Corporations have always relied on industry analysts, management consultants and in-house gurus for advice on strategy and competitiveness. Since these experts understand the products, markets and industry trends, they also get paid the big bucks.
But what experts do is analyze historical trends, extrapolate forward on a linear basis and protect the status quo -- their field of expertise. And technologies are not progressing linearly anymore; they are advancing exponentially. Technology is advancing so rapidly that listening to people who just have domain knowledge and vested interests will put a company on the fastest path to failure. Experts are no longer the right people to turn to; they are a waste of money.
Just as the processing power of our computers doubles every 18 months, with prices falling and devices becoming smaller, fields such as medicine, robotics, artificial intelligence and synthetic biology are seeing accelerated change. Competition now comes from the places you least expect it to. The health-care industry, for example, is about to be disrupted by advances in sensors and artificial intelligence; lodging and transportation, by mobile apps; communications, by Wi-Fi and the Internet; and manufacturing, by robotics and 3-D printing.
To see the competition coming and develop strategies for survival, companies now need armies of people, not experts. The best knowledge comes from employees, customers and outside observers who aren't constrained by their expertise or personal agendas. It is they who can best identify the new opportunities. The collective insight of large numbers of individuals is superior because of the diversity of ideas and breadth of knowledge that they bring. Companies need to learn from people with different skills and backgrounds -- not from those confined to a department.
When used properly, crowdsourcing can be the most effective, least expensive way of solving problems.
Crowdsourcing can be as simple as asking employees to submit ideas via email or via online discussion boards, or it can assemble cross-disciplinary groups to exchange ideas and brainstorm. Internet platforms such as Zoho Connect, IdeaScale and GroupTie can facilitate group ideation by providing the ability to pose questions to a large number of people and having them discuss responses with each other.
Many of the ideas proposed by the crowd as well as the discussions will seem outlandish -- especially if anonymity is allowed on discussion forums. And companies will surely hear things they won't like. But this is exactly the input and out-of-the-box thinking that they need in order to survive and thrive in this era of exponential technologies.
I tried such an experiment myself, crowdsourcing a book on women in innovation. After researching the exclusion of women from the technology industry, I wanted to propose ideas to fix the problems. It was unlikely that I, as a male, would be able to understand the depth of the problem that women face; to articulate painful stories of sexism and abuse; or to propose meaningful solutions. So I asked the crowd. I enlisted Columbia School of Journalism professor Farai Chideya as my coauthor, and we hired a project manager, Neesha Bapat. Together, we brainstormed questions we wanted to ask and problems we wanted to solve. We placed these on an online discussion forum. Then we approached our women friends and armies of social media followers to ask them to join the discussion. By the end, more than 500 women had come together to share ideas and propose solutions. Within six weeks, we were able to perform research that would have taken years, and developed a consensus on what needed doing. Women documented their own heart-wrenching stories and told the secrets of their success. The result of this effort is a book, Innovating Women, which dozens of women have told me has helped, motivated and inspired them.
Another way of harnessing the power of the crowd is to hold incentive competitions. These can solve problems, foster innovation and even create industries -- just as the first XPRIZE did. Sponsored by the Ansari family, it offered a prize of $10 million to any team that could build a spacecraft capable of carrying three people to 100 kilometers above the earth's surface, twice within two weeks. It was won by Burt Rutan in 2004, who launched a spacecraft called SpaceShipOne. Twenty-six teams, from seven countries, spent more than $100 million in competing. Since then, more than $1.5 billion has been invested in private space flight by companies such as Virgin Galactic, Armadillo Aerospace and Blue Origin, according to the XPRIZE Foundation.
Heritage Provider Network's CEO, Dr. Richard Merkin, wanted to decrease the number of avoidable hospitalizations -- which cost the country more than $40 billion every year. So, in 2011, he offered $3 million to the team that could best predict how many days a patient would spend in the hospital, and 4,500 teams, from 41 countries, provided more than 39,000 entries. The best entries were seven times as accurate as any health-care organization's predictions. "Health care has become an information science, and health-care organizations that embrace the status quo will become the Kodaks and the Blockbusters of the second decade of the 21st century," Merkin wrote in an email to me.
Competitions needn't be so grand. InnoCentive and HeroX, a spinoff from the XPRIZE Foundation, for example, allow prizes as small as a few thousand dollars for solving problems. A company or an individual can specify a problem and offer prizes for whoever comes up with the best idea to solve it. InnoCentive has already run thousands of public and inter-company competitions. The solutions they have crowdsourced have ranged from the development of biomarkers for Amyotrophic lateral sclerosis disease to dual-purpose solar lights for African villages.
Not long ago, success in business came from hoarding knowledge. Whether in departments, in groups, or in individual experts, the motivations were to keep information confidential and use it to gain an edge. Today, it is all about sharing. When an idea is shared, one plus one equals three, because the parties learn from each another and develop new ideas. In this way, crowdsourcing harnesses the creative and competitive spirit of people all over the world, enabling them to solve big problems as well as small and bypassing the knowledge-hoarders we once depended on.