December 03 2012

Innovation: The benefits of crowdsourcing

by Nick Wright, posted in Social Business on 3 December 2012

Before the budget was announced earlier this year, crowdsourcing was a relatively unknown concept in the UK – and many of those that did know about it were sceptical, to say the least. But with the Government using crowdsourcing to facilitate a mass public consultation on how to reduce the national debt and improve public service provision, the nation’s intrigue is on the rise.

While we wait for the Treasury to consider the workability of the tens of thousands of suggestions put forward, savvy members of the business community are looking at whether and how crowdsourcing can transcend politics and improve their own operations.

So what is crowdsourcing and where did it come from? The concept behind crowdsourcing is that the best ideas in life often come from the most unexpected places; that two heads are better than one; and that 1,000 heads are better than two. Taking crowdsourcing, or mass-collaboration, from concept to practice involves a webbased platform, built upon social media, that enables members of a relevant community to voice ideas on how to solve a specific set of problems and vote on the suggestions put forward by their peers.

Not surprisingly, crowdsourcing started out in the States. In terms of its business benefits, cynics will tell you that it’s yet another buzz word, part of the social media frenzy – all fluff and no substance or demonstrable return. Yet dig a little deeper, and crowdsourcing is just a concise term for costeffectively harnessing the collective wisdom of the crowd. Whether it’s opening up debate past the traditional boardroom barriers to engage frontline staff on decisions usually made on their behalf, or targeting customers to improve product and service offerings, or looking for ways to reduce spend or improve processes – mass ideas collaboration, facilitated by social media, has a lot to offer businesses if approached with thought and enthusiasm.

An example of crowdsourcing delivering in a business capacity can be found in Unilever’s recently launched crowdsourcing competition to develop its new ad campaign for signature brand, Peperami. Not only did this help the company to engage with (and nodoubt collect contact details for) a key section of its customer base – it received in excess of 1,200 suggestions but Unilever estimated the process worked out up to 70 per cent cheaper than its traditional advertising agency approach.

But for crowdsourcing to be effective, as it was for Unilever, there are some ground-rules, and indeed pitfalls, to be aware of. The over-moderation of a crowdsourcing platform can alienate members and end up being counterproductive. The first rule of crowdsourcing is to remember that ideas generation via mass collaboration needs to be organic in order to be successful. People also have to believe you have a genuine interest in sourcing their ideas, comments and votes.

Crowdsourcing must not be used as a political device or cynical exercise to try to make people whether that’s staff, customers or the general public – feel like their ideas are valued. Businesses using crowdsourcing must deliver on their promise to seek new solutions.

Crowdsourcing is still in its infancy in the UK. But for many businesses, from major supermarket retailers and television production companies to SMEs across multiple B2B and B2C sectors, it represents an internationally proven and cost-effective way to embrace innovation, tackle waste and improve performance.

Avoiding common Crowdsourcing pitfalls
Crowdsourcing has become a media hot topic in recent weeks. As well as the UK government’s attempts to harness the ‘wisdom of the crowd’ by launching its Your Freedom platform, BP has also turned to anyone with an idea and an internet connection for inspiration.

But it’s not just governments and global oil companies that are recognising the value of engaging the masses to help solve problems. Many businesses the world over are jumping on the crowdsourcing bandwagon in an attempt to reduce cost, tackle inefficiencies or simply better engage with customers to ensure business offerings are as tailored as possible.

However, with the rush of interest in crowdsourcing, comes the associated risk of getting it wrong. Although crowdsourcing may seem a simple concept, there are a few pitfalls to be aware of. So what are the deadly sins of crowdsourcing and how can you be sure your mass collaboration efforts aren’t wasted?

1. Over moderation
Crowdsourcing, using a social media platform or website, breeds communities and, by and large, these communities are self regulating. It’s always advisable to appoint a moderator or community manager to help facilitate the free flow of ideas, respond to antisocial behaviour and encourage user engagement but be aware of the consequences of over moderation.

Trying to assert too much control will result in a backlash from the community you’ve worked so hard to develop and will ultimately be counterproductive. The rule to remember is that ideas generation via mass collaboration needs to be organic to be successful. If you’re concerned about a particular group of users promoting individual agendas, wait for others in the community to apply peer pressure and only exercise a light touch as a last resort.

2. The sin of cynicism
People have to believe you have a genuine interest in sourcing their ideas, comments and votes. Crowdsourcing must not be used as a political device or cynical exercise to try to make people, whether they’re staff, customers or the general public, just feel like their ideas are valued.

Be honest from the outset and make sure the people you’re engaging with feel confident that your intentions are genuine and that their actions and ideas will contribute to change. Businesses using Crowdsourcing must signup to delivering on the promise to seek new solutions.

3. The ‘build it and they will come’ philosophy
You’ll often hear me say to customers, ‘we provide the platform, you provide the content’. As with all processes, you have to work at crowdsourcing. In the early days you have to work at signing people up and this can often be the hardest part depending on the type of people you’re trying to attract. For a HR manager looking to engage staff this can be straight forward but for a business trying to engage its customer base for market research or product/service development purposes things can get a bit trickier. Utilising other social media portals such as Twitter and Facebook to infiltrate pre-existing groups and direct ‘fans and followers’ to the crowdsourcing platform should be made a priority. In addition, hyperlinks within customer email newsletters and incentivising participation with competitions or promises of improvements – should also be considerations.

There’s then the hurdle of education to overcome – although many savvy businesses are aware of crowdsourcing, many consumers are not. Explaining what it is and communicating its benefits and then its successes on a continuous basis is paramount.

‘Build it and they will come’ might have been alright for Kevin Costner, but like most things worth having in life, you have to put in the leg work if you want to see the results.

4. A vague commitment
In the main, people who contribute to crowdsourcing do so as a result of intrinsic motivation. In other words for the love of it. Their reward is reputation-based. For a business implementing a crowdsourcing platform, there needs to be clear motivation from the outset, with plans in place as to how to recognise the contributions made by the communities being developed. Will you help promote key contributors in the eyes of their peers, and make sure their reputation is enhanced across the community? Or will you also introduce extrinsic motivation in the form of rewards? Making no commitment either way leaves people feeling undervalued and will significantly hinder success.

5. A community of clones
Perhaps one of the worst crowdsourcing sins to commit is a lack of community diversity. If you’re seeking new marketing ideas don’t just ask marketers to join the community, get other points-of-view and thinking in the mix too. The whole ethos of crowdsourcing is that the best ideas in life come from the least expected places, accompanied with the fact two heads are better than one – and 200 heads are even better still! If you’re looking to survey your customers, don’t just approach the ones who are often vocal on Facebook groups or Twitter profiles – and don’t just approach the happy customers either. Dig out customers who have complained in the past and invite them to have their opinions heard, share experiences of products, services and areas for improvement. Not only will this help to improve your relationship with difficult customers who will feel like their feelings matter to your organisation but it will produce a more diverse range of ideas and solutions. If you create a community of clones you get something referred to as ‘redundancy of thinking’, which works against the break through thinking you’re trying to achieve.

Written by Nick Wright for Crowdicity

Nick Wright

Nick Wright is Co-founder and Chief Product Officer (CPO) of Crowdicity, a social innovation software provider. For over 15 years Nick has helped organisations to better understand the power and poten…

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