Wholesome Marketing Ideas, Bite Size

Wholesome marketing ideas, bite size

Sunday, July 10, 2011

Why crowd-sourcing innovation is worth it

This is a guest post by Mike Dover. Based on the success of his recent book, I asked Mike (Ivey MBA 1997) if he'd like to share with us what he's thinking about nowadays. 
Mike is Managing Partner of Socialstruct Advisory Group. He is the co-author of Wikibrands: Reinventing your Company in a Customer-Driven Marketplace. Mike is a highly-connected research executive with more than a decade’s experience leading New Paradigm, a world-renowned think tank. He was responsible for operations, content quality, and client management, leading multi-year research studies at the intersection of technology, business strategy, and society including the groundbreaking Talent 2.0 Research Program. Mike led more than 200 professionals over the course of the programs. The research in these programs formed the basis for the bestselling books Wikinomics: Mass Collaboration Changes Everything and Grown Up Digital: How the Net Generation is Changing Your World. In addition, he has collaborated with many industry thought leaders including Joe Pine, author of The Experience Economy. He is a Research Fellow for Moxie Insight. He blogs @wikibrands and @doverd4s. He can be reached here.

“If you’re in a company today that’s thinking about open innovation, get busy. Not only are enterprise companies using open innovation, but you’re competing against companies that are built from the ground up on open innovation.”*
David Ritter, CTO of Innocentive

Savvy firms are using customer forums to develop the next releases of their products as well has how they provide after-sale service through active discussions and problem-solving threads. What was originally a cost-reduction measure – moving customer inquiries to a lower-cost channel, has become a treasure trove of customer insight. A useful exercise is for a company to map out its entire operation, and then brainstorm for each business unit the best way of incorporating customer input.

Through Ideastorm, Dell was able to turn a negative (customer satisfaction had plummeted and had been manifested through protest websites like “Dell Hell”) to a positive. By transparently asking for feedback, Dell was able to capture a lot of great ideas from their customers and prospects. Dell Executives believe that the insights were well worth the airing of dirty laundry. Software firms such as Salesforce.com and Intuit actively harness their user forums for feedback on product performance as well as ideas for new releases.

Organizational hurdles to crowdsourcing innovation mostly deal with soft issues such as the company culture being unable to give up control, lack of a clear direction or purpose, or lack of genuine engagement from the leadership group. Monetary concerns such as lack of investment or the need to hire people are important, but lower down the list.

1.      Does the Company Culture support crowdsourcing? In order to succeed, the company must be open to change and avoid a “not invented here” attitude. Successful crowdsourcing requires sharing, so the company needs to be able to be transparent about consumer and product data, perhaps to a degree that is outside of its comfort zone.

2.      Lack of executive/managerial support. Top management needs to be on board with the crowdsourcing model. They can actually have an active voice in the community if their skill sets and schedules allow. In any case, their support is required by aligning staff performance metrics to the crowdsourcing activity – a platform demoted to “evenings and weekends” is doomed to fail.

3.      Too controlling. An effective community needs to be well-managed. Treat it like a garden, in that it is well planned, negative influences such as spammers, trolls, and disruptive personalities are removed, but ensure that vibrant conversations are encouraged to thrive. Community managers should be regarded more as hosts and facilitators than referees or chiefs.

4.      Lack of authenticity/genuine engagement. It is important that companies present an authentic community experience. Consumers are increasingly sophisticated and are able to tell if a firm is just going through the motions and are wary of a traditional communication strategy being force fit into a social media platform or one that is given to an outsourcer is not intimately aware of how the company operates.

5.      Lack of community leadership. This hurdle refers to the operational level and is the reverse condition to #3. If content is not kept fresh including new challenges and opportunities for the community it will be quickly become a ghost town.

6.      Ineffective measurement. Measuring the wrong things can be the downfall of community strategies. It is important that whatever metrics are chosen that they match with the overall business plan underpinning the community.

7.      Lack of relevant skills of people involved. The most important skills of a community manager; since it differs from (and combines) regular corporate communications and research & development, a brand new person may need to be hired. In other cases, since the duties and skills required are diverse, they may need to be spread out among a team.

8.      No clear purpose. Innovation assignments need to be specific for the community including what is being asked, what tools are provided, what are the success criteria as well as the progress of new ideas in consideration/development.

9.       Lack of ongoing strategy/plan. As a community becomes more sophisticated, its goals should become more sophisticated. If new content and challenges are not added, the community will become a ghost town.

10.  Lack of investment. Proper resources need to be allocated to support communities, but typically the actually technology costs are relatively modest. The more significant investment is for human resources to seed, manage and operationalize the community insights.

But why do people so freely give up their time and expertise? Volunteer community experts offer the following as their motivations for participating in the community:
They have a genuine need to help people. All the dedicated forum participants we spoke with really enjoy helping people solve their problems and, by doing so, gain an authentic sense of satisfaction. Steve Molis, an active Salesforce.com community member, empathizes with a beleaguered IT department that is instructed to use the product in a way that doesn't seem to make logical sense. He tells us that he offers a cautionary tale: "If you really have to use it that way because of your business processes, please be aware of A, B, and C."

They get a thrill from solving problems. Active participants in customer groups are predisposed to solving problems. When Molis was left at home alone as a child, he would take appliances like the toaster apart and try to put them back together before his parents came home (if he had to abort the mission, he'd throw the parts into the casing and hope that he could finish the project before anyone needed to make breakfast). According to Molis, people like him do not "solve the New York Times crossword or play Soduku, they answer people's salesforce.com questions."

It makes them better at their jobs. To solve customer problems, experts need to know the product intimately, and the logic and solutions involved in their salesforce.com activity is directly applicable to their day jobs. Also, since they are given sneak previews of new features, they are better equipped to forecast how their company's needs can be met by the product in the future.

It builds their personal brands. Not only are they celebrities in an (admittedly niche) community, but volunteer experts also have the opportunity to impress people with their problem-solving and professional communication skills. Molis tells us how after he solved a particular tricky problem for a community member, she sent him a thank-you gift from her brother's winery. We think she would be thrilled to help him if he decided to send her a résumé. He also reports that he would be confident that he would have some concrete accomplishments to point to that came from his work on the Answers Community.

Extrinsic rewards. Many companies use badging (such as Salesforce’s MVP program) and leaderboards to highlight the contribution of various members. Even though this costs very little it can be very meaningful to contributors. Other examples of extrinsic rewards include invitations to events, access to new or beta releases, special edition products, etc.

Helping gives them a sense of ownership in the product. For community members, seeing their ideas come to life as a feature in a new release is exciting. It also amplifies their dedication and engagement in the community. Matt Brown, a Salesforce.com community member says that seeing his ideas become part of the product "makes me feel like a stakeholder and increases my emotional connection to the company." Even having the ear of a company is a benefit for some community members. Steve Molis explains that the upper echelon of the Salesforce community is called on frequently to provide input on new product developments. Steve and his colleagues really like that they have the ability to steer the product.

The Sense of Community. Belonging to the community provides intrinsic benefits on its own. Many of the people we interviewed told us that the group learning, meeting people of similar interests and working together on a project was very satisfying. Especially amongst the VIP levels of community forums, all the main players know each other and in many cases extend their relationships beyond the forum.

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* David Bratvold, “9 Tips for Open Innovation Success”, The Daily CrowdSource, June 27, 2011.

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