Crowdsourcing is a decentralized model used to provide solutions to design or production problems by outsourcing the task to people from the crowd. These people voluntarily contribute their time, effort and ideas in exchange for compensation or intrinsic rewards.
This is an open innovation approach often employed when organizations require distant knowledge. Sometimes, in order to solve a complex problem, a unique set of skills is required that the organization may not necessarily possess internally. Consequently, companies launch crowdsourcing campaigns with the aim to find a valuable contributor in the crowd. Even though there are different methods of interacting with the crowd, the one most used is the crowd contest.
The crowd contest is one method to engage the crowd. First, companies have to identify a problem that requires the help of the crowd. After that, companies have to promote the contest. To run a successful crowdsourcing contest it is is crucial that it will receive enough attention from skilled people in the crowd. An efficient way to involve the crowd is by offering cash prizes and/or other opportunities to the winners.
The purpose of creating these initiatives is to generate high-value answers to complex and creative problems through diverse experimentation. In creating contests, however, companies have to face different challenges. Companies have to make sure that the crowd understands the company’s needs while at the same time avoid spreading specific details of the company itself. The next sections will provide examples of two recent and successful crowd contests.
The Oil Spill Recovery Institute (OSRI) was established by Congress in response to the 1989 Exxon Valdez oil spill. The institute came up with a problem and used InnoCentive, an open innovation and crowdsourcing platform, to outsource the task. OSRI posted the challenges on the InnoCentive website, thus allowing external stakeholders to enter the platform and contribute to solving the problem. The challenge consisted of finding a method to separate oil that had solidified into a viscous mass with frozen water in recovery barges.
Specifically, they had to allow a 1000 gallon enclosed metal tank to be pumped empty within half an hour and the oil had to be able to flow 4 meters to the intake of the pump at the bottom of the tank. OSRI offered a reward of $20.000 for the best solution of the contest, which lasted for three months.
In this period of time, OSRI received 53 different solutions and the problem was successfully solved. The winner of the contest was an industry outsider that came up with the answer in only two months by using his expertise from the cement industry, where he was employed. This example shows how external contributors with different skills and no background in the industry can have the best ideas. The crowd can be a key ally when it is required to think out of the box to find the answer.
”If it was easily solved by people within the industry, it would have been solved by people within the industry”
Scott Pegau, Program Manager, OSRI
Tongal is a crowd-powered advertising agency, a contest platform available to companies facing design problems. These challenges require creativity, a skill that firms can obtain from outside the organization. Tongal regularly asks the crowd to come up with campaigns for consumer products firms, such as Doritos and Pepsi.
The process used by the agency to find the best advertisement is pretty simple. In the first stage, the company posts the film project on the Tongal platform. Then, solvers work on ideas for the concept and the company selects the bests of them. The winner ideas receive a reward and based on those ideas producers pitch their vision. The pitch winners go into production and submit their final videos. From the top finalists, the company selects the winning video.
Tongal sustains that using the crowd instead of a traditional way of advertising permits companies to save money and time. According to their data, by creating a Super Bowl crowdsourcing contest firms will have their final campaign in six weeks instead of six months. In addition, companies would spend around $200,000 instead of 1 million dollars. Crowdsourcing seems to be the method to use to make problems easier to solve.
Crowdsourcing can be an effective method for involving users and other stakeholders into the innovation process. Particularly, creating a contest permits companies to get around creative and complex problems. At the same time, by engaging the crowd, firms ensure that new products match customer expectations. To handle the crowd efficiently, idea management platforms are the tools to use.
Is idea management an abstract concept in our mind? Be sure to check out the article What is Idea Management and Why is it Important? to get a basic and good introduction to the topic of idea management.