Wanted: leaders that can extract wisdom from the 'crowd'

There's been quite a bit of discussion lately in the concept of "crowdsourcing," which is based on the logic that communities of interested participants can arrive at solutions quicker and more effectively than cloistered research and development departments.

It's clear that many, if not most business leaders --under tremendous cost and competitive pressure -- expect more innovation to be driven from outside their organizations. Last year's global CEO study of 1,000 companies, conducted by IBM, found that 40 percent of respondents are changing their enterprise models to be more collaborative. Most will look to sources outside the walls of their enterprises, such as customers and partners, for innovation.

As the IBM study observes, while 38 percent of CEOs plan to keep innovation work within their organizations, 71 percent — nearly twice as many — plan to focus on collaboration and partnerships. CEOs in the survey "are pursuing more collaborative models to gain efficiencies, fend off competitive threats and avoid commoditization. Their end goal is to offer customers a differentiated value proposition."

An article in Network Computing reports on some instances of corporate efforts to capture the wisdom of crowds to deliver new innovations. For example, GE Research had conducted an experiment in which 85 employees bought and sold "stock" in 62 new product ideas. The project with the greatest value at the end of this prediction-market experiment would receive $50,000 in research funding. Dell employed a voting platform that enabled customers to vote on the features they would like to see in the next line of PCs.

Crowdsourcing is a process that needs to be managed smartly. My colleague Jon Husband, who has been watching this phenomenon develop in recent years, observes that success in crowdsourcing requires inspired leadership skills. As he puts it:

"The job of a leader in today’s hyperlinked and transparent organizational world is to instantiate the crowd’s intelligence and/or wisdom with a clearly-stated and purposeful mission and objective, and then listen! These days (and certainly tomorrow) it’s less and less about charisma, command and control, and more and more about listening to conversations and championing, catalyzing and coordinating the collective wisdom of any given organizational crowd."

Many managers and executives recognize that there is considerable expertise and guidance that can be drawn from the world around their organizations. In fact, in many cases, they may have no choice if they wish to remain competitive in a fast-moving global economy. But being able to overcome organizational inertia, the fiefdoms, and fears of loss of control will take education and awareness.

The question is, who will lead the charge into crowdsourcing?  Will it percolate up through the ranks, in a grassroots fashion? Or will inspired C-level executives drive the effort as part of a strategic focus? It may be a combination of both. Or, as SmartPlanet colleague Vince Thompson points out, there may be a VP-level post created for that purpose -- such as Hearst Magazines Digital Media Group's VP of Social Media.