”The times they are a changing”. Bob Dylan put this line in of one of his songs. It definitely brings a certain sentiment along with it. In the sixties he sang about change in that time. As the time indeed changed; Information was spread much faster. Nowadays, we live in a world where information is being created, exchanged and shared at the speed of light.
When we look at these changes through a managerial glass, we can say that change entails a high degree of flexibility. The times they are a changing and the pace of change is picking up. In order to respond to this, businesses nowadays need to go along with these changes, innovate or invent new solutions. Time, companies and consumers change. The product itself is simply not enough to satisfy the customers anymore. The mass is becoming increasingly important, especially when it comes to innovation. Innovation creates room for ‘knowledge sharing’ and ‘co-creation’. Many students are familiar with the online encyclopedia Wikipedia, which is an excellent example of ‘knowledge sharing’ and ‘co-creation’; available for the mass, created by the mass. But what about using the crowd and develop your business model around it?
Nowadays, almost everyone knows about crowdsourcing and this is becoming more and more popular. On the net we often find successful stories of remarkable crowdfunding projects. Those projects get a lot of attention and raise more of the expected or required budget. It is interesting to know which route crowdsourcing will take in the future. In Gartner’s Hype Cycle crowdsourcing is currently on the peak (Peak of inflated expectation). But how soon will crowdsourcing follow this cycle? The increasing success stories of these crowdfunding projects lead to great expectations,which in turn creates a hype about this subject. When one realizes that these expectations are unrealistic and exaggerated the hype turns into a disillusion. Nevertheless, crowdsourcing will continue to exist and will, over time, reach a more stable phase (plateau or productivity). According to Gartner, it would be 5 to 10 years before crowdsourcing will be embraced as a method to do to business.
Although this phenomenon is well known, I am still optimistic about the future of crowdsourcing. In fact, I believe that crowdsourcing can quickly get into a more stable phase and eventually receive a fixed place within the business where it will become a habit. Given the emerging technological developments, we are moving one step closer to the online environment every day. The Internet is indispensable and more and more of our daily activities include the use of Internet. In addition, social relationships, locating and approaching people all around the world gets more accessible, allowing crowdsourcing to benefit from this. I expect that companies will use crowd sourcing for different purposes. For example, if we shift the innovation task from one innovation manager to the crowd, we’ll have substantially better initiatives. Also, the use of crowd creation brings many advantages. These are not all benefits in financial or technological field but also in the social field. Customers will feel more connected to the company, as they can make a contribution.
All things considered, the emerging technological developments will greatly play a role and customer needs will ultimately determine the future. Therefore, gradually more and more companies will involve their customers with the services / products they provide. I therefore predict a good future for crowdsourcing and expect that crowd creation will grow faster and its popularity will increase.
References:
Brussee, R., Hekman, E., Rovers, M., Swart, D., Vliet, H. van (2013), Crowdsourcing, Utrecht: Creatieve Industrie Utrecht, http://www.crossmedialab.nl/files/crowdsourcing.pdf
Gartner (2014), Hype Cycle for Emerging Technologies Maps the Journey to Digital Business, http://www.gartner.com/newsroom/id/2819918
Meuleman, T. (2012), Crowdsourcing – de stand van zaken, http://www.marketingfacts.nl/berichten/crowdsourcing-de-stand-van-zaken, 25 februari 2015
But if you shift from one innovation manager to the crowd, would you actually get a disruptive innovation that make a company explode, revenue-wise, or just small incremental innovations (changes)? To quote Steve Jobs: ‘The customer never knows what it wants until we’ve shown them’.
Hello Yuri. Thank you for your comment. That is something to think about! In my opinion, you can get both, depending on what you want ofcourse.
Let me elaborate on this with a familiar example of Crowd Creation; a campaign of the brand Lays of PepsiCo brand. Lays is known as a brand that sells different types and flavors of chips. In 2010 Lays launched the campaign ‘Maak de Smaak’ where everyone had the opportunity to invent a new flavor of chips. A winner was chosen at the end of the campaign and the imagined taste was produced and sold. This crowd-creation was used in form of a contest and the winner got 1% of the revenue.
http://www.pepsico.nl/media/persberichten/lays-maak-de-smaak–the-battle
So in this case the task was shifted from one innovation manager to the crowd and a the result was a hit! (They still produce and sell this flavor). To get back to your question: this example can be seen as an incremental change that made the company explode revenue-wise. Besides, this was also a great marketing opportunity for the brand. You can make it as bold as you want, shifting a part of the task to the crowd, or the whole task, depending on what you want to achieve with crowd sourcing/creation.
Hi Asli, you wrote an interesting part here on crowdsourcing, I really liked it, thank you! I certainly agree with you and I think crowdsourcing will definitely reach the plateau of productivity, but I have a small remark on this.
You stated that crowdsourcing is at the peak of inflated expectation at this moment, but don’t you think that crowdsourcing already reached the trough of disillusionment stage or even the slope of enlightenment? I actually think that is the case, because more and more companies are willing to use crowdsourcing in their daily activities. Not only in designing a new product through co-creation, which happens a lot, but also in financing this trough crowdfunding as you said.
Procter & Gamble, a multinational company, for example did not invent all its products itself. Trough their platform that they call Connect & Develop, which already exists for more than 10 years, they initiate partnerships with inventors worldwide to invent and develop new products. They believe inspiration, innovation and in this way mutual value creation will arise when they partner externally. In this way open innovation created a lot of products, for example Tide Total Care and the Swiffer Dusters. http://www.pgconnectdevelop.com
On the other hand, Dell tried something similar with their IdeaStorm, online brainstorm sessions to give their customers a voice and start a collaboration with them. This did not work out the way they wanted, because only 3% of the ideas the customers came up with were developed. http://www.ideastorm.com/
This last example shows that crowdsourcing is not always a success, which typically happens in the peak of inflated expectations. Still companies continue to use this as a source for innovation, which could be seen as prove that crowdsourcing already reached the through of disillusionment in which companies from which the technology does not work stop with the development and only the companies that improve their product continue (http://www.gartner.com/technology/research/methodologies/hype-cycle.jsp). Besides that I even think the slope of enlightenment will soon be reached, because in this stage companies really understand how they can use a technology, in this case crowdsourcing, in their advantage and the start with is already made.
Hi Quirine, thanks for your comment! I definitely get where you are coming from and totally agree with you. Maybe I did not elaborate enough on why I think that Crowdsourcing is still at its peak instead of the slope of enlightenment. Let me try it again. The examples you provided are indeed good examples of crowdsourcing, and those companies are sure not the only ones who used or perhaps are still using this form of crowdsourcing in their business model. However, these are just (temporary) examples and I do not think this form of crowdsourcing is stable enough to acquire a fixed place within the business. I genuinly believe that in the near future this form will be adopted as a big part of the business model and not just an activity on the side.