Harnessing the Power of Crowdsourcing

By Diane Youden, Principal, PwC

The social networking boom is not fading away anytime soon. Increasing emphasis on digital social relationships, along with rapid global digitization, has transformed how businesses communicate with consumers and, increasingly, their employees. One way companies are tapping into innovation is an approach known as crowdsourcing. Crowdsourcing enables a company to broadcast an issue to a diverse audience using Web-based collaboration solutions and asks them to contribute ideas to solve the problem. Organizations that have tried this have developed surprising solutions to internal problems and innovation needs.

According to PwC’s 14th Annual Global CEO Survey, 79 percent of CEOs expect their innovation developments will drive efficiencies and create competitive advantages, alongside the 78 percent who expect innovation to generate significant new sources of revenue over the next three years.

Unlocking worker knowledge and creativity has been on the minds of executives for some time now, and some are taking a cue from “digital natives”—Gen Yers and Millennials who routinely use collaborative social sites such as Twitter, Google+, Facebook, and digital applications to share information, obtain news, and decide what products to buy. While many companies are aware of these tools, relatively few have embraced them internally.

Community-centric younger workers will play an important role and should take a lead. This generation grew up with a social Internet, and they can help shape a crowdsourcing program that is relevant and current as they are more likely to embrace new and innovative methods of generating ideas. This can run counter to the existing culture but can signal a new way of doing things.

Crowdsourcing is effective, in part, because it draws upon the diverse experience and knowledge of a large, heterogeneous audience to arrive at innovative solutions. Another benefit: Crowdsourcing mirrors the social-collaborative mind-set of young audiences who are accustomed to communicating and sharing knowledge in a world where information is freely available with no organizational barriers.

Companies recognize that their diverse employees collectively know more than concentrated executive teams, and soliciting that knowledge has resulted in surprising solutions to difficult problems. At the same time, employees are thrilled to have an active voice in the creative process at their companies and are further engaged in the company mission. Organizations should conduct an analysis to understand their needs and the capabilities of vendors, while also considering the following five factors in positioning themselves for crowdsourcing success:

1. Include a diverse audience. The power of crowdsourcing lies in its ability to systematically engage a large, diverse group of people in collaborative problem solving. Research shows that significant advantages arise from including people with a diverse range of problem-solving approaches, backgrounds, and personal experiences. In fact, those most removed from the expertise typically associated with solving a problem often are more successful because they look at the issue from a fresh perspective.
2. Provide a clear purpose. To ensure crowdsourcing does not descend into chaos when an overabundance of voices spin off topic, provide a specific challenge for the company. For instance, ask employees to identify a new green-tech product that could generate a specific dollar amount in revenue over a defined period. An explicit purpose should give employees a catalyst, a community, and an outlet to unlock untapped innovation.
3. Motivate to participate. While employees are typically enthusiastic about providing input for new initiatives, there is no guarantee of universal participation. Participation is more likely to be self-generating in companies that have a trusting environment in which employees are engaged and encouraged to contribute.
4. Allow time to innovate. Companies often ask employees to innovate, yet many are unwilling to grant them the time to do so. Research has shown a direct correlation between teams that are given time to innovate and those that submit a winning crowdsourcing idea.
5. Don’t throw out ideas. Diverse audiences will deliver diverse solutions, and the most viable and financially promising suggestions typically win out. But that doesn’t mean the other proposals are useless. A key to successfully fostering innovation is the ability to turn failures into lessons and future successes. Apple’s iPhone and iPad, for instance, are both the result of related but “failed” products—the ROKR iTunes phone and the Newton tablet computer, respectively. To truly innovate, companies must embrace a culture in which a failed idea is acceptable and the workforce is encouraged to continually push the boundaries.

It is also critical that crowdsourcing participants know their ideas are being heard and taken seriously. Accordingly, senior leaders should actively participate in discussions to demonstrate a top-down commitment. In this new world of collaborative innovation, trust in management is an imperative that can be quickly built. It’s one thing to solicit employee opinions, but offering the opportunity to develop new products or services is empowering and can boost engagement.

The proliferation of social technologies among consumers virtually guarantees that corporate cultures and operating models will shift further toward an entirely digital ecosystem. And that means in the company of tomorrow, employees will work in new and very different ways.

Crowdsourcing presents a strategic opportunity for HR leaders to champion a collaborative digital enterprise that will bring the organization into today’s community-centric culture. Because of the typical role HR plays in owning the employee experience from hire to retire, it can play a pivotal role in not only helping to drive the talent management strategies that make crowdsourcing successful but also can proactively help drive changes to the corporate culture to be truly collaborative and innovative.

Diane Youden is a principal at PwC.