The Power And Challenges Of Crowd Innovation

Managing Partner at Amyx Ventures, TEDx, Top Global Innovation Keynote Speaker, Forbes, Singularity U. Smart City Accelerator, SXSW.

Companies are recognizing the power of crowdsourcing as a complement to their internal innovation, with executives acknowledging that company R&D is no longer the exclusive holder of valuable ideas and innovation. 

According to a 2015 report, 85% of top 100 global brands have used crowdsourcing: 59% to generate innovative ideas, 34% for marketing and communication ideas, and 7% to find design solutions.

So, how does crowdsourcing harness the power of diversity?

Technical And Social Marginality

Experts, because of their domain knowledge, can generate high-quality ideas, but with little variation because they analyze from their specific swim lane. Crowdsourcing, on the other hand, tends to attract nontraditional participants from diverse backgrounds who may not be domain experts. The topical distance from the field of the problem is referred to as marginality, which, according to research, has a positive correlation to higher rates of winning ideas. 

Outliers

It turns out that innovative ideas have a normal distribution, bell-curve shape. As such, there are many average ideas but relatively fewer low quality and fewer exceptional ideas. Truly groundbreaking ideas are very rare. We call these outliers. As discussed earlier, domain experts come up with higher-quality ideas but with low variance, whereas nondomain experts generate low average quality but with high variance. What is fascinating is that the outliers with extreme values came from nondomain experts. 

Cross-Fertilization

Ideas don’t always work in isolation. Cross-fertilization is the concept that even better ideas emerge when the crowd can easily build on, combine or reconfigure others’ ideas. The open-source version control system Git (of GitHub) enables the developer community to take open-source components, build on top of them and assemble them with other open and proprietary components to develop new novel applications.

But like any good thing, crowdsourcing isn’t the answer to every innovation project. 

Fundamental Flaws

We like to believe that a good crowdsourcing campaign is when the problems are well defined and engagement is high, but what if that very premise leads to subpar results?

According to research, many crowdsourcing projects are structured so that participants try to come up with the best ideas on their own without ever interacting with others in the crowd, especially if they feel that sharing their ideas could jeopardize winning the contest. In essence, withholding their best ideas in order to protect their intellectual property defeats the intent and purpose of crowdsourcing. 

For this and other reasons, the participants are not able to produce solutions collectively as a brain trust. Instead, the ideas produced are largely random and performed in isolation. This results in a constrained innovation model that makes suboptimal use of crowds. 

Another major issue is that, most often, the problem is provided by the sponsor. The crowd never had a chance to challenge the organizer if the wrong problem was being pursued. Unless structured well to facilitate collaboration and cross-fertilization, the participants are not able to tackle a larger more complex problem and consider the comprehensive range of issues to generate ideas across the crowd in a nonrestrictive way that leverages each other’s ideas. The problems given are often highly constrained and modularized, such as coming up with a tagline or improvement to an existing product. The crowd is rarely engaged to help formulate strategic directions. Moreover, the ask is very specific to the organizer. They are not asked to look beyond the organization, its sector or industry to something that transcends borders and cultures. For instance, the crowd is not spurred to tackle the world’s most pressing problems such as corruption, income inequality, climate change, pandemics and other existential threats. 

Issues With Crowd Voting

Research has shown that blindly following the crowd can take you down the wrong path. When participants are allowed to rate ideas, top votes aren’t always a good predictor of the quality and potential of an idea. Matter of fact, it turns out that there is no correlation between participants’ votes and the eventual market success of the ideas selected. Moreover, participants tend to propose ideas high in novelty but low in implementation feasibility.

Another issue identified in the research is that participants tend to reciprocate vote for vote. That is, if you vote for my idea, I will vote for yours. This creates a skewed result based on the participants’ ability to solicit quid pro quo from others rather than the value and merit of an idea.

Rogue Participants

Not everyone comes into crowdsourcing to help. Some come with the intention of using it as a way to vent their anger or ridicule the sponsor. If not properly managed, the crowd can turn into a bullying mob that is bent on tarnishing your brand and goodwill. 

Internal Cultural Bias

Crowdsourcing can yield great outliers, but unless the sponsoring organization’s culture is conducive to taking those great ideas, it’s an expensive project that will simply fizzle and the winning ideas found will never be implemented. Watch for internal stakeholders who are out to squash these projects. They may have a bias against ideas from outside their organization. Some may even feel threatened. This is especially true when radical solutions are offered by participants. Internal staff might believe it’s too radical to implement. 

If we are honest, many crowdsourcing projects today do not leverage the power of the crowd to solve wicked problems. What if we freed the crowds from handcuffing constraints to work on complex strategies and major issues plaguing our society? Could the crowd help businesses, governments and NGOs come up with creative yet feasible solutions to problems such as human rights, poverty, world hunger, health and well-being, quality education for all, gender equality, clean water and sanitation, affordable clean energy, economic growth and prosperity?

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