Archive for June, 2008

Hey, why not let everyone help develop your products?

Friday, June 27th, 2008

Another way companies are breaking down the barriers between themselves and their customers or other folks outside is via “crowdsourcing.” That is a way to get people on the outside to provide value to the organization on their own time. It is essentially the open source model applied to more than just software.

STRIKING GOLD
The best example I know is the Goldcorp story. Their president put all their proprietary geologic data for a mine on the web and held a contest. The winners with the best ideas of where to drill would share half a million dollars. The diversity and originality of ideas they received was far beyond anything they anticipated. Years later they were still drilling sites suggested by contestants. They were mining so much gold they were the only gold mining company that was stockpiling for better prices in the future. Furthermore, their stock price went up thirty fold. (See Taylor’s book referenced below.)

ADVANTAGES
The internet and the decentralization of expertise has enabled crowd sourcing and it is typically used to develop solutions. That is at the back end of the product development process. Companies can gain key advantages via crowd sourcing.

LEVERAGE —
achieving goals not possible with a limited fixed staff

This is the advantage of scale. For example, large companies experience many more customer demands for new products than they can keep up with. Some have formed external networks to act in an advisory role or even do project work directly (as in the Goldcorp example) to develop more new products. NASA has used volunteers to process enormous amounts of data making images available months earlier and freeing up researchers to concentrate on higher end work. Google essentially uses crowdsourcing in the way it ranks pages for its search engine.

ORIGINALITY —
access to a larger number and far more diverse range of ideas than possible in-house

I think William Taylor says it best in this chapter title from his book Mavericks at Work: Ideas Unlimited: Why Nobody is as Smart as Everybody.

Inviting people from other boxes to work on your problem is a pretty easy way to get real “out of the box” thinking.

CROWDSOURCING AT THE FRONT END
I see parallels to the kind of work we do at the front end to understand the problems you should be working on in the first place. You can use crowdsourcing methods to find out what the most important problems are for you to solve, as well as to craft solutions. That is, from voice of the customer to voice of the collaborator. We have actually done both here.

For more,
“On the Edge,” by Tim Gilchrist, PMI Network, May 2007, p32.
Mavericks at Work, William C. Taylor and Polly LaBarre, Harper Collins, 2006. (See Chapter 4.)

TiECON East 2008

Tuesday, June 3rd, 2008

I’ve said before TiECON is one of the best values for the money I’ve found. It is focused on entrepreneurs and I am still impressed that the conference finds new ways to be innovative each year. It makes sense since the attendees are innovators on the cutting edge struggling to come up with the next big thing. That kind of thinking is contagious.

SOMETHING NEW
This year the new thing that stood out for me was an entrepreneurs’ forum. I enrolled and got three half hour sessions of face-to-face counseling about my business with venture capitalists and attorneys who specialize in startup businesses. It didn’t cost me anything extra. How would I normally even get access to people like this for a little bit of undivided attention to my business?

A COMPARISON
I contrast this with my experience working with the PDMA. Even though they preach innovation, it is very much from the large company perspective. That’s where most of their members and speakers are from. Having seen both I’d say slower, more cumbersome and less risk taking in comparison. I joined the board of the local PDMA chapter briefly this year to help them develop a schedule of speakers 6 months in advance instead of the month-to-month scrambling they’ve been doing.

Essentially, I was going to do a simple VOC exercise to find out what kind of speakers the membership wanted to hear from, prioritize, and then recruit speakers with that guidance. I’ve done the same thing with great success for other organizations in the past. I didn’t really want another volunteer activity but offered that I could do that for them. They liked the idea when they recruited me to join back in January

It seems like this project was too novel for someone. After 2 months they still couldn’t email my simple 5 question survey to the membership. Plenty of announcements went out in that time. Another month later there was still no response to my weekly email queries, no attempt to communicate any issues or resolve them. I’d only get a call when someone desperately hoped I would drop what I was doing to arrange sandwiches or name tags for a meeting that night.

I am sure there was nothing personal here as I saw the same thing happening to other initiatives. I’m still waiting for someone to respond and close the loop with me. For all I know I might still be a member of the board though I’ve given up. I’m not going to let this drag out until I’m stuck scrambling each month to get a speaker at the last minute. I only got involved to extricate them from that pathology, not participate in it. (I’ve become more careful how I invest my volunteer efforts over time.) The point I’m getting to is that this is very much how I felt working at a Fortune 200 sized company. Any innovation has a lot to overcome and is often filtered out in spite of the lip service paid to it. There are exceptional bright spots throughout large organizations so a generalization isn’t fair to everyone but I think it describes the norm. Let me know if you see it another way.

RECOMMENDATION
My recommendation to people working in the innovation space at large companies is to spend some time attending entrepreneurial events and mixing with people from much smaller companies. I think exposure to this faster innovation lane will help you innovate a little better than your large compatriots in the slower lane and gain you a competitive advantage.

SOCIAL RESPONSIBILITY
Back to TiECON East I was also struck by how social responsibility was an underlying theme especially from some of the keynote speakers like Bob Compton (documentary “Two Million Minutes”), Alan Rosling (Executive Director of Tata Sons), and Craig Newmark (founder of Craig’s List). A lot of these business leaders are focused on more than just making money. Ironically, I think they will make (or have been making) more money as a result. I see this in contrast to the narrow focus on the numbers in the large companies, (looking beyond what they say, to what they do).

Understanding the big picture helps you avoid costly trouble in the future. The lesson here is that success really is about people one way or another. Be it how you treat your employees, the community you operate in, or your customers, it’s good business to know that you are touching lives.