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Will corporations lag behind the crowds?

Crowdsourcing is fast becoming an enterprise solution which will be widely adopted. Yet corporations are lagging in establishing these types of collaborations. At the same time, these corporations are lamenting the difficulties they face, remaining relevant without the speed and agility of a start-up. The very start-ups that can help them to scale at reduced costs and quickly!
The resistance to crowdsourcing as a way of business is not new. Apple’s former CEO Steve Job’s initially resisted opening up the Apps platform to market creators. For the most part, he could not see the benefit to Apple or its iOS platform. The fear was that outsider Apps could be potentially harmful the platform, furthermore Jobs was protective of the Apple brand image.

Apple changed their mind and was able to significantly benefit from being open. In fact Apple created a powerful ecosystem whilst retaining control.

For the first time in Australia, payment processor, VISA is providing an “Everyday initiative challenge.” This challenge means that VISA will allow tech start-ups to co-create an innovation in the payments space .
Start-ups get to help VISA create a new consumer payment experience, solve an existing problem for merchants or create a solution in the disability sector. In doing this, VISA can capitalise on the innovation and retain control of their IP.
Crowdsourcing solves problems in a fundamentally different way. Research shows that the further away from your domain a problem is, the more likely you are to solve it. Combine that with a number of people who are unrestrained by the corporate culture or politics. The odds of success increases.

I explored this whilst teaching students studying UTS’s Bachelor of Creative Intelligence and Innovation. The cross-disciplinary teams together with creative techniques allows them to come up with the diverse solutions and quickly. They are able to self-organise to build on each other’s ideas from their own unique perspective. The outcome, highly sought after, patentable ideas.

The more diverse each team, the greater the number of such teams, the more likely the organisation will end up with a unique and suitable solution. Therefore opening it up to a national or even global scale, produces an amazing array of possibilities to pursue.

Proctor and Gamble (P&G), makers of brands such as Oral B, Duracell and Gillette, are prolific users of crowdsourcing to solve research and development (R&D) problems. Their system has been used to source solutions from smart minds around their world. It has also been used to keep their internal R&D team accountable. P&G is able to protect themselves by allocating parts of the problem to be solved by different groups. In the same way that digital entrepreneurs requiring a program will split up the code.

Crowdsourcing for P&G has certainly allowed them to maintain a sustainable competitive advantage in their industry.

Beyond this, over two-thirds of the world’s population are yet to make it onto the internet. Mark Zuckerberg under Internet.org, wants to be the person that makes that happen, bringing internet access to everyone. This will enable future arbitrage opportunities to emerge. Crowdsourced ideas and solutions will flourish further.

With crowdsourcing being the way of the future, leaders and managers need to understand how best to manage a process that is outside of their direct span of influence. Think of it like this, as an Executive Leader you will be asking a large group of undefined people to deliver the solution. The skills will be akin to project management and solution curators (among many others). Many things can and do go wrong.

How will you sift through thousands of solutions? How will you judge the quality of the solutions? How will you know if they are relevant to your business? What happens to the thousands of solutions that don’t make the cut?

So when is crowdsourcing appropriate to use?

It depends on what you want to use it for and when. To maximise impact, I recommend crowdsourcing when radical solutions are warranted. These are the problems which are so unique and different that in house expertise won’t cut it. These problems are also less likely to need a great deal of knowledge about the history and context from the organisation.

When the problem and your company data is going out to undefined crowds it can be easy to lose control. In my work, I have helped corporations define their brief in such a way that company IP is protected and privacy is ensured. We look at the risk management issue, setting out what could go wrong and ultimately how to mitigate those risks.

Matching the type of problem-solution to the crowdsourcing platforms is also important. For problems requiring highly technical solution, tapping into key talent in a field may be necessary. In this instance the high rollers room on prestigious platforms may be most relevant. These players can even work to continually improve on the solution and build on each other’s solutions.

For some corporations, the most difficult aspect will be sifting through possible solutions and selecting the ones that suit them. Using our core framework, we can quickly identify solutions that are tightly aligned to the organisation.

The outcome: solutions that support the future sustainability of your business whilst providing a competitive advantage.

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This entry was posted on Tuesday, August 23rd, 2016 at 2:32 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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