Relying on a community to perform tasks for you: Crowdsourcing

By Xavier Forneris

Innovation can not be reduced to hardcore R&D. Developing a new way of doing business, of procuring or delivering a product or service, is a valuable form of innovation, even though no patent is filed. A very interesting innovation in the private sector is the utilization of “the masses”, meaning people like you and I, multiplied by millions. I am referring to the “crowdsourcing” concept.

What it is

For Jeff Howe, who coined the term in a 2006 Wired magazine article (see reference at the end of my post), crowdsourcing is simply:

The act of outsourcing tasks traditionally performed by an employee or contractor, to an undefined, large group of people or community (a “crowd”), through an open call

The community is the “crowd”; the open call is more often than not made on the web, by posting requests on the internet. We can say that crowdsourcing is a variation, an evolution of the well-known “outsourcing” concept. But outsourcing is so last century. Crowdsourcing is the latest thing…or is it?

How new is it?

Although the term only appeared in 2006, a reporter for memebern.com named Stuart Thomas went back to the history books and found that this “new” concept is actually quite old. I hope Stuart will not mind that I use two of the examples he’s providing, which I loved. In 1714 the British government made an open call to the public and offered a cash prize to anyone who could offer a simple and practical method for determining with precision a ship’s longitude. Under Napoleon I, the French government offered a cash prize to anyone who could devise a cheap and effective method of preserving large amounts of food. Of course Napoleon was concerned about a special kind of “food security”: he wanted to make sure that soldiers of the Empire waging war in far away lands would have ample and safe food supply. There are more examples in Stuart’s article, which I really recommend reading if you are interested in the subject (and want to know whether these two historical crowdsourcing initiatives led to any innovation). The point here is that “crowdsourcing” is not as new as some would like you to believe. But the web has been a tremendous enabler…once more I would say. It allows to reach a broader audience and therefore to more efficiently and effectively publicize and then manage the crowdsourced projects.

Who is using crowdsourcing?

You may think that the strategy is mostly used by non-profits and small firms or individual business owners and other start-ups in an effort to cut costs. Sure, but not only. In fact “everybody and their brother-in-law is doing it”. Let me give a few examples:

According to Stuart Thomas (Memebern, Sept. 15, 2011), Iceland is crowdsourcing its new constitution while Microsoft is crowdsourcing aspects of Windows 8. These entities are not exactly your typical feldgling start-up or NGO.

Artists and writers are doing it: best-selling author James Patterson invited members of the public to write 28 of the 30 chapters of his book, AirBorne. That’s crowd-writing. Another example is Wikipedia. What is it if not an encyclopedia written by the masses?

Local governments are doing it: the city of Salt Lake City has been using crowdsourcing for transit planning.

Even scientists are doing it: an astronomy project (Galaxy Zoo, 2007) relied on 150,000 stargazers to classify millions of pictures of galaxies. The task is not complicated but it would have taken several lifetimes to the members of the research team. With the power of the masses, it was done at a comete’s speed…

It is used in advertising. A famous example, cited by Wikipedia, is Doritos (snack food), which crowdsourced the production of an ad for the Super Bowl. Football and Doritos fans had a chance to win a cash prize, a trip to watch the Super Bowl, and the proverbial “15 minutes of fame”.

Entrepreneurs are using it, especially start-ups and small companies, for a range of needs, from designing their e-commerce website to raising capital. The latter is called “crowdfunding”.

But now, large firms are also coming to it, as reported in the Wall Street Journal (17 January 2012). The Journal cites AOL which used crowdsourcing last year to get an inventory of its video library; it adds that AOL, Microsoft, and LinkedIn have all used the services of Amazon’s Mechanical Turk crowdsourcing service (over 500,000 registered “workers” from 190 countries).

The applications are infinite. At this stage of the paper, if you are a parent, like me, you can’t help having this inner dialogue: “Are my children crowdsourcing their homework? No way! I don’t think so. I hope not. They can’t do that. Can they?”.

Why it works

According to Jeff Howe (quoted in Wikipedia) the concept depends essentially on the open call. Because it is an open call to a group of people, it naturally gathers those “who are most fit to perform tasks, solve complex problems and contribute with the most relevant and fresh ideas.” Howe further explains that because technological advances have allowed for cheap consumer electronics, the gap between professionals and amateurs has been diminished. As a result companies are now able to take advantage of the talent of the public. Promoters can tap a wider range of talent than might be present in their own organization. My take on this: the masses are more creative, innovative, and smart than you and I would have thought. And if businesses find that it’s cheaper and faster than traditional outsourcing or hiring temps, they’ll keep using it.

Is money always involved?

Not always. Some projects offer monetary incentives, cash prizes, but not to every participant. Usually it’s only the person who found the right solution who gets the compensation; there’s a competitive aspect to many crowdsourced projects. But other projects only offer to the contributors a chance of fulfilling a hobby, the satisfaction of having contributed, of working collaboratively, with a community, of being publicly recognized.

Is this ideal, a panacea?

Sadly, like most things in life, it’s neither ideal nor a panacea. There are most certainly fields that do not lend to crowdsourcing because of issues of confidentiality, security, liability. Also, crowdsourcing doesn’t always produce the quality results one is looking for. Contributors are usually not protected by a written contract. Companies are not guaranteed that the contributors will remain involved throughout the duration of a project. Also, it can be abused to source cheap or even unpaid labor. Harvard Law School professor Jonathan Zittrain talks about the risk of “digital sweatshops”, reminiscent of the Nike-China factory scandal of years ago. Facebook faced these criticisms in 2008 when it began its “localization program” inviting users in each country to translate for free. To address these risks, the ‘crowd’ is increasingly vetted in advance, selected and professional ‘brokers’ facilitate the exchange between outsourcing companies and the ‘crowd’. An example is offered by Amazon.com’s Mechanical Turk, which empowers firms, developers and creators by “lubricating the relationship between them and crowdss”, and by “creating a platform through which crowds and employers communicate and perform transactions in a way that is safe for both parties”. Other examples of this trend towards professionalization and intermediation include OnForce, Elance.com, Innocentive, CrowdSpring, and Guru.com.

What functions lend themselves to crowdsourcing?

As mentioned above, not every function can be crowdsourced; as the CEO of a company, you would perhaps outsource what you perceive as support or back-office functions (accounting, travel services , IT, some but not all functions of H.R, etc) but you would not outsource to someone you do not control an activity that is your core competence. The same caution probably applies to crowdsourcing.

ScalableWorkforce has identified 5 business areas that lend themselves well to crowdsourcing:

1. Problem-solving (medicine, biotech, science, manufacturing and engineering)

2. Design (designing clothes, designing websites…)

3. Simple, general, or routine tasks (transcription services, surveys, copy writing, proof-reading, editing, internet research, etc.)

4. Testing (particularly for software, games, websites…). Who would make a more enthusiastic tester of a new video-game than a hardcore gamer? I bet some would pay for the privilege and opportunity to be the first users…

5. Customer support: sometimes the enthusiastic (and unpaid) users of a product can provide better information to other customers than the manufacturer’s staff itself.

In closing, I would be interested in knowing what you think of crowdsourcing. Is it a fad or something that is here to stay, that has great potential? In which field? Have you used crowdsourcing and, if so, where you satisfied with the experience? If you haven’t used it yet, for which task or project would you use crowdsourcing?

Source / Read more:

“The rise of Crowdsourcing”, Jeff Howe , Wired, June 2006.

“Big Firms Try Crowdsourcing”, Rachel Emma Silverman, The Wall Street Journal, paper edition, Jan. 17, 2012.

“9 examples of crowdsourcing before crowdsourcing existed”, Stuart Thomas, memebern.com, Sept.15, 2011. Retrieved at: http://memeburn.com/2011/09/9-examples-of-crowdsourcing-before-%E2%80%98crowdsourcing%E2%80%99-existed

“10 examples of how crowdsourcing is changing the world”, The Social Path, May 29, 2009. Retrieved at: http://www.thesocialpath.com/2009/05/10-examples-of-crowdsourcing.html

 “Crowdsourcing Business Examples”, ScalableWorkforce (undated). Retrieved at: http://www.scalableworkforce.com/crowdsourcing-history-background/crowdsourcing-examples-in-business/

Will Harvard Business School succeed in reinventing its legendary MBA?

 By Xavier Forneris

Harvard Business School (HBS), one of the most prestigious producers of MBA’s worldwide, has introduced a big change to his curriculum. As reported in The Economist (12/3/2011), the “Field Immersion Experiences for Leadership Development” whose acronym is, conveniently, “FIELD”, is supposed to become as important as the well-established case method that Harvard has pioneered and was adopted by most business schools. It applies to the new cohort of 900 full time MBA’s who started their two-year program at HBS last summer.It apparently consists of 3 components, all introduced in the first year (the second year part of the FIELD is still under development):

  1. Team-building exercises. Each student is expected to lead a team for a specific project, with the objective of learning how to collaborate, give and receive feedback. 
  2. Field work: each student would be sent to a firm, among 140 in 11 countries, to work there for a week, in a sort of “structured learning by doing”. HBS alumni would certainly be mobilized to host students in their respective companies and HBS has vast network of alumni, dispersed globally.
  3. Each student will receive $3,000 in seed money and have 8 weeks to launch a small business. A vote will then take place among all students to select the most successul or promising venture(s), that will receive more funding.

Looking at these three items, my first observation was “Why, they didn’t have team-building exercises yet”? In my own MBA program, at the University of North Carolina’s Kenan Flagler School of Business, team-building was one of the first things we did, at the outset of the program. I’m surprised that HBS MBA’s didn’t have that until now. In fairness, I don’t have enough detail about what each item really entails so it’s difficult to judge how innovative that is. Also, my MBA was for Executives and the article is about the full-time MBA program. But I would be surprised if full-time MBAs at UNC do not have team-building exercises already built in their curriculum for year 1.

The Economist raises a good point when it says, talking about item #2 “It is unclear how much the one-week working assignments will achieve”. I fully agree. The idea of being embedded in company, whether a domestic or overseas one, is a great concept, but shouldn’t they make this a longer experience? The Economist quotes a management guru, Pankaj Ghemawat:

Litterature suggests that an immersion experence needs to be at least 2-3 week experience and be backed up with time in the classroom”.

Clearly HBS must have access to this research. It often is one of the leading and most prolific sources of management literature. By the time you get to China or India, get over jet lag, orient yourself in the company, it’s basically time to come home…I’m slightly exaggerating here, and it’s true that a lot of ground work preparation can be done over the course of several weeks before the actual student’s departure. Yet, one week seems very short, and with the pressure of the MBA course requirements one can question how much time the HBS students will actually devote to this preparation.

As The Economist also points out, it remains to be seen how item # 3 (seed money for start-up) is different from the traditional business plan competition. I don’t have the details but the difference may be the actual start of a business. In a traditional business plan competition, one does not actually have to start a business before the competition; if you win, you can then use the prize money to implement your project. Here, it seems that students will be required to actually start a business, not just dream one on a business plan, and do so in a relatively short period (2 months). To me, it seems to be the most innovative aspect of the FIELD initiative, the one I would have enjoyed doing if it had been part of our curriculum. What is often lacking in many MBA programs is the practical application of what you are learning in class and also a focus on entrepreneurship. There are some MBA specializing in entrepreneurship but it is my impression that most MBA’s are really designed to teach you how to operate within, manage and grow an existing business rather than how to start your own.

Finally, The Economist article explains that the initiative was approved by faculty, in a vote that was apparently not very enthusiastic, and only for a 3 to 5-year period to “experiment”. Finally, it says that the experiment should add 10 to 15% to the cost of the course, borne by HBS, at least in the beginning.

 Source/Read more: The Economist, Dec. 3, 2011