One of the most astonishing changes in ways of working that companies need to understand and tap into is crowdsourcing. This represents a huge change, from having employees sitting in your offices, to using a resource that includes anyone with a computer connected to the internet. And this resource isn’t just flexible, with huge expertise. Some of them don’t even want to be paid! It’s a massive change. This is one of the themes in Accenture’s 2014 Technology Vision; a sure sign that crowdsourcing has gone mainstream.
Why here, why now?
Mobile, cloud based engagements have made it increasingly easy to make connections and to collaborate, and crowdsourcing is one of the benefits that has emerged. People are making connections with others around the world regardless of whether they are employed by the same company. It makes a lot of sense for companies to tap into those connections, both formally and informally.
Part of the reason that this is happening now is the pace of change of technology. Companies cannot keep up. But individuals can, and although some of those individuals may be employees, others are not, and will not want to be. But they may be happy to help companies solve their problems. Alongside this has come the maturation of crowdsourcing platforms, bringing together those who have problems to solve with those who have the skills to solve them.
This goes beyond traditional or even freelance marketplaces. It is about creating a community around a particular problem, which has the passion and skills to help solve it. It’s much more fluid than any human resources model yet seen.
An example of crowdsourcing is the start-up Local Motors. Its co-founder, Jay Rogers, believes that there are two ways to get things done: you can hire people, or you can put the problem out into the cloud. He says that you get better ideas, faster, by doing the latter, and his company has now, within 18 months, designed and built a car using crowdsourcing.
Perhaps a more obvious example of the use of crowdsourcing is in marketing. Companies can put a product or idea out there, and interact directly with potential consumers to get immediate comments and feedback. And this doesn’t just work for new products, but established products too, providing huge insight for product development and improvement. And while purists might sniff that focus groups are designed to be representative whereas those who comment online are self-selecting, the potential numbers prepared to interact online outweigh this. After all, comments from over 100,000 potential consumers via the internet are probably much more statistically sound than the views of 100 focus group attendees.
Crowdsourcing has also been used to fund projects and businesses in the form of crowdfunding. Kickstarter is the best-known, and arguably the best, of the crowdfunding websites, although there are others. Crowdfunding is used by companies and individuals to provide start-up funding for projects, ranging from films to new product development. But companies are now starting to use it for market research. By allowing people to ‘put their money where their mouth is’, it gives a direct insight into what people will actually pay for, and is therefore hugely valuable as a market research tool. For example, Tesla Cars has asked for a ‘reservation fee’ for its new electric cars of $5,000 per car. Not only does this give them an idea of demand, it also provides valuable working capital at zero percent interest.
Many companies are using crowdsourcing to tap into our desire to innovate and solve big, intractable problems, by running problem-solving competitions. They put the problems out in the cloud, and offer a cash prize to the best solutions, then sit back and wait for the ideas to arrive. And collaborative consumption is almost the ultimate in crowdsourcing, in that it connects the ‘crowd’ with itself. The resources of the crowd can therefore be used directly to solve other consumers’ problems, rather than those of big or small corporations.
Not without challenges
There are significant challenges for companies wanting to harness the potential of crowdsourcing. First of all, how do you manage a workforce that has suddenly expanded from a few hundred to several hundred thousand? You can’t performance manage them all directly, so you have to set very clear parameters, and also plan very carefully and provide the right incentives to ensure that you get what you want when you want it. It’s a very human challenge, despite the technology, but for companies prepared to step up, crowdsourcing offers huge potential.