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Crowd Wisdom | 3 min read

The Benefits and Limitations of Crowdsourcing

Crowdsourcing has become one of the most transformative innovation and ideation methods of the last 20 years. Although crowdsourcing at its core has been used for hundreds of years, the internet has enabled organizations to crowdsource from entirely new sets of people that they may not have been able to reach before.

Benefits of Crowdsourcing

Success Stories

It is easy to see why many organizations saw the value of crowdsourcing and why they wanted to find ways to use it within their own processes. When Jeff Howe, editor at WIRED Magazine, wrote about “The Rise of Crowdsourcing” in 2006, each use case that he included showed the distinct rewards reaped by the organization and its users:

  1. Crowdsourcing photos from professionals as well as hobbyists made stock photography more affordable, permanently altering how companies acquire stock images
  2. Cheap television productions were made possible by gathering and showing user-generated content from the internet
  3. Organizations have tap a wider pool of experts from diverse knowledge backgrounds, helping to keep the costs of R&D from rapidly rising
  4. Outsourcing tasks that cannot be tackled by computers, and need to be completed by humans

Short-Term Gains

Crowdsourcing is also attractive to organizations that are looking for ideation on short-term, transactional projects. The process is quite straightforward: a challenge is presented, then volunteers brainstorm and submit their solutions, then the organization selects an idea and (usually) compensates the winning creator.

Read Next: The role of crowdsourcing software in open innovation

Ideas only flow in one direction, and the organization normally does not know much, if anything, about the people that they are tapping for ideas. There is no opportunity for discussion or clarification, or to gather participant information.

Limitations of Crowdsourcing

Underused Audiences

For some applications, the above aspects of crowdsourcing may suffice. However, organizations must recognize the limitations of crowdsourcing if they want to try this method for ideation and innovation.

Crowdsourcing ideas and running one-off Innovation Challenges/Idea Contests can still work well, but the reality is that they are episodic and you’re not building long-term relationships with participants or with customers.

Organizations miss a tremendous opportunity in engaging a potentially interested and invested audience when they do not take the time to get to know the people they are tapping for ideas.

Since crowdsourcing is a voluntary activity (where the possibility of compensation for work is low since your idea must be selected in order to receive a reward), it is highly likely that the crowd you have amassed from your open call of work is one or more of the following: specialized, knowledgeable, and/or very interested in your company/brand.

By engaging them in a unilateral process that does not allow for democracy and communication, your organization might be losing out on insights and innovations that you may not otherwise uncover in traditional insights and innovation activity.

Limited Knowledge & Relationships

The episodic nature of crowdsourcing also limits the possibilities for further ideation. In many cases, the final products or solutions do not match the original ideas that are submitted in a crowdsourcing project.

Large companies may have internal resources to help refine the ideas that are submitted, but smaller organizations might not have the same capacity. If you are able to engage the crowd for a longer period of time, you may be able to collaborate with them as you go from ideation to selection, and even with go-to-market and marketing strategies.

Additionally, engaging the crowd for a longer term may mean that you are able to collaborate with them more than once. You would not have to amass a new crowd for every challenge - getting to know the same group of people and recognizing their strengths and tendencies may allow for even better ideas to come forward with time, because you have developed a relationship with your volunteers.

The Crowd is Not Always Right

Another limitation of crowdsourcing is that the crowd, however powerful, is not always right. Even James Surowiecki, author of the book The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations, acknowledges that not all crowds are wise crowds. According to Surowiecki, a wise crowd must have:

  • Diversity of opinion
  • Independence
  • Decentralization
  • Aggregation

If a crowd does not have any of the above, they are prone to fail and may produce poor judgments. However, in a crowdsourcing exercise, it is difficult - and nearly impossible - to know and guarantee that the participating crowd will have all of the above characteristics.

The Solution: Co-Creation

At Chaordix, we have recognized these limitations and therefore encourage organizations to take a step forward from crowdsourcing to co-creation. Co-creation not only addresses these limitations, it also reaps the rewards of crowdsourcing, plus adding the benefits of transforming a crowd into a community.

Want to know more about how you can take the next step into co-creation?

CINO's Guide to Open Innovation

 

 

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