Tapping into the wisdom of the crowd is increasingly popular, with organisations looking to the masses for insights and ideas on how they can improve their business.  Forerunners in this brave new world were Dell, with their Idea Storm website allowing customers to post up ideas to improve the company.  Users could vote and comment on ideas, with the aim that the best ideas would be implemented.

Except, that hasn’t really happened.  Despite thousands of ideas being submitted to the site, the implementation rate is a miserly 3%.  So 3 out of every 100 ideas actually gets implemented.

The story is similar, yet worse, at My Starbucks, the identical site setup by Starbucks to crowdsource ideas for improvement from their customers.  The success rate there is under 0.5%, or 1 from every 200 ideas submitted actually getting implemented.  This is despite coffee seemingly being an easier environment for new ideas than computer manufacturing.

Both examples underline the problem with organisations looking for ideas outside their traditional environments.  Firstly, whilst there is much to be said for the value of fresh thinking and fresh perspectives, few of those submitting ideas to these sites have any idea about the inner workings at Dell or Starbucks.  They don’t know the processes that make up either business, and therefore it’s incredibly difficult to know whether their great idea can ever be implemented profitably or not.

Which is kinda the other big problem.  Ideas are great, but the real value often comes from implementing those ideas, and it’s highly likely that the person suggesting the idea will have little to no input into the actual implementation of that idea, which is hardly an ideal situation.

Contrast that to crowdsourcing ideas from within the business.  At a low tech level, car manufacturer Toyota regularly implement thousands of employee suggestions each year, and they can do so because those employees typically know the business inside out.  The likes of IBM and HCL also turn to employees to help them craft the strategies and business plans they will use in future, which is great because it will inevitably be the employees that have to implement those plans, so it makes perfect sense to involve them.

All of which makes externally facing idea generating platforms appear little more than public relations exercises, except of course they’re not very good public relations exercises because of the inevitable vexation customers feel when their ideas get either shot down or not implemented.  Folks will only put effort into something if they see returns on that involvement, and no amount of talk about building relationships will matter if both parties aren’t getting something from it.

The key to getting this right therefore is to apply some focus to things.  Sites like Innocentive and concepts such as the xPrize work because they have a tight focus on a particular issue, that the organisation or sponsor get to define as being particularly painful to them at that moment in time.  It’s smartsourcing rather than crowdsourcing.  Because this focus is strong, the organisation can then ensure adequate resources are given to the innovator to support implementation, with the innovator given cash incentives to stay on board past the ideation stage.