Crowdsourcing – The New Business Fundamental

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The Term

After the term “crowdsourcing” first appeared in Wired Magazine in 2006, it didn’t take long to prove that group-thinking and execution could frequently deliver better results than traditional linear models. The term itself has evolved quite a bit since then, and now includes many extensions of the baseline meaning. Words like crowd-funding, crowd-testing and crowd-searching.

With the emergence of the social enterprise, crowdsourcing has taken on new meaning yet again.  This time it has an internal focus and manifests itself as employee engagement. This is the notion that an individual can choose to go the extra mile and fully participate in the success of their organization. When this trend reaches critical mass it creates an internal “crowd”. This crowd is where sum of the organization becomes greater than the parts….

Real Business Impact?

The hope is that an internal crowd of engaged employees can offer the creative problem solving and speed that existing R&D and delivery models are struggling to deliver. This has forced companies to look more closely at how the engagement of their crowd really impacts the performance of their businesses. But….

Is there really a business case for why the engagement levels of the internal crowd should take on the same importance level as fundamentals like profit, loss, cash flow and debt?

The Argument

Consider these points:

  1. In a 2013 Harvard Business Review study, Employee Engagement was a top-three success factor for companies focused on growth.
  2. A 2012 Gallup study highlighted that “Work units in the top quartile in employee engagement outperformed bottom-quartile units by 10% on customer ratings, 22% in profitability, and 21% in productivity.” They also saw lower turnover (25% in high-turnover organizations, 65% in low-turnover organizations)
  3. In a 2013 Inc. Magazine article Suzanne Lucas argued that in dis-engaged organizations turnover costs materialized in unforeseen ways, i.e. lower productivity, overwork of remaining staff, lost knowledge, training costs, interview costs, and recruiters.

It would be easy to over-simplify the creation of an engaged organization. As pointed out in the HBR study, employee engagement is viewed by many executives as a soft factor that is difficult to implement and measure. But don’t the points above validate that the engagement levels of an internal crowd have serious ramifications to traditional business fundamentals? Don’t they force force us all to re-think some of our assumptions about how to measure business success?

Companies often say their employees are their greatest assets. This has never been a truer statement. Companies can empower their  internal crowd by implementing the processes, communication protocols and tools that reinforce trust across the organization. These companies will reap the benefits. The proof is in the numbers…..