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Crowdsourcing: friend or foe of KM?

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Seen from a knowledge management perspective, crowdsourcing is a technique for capturing and using tacit knowledge. Often used for innovation, crowdsourcing can bypass organizational structures to obtain insights from large groups of individuals either within the company or outside it. Innovation has become a driving force for many companies; according to Forrester, more than 60 percent of Fortune 500 companies have appointed a chief innovation officer, and nearly 75 percent have innovation strategies. Crowdsourcing can also be a mechanism for increasing employee engagement and buy-in. The opportunity to share ideas for improving operational performance can shift employees from questioning change to supporting it.

Employee engagement

Oldcastle Materials, an Atlanta-based supplier of aggregates, asphalt, cement, ready-mixed concrete, paving and construction services in North America, has a network of operations in almost 1,200 locations across 43 states and eight Canadian provinces.

“Safety is always our top focus and at every management meeting, safety is number one on the agenda,” says Charlie Brown, CFO of Oldcastle Materials. “The people on the front lines are the ones who are exposed to the biggest risks, understand issues best and can most likely provide innovative solutions to improve our safety performance. Although we have methods of soliciting feedback, we want to focus more on how we can get candid feedback, suggestions and for them to identify areas of improvement in a timely manner.”

The idea of using crowdsourcing came up by chance when Brown was talking with a friend who was working for POPin. The company’s software sounded like something Oldcastle could benefit from. In a field that has not been an early adopter of advanced IT solutions, Brown still related to the potential. “Their CEO, Hayes Drumwright, was speaking a language I understood about how Oldcastle Materials can make sure our employees are in alignment with our priorities and how the people who have knowledge can feed it back to the company,” Brown says.

One limiting factor in employee engagement is that only about half of the workers have an email address. “Many of them are out in the field with no access to computers,” Brown explains. “However, POPin works through a browser interface and can be used on smartphones, which nearly everyone has, so this was feasible as a companywide approach.”

Although the issue of safety was a primary driver for obtaining a crowdsourcing application, a high priority initially was to integrate back-office functions. “We grew through acquisition of many different local companies, and they all had different ways of doing things, so we wanted to standardize,” Brown says. “For example, it was difficult to gauge the performance of different quarries in an apples-to-apples comparison.” As with any change, there was a degree of resistance from various operating companies to implement a standardized approach.

Fostering candidness

About six months ago, Oldcastle Materials started using POPin to get input from employees about the IT projects that were being put in place to standardize data. “We asked them questions such as, ‘Have you gotten what you need to move the project forward this month, yes or no?’ There was an opportunity for comment,” Brown says.

The question went to the subject matter experts, but their peer group could also provide input. For example, when the question “What would prevent this project from being successful?” was asked, employees could provide answers and other employees could comment on or validate the answers. Employees can use the well-recognized thumbs up or thumbs down to rate ideas. Top-rated ideas as well as the most controversial ideas are logged and discussed.

At the moment, about 500 employees, including leadership and the back-office and IT staff, are plugged into POPin. “Our response rate to questions is about 60 percent,” Brown says. “We are now in the process of evaluating how we can use POPin for other functions and projects. There is also discussion around how we can include those in the field and hear directly their ideas and viewpoints.”

Brown recognizes that some employees will be hesitant to be candid but points out that he received some straightforward advice about his own performance, which was that he should slow down and focus on a few things rather than trying to do everything at once. He affirms that management does plan to implement changes based on feedback solicited via the POPin platform. “In our interactions with POPin, they advised us that this process would be a waste of energy if management was not truly open to change, and we are ready to move forward with change,” Brown says.

Feedback from employees is vital, according to Lee Ott, president of POPin. “POPin is a disruptive approach to solving traditional leadership challenges that leverages crowdsourcing techniques,” he says. “In the management world, leaders frequently have to guess what’s going on in their teams, because speaking to everyone individually is not feasible.” Those who are most aware are usually those on the front line, and there is often a disincentive to speak the truth. POPin is designed to solve employee engagement issues and bring in ideas from people whose opinions might not be accessible otherwise.

Typically, the leader will ask a question and then there is a three-day window for responses. Because the dialog is ongoing, it evolves over time. “The first answers may not be the winning ones,” Ott notes. After asking a question—such as “What would improve our chances of success?”—a second message is sent with the top results and a follow-up question that asks how each employee would solve the problem. “By getting people involved, the company gains buy-in from stakeholders,” says Ott. “The company can go from merely being informed, as they would be from using surveys, to being impactful.”

Reaching out to external resources

LEO Pharma, based in Denmark, produces dermatological products for use in treatment of numerous skin conditions. The company is foundation-owned and has been in existence for over 100 years. With a strong R&D program that dedicates 14 percent of its revenue to research, LEO Pharma wanted to identify some additional competencies outside the company that could contribute to its drug products and delivery systems. As part of this effort, the company sought a crowdsourcing solution that could expand its range of knowledge and possibly find some practical solutions, as well as explore some theoretical issues.

To learn what the options were, the company hired a student from the Copenhagen Business School, who researched the topic thoroughly, finding out how the process worked and what could be expected from it. As a result of that exploration, LEO Pharma chose InnoCentive for some of its innovation activities. “The company was an established leader in the field of life science,” says Niclas Nilsson, head of open innovation at LEO Pharma, “and had a track record that was encouraging.”

LEO Pharma conducted several crowdsourcing competitions, which in the terminology used by InnoCentive are called “challenges.” The first was a reduction to practice (RTP) challenge, which requires experimentally validated solutions. It was designed to explore practical solutions to issues such as skin biopsies and biomarkers. “About 200 solvers signed up, and about 20 percent of the solutions were potentially relevant,” Nilsson says. “We awarded three and tested the prototypes. As it turned out, none fulfilled our predefined success criteria. However, we were not overly disappointed because we knew this task would be hard. We knew the field well and hoped there might be some approaches we had not discovered.”

The company also ran two ideation challenges, which are global brainstorming exercises for producing ideas such as new product lines or creative solutions to technical problems. Those ideas are at an earlier stage than those in the RTP challenges. “We definitely got value out of these exercises—they are farther from the product stage and obvious business value, but they generated some great scientific insights,” Nilsson says. “We also noted that we had a global reach in this process and a global engagement across all the continents. This was refreshing to see. Not only did we get a more complete view of the technical issues, but we also saw how we are perceived by others, which was very useful.”

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