Jason Sherman reflects on purpose driven living, money and obsession since quitting his job ten years ago to start a qualitative and customer experience research and innovation firm.
I quit my job with a big company ten years ago to start Whyze Group. I love my life. Have I ever looked back? Yes.
I miss the social perks, the rows of offices filled with fun, quirky colleagues. And, despite the layoffs and executive greed regularly described in headlines, I sometimes long for the illusion of security I felt getting a regular paycheck that had a Fortune 500 logo on it.
Today, my corporate clients, pressured to do more with less, are feeling less secure in their jobs. I listen to them and apply a comforting salve of acknowledgement and advice when I can. I obsess over the production of scintillating reports and presentations that make our clients heroes within their companies.
My obsession extends to other areas. Are we fulfilling our mission?
I look for validation: our ten year track record, our growing list of Global 2000 clients, the level of confidence clients place in us, the caliber of people we attract–Ivy leaguers, visionaries, and the kind of people Seth Godin calls linchpins.
Revenues have grown, too, but it’s never been about the money.
It’s been about the mission. That is, to help companies learn what customers experience and to innovate so that all parties–companies, customers and investors–benefit.
But, when I attempted to confine myself to pure pragmatism, I kept returning to this thought, “What’s the point of shooting lower than altruism? We can do well by doing good.”
And, we have done well and good:
We’ve been innovators in qualitative research and hybrid methods for surfacing deep insights into customer experiences.
We created ways for organizations to far more easily internalize and use what they learn. I’m proud of our case studies.
Our white paper on research and innovation was the first of its kind cited U.S. Department of Commerce Baldrige National Quality Program.
We invented the Management Beliefs Audit, which helps organizations align their people and resources toward achieving what’s most important to customers. (Whyze Group is still the #1 search result on Google for this.)
We began doing these things more than ten years ago because they were consistent with our mission–providing easy ways for companies to acquire insight, learn and innovate.
Our mission is resonating with a growing legion of fans. Our clients talk about how working with Whyze Group is different here and on Linkedin.
Our mission is also getting more interesting. Social media and mobile computing are dramatically expanding opportunities. They’re driving demand for services like ours that provide the insight expertise, creativity and perspective needed to maximize these technologies. We’re partnering with top experts in social and mobile who augment the unconventional whyzdom we provide and are incredibly stimulating, fun people to be around.
I’m very excited about the next ten years.
I’m grateful to Whyze Group clients and colleagues for supporting our mission. I’ve gotten to work with people I enjoy and have had the privilege of choosing how I invest my energies each day.
There’s an irreplaceable joy that comes from that.
To all Whyze Group clients and colleagues, thank you.
Heard of online focus groups but feeling like you’re old school because you haven’t ever seen one?
No worries. Here’s some info that will help you fake-it-’til-you-make-it as an authority.
The most common format for online focus groups today is the bulletin board. Bulletin board focus groups are great for reaching geographically dispersed participants and participants who’ll respond more openly if they remain anonymous.
Bulletin board focus groups are not like face to face groups where the participants, observers and moderator meet for two hours, then go home. Participation in bulletin boards is “asynchronous,” meaning participants don’t have to be online at the same time. Participants answer questions each day at the time most convenient for them.
In fact, participants don’t have to live in the same city. They can be in different time zones, happily typing their responses from their homes or offices.
Participants usually spend from 15 to 30 minutes each day on the bulletin board. Most groups last three to five days.
Observers can log into the conversation from their homes, offices or on the road. The bulletin board is divided into areas where the moderator’s questions appear, and where a related image, narrative description or video is shown. Participants type their responses in a reply box. Another section shows all participants’ and moderator comments.
Typically, participants type their answers before seeing the responses of other participants. Participants can then discuss their reactions with each other. The moderator can type follow up questions for the group, send private messages to individual participants and interact with client observers through the software.
iTracks, Qualvu and 20/20 provide bulletin board software platforms that are popular today. Each has unique strengths, but operate similarly.
Unlike face to face groups, where moderators can instantly sense confusion and reframe questions in real time, a bulletin board moderator is limited to clarifying questions through posts, emails and phone calls to participants. This can take some time. To avoid having to reframe questions, bulletin board moderators need to be adept at projecting how participants will read and interpret questions.
Choosing a Moderator
This leads me to another important consideration when hiring a moderator: Make sure your moderator can guide your project team as well as customers through this process.
Team members have usually been immersed in an industry for several years. They forget what it’s like to think like customers, who may be engaged for only seconds. This is normal. Without coaching, team members frequently write research questions that are overly complex and jargon-packed. Their questions can be “technically correct” but ineffective in eliciting meaningful customer reactions. They often miss opportunities to surface critically needed insights.
Your moderator not only needs to be a qualitative research expert, but also a coach who can diplomatically nudge team members toward coalescing around meaningful, achievable objectives. His contributions will show up before the groups in the research design process, during the groups and afterward when your team will appreciate sage guidance about what they learned and how to apply it.
The sputtering economy is, in part, a symptom of a greater problem—a tectonic shift in global demographics. This shift may change consumers’ consumption and saving behaviors for years.
These changes open up new opportunities for companies that can learn and adapt most efficiently.
Here are six things you should know…
1. Declining birthrates are eroding the economies of developed nations. Their deleterious effects will likely be with us for a long time.
Reputable demographers and economists with the WCF, tell us, “The population of the world, particularly in developing countries, is aging. The baby-boom generation is reaching retirement and will need to be supported by the generations that succeeded them, all of which have had fewer and fewer children. This means fewer and fewer workers paying into the social security, medical and welfare systems of the world. Economies will be strained and governments will slow bleed as relative production dwindles and tax revenues decrease.”
Last month’s media coverage of worker protests in Greece might leave us to believe that the cause was the Greek parliament’s reigning in liberal social welfare programs. But, Greece’s fiscal math worked before. Not anymore.
The birthrate required to sustain population equilibrium is 2.1 children per woman in Europe. Greece’s birthrate had been declining for years. As of 2004, the Greece’s birthrate was 1.3. Today, there are too few younger workers to pay for the social security of Greece’s retirees.
Similar problems plague Spain (with a birthrate of 1.3), Italy (1.3) Germany (1.4), Netherlands (1.7), Norway (1.8), France (1.9) and Ireland (2.0). In Russia, the birth rate is so low that the government is paying women to have more children. According to the WCF, Russia is expected to lose one-third of its current population by 2050.
Japan is facing similar demographic imbalances and economic challenges. According to a market update circulated by Charles Schwab last week, “The problem in Japan is that “cheap money” hasn’t stimulated demand, a liquidity trap exacerbated by an aging population that’s shifting away from consumption.”
Similar challenges exist in the United States, though they are somewhat ameliorated by influx of immigrants, particularly immigrating women, who bear more children on average than women born in the U.S.
2. Deflation is a risk in developed markets.
Schwab’s update continues, “The weight of deflation is also a factor. Consumers believe that prices could be lower in the future, providing little reason to consume or invest today, so economic activity gets delayed. Lower demand results in a drop in production, job cuts and wage decreases, resulting in a reinforcing and detrimental cycle. Global economic growth is slowing, and with the threat of a double-dip recession in Europe amid fiscal austerity, there’s increased potential for deflation, not inflation, for most of the developed world.”
3. As a result, consumers say they are reverting to post-World War II spending and savings patterns.
Recent McKinsey&Company research shows that 90% of U.S. consumers 36 to 65 years old with incomes of $25K to $100K say they are reducing spending. The personal savings rate, which was zero in 2008, climbed to nearly 6% of disposable income in 2009, approaching the 9% savings rate of the post-World War II era.
Less than half of surveyed U.S. consumers believe the stock market will outpace inflation over the next 30 years. Eighty-five percent of consumers ages 36 to 45 believe that it won’t.
Unlike recent business cycles, this downturn appears to be leveling off at range of economic activity that will remain with us for the long haul. Consumers and business leaders looking for help from financial services institutions and governments are finding them bereft of solutions.
4. The future favors companies that efficiently learn and adapt more efficiently in response to customers’ new savings and spending habits.
Learning and adapting sound simple. However, most companies fail to integrate the components of learning–data collection, analysis, knowledge sharing–with the components of adapting–planning and managing change.
5. Change management skills are required to get organizations to adapt more quickly, but change management is a blind spot for most CMOs.
This is where there is plenty of opportunity for improvement.
“CEOs and CMOs agree that the formula for success involves leading innovation, improving marketing’s alignment with the rest of the organization, business strategy and marketing execution. Yet, both CEOs and CMOs agree that marketing is not as effective as it can be,” according to a report by executive recruiting firm, Spencer-Stuart.
6. As we reported in our 2009 white paper, “Bridging the Research-Innovation Gap,” (downloadable from our home page) most companies’ learning and adapting processes are quaint and inefficient.
Companies are attempting to learn and adapt via assembly-line management practices conceived at the turn of the last century. Potentially valuable customer insights are thrown over marketing’s silo wall to next-in-line executives who either don’t understand them, don’t believe them, don’t remember them or are unwilling to use them.
Hundreds of executives and marketing researchers have read our white paper and support our conclusions, which specify 11 ways to bridge the research-innovation gap. The U.S. Department of Commerce cites our paper as recommended reading for U.S. business leaders.
With businesses and consumers becoming more budget and value consciousness, demand will likely continue to shift toward companies that operate more efficiently.
That applies to innovating more efficiently, too.
Over the last ten years, Whyze Group has helped dozens of top companies innovate more efficiently. We integrate customer experience research, design and change management to enhance the innovativeness and performance of companies with which we work.
Customer experience research surfaces the influences of someone’s experiences, memories, goals, mental models, perceptions and emotions on their behaviors around brands and products. This understanding of ‘the person’, who has a life beyond the limiting role of ‘customer’, helps us more accurately anticipate how people are going to respond to specific new product and service ideas.
Customer experience design uses a workshop approach to designing advertisements, sales processes, products and services, packages and post-purchase events that deliver experiences customers deem worthy of rewarding with their loyalty and referrals.
Change management is applied in creating leadership alignment around what leaders believe and need to learn about the customer experience. Change management is integral in implementing organizational changes needed to deliver the intended customer experience.
One word changed the construct research subjects used to answer a question…and opened a flood gate of new product development insights.
We recently did some new product development research for a manufacturer trying to learn how tradesmen evaluate competing power tools. Personal construct psychology informed our approach.
Personal construct psychology (PCP) is a framework for understanding the categorical templates that people use to organize the realities of the world. Each person’s templates evolve in accord with what they learn from past experiences. They lay their templates over new, similar experiences to anticipate what will happen.
By understanding which constructs customer use to distinguish offerings, you can begin to understand which elements of message, product, package and experiential concepts differentiate offerings in customers’ eyes and which don’t.
In our initial draft of the discussion guide, we asked tradesman, “What makes some of these tools better than others?
We got these answers:
“Durable. It’s going to get banged up on a construction job.”
“The manufacturer stands behind their product. They’ll take it back if it breaks.”
“You can maintain it easily to increase its working life.”
“How much it costs to use.”
While these comments were helpful, they weren’t entirely satisfying. We felt we had tapped constructs that tradesmen use to evaluate the quality of tool manufacturing. This was only tangentially related to what we wanted to know: what constructs do tradesmen use to select tools they’re going to buy?
So, our client agreed to change the question from, “What makes some of these tools better than others?” to, “What makes some of these tools more useful than others?” The word, “useful,” evoked a different contextual construct. It surfaced memories of on-the-job customer experiences where some tools were frustrating to use.
Here’s what we learned over and above what we heard before…
“Speed. How fast it does the work.”
“Maneuverability. It needs to fit in tight spaces. It needs to be lightweight.”
“Portability. Sometimes, electric plugs get kicked out by other workers on a job site. That costs me time. Help me avoid having to use extension cords.”
“Safety, Make sure it can’t tip over while it’s on. Put a guard on it so no one backs into and hurts themselves. Pat a safety lock on this so there’s no change it will turn on when it gets knocked around in my tool bag.”
“Run time. Make it so I don’t have to replenish the power source as often. Give me a way of knowing how much run time is left so I can replaced the power source before I start a job.”
“Adjustable controls. Let me adjust the power to a level suitable for doing the job.”
Much richer stuff. In this case, using just the right word meant the difference between acquiring pedestrian insight and scratching the surface of strategically valuable wisdom. It informed a variety of decisions about the product design and package copy.
We typically find that customers in a product category,
cluster into groups who share common, but not identical sets of, constructs that help them anticipate what their experiences will be, and
assign varying levels of importance to each dimension (e.g., speed, maneuverability, portability, etc.) across these groups
Personal construct psychology informs approaches that complement segmentation. At times, it can provide insights that go deeper. You learn not only what customers needs exist, but also how customers distinguish new products that will help them better meet their needs.
Bottom line: If you know why and how your prospect thinks and feels (not just what they feel), you can anticipate how they’ll act in new situations. That focuses creative thinking around those few new product ideas worthy of developing further.
Jason M. Sherman is president of Whyze Group, the leading customer experience research and innovation firm. Whyze Group works with B2B and B2B2C Fortune 500 organizations. The company has been recognized by the Baldrige National Quality Program, business associations and numerous business media as a leader in research and innovation. Inquiries: Jason@whyzegroup.com, (440) 785-0547.
Choice architecture is the organization of the context in which people make decisions. Because of recent health care legislation, your health care choices are going to be largely influenced by choice architecture. Choice architecture is drawing interest from other sectors, too.
What is choice architecture?
Marketers are probably most familiar with one element of choice architecture: the order and placement of choices. We rotate the presentation of survey questions, for example, to neutralize the influences of order bias.
“Researchers tell us that if a candidate is listed first on the ballot, he may well get a 4% increase in votes,” say Thaler and Sunstein in “Designing Better Choices“.
But, the mere order or placement of choices is only one dimension of choice architecture. The actual construction of the choice options, including the content and number of options is a second dimension. A third is the environment in which choices are presented.
Choice architecture is an component of behavioral economics, popularized by recent bestselling books Nudge, Freakonomics and Predictably Irrational.
At Modern Healthcare.com, Rebecca Vesely writes, “Over the next five years, the government will put behavioral economics into practice on a large scale through the Patient Protection and Affordable Care Act. Starting in 2014, employers can offer workers rewards worth up to 30% to 50% of their cost of health coverage for participating in a wellness program and meeting health benchmarks.”
AFSCME is already seeing the benefits. Vesely reports, “Prior to 2007, [AFSCME] was seeing steady double-digit increases in medical claims. But since implementation in January 2007, paid claims have been flat, and are below 2006 levels…The union also is starting to see movement in risk factors such as smoking, weight loss and cholesterol.”
But, reducing choice architecture to “carrots and stick” is an oversimplification.
In Predictably Irrational, Dan Ariely, demonstrates more subtle, but equally powerful influences of choice architecture on our behavior. Ariely shows us an advertisement for The Economist Magazine that he found.
The ad offered three subscription options:
Electronic Only: $59
Print Only: $125
Electronic and Print: $125
Would more people choose the Electronic Only option or the Electronic and Print option? Ariely conducted a test with 100 MIT students to see what they’d choose. 84 students chose the Electronic and Print option. 16 chose the Electronic Only option. None chose the Print Only option. Why would they?
The Print Only option seems irrelevant. But, it isn’t!
Here’s what happened when the seemingly irrelevant Print Only option was eliminated. Ariely offered another 100 students only two subscription options and asked them to choose:
Electronic Only: $59
Electronic and Print: $125
Now, only 32 students chose the Electronic and Print option. That’s 52 fewer students than when three options were presented. What happened?
The presence of an irrelevant option, a decoy, influenced twice as many students to choose the more expensive subscription.
Ariely describes the cause as “relativity”. We’re wired to compare the things that are most comparable. The choice between Print Only at $125 and Electronic and Print at $125 is a no brainer.
Behavioral economics is revealing that we choose and act in ways that are decidedly irrational. If you want to discuss choice architecture, please give me a call.
“Innovation: Fresh Thinking for the Ideas Economy”, a conference produced by The Economist magazine, starts today at the Haas School of Business at UC Berkeley.
The program announcement includes many of the trendy buzzwords that have become all too familiar to those of us in the innovation trenches–open innovation, social entrepreneurship, bottom of the pyramid, flat world, crowdsourcing and the be-all-end-all, technology…Ugh…double ugh.
Since I’m not planning on attending, I can’t speak with any authority about the outcomes of this conference. It’s not that I don’t feel this conference could be useful. I just find that the vast majority of attendees at these events are mostly consultants and academics who already get it.
I’ve often felt that we were talking to ourselves, validating ethics, ideas and principles that are mostly inarguable. But, these ideas haven’t been practically implemented by the very people who would benefit their organizations and maybe even the rest of us by putting them to use.
They, by the way, also mostly get it, or are at least receptive. They don’t attend these conferences, I suspect, because they can’t implement it..or do attend because they are looking for ways to implement it. They need playbooks, not platitudes, nor quick fix psuedo-solutions.
Our conversations with clients breeze easily over the principles of innovation. They get it. Where they get stuck…and fear-struck, is where we start talking about applying these principles in their organizations. They want the playbook, the nitty gritty details of how we help them implement innovation–or change– in their organizations.
Their concerns pertain largely to the organizational barriers to innovation, or, to put it in simple terms, how not to get fired in the course of deflecting their organizations, with all their histories, traditions and lines of authority, away from the status quo.
Open innovation? Bottom-up ideation? Social entrepreneurship? “Fine,” they say. “How do I get people in my organization to be more responsive to customers when their bosses, whose interests may not be aligned with customers, are the arbiters of their immediate economic security?
The playbook starts with understanding the playing field, or more accurately the organizational mine field, which we describe in “Bridging the Research-Innovation Gap” (available for download on our home page.) Once you know where the mines are, it’s easier to avoid them, survive and even live a fulfilling life as an innovator.
So, I hope this conference marks the beginning of the Ideas Economy 2.0, where we begin to hold as self-evident that encouraging creativity and sharing ideas are good, like motherhood and apple pie. We need more of the playbooks that enable those principles to be exercised.
In this article, we examine the prevailing management belief that more research leads to more innovation.
What’s the relationship between research spend, innovation and business performance?
The Fortune 500 are by far the biggest marketing research spenders in the U.S., consuming the majority of $7 billion in research services annually. Several years ago, we hypothesized that companies among the Fortune 500 would remain preeminent from decade to decade given their advantage of large research budgets. So, we tracked them…
We started with the Fortune 500 list for the year 1990 and then looked at the list ten years later. We expected to see some churn, but not at the level we found. In those ten years, about forty percent of the firms on the 1990 list disappeared. About 200 firms had been displaced, absorbed or tanked at the hands of competitors. In the next four years, between 2000 and 2004, twenty-five percent of the Fortune 500 had churned. These were household names; GTE, Hasbro, Ingersoll Rand, Nabisco Holdings, Paine Weber and Ralston Purina. (Whyze Group internal research, 2005).
While our findings weren’t conclusive, it raised challenges to the notion that more research leads to meaningful innovation and business results.
Later in 2005, Booz Allen completed a study of the top 1,000 R&D spenders among public companies globally. Based on Booz Allen’s analysis, they concluded, “Contrary to conventional assumptions, R&D spending levels within the Global Innovation 1000 had no apparent impact on sales growth, gross profit, operating profit, enterprise profit, market capitalization, or total shareholder return.” (Bordia, R., Dehoff, K., Jurelzekski, B., “The Booz Allen Hamilton Global Innovation 1000: Money Isn’t Everything”, Strategy + Business, Winter 2005, p. 5)
The belief that there is a relationship between research spend and business performance persists, but a growing body of empirical evidence runs contrary to this perception. Another question we asked is, “What’s missing when research fails to improve business performance?”
Why Doesn’t More Research Produce Better Business Results?
We asked managers in client organizations and colleagues in a variety of research firms to give us their perspectives. Among the questions we asked was, “What percentage of marketing research findings are actually applied?” While the answers varied, the most common response from research suppliers and clients alike was, “fifty percent”.
This is consistent with what we see at nearly every client organization that has asked us to facilitate our Customer Experience Management Audit with their management teams.
Most corporate libraries contain reams of well-executed marketing research studies. Most contain nuggets of insight that seem valuable on the surface. To understand the value of these studies, we needed get a view of the context in which these studies were commissioned.
What we found when interviewing managers at these firms is that these research reports often misaddressed key issues that managers were wrestling with at the time. In some instances, we found that the research was misapplied, leading to dangerous actions.
One example was a company that had commissioned dial testing of its new TV advertisements. Dial testing shows how viewers are responding to audio-visual advertisements on a second-by-second basis. It shows emotional high and low points as the ad is being absorbed. What it doesn’t show, and what managers needed to know at the time, was how well this ad positioned the company against its competitors. The dial testing showed high points in the ads where managers wanted them and company made significant media buys. The ad tanked and was pulled at a cost of millions of dollars to this company.
Malcolm Baldrige Stocks Return 300% More than the S&P: Suggests Application of Findings is Key
Our convictions about how customer data translate into improved customer experiences and business performance coalesced further when we looked at the performance of Malcolm Baldrige National Quality Award winners.
Malcolm Baldrige winners achieve superior business results. During a ten-year period, the portfolio of Malcolm Baldrige winners’ stocks outperformed the S&P 500 by a margin of 3-to-1. The graph below compares the 10-year returns on investments of $5,291 in the S&P and in the portfolio of Baldrige award winners.
The Malcolm Baldrige Award isn’t given to companies that conduct the most customer research. It’s awarded to companies that excel at applying what they learn.
There are hundreds of questions in the Malcolm Baldrige application that pertain to how companies apply what they learn. An example of the questions that Malcolm Baldrige applicants answer is, “How do you use voice-of-the-customer information and feedback to become more customer-focused, to better satisfy customer needs and desires, and to identify opportunities for innovation?”
We even interviewed Rick Kolster, Quality Manager at Solectron, a Malcolm Baldrige winner. Rick gave us a ton of insights into what made Solectron a leader in its field. In short, there was a process by which managers were imbued not only with customer intelligence, but a means of applying it over and over again.
Over the last decade, we at Whyze Group have evolved our thinking and our services. This journal is an opportunity for us to continue learning and to share perspectives with our colleagues around the world. This particular article serves as foundation for a more expansive white paper on the subject of organizational learning and innovation.
We welcome your reactions, points of view and criticisms.
We are pulled toward shiny, new technology baubles, especially ones that promise greater customer intimacy and profits. Crowdsourcing is gaining traction after a couple of years of finding successful case studies (e.g., Threadless) that prove the concept…at least for specific applications.
Historically, other shiny baubles, like early dotcoms and CRM, lost their luster when they failed to live up to expectations. In hindsight, we learned, “This could be a great addition to our tool chest. We should learn how to use it next time.” History will repeat itself.
Crowdsourcing is so new that there are few real experts in it. But, a critical look at the social and business challenges and Web 2.0 technology platforms that support crowdsourcing reveals important clues about how to manage crowdsourcing effectively.
As Donald Trump once said, “If you manage the downside, the upside takes care of itself”. In her post about the challenges of crowdsourcing, Monica Hamburg does us all a great service by stripping the silvery patina off crowdsourcing and looking carefully at the cold gray steel underneath.
Among Monica’s observations, which I’m paraphrasing, are the following:
Questionable wisdom. Not all crowd members act in the spirit of crowdsourcing or are well-intended. Just look at the stream of comments following a Youtube video.
Limited demographics. The typical web user is white, middle- or upper-class, English speaking, higher educated and with high-speed connections.
Myopic understanding. Crowds may not have enough understanding of your industry to make educated decisions.
Limited control. Loss of control can result in crowdslapping, where the crowd turns on you and your brand. This may not be avoidable, especially if you want to encourage open dialog, which is the whole point of crowdsourcing.
Lower quality. Quality expectations for some tasks should be lower, not higher, depending on the task that you’re asking the crowd to do.
Insufficient programming. This is the digital analog to coffee, donuts and engaging events, which, if missing, will result in the crowd moving on.
Leadership. Lest your crowd detect they’ve entered a space where anarchy reigns, you’ve got to have a socially astute host who introduces topics, moderates discussions with a light and easy hand and celebrates victory when the crowd takes ground.
Exploitation fears. Key contributors expect and deserve rewards for their participation. These need to be spelled out in advance and followed through religiously.
Each of these challenges are overcome with a little forethought and deliberate action. Effective crowdsourcing starts with defining the problem that you’re going to ask the crowd to solve. The assignment needs to be specific, measurable, easily understood, and framed in a way that engages the right crowd.
Threadless is a great example of engaging a crowd to solve attractive new product development problems. The crowd designs t-shirts and votes on the winners. Threadless draws the right crowd, designers who can really design creative, off the wall t-shirts. Their reward system is transparent and straight forward: winning designers get $2,500 in cash and gifts. Their website is fun, engaging and serves as a catalyst for a creative community of talented artists.
Underlying their website is a savvy set of facilitators who change the website each day, posting recently submitted designs for sale and votes. This draws in a global talent pool that the company taps successfully and whom extend Threadless’s idea-generating capacity far beyond the walls of the company.
If your company is considering crowdsourcing, your approach should be equally clear and compelling.
This post only covers the basics of effective crowdsourcing. There will be more to come.
Those who make a living on the bleeding edge of Web 2.0 are proposing that social networks are replacements for focus groups and other traditional (i.e., “obsolete”) forms of qualitative research. They’re not and here’s why.
Today’s oft recommended solution-du-juor, crowdsourcing, is defined as, “the use of people and companies to help other people and companies for compensation,” according to Paul Poutanen, president of crowdsourcing firm, Mob4hire.
That doesn’t sound so different from focus groups.
But wait, they say. Unlike focus groups, crowdsourcing is inexpensive, unbiased, fast and reliable…because large numbers of customers are collaborating in the innovation process right there with you, in real time.
With crowdsourcing, all you have to do is define a problem, find customers who can solve it, invite them and compensate them for their contributions. Companies need only facilitate the collaboration process and discern which of their many ideas the company should implement.
That’s unlike focus groups, where you have to define the problem, find qualified customers, compensate them, facilitate the process and figure out which of their ideas to implement.
See the difference??? Neither did I.
The fact is that both crowdsourcing and focus groups have their respective strengths and applications. Both require time and effort. Choosing requires judgement in defining the problem to be solved and in how each tool is most usefully applied. The chooser must be able describe why one tool was chosen over another in way that is informed, transparent, and imbues decision makers with confidence.
I’ll write more in upcoming posts about situations in which crowdsourcing, focus groups and other tools are optimally used.
In the meantime, remember that information technologies are only tools. They render value measured by the skills of those who use them.