have made a significant mark in facilitating investment (in Kickstarters case, $679 million since its founding in 2009). They have enabled companies to gather support and win market validation for projects in the fields of design, technology, film, and publishing, amongst many others. In the crowdfunding model, customers are investors.

Large organizations have yet to attempt this kind of customer outreach, mainly because they haven’t considered it as an option or, for those that have, discovered that the mere thought of the legal and governance bureaucracy can be daunting. For those willing to consider this model, there is only an upside. Customers are involved from the very beginning of the product-creation journey, ponying up their savings to fund initiatives they believe in. It’s a cradle-to-cradle movement, a self-sustaining ecosystem that simultaneously validates product concept and provides working capital.

From corporate responsibility to community impact
In most large companies, corporate responsibility is a key part of the business model, with self-regulation as the primary objective, and often extending to realms of social good and philanthropy. Billions of dollars are donated on behalf of organizations to countless initiatives around the world. For the most part, organizations use an arms-length approach to funding – sending donations and sponsorships through not-for-profits, NGO’s and the like. While this approach certainly has an impact, we have seen a new kind of CSR model that is a recipe for success.

It is called Civic Community Building, which looks to make a lasting impact on communities directly, asking those who live, work and play in them to recommend where dollars would be the most helpful. This community co-development model relies on individuals within communities to elevate awareness of community issues and projects to address them, with the objective of gathering support.

For instance, the Aviva Community Fund is a platform that allows citizens from across the country to submit an idea to benefit their communities. With $1 million in funding available, idea creators compete nationally to gain support for important community-focused projects. Initiatives have included after-school programs, playgrounds, animal shelters and health education. By having a civic impact, Aviva creates a bond with people in the communities.

Through our work in building innovation processes, changing organizations and establishing strategic capabilities, we’ve seen countless opportunities for crowd-based operating principles to drive strategic differentiation. While I’ve provided a number of examples based on crowdsourced principles, the key for any and all is identifying the initial objective and purpose, establishing the right framework, building an initiative with a deep understanding of context, and aligning with an organization’s culture.

Reprint from Ivey Business Journal
[© Reprinted and used by permission of the Ivey Business School]