Case Study Description of Developing Innovative Solutions Through Internal Crowdsourcing
This is an MIT Sloan Management Review article. As organizations search for better solutions to their everyday problems, many are encouraging employees to use their experiences to develop new ideas and play a more active role in the innovation process. Companies including AT&T Inc., Google Inc., and Deutsche Telekom AG have turned to what's known as internal crowdsourcing. Although external crowdsourcing, which solicits ideas from consumers, suppliers, and anyone who wants to participate, has been widely studied, internal crowdsourcing, which seeks to channel the ideas and expertise of the company's own employees, is less well-understood. However, as the authors point out, harnessing the cognitive diversity within organizations can open up rich new sources of innovation while at the same time engaging younger employees and people working on the front lines. In this article, the authors examine the benefits of internal crowdsourcing and the common roadblocks to participation, collaboration, and implementation; they draw on their research at a number of companies, including a health care company, a telecommunications company, and fashion and retail company Li & Fung Ltd. The authors present a set of action steps to help executives make their internal crowdsourcing efforts more effective. Those steps include: (1) keeping the focus broadly on long-term innovation rather than short-term problem-solving; (2) giving employees slack time to participate; (3) allowing for anonymous participation; and (4) making sure experts within the company don't exert too much influence. The authors also recommend that companies encourage collaboration, use technology platforms that connect individuals with ideas from other participants, and have well-defined procedures for how ideas will be handled after the crowdsourcing event. "Although companies are accustomed to giving recognition to teams who submit winning solutions, they don't always offer clear criteria to guide the process or take the time to follow up with employees who don't win,"the authors write. "But these efforts can pay big dividends in terms of driving future participation and generating better solutions later on."
Authors :: Arvind Malhotra, Ann Majchrzak, Lale Kesebi, Sean Looram
Swot Analysis of "Developing Innovative Solutions Through Internal Crowdsourcing" written by Arvind Malhotra, Ann Majchrzak, Lale Kesebi, Sean Looram includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Crowdsourcing Ideas facing as an external strategic factors. Some of the topics covered in Developing Innovative Solutions Through Internal Crowdsourcing case study are - Strategic Management Strategies, Labor and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Developing Innovative Solutions Through Internal Crowdsourcing casestudy better are - – supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, wage bills are increasing, geopolitical disruptions, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies,
central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Developing Innovative Solutions Through Internal Crowdsourcing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Developing Innovative Solutions Through Internal Crowdsourcing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Crowdsourcing Ideas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Crowdsourcing Ideas operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Developing Innovative Solutions Through Internal Crowdsourcing can be done for the following purposes –
1. Strategic planning using facts provided in Developing Innovative Solutions Through Internal Crowdsourcing case study
2. Improving business portfolio management of Crowdsourcing Ideas
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Crowdsourcing Ideas
Strengths Developing Innovative Solutions Through Internal Crowdsourcing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Crowdsourcing Ideas in Developing Innovative Solutions Through Internal Crowdsourcing Harvard Business Review case study are -
Ability to lead change in Leadership & Managing People field
– Crowdsourcing Ideas is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Crowdsourcing Ideas in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Crowdsourcing Ideas is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Crowdsourcing Ideas is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Developing Innovative Solutions Through Internal Crowdsourcing Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Crowdsourcing Ideas
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Crowdsourcing Ideas does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Crowdsourcing Ideas has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Low bargaining power of suppliers
– Suppliers of Crowdsourcing Ideas in the sector have low bargaining power. Developing Innovative Solutions Through Internal Crowdsourcing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Crowdsourcing Ideas to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Leadership & Managing People industry
– Developing Innovative Solutions Through Internal Crowdsourcing firm has clearly differentiated products in the market place. This has enabled Crowdsourcing Ideas to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Crowdsourcing Ideas to invest into research and development (R&D) and innovation.
Strong track record of project management
– Crowdsourcing Ideas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Crowdsourcing Ideas has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Crowdsourcing Ideas has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Crowdsourcing Ideas has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Developing Innovative Solutions Through Internal Crowdsourcing HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Crowdsourcing Ideas is one of the most innovative firm in sector. Manager in Developing Innovative Solutions Through Internal Crowdsourcing Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Crowdsourcing Ideas has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Crowdsourcing Ideas to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Crowdsourcing Ideas has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Developing Innovative Solutions Through Internal Crowdsourcing Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses Developing Innovative Solutions Through Internal Crowdsourcing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Developing Innovative Solutions Through Internal Crowdsourcing are -
No frontier risks strategy
– After analyzing the HBR case study Developing Innovative Solutions Through Internal Crowdsourcing, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Products dominated business model
– Even though Crowdsourcing Ideas has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Developing Innovative Solutions Through Internal Crowdsourcing should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Crowdsourcing Ideas is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Developing Innovative Solutions Through Internal Crowdsourcing can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Crowdsourcing Ideas has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Crowdsourcing Ideas supply chain. Even after few cautionary changes mentioned in the HBR case study - Developing Innovative Solutions Through Internal Crowdsourcing, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Crowdsourcing Ideas vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Developing Innovative Solutions Through Internal Crowdsourcing HBR case study mentions - Crowdsourcing Ideas takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Need for greater diversity
– Crowdsourcing Ideas has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Workers concerns about automation
– As automation is fast increasing in the segment, Crowdsourcing Ideas needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Interest costs
– Compare to the competition, Crowdsourcing Ideas has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Developing Innovative Solutions Through Internal Crowdsourcing, in the dynamic environment Crowdsourcing Ideas has struggled to respond to the nimble upstart competition. Crowdsourcing Ideas has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Crowdsourcing Ideas has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Opportunities Developing Innovative Solutions Through Internal Crowdsourcing | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Developing Innovative Solutions Through Internal Crowdsourcing are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Crowdsourcing Ideas can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Crowdsourcing Ideas to increase its market reach. Crowdsourcing Ideas will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Crowdsourcing Ideas in the consumer business. Now Crowdsourcing Ideas can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Crowdsourcing Ideas can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Crowdsourcing Ideas can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Buying journey improvements
– Crowdsourcing Ideas can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Developing Innovative Solutions Through Internal Crowdsourcing suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Crowdsourcing Ideas can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Crowdsourcing Ideas can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Learning at scale
– Online learning technologies has now opened space for Crowdsourcing Ideas to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Crowdsourcing Ideas in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Crowdsourcing Ideas has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Developing Innovative Solutions Through Internal Crowdsourcing - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Crowdsourcing Ideas to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Crowdsourcing Ideas can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Crowdsourcing Ideas can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Developing Innovative Solutions Through Internal Crowdsourcing, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Crowdsourcing Ideas to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Crowdsourcing Ideas to hire the very best people irrespective of their geographical location.
Threats Developing Innovative Solutions Through Internal Crowdsourcing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Developing Innovative Solutions Through Internal Crowdsourcing are -
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Crowdsourcing Ideas can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Crowdsourcing Ideas
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Crowdsourcing Ideas.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Crowdsourcing Ideas needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Crowdsourcing Ideas has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Crowdsourcing Ideas needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Stagnating economy with rate increase
– Crowdsourcing Ideas can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Crowdsourcing Ideas.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Crowdsourcing Ideas in the Leadership & Managing People sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Crowdsourcing Ideas with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Crowdsourcing Ideas is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Crowdsourcing Ideas needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Crowdsourcing Ideas can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Crowdsourcing Ideas in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of Developing Innovative Solutions Through Internal Crowdsourcing Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Developing Innovative Solutions Through Internal Crowdsourcing needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Developing Innovative Solutions Through Internal Crowdsourcing is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Developing Innovative Solutions Through Internal Crowdsourcing is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Developing Innovative Solutions Through Internal Crowdsourcing is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Crowdsourcing Ideas needs to make to build a sustainable competitive advantage.