Point: Crowdsourcing is maturing beyond its amateur-content and open innovation origins toward core business processes.

Story:

In the beginning, companies used crowdsourcing as part of their open innovation efforts to get new ideas from lead users, customers, and the world at large.  But now, entrepreneurial companies such as Trada and CloudCrowd are moving beyond one-off design efforts and contests (e.g., the Netflix Prize) to encompass routine everyday business processes.  As CloudCrowd CEO Alex Edelstein sees it, “similar to the way Henry Ford’s early assembly lines created a new, more efficient way to complete work, we’ve designed an online process that delivers accurate finished work for even complex projects at a significant savings.”  Let’s look at these two examples.

First, Trada Inc., which recently emerged from stealth mode private beta, offers crowds of pay-per-click experts who create paid-search marketing campaigns.  Each vetted crowd member generates his/her own keywords, ad copy, and deep links to attract prospective pay-per-click customers to the client site.  The result is a much broader span of keywords with less chance of overpaying for over-used common keywords.  By giving access to the long tail of keywords, Trada executes campaigns at lower cost and with greater success than do traditional agencies with in-house employees.

Second, CloudCrowd has 18,000 registered workers who participate in its Labor-as-a-Service business. CloudCrowd’s project managers begin by breaking down a complex task into hundreds or thousands of smaller tasks. These tasks are then passed on to Cloudcrowd’s registered workers. CloudCrowd speeds delivery time and lowers costs in a wide range of BPO (Business Process Outsourcing) applications.  Tasks that CloudCrowd has deconstructed include tracking the University of Southern California’s “lost alumni” and a wide range of web content creation tasks.

Both Trada and CloudCrowd eschew the winner-take-all model of contest-oriented crowdsourcing projects.  Instead, they offer well-defined incremental pay for incremental results.  In the case of Trada, an expert gets paid for each click-through of the ad that the expert created (Trada also offers pay-per-sale crowdsourced campaigns).  CloudCrowd gives its workers a pre-agreed payment for each unit of work they successfully complete.  In CloudCrowd’s case, a worker’s “success” is measured using a system of escalating peer reviews that are also crowdsourced.

Both Trada and CloudCrowd create carefully-cultivated crowds — more like reliable workforces than mobs of transient volunteers of dubious quality.  Trada uses online testing and verified identities to ensure that its experts are really experts.  CloudCrowd assesses each worker’s percentage of correctly-completed tasks to compute a Credibility Rating.  Highly-rated workers gain access to higher-level, higher-paying tasks.

Action

• Evaluate which business processes might benefit from on-going outside expertise or labor
• Create clear tasks and clear rewards
• Create processes to vet or rate prospective crowd members on expertise or quality
• Use the crowd to monitor the crowd

Sources:

Personal interviews with Niel Robertson, CEO, Trada http://trada.com/

and Cloudcrowd (via email) http://www.CloudCrowd.com/

Point:  Accelerate innovation by finding an analogous solution from a different industry.

Story:
Henry Ford’s assembly line is often touted as a breakthrough innovation. What’s less known is that Ford got the idea by seeing the “disassembly line” process of butchering hogs at the Philip Armour meatpacking company in Chicago. Similar techniques were also already being used by Campbell’s to automate canned food production.

Adopting ideas from other industries and applying them to your own industry is a powerful and proven source of innovation. But what if you don’t know which industry to examine, or where to look for that potentially breakthrough idea? Solutions may arrive serendipitously as you visit companies and read widely, but how do you accelerate the process and make it systematic?

One exciting solution I came across was described by Jim Todhunter, CTO of Invention Machine at the Open Innovation Summit last month. Invention Machine’s Goldfire software uses semantic technology to access a vast collection of scientific principles, patents, articles and Deep Web technical websites (meaning you can’t find them via standard search engines like Google). Simply put, Goldfire automates searching for analogous solutions in different industries.  I talked with Todhunter to learn more about how Goldfire, an innovation platform, can help a company innovate systematically.

Todhunter described how a manufacturer of plumbing fixtures used adjacencies to remove lead from their plumbing fixtures.  Companies have long known the dangers of lead and have substituted copper pipes for lead ones and stopped using lead-based solders for plumbing. But most of us don’t realize that fixtures like brass faucets also contain lead in the brass alloys. The reason faucets contain lead is because lead makes the brass machinable. A couple percent of lead mixed into the copper and zinc of the brass makes it easier to mill attractive surfaces, drill clean holes, and create smooth pipe threads on the brass.  In short, the lead helps a faucet manufacturer create attractive, high-quality faucets. But over time, some of the lead in the brass leaches out into the water that flows through the faucet, which poses some health risks.

The faucet maker realized they needed help to solve the problem and turned to Invention Machine’s Goldfire software to find feasible external innovations. “Goldfire helped them in two ways,” Todhunter said, “in terms of what are called adjacencies and proof points.”

Adjacencies involve finding potentially analogous innovations found in other industries. For example, faucet makers aren’t the only companies worried about producing quality products from hard-to-machine materials.  “On the adjacency side, when the company started to examine the problem with Goldfire, they were able to discover that there were technologies and methods used in other industries that could obviate the need for lead in brass,” Todhunter said. In particular, the manufacturer discovered that woodworkers have clever techniques for milling wood.  These techniques could be adapted to machining lead-free brass.

The second help to accelerate the innovative solution is called proof points — tangible examples that prove a solution is commercially feasible.  In terms of proof points (i.e., “are there ways to do this?”), the manufacturer was able to discover a very clear proof point through Goldfire: someone had already discovered a way to make millable lead-free brass.  “The client didn’t even have to go invent this material — they were able to find a supplier,” Todhunter said.  “As a result, the faucet maker accelerated their time to market for delivery on this kind of concept tremendously because this discovery created a partnering opportunity.”

Action:

• Clearly define the problem at hand (e.g., lead-free brass AND attractive, high-quality machined features)
• Survey adjacent industries or applications for ideas that overcome the problem (e.g., tricks for milling a hard-to-mill material)
• Survey external innovations and suppliers for proof points (e.g., a commercially available, lead-free brass alloy that is machinable)
• Combine externally-found adjacencies and proof points (i.e., use the best adjacent methods on the best proof point solutions)

For Additional Information:

Computer power yields radical ideas, by Stuart F. Brown, Fortune

Innovation to the Core: A Blueprint for Transforming the Way Your Company Innovates by Peter Skarzynski and Rowan Gibson

Point: When reviewing the ideas submitted to your open innovation portal, identify ideas that have momentum and ideas that are outliers.

Story: Open innovation efforts yield many ideas, often too many to use. So, what’s the best way to manage and make productive use of the ideas you receive? To answer this, I interviewed Jim Todhunter, CTO of Invention Machine, as part of the Open Innovation Summit held in Orlando December 3-4, 2009. I asked Jim about how Invention Machine Goldfire software can be used in open innovation efforts. He described three key tasks to do after you have received a set of submissions from an open innovation effort.

The first step is to organize the ideas into buckets.  Todhunter described how Goldfire speeds this process and reveals relationships among ideas as well. Goldfire uses semantic technology, which means that it’s not limited to finding exact keyword matches when searching or analyzing submissions. Rather, semantic engines understand the meaning of the words, so they can cluster related ideas regardless of the specific terms that users submitted. That’s a useful feature for open innovation, because people often use different terms or nonstandard words in their submissions. Semantic technologies find text that has similar meaning, even if it does not use identical words.

Todhunter illustrated the second step with a hypothetical example. Let’s say you’re a medical device company looking for innovations related to sphygmomanometers (the familiar arm-cuff device for measuring blood pressure). Goldfire will automatically divide your open innovation ideas into different tiers of concepts. Top-level tiers are general concepts and concepts around functionality. Finer-grained buckets under these meta-categories are categories like advantages and disadvantages that your customers see about your product or competing products.  For example, within the “advantages” cluster you might notice that a customer submitted an idea referencing an advantage of a competing product by saying “this other sphygmomanometer doesn’t pinch when people pump it up.” Regardless of the specific terms that a person uses, Goldfire can identify a concept like “pain-free use” and create a cluster of that concept.  If several other people use terms such as “pinch” “hurt” “discomfort” or “squeeze”, then you know that’s a key issue to focus on. Identifying ideas that have momentum helps the company serve existing customers better.

But it’s not just the momentum ideas that have value. In the third step, you identify a different type of potentially valuable suggestion. Specifically, Goldfire looks for what Todhunter called “singularities” — outlier ideas that had very little discussion. Outlier ideas may be worth nothing or they may be the future of the company.  On one hand, the dearth of discussion might mean that the idea wasn’t very useful. On the other hand, that singularity may be next new application that is just starting to emerge. “Singularities represent interesting, unique points of value that may relate to unserved audiences, new applications, new applications of technology, or new pockets of interest that you as a company haven’t served — these can be your underserved communities that create the opportunity for new disruptive market elements,” Todhunter said.

Action:
1. Gather as many open innovation idea submissions as possible
2. Quickly bucket the ideas (and parts of ideas) to look for patterns
3. Look for the most-mentioned ideas to find high-priority innovations
4. Also look for outliers to find potential high-value innovations.

For more information:

Open Innovation Summit

Invention Machine

Jim Todhunter’s blog: Innovating to Win

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