People Innovation Excellence

Crowdsourcing as an Open Innovation Model for Managing Business ​

Research and development in early twentieth century refer to close innovation in a protected and highly secure labs white high skill scientist. But today with advance technology of internet, online and cloud technology collaboration change into open innovation model that popularized by Henry Chesbrough where things like intellectual property, organizational boundaries, and the identification of new markets became a much more public and shared experience. The boundaries that once separated different disciplines, organizations (even competitors) began to dissolve and innovation opened up to become a much more collaborative process.​

The reason said Henry are “the increased mobility of skilled workers, the expansion of venture capital, external options for unused technologies, and the increased availability of high-capable outsourcing partners”. With a global workforce and the online tools that allow them to collaborate instantly, across language barriers from anywhere, engaging huge groups of employees in the innovation process is not only possible, it’s preferable to letting all the change happen behind closed doors with the folks in lab coats.​

This open innovation model goes along with trends of using crowd-sourcing model where everyone can submit ideas that they think could solve a certain business challenge or to develop product. Companies create a large cloud-based suggestion box, which allows employees from all over the business to submit ideas that they think could solve a certain business challenge. These ideas are then analysed by the community, who vote up ideas that they like. Gamification techniques are used to encourage engagement and the most popular ideas then go through to the next stage, until the business leaders are left with a shortlist of the best.

In a bid to transform its business, Microsoft recently announced it would cut thousands of middle management jobs to ease the flow of information and decision making, ‘no longer respecting tradition but only innovation’.

With Crowdsourcing as an open innovation model it give companies great mass content for idea from product and others but also give ​a lot of ‘background noise’ which can drown out that one truly great idea. With this model need more attention span that will effect in dropping the engagement. This combination creates tension in the innovation process. Current crowd-sourcing solutions and methods attempt to ease this by killing weak ideas as quickly as possible. Although this isn’t always for the best, as I’ll explain later.

Main concern with this innovation are the shocking economics and critical culture. Where  failure rate for approved innovation projects is between 50-80%. In other words, most attempts to be innovative will fail where most big businesses do not like. It costs money and, if not handled properly, can damage reputations. As such, many innovation programmes face being shut down before they’ve had a chance to really prove their worth.

Thankfully this corporate culture of blame is decreasing as Gen Y employees are taking their first management positions with their a new way of working. They care with horizontal structure rather than hierarchy. They are using their new way of doing business where experience only can’t pace up with change speeds up. They are using bottom-up innovation that is already starting to decentralise the “command and control” nature of more traditional organisations.​

A working environment which welcomes brave decisions and unusual thinking, whether it works first-time around or not, has been key to the success of so many of today’s household names. Mark Zuckerberg’s guiding philosophy, the “Hacker Way”, openly encourages Facebook employees to “make bold decisions, even if that means being wrong some of the time”.

This doesn’t necessarily have to mean big dramatic changes, rather the creation of a culture and way of working which fosters a continuous stream of incremental innovations. In fact I’d argue this is an infinitely better way to do things. It spreads the risk, thereby generating predictable returns – which might be less glamourous than inventing the next iPhone but will be a lot more palatable for senior management fixated on old ways of working. To this point, we at Mindjet have been exploring the concept of emergence.

Eventually, enterprises all over the globe will begin to embrace this collaborative way of working. It’s a saying that goes back many years, but “the wisdom of the crowd” is as relevant as ever – especially in business. In 1906, statistician Francis Galton used the collective mind of a crowd gathered at a country fair to correctly guess the weight of a prize bull. Although a rudimentary example of crowdsourced intelligence, it clearly demonstrates how no one entity is greater than the sum of its parts.

​Ref:

https://www.innovationmanagement.se/2015/03/30/emergence-the-next-efficient-evolution-of-crowd-sourced-innovation – Accessed on 9 Oct 2015
http://essentialsofbusiness.ufexec.ufl.edu/resources/information-technology/understanding-crowdsourcing-and-its-importance-for-managers/#.VhiMUOyqqko – Accessed on 9 Oct 2015​

Published at :
Written By
Dony S
Deputy Head of IBM | Bina Nusantara University
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