Firm innovation benefits from crowdsourcing

(This article was originally published in our research institute’s blog but these no longer exist after website updates. Therefore, I publish it here with updated figures.)

My Starbucks Idea has more than 98 000 product ideas suggested by consumers. Dell’s IdeaStorm community has contributed more than 18 500 ideas, of which 527 have been implemented. Bombardier Transportation successfully hosted YouRail Design Contest for not only professionals and designers but anyone interested in the future of modern transportation.  LEGO’s Digital Designer allows users to create their own models on an ongoing basis. Nokia’s IdeasProject has attracted more than 23 000 users during its first two years.

Today, consumers want to create their own experience.

Online networks represent spaces for communication, entertainment, relationships and up-to-date information. Instead of being passive recipients of what firms want to offer, more and more people engage themselves in developing and modifying products – a phenomenon to which professor Eric von Hippel (MIT, Sloan School of Management) refers as ‘consumerism’.

A new innovation paradigm has evolved together with the advances in user-centered communication technologies. Users develop and rate new products or features within user-driven communities, while producers enter the market only after the market potential is clear.

One mode of engaging consumers into co-creative activities is crowdsourcing – one of the current trends in open innovation. Indeed, there are a variety of examples of crowdsourcing before the term was even invented, but online communication has speeded up collaborative activities.

Crowdsourcing may take many forms, but a common feature to all of them is that they depend on the contribution by a certain crowd. Participation is non-discriminatory in nature, reflecting the tone of open innovation.

For instance, when a company wants to harvest consumers’ ideas, it may establish

  1. an idea competition or challenge, where a company invites general public or a specific target group to submit contributions on a certain topic within a period of time
  2. a crowdsourcing community, where users may freely share and rate each others’ ideas on a continuous basis.

If firms want to benefit from crowdsourcing, the same lessons apply as within any virtual community: you must first evaluate the context. If the selected objective is not best addressed by open participation and contributions of individual users, consider another alternative.

Secondly, take into account the type of knowledge you need to deal with. Online communities only rarely become the source of radical innovations. Instead, they build continually on existing knowledge and cumulate on it through shared problem-solving and creativity.

Thirdly, invest in firm-internal resources in order to take advantage of crowdsourcing. You have to locate the key individuals and organize the community-internal activities, which is often the easy part when compared to knowledge integration and taking use of the ideas a community generates.

Finally, breed user activity and reward active contributors in the manner they appreciate the most. Often recognition by the hosting firm is highly valued.

For more information, please see The Promise of Idea Crowdsourcing by Tanja Aitamurto et al. (2011).

It is a strategic choice for firms to stick to existing modes of product development or establish means to engage their consumers in co-creation. Either way, online crowds march forward.

Yksi kommentti artikkeliin ”Firm innovation benefits from crowdsourcing

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