Utilising crowd led approaches to create value is increasingly familiar in both the literature of business comment and reporting and through our own experience. Crowdassets, as we refer to them, represent a profound and enduring source of innovation and we must adapt and respond to this opportunity. In the fourth of a series of articles focused on Innovation Culture, we are going to provide a more holistic view of the concepts as well as the means to embrace the growing opportunities presented by the crowd empowered ecosystem.
1. How to accelerate the process of bringing innovation to market?
The dynamics and characteristics of crowd led activities bring many advantages when applied to a business context. The crowd is by its very nature a broader and deeper source of insight and expertise than any internally facing organisationally bound resource. The crowd, by definition, is also the market place for most, if not all, businesses and by integrating the crowd into your innovation processes you are not only tapping into a greater and deeper source of insight you are simultaneously aligning your development with your consumers wants and needs.
The crowd is by its very nature a broader and deeper source of insight and expertise than any internally facing organisationally bound resource.
We can also allow this same asset class to fund our developments and become advocates and marketeers for the resulting product or service, becoming bound into its continual improvement. The mutually beneficial aspects of crowd engagement operate in parallel so permitting us to accelerate the process of bringing innovation to market and validating the process in such a way as to “magnetise” our innovation into attracting further investment and filling our business pipeline with potential clients and customers. But harnessing the crowd in the many and varied ways it can and should be is not a simple process. It requires analysis, planning and forethought. In shaping a crowdfunding project, for example, we adopt a four stage process to properly explore the opportunities and requirements of the campaign as we believe that only in this way will we embed the crowdasset concept into the heart of what the organisation does. Only through this alignment and immersion in a crowd driven approach will the organisation derive the complete value on offer. Often we encounter a situation where the decision to reach out to the crowd is conceived as a solution to a single problem and not as a shift to the crowd becoming an enduring source of value. In the case of crowdfunding the typical perspective of the protagonist is to address simply a dearth of investment. Whilst crowdfunding can indeed provide an injection of funds, to undertake such a campaign without appreciating the broader and much more valuable potential of reaching out to the crowd is to significantly curtail the return on investment that such a campaign will require.
Developing this crowdempowered ecosystem requires that the activities are properly set in a strategic context.
Developing this crowdempowered ecosystem requires that the activities are properly set in a strategic context. Employing a four stage process with the three initial steps designed to position, align and resource the crowd based campaign as a central driver for the organisation is a mechanism that forces the organisation to explore the broader possibilities of crowd led activities. The organisation must put in place processes and develop skills that will generate a far greater ROI in the short term whilst building an enduring and invaluable asset that will return incalculable value in the medium to long term. We refer to this as the TAMP process. It can operate as a decision support system, a sense making framework and gap analysis tool.
Being able to apply that harvested asset base to create innovative products and services does not simply happen.
It is imperative that the cultural, collaborative, communication and community building skills and structures are both in place and understood. How you identify, harvest and share insight knowledge and value in a crowdempowered circumstance is different to a purely organisational one. Being able to apply that harvested asset base to create innovative products and services does not simply happen, and the skills and techniques to achieve that need to be continually developed and expertly executed. That said it is not irrational that the proposition of placing the crowd at the heart of your strategy can create a sense of unease. Many of its ideas seem counter intuitive to our traditional business thinking, or the concept can seem too nebulous and poorly defined to effectively grapple with. Common concerns and challenges amongst those reaching out to the crowd include issues of resourcing and time commitment required for such an effort. In the case of crowdfunding the amount raised can sometimes seem small when the costs or staffing a campaign are factored in leading some to look for third parties to undertake the process. Not only is this a very mistaken approach likely to lead to failure, but it ignores the additional asset value that such a campaign can develop over and above cash.
Identifying and nurturing the community and crowd can also present challenges.
Identifying and nurturing the community and crowd can also present challenges. These activities take effort and skills and don’t just simply happen, but the processes and approaches can be developed. Concerns around the protection and securing of IP are also raised, but again this is something that is entirely manageable and mitigated. This is not to say that harnessing the value of crowdassets is a simple or mechanistic process.
The important understanding is that frameworks and approaches exist to help an organisation prepare for successful engagement with the crowd.
The ongoing review, monitoring and improvement of the crowd empowered business is an interlinked process that is a combination of an art and a science. It is absolutely essential that it is in place and continually updated, and it does not happen without planning. We consider that moving to crowd based approaches requires that the three phases of the crowd engagement process, that is to say before, during and after are a continuing cycle of improvement and learning. The important understanding is that frameworks and approaches exist to help an organisation prepare for successful engagement with the crowd.
2. Does your organization culture support crowd led approaches?
The innovation journey is as structured and open to improvement when incorporating the crowd as it is when working within the confines of the organisation or with a group of collaborative partners. Indeed we would contend that the range and scope of skills, systems, processes and competencies necessary to harness crowdassets are far wider than the industrial age management paradigm could possibly imagine or be prepared for.
To embrace the opportunity presented by the new crowd empowered age it is necessary to reexamine and reimagine your innovation capabilities.
To embrace the opportunity presented by the new crowd empowered age it is necessary to reexamine and reimagine your innovation capabilities as well as the type of behaviours and attributes that typically supports and accelerates the development of these particular capabilities. The common innovation capabilities essential to embrace crowd empowered approaches are usually a blend of knowledge, processes and tools that must be brought together. Taking a more holistic view, these innovation capabilities are among the ones that enable companies to perform specific functions at all the steps of the innovation journey. Like the “The Path for Growth an Innovation Journey” they typically cover the areas of Strategy, Organizational Culture & Collaboration, Knowledge and Market Intelligence, R&D value chain (ideation and execution) and Performance evaluation.
It is essential to assess which sets of capabilities exist in the organization and how they address the crowd led approaches.
Therefore it is essential to assess which sets of capabilities exist in the organization and how they address the crowd led approaches. Some of these common innovation capabilities are presented:
- Promotion of awareness and communication of the innovation purpose - the process of bringing innovation to market is complex and requires a shared understanding of the main goals and the communication of the innovation requirements. No sort of value can be generated from the crowd if there is no awareness about the purpose of the innovation. Organizations should make their intentions about innovation clear for all parties and particularly to the crowd.
- Creation of an organizational culture that supports collaboration – having strong internal collaboration practices is a requirement for incorporating the inputs from the crowd. Before asking external experts and innovators to submit their contributions or going proactively after the best ideas and insights that are available in the crowd, organizations must stimulate regular practices of sharing ideas and knowledge among employees with a diversity of perspectives. More than ten years ago, P&G did a giant step into R&D crowdsourcing when declaring that half of all new products and technologies would have to come from outside the company (Libert and Spector, 2008). This huge effort required new communication systems and tactics to overcome the resistance of many of P&G key researchers.
- Anticipation of change and trends, constantly scanning the expert crowd and the external environment. It requires connecting and empowering employees with the market and technology intelligence. Such practices enable the collective intelligence of the organization, capturing knowledge, having independent competitive insights from the marketplace, reducing the time to market and bringing innovation sooner to the marketplace.
Involvement of the crowd in the idea generation process emphasises the need for the management of intangible assets, including know-how and intellectual property (IP).
- Involvement of the crowd in the idea generation process – many organizations are now involving suppliers in pre-commercial procurement and engaging with customers in an early stage to test market readiness. The above-mentioned initiative from P&G opened the door to some of the most prominent idea exchange marketplaces and technology scouting platforms that are operating in the market. It emphasises the need for the management of intangible assets, including know-how and intellectual property (IP). These kind of issues are much more critical when embracing the power of the crowd. Without going into detail, it is easy to think about typical constraints related to ownership rights of IP generated by an expert partner, the license to use the R&D results for internal use or even the right to license IPRs form external partners to third parties. Similarly many IPRs issues could be discussed around the engagement of clients, as lead users or in any form of ideation.
- Engagement with the crowd to test the validity of concepts during product/service development – it requires communication and knowledge sharing during all the idea execution phases. It also involves the deployment of project resource requirement forecasting and planning tools, assuring the right interactions between functional company areas and external partners. Under this stage the risk of embracing crowd led approaches is much higher for the organization. Being closer to the market and commercialization, risks of sharing competitive information with the crowd should be wisely mitigated.
Adoption of indicators that monitors not only innovation financial performance but also the intangibles.
- Adoption of indicators that monitors not only innovation financial performance but also the intangibles (knowledge, reputation, brand, relationships, …). Given the fact that crowdassets are most of the times intangibles, it does not make any sense for an organization not include these in the design of the evaluation model.
But what is the real ability of the organization to shape the right behaviours and promote a culture that support crowd led approaches?
The common organizational cultural drivers that supports and accelerates the development of the above mentioned innovation capabilities are based on the following behaviours:
- Culture of collaboration across functions, geographies and external partners
- Commitment and engagement with the solutions offered to the market
- Focus on providing an unique customer experience
- Continuous benchmark with other industries and sectors
- Openness to new insights from customers, partners and even competitors
- Pro activeness in resources allocation to support initiatives along the entire innovation cycle.
3. The Challenges
The diverse and myriad ways in which the crowd is able to play a part in solving business challenges and creating value can at first seem bewildering. Understanding where the value lies in the crowd, be it in individual deep expertise and insight hidden in the crowd at one end of the spectrum, or the groundswell of a burgeoning crowd at the other and the ability to manage those relationships and transactions effectively requires skill, application and planning.
We do not contend that working the crowd is simple. We do contend that it can be done well and to great effect if the appropriate planning, competencies and systems are in place.
Adopting a rigorous approach to building the case and method for harnessing your crowd is invaluable as is the process of constantly reviewing enhancing and improving your execution. We do not contend that working the crowd is simple. We do contend that it can be done well and to great effect if the appropriate planning, competencies and systems are in place.
So perhaps the key question to ask is what is stopping you?
- Libert, B. & Spector, J. (2008) WE are smarter than ME: How to unleash the power of crowds in your business, Wharton School Publishing.
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