The leading minds in corporate innovation don't always work inside a corporation. Despite having a research and development budget in the millions, Goldcorp--a global leader in mining with a market cap over $10 billion--looks for its next great idea outside its walls, deploying what is known as crowdsourcing crowcrowto generate world-changing opportunities. 

And the benefits of crowdsourcing are not just available to big companies. As the founder of a startup or small business, you should engage your communities (suppliers, customers, distributors, and advisers) through open innovation to solve your business issues. 

I recently participated in #DisruptMining, the annual global conference on innovation and mining. I had the job of pitch coaching the four finalists in the  $1 million innovation challenge sponsored by Goldcorp. Here is what you can learn from my experience witnessing open innovation in the wild.

Crowdsourcing

When an organization outsources formerly internal activities to a large community of outside individuals, it is using a technique named (by Jeff Howe in 2006) crowdsourcing.

Crowdsourcing runs counter to the traditional secrecy and silo mentality of 20th-century corporate research labs. Instead of solely relying on internal R&D to generate corporate innovation, the company turns to the outside world, often through cash prize challenges, to get external minds involved in finding solutions.

Goldcorp is no stranger to crowdsourcing. In 2000, Goldcorp's founder, Rob McEwen, did the unthinkable (at least in the mining sector): he made Goldcorp's geodata public and challenged the world to develop a better way of discovering gold on his property. The results speak for themselves: in the years that followed, Goldcorp became one of the most successful players in the mining industry.

How Your Business Can Benefit From Crowdsourcing

The finalists of the $1 million #DisruptMining innovation challenge all benefited from participating.  While only one ( Acoustic Zoom) won the cash prize, all were able to showcase their innovations to more than 1,000 future buyers in the audience. This live version of Shark Tank allowed innovators with no connection to Goldcorp to demonstrate how their innovations would exponentially add to the value propositions of their mining clients. After leaving the stage, each finalist was swarmed by members of the audience who wanted to learn more or even potentially adopt the innovations of these startups.

Thus, open innovation becomes a channel to push adoption. This is the first way your business can benefit from open innovation: participate in crowdsourcing challenges in your industry.

Another way small businesses and startups can leverage this new paradigm is to participate in crowdsourcing challenges in other industries. Leveraging your firm's expertise to solve another industry's problem is not only a proven way to generate innovation, it is also a cost-effective way to monetize intellectual property and capacity. 

Some businesses rely on crowdsourcing not just for their innovation, but for their entire business model. YouTube leverages content created by users. Google leverages the crowd by using citation preferences to rank and sort the internet. Amazon facilitates millions of retail transactions where it is not the seller. Threadless sells out of every T-shirt it produces, yet relies on the crowd to design the shirts. Crowdsourcing has become a competitive advantage for some former startups, so consider if your core business model could be enhanced by relying on those beyond your firm's walls.

Finally, some businesses crowdsource non-core elements of their business model: virtual assistants, cloud bookkeeping, and even staff recruitment. So don't limit your use of crowdsourcing to just R&D. Consider all the non-core aspects of your business model. Which can you crowdsource?

4 Tips to Consider When Bringing Crowdourcing Inside Your Venture

Dwayne Spradlin, President and CEO of InnoCentive, suggests some of the following:

  1. Check your ego. The biggest hindrance to innovation is ego. Believing that you already know everything hinders your ability to discover new things. So leave your ego at the door and be willing to hear all opinions, especially those that challenge your business model fundamentals.
  2. Promote diversity and inclusion. The more radically different mindsets you can engage, the more likely you are to succeed in generating innovation. So look to include customers, employees, suppliers, mathematicians, musicians and pretty much everyone you can get to participate.
  3. Everything is fair game. Look to open your challenges to all parts of your business model. Blockbuster and Netflix have the same value proposition, but deliver on it in very different ways.
  4. Better definitions lead to better solutions. The better defined the problem statement and the more the explicit the boundaries, the more likely you are to generate radical innovations.

Whether you are participating in a crowdsourcing challenge or running one, relying on the crowd for your core business or just trying to drive efficiencies, the best and most cost-effective solutions often come when different minds meet up to solve big problems. That's where you find open innovation, and that's where crowdsourcing operates best.

Why It’s Always the Right Time to Innovate

Why It’s Always the Right Time to Innovate
Published on: Apr 11, 2018