Crowds are not inherently wise
It has been over a decade since it became popular to involve large groups of people beyond corporate boundaries in the creation of ideas for products or services. From technical problems to sports equipment, lifestyle products, or financial and public services, organizations increasingly sought to tap the knowledge of the crowd. The rapid growth of online platforms and the emergence of diverse online communities became an ideal resource from which to generate new product ideas or business solutions.
Crowdsourcing success stories abound, but so do stories of failure. Lego’s use of a crowd-based innovation strategy played a crucial role in reviving the struggling toy manufacturer. Netflix likewise used crowdsourcing to improve the efficacy of its recommendation engine by 10%, attracting over 44,000 submissions. Starbucks launched MyStarbucksIdea.com in 2008, to get ideas from consumers; the company has so far received more than 100,000 submissions from consumers around the world. By contrast, the crowdsourcing platform Quirky went bankrupt in 2015 because it didn’t adequately vet the market potential for ideas that were too quirky, financing too many bizarre products (Wi-Fi-enabled egg trays, anyone?) with no commercial appeal. Another tricky field is the public contest where an organization invites the public to suggest names, flavors or advertising ideas. The unpredictable dynamic of crowds can lead to “crowdsourcing fails” as in the Boaty McBoatface case that received global media coverage in 2016. The United Kingdom’s Natural Environment Research Council (NERC) had invited the public to choose the name of its newest polar research vessel, never anticipating the awkward moniker that won the online poll.
Crowds are effective under the right set of conditions
Obviously, crowds can be – but are not always - effective. Crowds, after all, are composed of human beings and can display the same unpredictable tendencies as the set of individuals that comprise them. To use crowds effectively requires the alignment of several factors. These are: crowd composition, the right question at the right time, and the right analytic method applied to the responses. Crowd-based creativity can be seen as a natural resource. It takes specific skills to acquire it, harness it effectively and sustainably, and transform it into offerings that markets value. Just as oil companies don’t randomly drill holes and hope for the best, companies should not attempt crowdsourcing without deploying a solid framework from inception to completion. Based on a comprehensive review of the existing research, we devised a crowdsourcing framework for the successful involvement of crowds in the innovation process. It consists of four stages: Define, Broadcast, Attract and Select – the “DBAS” framework and in each face some key questions need to be addressed (see Figure 1).