Crowdsourcing Often Sparks New Business Ideas

Summary

WSJ Your Money Briefing – Episode Summary

Episode Title: Crowdsourcing Often Sparks New Business Ideas
Date: June 12, 2019
Host: J.R. Whalen (B)
Guest: Henry Williams, WSJ News Editor (C)
Main Theme:
Exploring how large companies are increasingly using crowdsourcing and crowdfunding within their employee ranks to generate innovative business ideas and improve engagement, using the models pioneered by platforms like Kickstarter.

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Overview

This episode examines how big companies are moving away from relying solely on traditional research and development departments for innovation. Instead, they're leveraging the collective insights and experiences of their front-line employees using internal crowdsourcing and crowdfunding platforms. The benefits include not only more relevant ideas but also improved staff engagement and retention, especially in a tight labor market.

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Key Discussion Points & Insights

1. Why Crowdsourcing Within Companies?

• R&D Limitations: Traditional R&D departments may not always have "a complete pulse on what new products might be successful." (B, 02:53)
• Frontline Perspectives: Employees working directly with clients or products often have the deepest understanding of needs and opportunities.
  • Quote: “The people working at the coal face, the people working with clients...understand it better than the R and D department.” (C, 03:02)

2. How the Process Works

• Internal Crowdfunding Model:
  • Mirroring Kickstarter, employees can propose ideas—even unpolished ones—and seek support and funding from colleagues and management. These ideas may not have otherwise reached the decision-makers. (C, 02:33-02:53)
• Staff Engagement:
  • Enabling staff input boosts morale and gives employees a tangible stake in company direction.
  • Quote: “Making the staff feel like they're valued and that their opinions matter made a big difference in the approach to this project.” (C, 05:14)

3. Case Study: AstraZeneca

• Purpose: Focus on process improvements rather than just new products (C, 03:37).
• Example: Automating the process of sending safety letters to drug trial participants—an idea repeatedly suggested via crowdsourcing.
  • Impact: Resulted in streamlined communication and better feedback collection.
  • Quote: “It's not something that they had thought about before in doing project ideation...This came up again and again in their crowdsourcing. How can we automate this process? And they did.” (C, 03:37-04:17)

4. Case Study: IBM

• Platform Built: iFundit—an internal and now externally licensed crowdfunding platform (C, 04:32).
• Longevity: One in a series of engagement platforms developed over the last 15–20 years.
• Global Intelligence: Valued for tapping into “the global intelligence of their employees.” (C, 04:32)
• Commercialization: IBM now licenses these platforms to its clients.
  • Quote: “All of those platforms have now become things that they sell to their clients.” (C, 04:59)

5. Employee Retention & Engagement

• Labor Market Dynamics: Enhanced engagement and sense of contribution helps in retaining employees amidst competitive labor markets.
• Common Theme: All companies interviewed underscored how crucial it is to make employees feel heard and valued.

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Notable Quotes & Memorable Moments

• Frontline Knowledge:

  • “The people working at the coal face...understand it better than the R and D department.”
    — Henry Williams (C), 03:02

• Value of Small-Scale Ideas:

  • “Those ideas, maybe on a small scale, might be better than what the R and D department can put together.”
    — Henry Williams (C), 03:18

• Automating Safety Letters at AstraZeneca:

  • “One of the winning pitches...was actually a very boring topic...this came up again and again in their crowdsourcing. How can we automate this process? And they did.”
    — Henry Williams (C), 03:37-04:17

• Employee Engagement:

  • “Making the staff feel like they're valued and that their opinions matter made a big difference...”
    — Henry Williams (C), 05:14

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Timestamps for Important Segments

• [02:33] – Introduction of crowdsourcing models based on Kickstarter
• [03:02] – Value of frontline employee insights
• [03:37] – AstraZeneca example: automating safety letters
• [04:32] – IBM’s iFundit platform and employee engagement
• [04:59] – Commercialization of IBM’s internal engagement platforms
• [05:14] – The importance of staff feeling valued and its effect on retention

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Conclusion

This episode highlights how crowdsourcing within organizations not only uncovers valuable, sometimes overlooked innovations but also fosters a culture of inclusion and engagement. By leveraging the ideas and experiences of employees at all levels, big companies can stay agile, improve internal processes, and keep their workers motivated and connected to the broader mission.

Transcript

[A]

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[B]

Here's your Money briefing. I'm J.R. whalen at the Wall Street Journal in New York. The next great idea for your company might not come from the research and development group. It might come from the person sitting in one of the cubicles. In a moment, we'll explain how big companies recognize that and are getting employees involved. First, these money and market stories you should know. So far, so good when it comes to inflation. The producer price index, that's the prices that businesses get for their goods and by other companies, was up just 0.1% in May compared to April. Declining prices for energy and gasoline as well as food helped to keep those numbers in check. But medical care and transportation costs did go up. And home flipping is popular again. A new real estate sector report indicates about 49,000 homes were flipped in the first quarter of 2019. That is, the owners bought low and sold at a higher price or they bought a home needing repairs and then sold it for a profit. The 49,000 flipped home count makes up 7.2% of all nationwide home sales in the first quarter. That's the highest rate since the first quarter of 2010. And this year, the homes flipped sold for a median price of $215,000. And with the median purchase price standing at $155,000, the gross flipping profit was $60,000. But that's down $8,000 from a year ago to a three year low. A company's success can turn on what projects are funded and pursued, but oftentimes those decisions are made by a few people at a company. And more companies are now tapping into the knowledge of rank and file employees to chart the future. And Wall Street Journal news editor Henry Williams is here with some details. So, Henry, this process is modeled a bit after Kickstarter.

[C]

Yeah. So you know, with Kickstarter, companies come along with new ideas that aren't necessarily ready for the market and they look for engagement from people in the real world. This is kind of similar. It works with staff. They come up with these ideas that aren't necessarily polished that won't necessarily get the budget from the company, and they put it out to the staff.

[B]

And so companies are realizing that as talented as the staff is in their research and development departments, they might not have a complete pulse on what new products might be successful.

[C]

Yeah, I think the idea is that the people working at the coal face, the people working with clients, working selling the products, understand it better than the R and D department.

[B]

So somebody on the front lines might have a better idea as to the needs of the current and potential customer base.

[C]

Yeah, they're the subject matter experts. So the idea with this sort of crowd sourcing and crowdfunding idea is that those ideas, maybe on a small scale, might be better than what the R and D department can put together.

[B]

And this is not just small companies doing. The drug company. AstraZeneca is a company that's tapped into its knowledge of its staff.

[C]

Yeah. So they're not necessarily looking to come up with new drugs or anything like that, but they're looking to improve process and the way that they approach trials, you know, drug trials. So one of the winning pitches at AstraZeneca was actually a very boring topic. It's not something that they had thought about before in doing project ideation. And that was to do with the sending of letters to trial participants, you know, with safety letters. And this came up again and again in their crowdsourcing. How can we automate this process? And they did. They've got the funding. People were really interested in making this process automatic. So now that process is an automated one. They can capture the feedback from the trial participants.

[B]

And this can be a good process for employees who feel they have a hand in the direction of a company. But at the same time, going this route can help to improve the spirit and ecology of the staff. And in a tight labor market, it can also help in staff retention. And you spotlight IBM in your story.

[C]

So IBM built a crowdfunding platform they call iFundit. And it was actually a whole series of platforms that they built over the Last sort of 15, 20 years. This is the most recent iteration. They told me that engagement really is critical for them and that they see that their sort of global intelligence of their employees is what made it really valuable, and they now sell that platform externally.

[B]

Oh, so they have then taken that idea and they have licensed it out.

[C]

That's right. Yeah. So, as I said, they have many platforms, and all of those platforms have now become things that they sell to their clients.

[B]

And for a company in a labor market like this, being able to keep employees happy and feeling engaged, that's really important.

[C]

It is. And it was a common theme with all the companies I spoke to for this story. Everyone mentioned that making the staff feel like they're valued and that their opinions matter made a big difference in the approach to this project.

[B]

All right. That's Wall Street Journal's Henry Williams here with us in our studio. Henry, thanks for coming on the show.

[C]

Thank you.

[B]

And that's your money briefing. I'm JR Whalen in New York for the Wall Street Journal.

[A]

Still running global payroll like a relay race. Deal replaces fragmented payroll vendors with one global system. No third parties. Hire, manage and pay teams in 150plus countries with in house local experts and white glove delivery. And deal plugs into what you already use. Workday, SAP, Netsuite, operate like a local everywhere. Visit deel.com WSJ that's deel.com WSJ.