A New Form of Crowdsourcing for Innovation: Problemsourcing

by Yannig Roth

A New Form of Crowdsourcing for Innovation: ProblemsourcingAn increasing number of companies use crowdsourcing today, tasking the crowd to come up with creative solutions to their corporate problems. But this open, company-initiated approach has drawbacks, like the uncertainty of crowd response, the temporary nature of the relationship or the identity clash that can arise when there is a poor fit with the identity or culture of the organization. Researchers from New Zealand have come up with an interesting twist to the crowdsourcing model: instead of having a company asking the crowd for solutions, they had a government-owned R&D organization asking the crowd for problems (“What is Your Problem?“). Here are some learnings.

When you ask a crowd for solutions, you benefit from a variety of things: access to a wide knowledge pool, generation of market or consumer insights, fast and cost-effective problem-solving capabilities, buzz around your brand… The academic literature and popular press has covered the topic extensively (and you probably know it, too). However, you have du juggle with some issues: potential project delays, possibly few and poor responses, the sporadic nature of the call for entries… Crowdsourcing might be good to solve problems and stimulate creativity, but seldmomly does it allow you to engage in deep interactions with crowd members (also see this article on co-creation and crowdsourcing being complementary).

Crowdsourcing can be more time- and effort-intensive and the solution may not “stick” within the firm because it was not in- ternally generated (Davenport et al., 2013)

In a recent article, researchers from Victoria Business School in Wellington, New Zealand, suggest a solution. Instead of asking solutions, let organizations ask for problems. “We look at how an R&D organization in New Zealand developed a variant of crowdsourcing processes that addresses some of the dilemmas identified above,” they explain in their paper, “we have termed this approach problem-oriented crowdsourcing, or “problemsourcing.” The example described in their article is the What’s Your Problem News Zealand? challenge, which was organized by the government-owned R&D organization Industrial Research Limited (IRL), recently rebranded as Callaghan Innovation.

The "Call For Problems" on IRL's March/April 2009 issue

In 2009, IRL launched the “What’s Your Problem New Zealand?” competition by putting out an open invitation to all New Zealand firms to describe their challenging R&D problems that would advance their business. IRL offered the winning firm $1 million worth of R&D services at its facilities. The competition involved two stages (in the first stage, applicants submitted a two-page proposal and completed a questionnaire; in the second stage, the 10 finalists consulted with IRL experts to determine a possible path to solving their problem) and attracted over 100 applicants. Paint manufacturer Resene’s “problem” was determined as that most likely to benefit from the application of IRL expertise and was announced as the competition winner.

Employees of Resene Paints, a family-owned business with a strong commitment on producing environmentally friendly paints

Resene proposed to develop a paint made of 80% sustainable ingredients, but the firm had been unable to find such a product on the market. The existing improvements in paint sustainability were small tweaks of current technology, but Resene wanted to challenge the fundamental dependence on petrochemicals and hoped to make a superior paint for around 4/5 the price of competing sustainable paints. Yet, Resene lacked the necessary resources to develop it on its own, and therefore entered IRL problemsourcing competition.

We had a clear idea of what we wanted. More than anything, we knew where the gap in the market was (Danusia Wypych, Resene’s technical manager)

By January 2010, Resene announced that, with the help of IRL, the team had discovered the ingredient required to produce its environmentally friendly paint. By mid-2012, a novel binding ingredient had been developed and a patent application had been submitted. The market performance of the newly developped product has yet to be proven, but the researchers from Victoria Business School in Wellington saw the experience as an innovation: “Whatever the eventuality for IRL and Resene, we believe that this case represents an interesting new organizational manifestation of local open innovation, which is a variant of crowdsourcing for corporate R&D,” they conclude in their paper.

What did the government organization IRL get out of this experiment? I asked Shaun Coffey, Chief Executive at IRL at the moment of the problemsourcing initiative (“Shaun’s major legacy at IRL is a more creative science system and people with a keen focus in putting science to work in industry,” said the press release that announced him leaving IRL, which is clearly in line with the creative problemsourcing approach).

Here are his enlightened answers:

How did the “problemsourcing” idea come about?

The idea for “IRLs What’s your Problem New Zealand?” originated as a project devised and developed by a cross-functional group of staff who were participating in the companies Leadership Development Program. Each cohort completing the course was given a different corporate problem or opportunity to consider and to come up with project ideas to address the problem. The “problem” giving to the groups in this particular cohort was how to better make potential client/customer companies more aware of the capabilities and services that IRL had to offer.

What did IRL and, to a different extent, New Zealand, get out of this initiative?

The benefits of “IRLs What’s your Problem New Zealand?” have been seen in many areas. Of course, there was the winning project itself that was very successful from a commercial and a scientific perspective.

There were many other outcomes. For IRL some these included (in no particular order): (a) the winning project has resulted in new business and now opportunities for the company involved, and the development of new capabilities within IRL; (b) from all of the entrants, IRL was able to accumulate a large amount of information about industry needs, and opportunities for future work; (c) the impact on morale and productivity was positive, it build confidence right across the company about our ability to work with industry, and made recruitment easier (IRL was seen as an exciting place to work); (d)  the contract pipeline grew measurably as a result of the new relationships developed; (e) a vastly raised public profile for IRL, a measurable increase in awareness of the organization and its work; (f)  IRL was able to develop deeper and stronger partnerships with private companies.

For New Zealand, some of the benefits included: (a) a recognition that there was a large unmet demand for R&D in industry (b) a recognition that insufficient resources were been devoted to innovation in the manufacturing and services sectors ; (c) many individual companies identified and pursued innovation possibilities that they had not work on previously; (d) a better understanding of R&D and innovation developed. e. many other research institutes and universities reported positive spin-offs from the project, and new partnerships between research organizations and private companies. f. the information gathered during the submission and analysis phase was a key part of successful proposals put by IRL to the national government to create and advance technology institute with almost double the existing resources been devoted to manufacturing.

Do you think the problemsourcing approach will be pursued at national and/or international scale?

“IRLs What’s your Problem New Zealand?” was run on a national scale, and the model could be run at that scale, on a regional scale, on an industry sector scale, or at a global scale. Other national projects have been spawned in NZ as a result – such as a project to enlist the general public in identifying national science challenges.

The problemsourcing is an original approach in the field of innovation. It requires an interested audience of applicants, with an open mindset for innovative thinking. Problemsourcing was a win/win for IRL and Resene, and it addressed many of the drawbacks of traditional crowdsourcing. But the research article also underlines that “A potential drawback of the competition format was that the losing finalists were disappointed,” which is the case in most competitions! “We hope to find ways to get all of the 10 finalists’ ideas into proper business cases and then funded in one way or another,” said IRL science group leader Richard Furneaux. We would be glad to hear about it!

References: Davenport, S., Cummings, S., Daellenbach, U., & Campbell, C. (2013). Problemsourcing : Local Open Innovation for R & D Organizations. Technology Innovation Management Review, (March 2013), 14–20. image credit: eYeka.com

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Yannig RothYannig Roth graduated in marketing and is currently Research Fellow at eYeka and PhD student at University Paris1 Panthéon-Sorbonne in Paris (France). His main research interests are creative crowdsourcing and community co-creation. Yannig regularly blogs at http://yannigroth.wordpress.com