I read an article on crowd sourcing which I thought was pretty good so I am going to summarize it below. Enjoy!
Why is it hard to use the crowd?
Because manages have generally lacked the ability to identify which challenges/problems would be suitable for the crowd to solve. By categorizing crowd sourcing into 4 general forms it becomes easier to match ones challenges to the crowd. Each form is suitable for different types of challenges/problems.
I . Contest
II. Collaborative community
III. Crowd complementor
IV. Crowd labour market
I. Contest – This form works when an organization identifies a specific challenge/problem and offers some sort of incentive (often cash) in return for solution proposals. Contests are best suited for situations where it is not clear what skills or knowledge is needed in order to best solve the given challenge/problem.
”Running a contest is akin to running a series of independent experiments in which, ideally, we can see some variation in the outcomes. Therefore, contests are most useful for problems that would benefit from experimentation and multiple solutions.”. Consequently, the contest is most efficient when the problem/challenge is complex, novel or when there is no established best practice to relate to. Furthermore ”Contests are also useful for solving design problems, in which creativity and subjectivity influence the evaluation of solutions”
II. Crowd collaborative communities – Teaming up with a collaborative community gives an organization access to customers who know the deficits and issues of your product(s) and have the skills to fix them. For this form of crowd sourcing to work, individuals need to be free to attack the problem/challenge which they identify while not having to worry about other parts of the product. Consequently, the strength of the crowd in a collaborative community is its diversity but it lacks cohesion thus the crowd is hard to control.
Another aspect which is important for collaborative communities to function and create value is the need of task modularization, standardized routines and technology which facilitates coordination. Historically, Facebook has relied on collaborative communities to translate its website into multiple languages. Lego works with a community of fans to come up with new designs and products. Organizations using collaborative communities need to be aware that the protection of intellectual property is nearly impossible thus it is important to have a strict division between proprietary assets and community assets.
III. Crowd Complementors – This form of crowd sourcing makes your core product or technology into a platform that generates complementary innovations by enabling other actors to create a market of goods and services upon it. Complementors provide solution to many different problems/challenges as opposed to competitions which provide different solutions to one specific problem/challenge thus the opportunity of complementors lie in the share number of solutions. As an example Ford Motors plan to convert its vehicle electronics, entertainment and hardware systems into an open platform which enables external developers to innovate.
Two grand challenges connected to crowd complementors are 1. Providing access to functions and information in the core product (through an API for example) 2. Protecting your technology and assets thus working mainly which trusted actors using contracts is necessary.
IV. Crowd labor markets – This type of crowd sourcing matches buyers and sellers of services and employ conventional contracting for services rendered. Rather than matching workers to jobs for long-term employment within companies, crowd labor markets serve as spot markets matching skills to tasks “on demand”. An example would be Testbirds, a platform which enables people who want to test apps and websites to be found and contacted by organizations who need testers.
Critical to the success of these platforms is their technological platform and infrastructure which allows for transactions to be effectively governed. For organizations, the biggest concern would be to identify which tasks to farm out and who would manage them within the organization.
Each of the forms have strengths and weaknesses but all can expand the capabilities of an organization and can thus be viewed as tools for organizational problem solving.
Reference: Boudreau, K. J. & Lakhani, K. R. (2013) Using the crowd as an innovation partner. Harvard business review (4:61-69)