How to innovate with the crowd? by Emilie Ruiz

Emilie Ruiz is a researcher at IREGE, University Savoie Mont Blanc, France. Hereafter she shares some key lessons on how corporations can set-up a crowdinnovation platform, and maximize its benefits, streamlining the adoption of the platform externally and internally through key success factors. Moreover she identifies when the adoption factors matter along the process.

Imagine with Orange was lucky to be one of the platforms sample that she reviewed. This post is based on Emilie’s doctoral studies, a PhD in progress named ‘Crowdsourcing for innovation, communities and product cocreation’, which conducts an empirical study of determinants and their evolution.

Some insights about the adoption of a crowdinnovation platform

A growing number of firms adopt open innovation strategies, especially through crowdsourcing platforms. With the exception of some emblematic cases, such as Connect + Develop (Procter & Gamble), little is known about the factors influencing this adoption process to identify the levers that help firms or the barriers they should anticipate.

What is crowdsourcing for innovation?

In 2006, Jeff Howe, contributing editor at Wired Magazine, published the article “The rise of crowdsourcing”. From that time, the term crowdsourcing (CS) has begun to spread, both in the scientific and managerial community. Howe defines CS as “the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call.”

For nearly 10 years, more than 40 definitions have been proposed (for more information see the article “Towards an integrated crowdsourcing definition”, Estellés-Arolas and González-Ladrón-de-Guevara, 2012), allowing us to identify 4 types of CS activities:

Table 1: A taxonomy of CS activities

(from Ruiz, 2015)

CS for innovation is the act of outsource a complex or creative task to the crowd, through an open call on a crowdinnovation platform (Ruiz, 2015).

Editor’s note: more on open innovation platforms by Jean-Louis Liévin

Imagine with Orange: an example of crowdsourcing for innovation

Imagine with Orange is a crowdinnovation platform where anyone from the crowd can share innovative ideas about a specific topic (Smart Agriculture, Womanly Digital, Mobile Money, Connected Family etc.), announced by Orange monthly through the platform.

The ideas that are the most supported by the community can win connected objects or be invited by Orange for an innovation workshop in Paris, to develop their project. Imagine crowdsourcing platform becomes then also a launchpad for entrepreneurs.

Why do firms adopt crowdinnovation platforms?

Several motivations drive firms to adopt a crowdinnovation platform. We suggest focusing on the three main ones:

Cost reduction: questioning the crowd has the main advantage to outsource a task to a large number of individuals for free or for a small fee. For instance, Lego (through its platform Lego Ideas) remunerates contributors whose ideas will be produced through a 1% profit on sales.

Access the wisdom of the crowd: crowdinnovation platforms allow firms to address many knowledge and resources. On the one hand, this knowledge coming from the crowd is considered as rare and unique. On the other hand, the IT platform tool allows firms accessing quickly to the crowd.

Identify client’s need: questioning the crowd means that firm address customers, users, scientists, communities etc., identifying trends and potential new markets. Crowdsourcing lets the voice of the user enter the innovation process from the upstream.

The stages of adoption process

Based on Damanpour (1991) and Helfat and Peteraf (2003) papers, we identify three main stages of the adoption process:

Initialization: firms decide to adopt a crowdinnovation platform;
Implementation: firms start the implementation of the crowdinnovation platform and adapt both the platform and their organization to each other to find the right organizational balance;
Pursuit of implementation: firms try to sustain the crowdinnovation platform.

Factors influencing the adoption process of a crowdinnovation platform

To reach success, we identify through a study (work in progress) different factors that have a strong impact on the adoption process of a crowdinnovation platform. We present then those that seem the most relevant.

The importance of cultural factors

Organizational culture, in addition to the motivation expressed upper, will lead firms to adopt crowdinnovation activities. Our study emphasizes that some values (innovation and openness, pattern of circulating ideas, risk taking culture) would drive the process.

Alignment of the crowdsourcing platform with innovation priorities and strategy facilitates its understanding internally, and maximize its impact on innovation roadmap.

But, if organizational culture has an impact on the first stage of adoption, cultural factors have a strong impact on the whole process, and firms should not underestimate this. When firms implement a crowdinnovation platform, it appears that implication of transversal functions, such as marketing, R&D, HR, purchasing, sales etc. would help the implementation. The study shows that in most cases, firms include marketing and/or R&D functions, while a “cross function” strategy seems more relevant.

The NIH syndrome

The Not Invented Here syndrome is more active than firms think! The NIH syndrome is a tendency to reject knowledge (ideas, solutions etc.) that comes from outside the firm. In most cases, R&D human resources are affected by this syndrome. Guittard and al. (in Garrigos-Simon and al., 2015) identifies several reasons explaining why some people are affected by the NIH syndrome:

Confident people, that believe in their own knowledge;
People that see the public revelation of difficulties or needs as a weakness;
A threaten to the R&D job, that could be replaced by the crowd.

In most cases, firms think they are not affected, while part of their human resources are skeptical or reluctant to the adoption of a crowdinnovation platform. Firms underestimate the NIH syndrome, by wrongly believing that when they implement the crowdinnovation platform (step 2), they have passed and are no longer confronted with it.

A smart organization

The crowdinnovation platform is the tool for implementing a CS for innovation activity, itself included in an open innovation strategy. It is not rare to see firms developing multiple platforms that address for instance different types of crowd. If the logic and the organization of these different platforms is clear for the firm, our study reveals that this could disrupt people forming the crowd.

From the internal perspective, skeptical, reluctant, or even interested people can be lost in too many CS for innovation activities. From the external perspective, for the crowd, too many platforms can be confusing and have an impact on participation.

Firms can develop smart communication to clearly explain both to the crowd and to their HR what are the different platforms for, for whom, what etc. This is the case of Orange, that presents on a single portal 6 platforms, each having a specific purpose and level of user involvement, from ideation to product testing.

Manage a community

When firms adopt crowdinnovation platform, they can’t imagine how much they will be asked by the crowd, facing the “crowding” phenomenon (Piezunka and Dahlander, 2015), in other words, receiving too many ideas, solutions etc. As individuals from the crowd are implicated, they are waiting for quick answer from the firms. The quicker is the feedback, the higher is the community’s commitment. Relationships with the crowd, and in most cases with a community, involves transaction costs firms should anticipate.

CS for innovation activities can be managed two ways:

Make: the crowdinnovation platform is managed by the firm, with internal human resources team;
Buy: in the case of scientific of technological challenge, firms can outsource it to an intermediate platform, such as InnoCentive or NineSgma.

These intermediaries can play the role of a filter between the firm and the crowd, but they have a cost. In the first case (make), our study shows that firms should not neglect the community manager function, because without crowd and community, the platform could die.

The importance of absorptive capacity to sustain a platform

The last thing that our study points out is the fact that in order to sustain a crowdinnovation platform, firms have to develop absorptive capacity (ACAP). ACAP are the firm’s ability to recognize the value of new information, assimilate it, and apply it to commercial ends (Cohen and Levinthal, 1990). More especially, to go to the third stage of sustainability, firms have to develop the capacity to assimilate and transform external knowledge into new business.

When do these factors have an influence?

The only identification of these factors is not enough to help firms to innovate quickly and successfully with the crowd. They also have to keep in mind that all these factors do not have the same influence on the whole adoption process. For now, our study is based on proposals. Further empirical investigation will illustrate the set of cultural, organizational and epistemic factors identified in the figure below:

Figure 1: synthesis of factors influencing the adoption process of a crowdinnovation platform

(from Ruiz, 2015)

Proposal 1: cultural factors influence particularly the first step (decision to adopt) of the adoption process of a crowdinnovation platform.
Proposal 2: organizational factors influence particularly the second step (implementation) of the adoption process of a crowdinnovation platform.
Proposal 3: knowledge factors influence particularly the third step (sustainability and maturity) of the adoption process of a crowdinnovation platform.

To be continued …

References

Cohen, W.M., et D.A. Levinthal. 1990. « Absorptive capacity : a new perspective on learning and innovation ». Administrative science quarterly 35 : 128‑52.

Damanpour, F. 1991. « Organizational Innovation : A Meta-Analysis of Effects of Determinants and Moderators ». Academy of Management Journal 34 (3) : 555‑90.

Estellés-Arolas, E. et F. González-Ladrón-de-Guevara. 2012. « Towards an Integrated Crowdsourcing Definition ». Journal of Information Science 38 (2) : 189‑200.

Garrigos-Simon, F.J., I. Gil-Pechuán, et S. Estelles-Miguel. 2015. Advances in Crowdsourcing. Springer.

Helfat, C.E., et M.A. Peteraf. 2003. « The dynamic resource-based view : capability lifecycles ». Strategic management journal 24 (10) : 997‑1010.

Howe, J. 2006. « Crowdsourcing : A definition ». Wired Magazine 1-5.

Piezunka, H. et L. Dahlander. 2015. « Distant search, narrow attention : how crowding alters organizations’filtering of suggestions in crowdsourcing ». Academy of Management Journal 58 (3) : 856-80.

Ruiz E. (2015), Crowdsourcing pour innover : proposition d’un modèle d’adoption, Séminaire de l’observatoire des communautés de connaissance “Communautés et Innovation”, Strasbourg.

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