Internal vs. External Crowdsourcing: How to Determine the Best Solution

Recently I had a chance to read a terrific article in the most recent issue of the MIT/Sloan Management review about internal crowdsourcing. Co-authored by Lale Kesebi at Spigit customer Li & Fung (watch her awesome presentation at Ignite here to get inspired), I recommend it to anyone considering doing ideation with an internal crowd.

I thought I would spend some time sharing a topic that the article touches on – when is it better to do ideation with an internal crowd versus an external crowd?

Let’s start at the beginning and define some terms.

Ideation terms and definitions

What is an internal crowd? An internal crowd is broadly defined as a group of employees of a company (more than 200 to be a crowd, per Spigit recommendations) that are invited to participate in an ideation challenge or ideation community. The employees can be in multiple departments or divisions.

What is an external crowd? An external crowd can be a mixed population of people that are not employed by a company hosting the ideation challenge or community. Companies often reach out to customers, partners, consumers (who may or may not be customers) and other specific groups.

What is an ideation challenge or community? An ideation challenge is a time-bound collaborative multi-step process to solve a specific business challenge, and is powered by ideation management software like Spigit to uncover the best ideas by using both crowd input as well as crowd science and machine learning algorithms. An ideation community, however, has no time constraints and the crowd works on broader problem sets, but otherwise follows the same staged process as an ideation challenge. Spigit customers can use Spigit for both or either.

What kinds of problems/challenges are better suited for external crowds? On the plus side, external crowds are less involved day-to-day, so bring a fresh perspective to solving problems, and the insight of a customer or potential customer. They are almost by definition less technically immersed than employees in how a company’s products are made and sold. Thus, the best type of challenges for an external crowd are:

• Customer experience (e.g. how might we improve in-store experience)
• Product roadmap feedback, validation, and some ideation
• Marketing campaign validation
• New product validation
• Hiring/recruiting

Spigit customer The United Nations High Commission for Refugees, or UNHCR, (read the case study here) routinely reaches out to refugee communities with ideation challenges in order to provide better support for refugees. This is a great example of where reaching directly into an external crowd helps improve the “customer” experience.

Issues to watch out for:  

• Intellectual property. Make sure you have a process whereby any ideas discussed and then used by your company can be owned by your company. (Spigit customers: for advice on how to do this, check with your customer success manager – we have lots of examples)
• Participation: Unless properly incented, external crowds just “aren’t that into you.” So keep the challenge questions super clear, and make sure people are incented to both participate as well as “win.” Their ideas have a tendency to be less fully formed than with an internal crowd.
• Feasibility: By definition, an external crowd doesn’t know your company’s business priorities. So some ideas may be off-strategy, or simply too costly. On the plus side, you will get ideas that you never thought of.
• Expectation: Whether you’re running a challenge with an internal or external crowd, your audience will expect some degree of transparency and follow-through. Communicate which ideas made it to the top and which didn’t, and why. This stops the perception that your company is issuing black-box challenges. Demonstrating openness and follow-through will help to encourage repeat engagement.

I’ve adapted a chart from the MIT article below.

What kinds of problems/challenges are better suited for internal crowds?

Employees are immersed in your business underlying technology – how do we make what we sell – as well as the markets you operate in. With a large enough crowd that includes employees outside the division hosting the challenge, you will have enough diversity. Here are the kinds of challenges that work well with employee crowds:

• Finding new revenue streams from new product ideas
• Improving internal processes and cutting costs
• Customer experience (call center reps KNOW what issues are out there)
• Culture – How do we improve or change our culture?

Issues to watch out for:

• Hosting an ideation challenge and then not implementing (or attempting to) the winning ideas can do more harm to employee morale than if you had never asked their opinions in the first place.
• Incentives should not always be monetary. Reward employees with incentives that make sense in your culture. For example, many Spigit customers allow the employee with the winning idea to work on the team implementing the idea. Other ¬customers reward winners with time with the company CEO. AT&T rewarded a call center operator with a winning idea by featuring her in the marketing campaign for her idea.
• You will have stronger participation with an employee crowd than with an external crowd, but you will still need to have a strong communications plan to drive not just initial participation but at each stage of your challenge. Spigit customers can use the Spigit Marketing Blueprint provided with your subscription.

Should we ever mix internal and external crowds in a single challenge? As a rule, we generally recommend against this due to potential issues with intellectual property and the need for differing incentive structures.

Remember: customers/consumers need different incentives than employees. However, there are always exceptions to a rule. Not sure if it makes sense for you? Check with your Spigit Strategy Advisor, and he or she will help you think through it.