In the previous blog posts, I have covered the following:
Having covered the individual level (e.g. Ioby.com) and companies that are mostly by knowledge institutions (e.g. Climate CoLab by MIT), I would like to explore what profit-making companies do through crowdsourcing. I like this explanation of companies’ crowdsourcing by Schenk, E. and C. Guittard (2009): “The organization identifies an activity that it does not want to perform internally. Rather than outsourcing it in the old way, (…) it uses the crowd. So it posts the conditions on an Internet platform (…) and fixes the terms for the participation of the crowd (agenda, reward, etc.)”. Often, larger companies often use crowdsourcing contests and crowd wisdom instead of crowdfunding or microtasks (which they can afford with their own resources). Voß and Rieder (2005) identified this “crowd” used by companies as the “working consumer”.
Increasingly, companies are pressured to have greater foresight and add environmental and social value to their operations to achieve a healthier triple bottom line (thinking about people, planet and profit) (Elkington, 2004). In Elkington’s seven sustainability revolutions, markets have shifted to a new paradigm of competition:
Increased transparency, more functional technology and longer lasting products are three points covered in my previous posts to show how they benefit us sustainably.
According to R. Maiolini (2011), companies engage in various forms of crowdsourcing function that are differently named compared to my generic article on crowdsourcing. R. Miolini (2011) describes these functions as:
- Ideating new product designs
- In order to better incorporate more sustainable products with less costly life cycles, companies tap on the global mind for new ideas. Though some are skeptical about having ideas from people who are not professionals, research has shown that these individuals create products that perform significantly higher in terms of novelty and customer benefit though slightly lower in feasibility (Poetz and Schreier, 2012). Often, companies use the next crowdsourcing function “Permanent Open Calls” to incentivize individuals to contribute.
- Permanent open calls
- These open calls are contests posted by the companies. Individuals will be awarded according to their performance. I will be covering several examples like Unilever and GE.
- Community reporting
- By creating a community of registered users, companies create a knowledge pool where they can gather information to aid future product strategies (e.g. marketing, development, etc.). Users sound out various trends and ideas that they hope to see (e.g. new type of payment technology) and the company will explore the various opportunities available. The example I will be covering for this is My Starbucks Idea.
- Consumer profiling and product rating
- We are all pretty familiar with crowdsourcing sites for product ratings. Being a Singaporean who loves food, my favorite site would be hungrygowhere.com where I can find reviews and more. Online travel agencies and other brand.com(s) usually serve as a platform to collate all these data. Companies will consider the feedback and data collected. One example would be online travel agencies that allow consumers to rate hotels, restaurants, flights and more.
- Customer-to-customer support
- They may not be paid but customers will act out of goodwill. Company forums are an example of C2C support. Customers can help others in need and this allows companies like Apple, reduce spending on staff and also increase rate of response.
Having this new knowledge about companies’ crowdsourcing practices, I want to zoom into the examples that advocate environmental sustainability. I think that the first 3 practices discussed above are more common in the environmental sphere of things. (4)’s product ratings are often not crowdsourced as products are usually not experiential unlike travel experiences. Reviews on how “environmental” a product is are few because those standards are hard to measure and advise on. For number (5) on customer-to-customer support, I could not find companies that do so at the moment!
To organize the following portion, this will be the systematic flow:
- Type of Crowdsourcing Practice: Miolini’s 5 Practices above
- Case example
- Type of award (if any)
- Type of environmental benefit
(1) Ideating New Product Design + (2) Open Call (Contest):
I decided to include this second example because of an observation I made.
Example 2: Unilever (Shower of the future)
Advantage: Choosing ideas that change consumer behavior without dismantling the existing showering system in place.
- Found this really good for a sustainability module because there are often ideas which involves an overhaul of an entire system. However, smart designs are those that work around current systems.
- Shower of the future, for example, helps by installing a simple short and long shower button (inspired by the half and full flush). The good in this is:
- Affordable and appealing for customers
- The use of existing system is way better than dismantling and disposing of it, which results in more environmental damage
(3) Community Reporting
Through this time of research, crowdsourcing does have great economic benefits for companies. Companies should try to embrace the disruption that crowdsourcing efforts will bring. Now with markets that strive on competition, companies have to double their efforts to tap on the potential of the masses. More companies could try sourcing for new sustainability methods online rather than just outsourcing other business operations (e.g. logo design, and more).
Cheers, Corinne 😀
Voß, G. Günter/Rieder, K., 2005: Der arbeitende Kunde. Wenn Konsumenten zu unbezahlten Mitarbeitern werden. Frankfurt a.M., New York: Campus.
Elkington, J. (2004). Enter the triple bottom line. The triple bottom line: Does it all add up, 11(12), 1-16.
Schenk, E. and C. Guittard (2009) Crowdsourcing: What can be Outsourced to the Crowd, and Why? in Working Papers Series, HAL – CCSD.
Maiolini, R., & Naggi, R. (2011). Crowdsourcing and SMEs: Opportunities and challenges. In Information Technology and Innovation Trends in Organizations (pp. 399-406). Physica-Verlag HD.
Poetz, M. K. and Schreier, M. (2012), The Value of Crowdsourcing: Can Users Really Compete with Professionals in Generating New Product Ideas?. Journal of Product Innovation Management, 29: 245–256. doi: 10.1111/j.1540-5885.2011.00893.
Füller, J., Lemmer, S., & Hutter, K. (2013). Crowdsourcing: How Social Media and the Wisdom of the Crowd Change Future Companies. Management of the Fuzzy Front End of Innovation, 243-249. Retrieved March 8, 2016.
Arnould, E. J., Price, L. L., & Malshe, A. (2006). Toward a cultural resource-based theory of the customer. In R. F. Lusch, & S. L. Vargo (Eds.), The service-dominant logic of marketing: dialog, debate and directions (pp. 320–333). Armonk, NY: ME Sharpe.
Djelassi, Souad, & Decoopman, Isabelle. (2013). Customers’ participation in product development through crowdsourcing: Issues and implications.Industrial Marketing Management, 42(5), 683-692.
Dhawan, E., Goodman, E., Harris, S., & Mitchell, C. (2010). Unilever and its Supply Chain: Embracing Radical Transparency to Implement Sustainability. Retrieved March 8, 2016, from http://mitsloan.mit.edu/actionlearning/media/documents/s-lab-projects/Unilever-report.pdf