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1. Crowdsourcing
The new innovation model
White paper | March 2012

2. Shikatani Lacroix is a leading branding and design firm
located in Toronto, Canada. The company wins
commissions from all around the world, across CPG, retail
and service industries, helping clients achieve success
within their operating markets. It does this by enabling its
clients’ brands to better connect with consumers through a
variety of core services including corporate identity,
naming and communication, brand experience, packaging,
retail, wayfinding and product design.
About the Author
Ann Meredith Brown, Director of Social Media, Public
Relations & Corporate Communications at Shikatani
Lacroix
An accomplished wordsmith, Ann has garnered a decade’s
worth of experience in copyediting, copywriting,
researching and reporting. She is responsible for
developing and executing Shikatani Lacroix’s social media
and communications strategies.
Ann possesses in-depth knowledge of the design and
advertising industries. She is the founding editor of Design
Edge Canada, a news and trends magazine and website for
the Canadian graphic design industry.
White paper | March 2012 | Crowdsourcing | 1

3. The new innovation model
In today’s hyper-socialized world, consumers have come to
expect authentic experiences that they can customize and
personalize specifically to their wants and needs. The same
goes for their interactions with brands. To engage
consumers, marketers must create environments that
enable consumers to interact with, contribute to, and tailor
brands, while avoiding the power struggle to
control their brand over a consumer’s need to own
it and live it.
This shift in the power balance between individuals
and organizations has been witnessed in the use of
open source and collaborative networks. While the
internet helped fuel the trend towards
crowdsourcing and user-generated content, social
media has opened the flood gates to creating
intimate, collaborative interactions as marketers
use social tools to connect with consumers on
their terms.
By taking advantage of these social tools, successful
companies are encouraging and facilitating user-generated
content to find, create and leverage knowledge and
expertise to solve problems and foster innovation faster
and at a lower cost than ever before. As a result, marketers
are not only creating stronger engagement and loyalty for
their brands, they are creating a new innovation model.
White paper | March 2012 | Crowdsourcing | 2

4. Crowdsourcing and user-generated content
According to Crowdsourcing.org, an authoritative
crowdsourcing and crowdfunding initiative by crowd
powered business enterprise Massolution, it all started with
the world wide web and its early applications that allowed
us to connect to anyone from anywhere at any time. Then
came the social infrastructure that provided the means for
brands to interact in a consequential way. Social platforms
have turned passive consumers of information into active
producers of content. Now production infrastructure is
being constructed to enable interconnected communities
to engage and produce. When people use this
infrastructure to problem solve or to generate something
new and of value, it’s called crowdsourcing.1
As brands participate in these social communities – by
asking and answering questions, engaging customers, and
sharing content – numerous opportunities arise to involve
the community with content creation, says Lee Odden,
CEO of TopRank Online Marketing, a digital marketing
agency that specializing in search engine optimization and
social media public relations consulting. According to
Odden, crowdsourcing helps a brand create new,
meaningful content and provides an opportunity for
relevant recognition of participants within the brand's
social community.2
White paper | March 2012 | Crowdsourcing | 3
1 Crowdsourcing.org
2 Clickz.com

5. Channeling this user-generated content offers several
advantages,3 says Odden:
• UGC is trusted.
• Contributors have an interest in helping promote the
content.
• UGC provides more information sources for prospects
and customers.
• UGC publishing allows for critical feedback about
products and services.
• UGC publishing provides tools for brand evangelists.
• UGC facilitates brand conversations within the
marketplace.
As such, crowdsourcing and UGC might bring to mind logo
design contests, homemade commercials, and online photo
competitions of recent years as brands bid to engage
consumers on a more interactive level by asking for their
contribution. However, this exchange has become much
more intimate with the advent of myriad social media
channels. Brands are now engaging consumers to become
part of their marketing programs in their own personal
space. And the reality is that most consumers do want to
contribute because the prospect of being part of
something bigger has always been popular.
As more brands use crowdsourcing to tap into the global
brain, organizations are realizing that this trend goes
beyond simple content creation and is spawning a new
model of innovation that is helping solve real problems.
White paper | March 2012 | Crowdsourcing | 4
3 Clickz.com
As brands use
crowdsourcing
to tap into the
global brain,
organizations
are realizing
that this trend
goes beyond
simple content
creation and is
spawning a new
model of
innovation that
is helping solve
real problems

6. Open innovation
In The Open Innovation Marketplace: Creating Value in the
Challenge Driven Enterprise, authors Alpheus Bingham and
Dwayne Spradlin discuss how organizations can use open
innovation, a.k.a crowdsourcing, to create global networks
to connect with knowledge from virtually any source, and
then collaboratively transform that knowledge into higher-
value innovation.
Bingham and Spradlin are the founder and president/CEO
of InnoCentive, a company that leverages open innovation
and crowdsourcing to help organizations solve pressing
challenges. According to InnoCentive, it enables
organizations to solve their key problems by connecting
them to diverse sources of innovation including employees,
customers, partners, and the world’s largest problem
solving marketplace.4
As The Open Innovation Marketplace explains, a more open
approach to innovation promises access to “smart people”
that are outside of an organization. While internal experts
may have a better understanding of the nature of the
problem or need, often the best minds for a given task lie
outside the walls of the organization. But most strategies
fall far short of effectively tapping that external crowd. A
new framework for innovation should position leaders to
understand the most appropriate mechanisms to find,
enroll, use and extract value from those external resources.5
White paper | March 2012 | Crowdsourcing | 5
4 Innocentive.com
5 The Open Innovation Marketplace: Creating Value in the Challenge
Driven Enterprise

7. “Businesses that adopt this approach will have a unique
opportunity to operate more effectively than ever before
and to build more flexible organizations with better, faster,
and more cost-effective access to an entire world of
productive capacity. And will have the flexibility to respond
to market opportunities when they arise.”
Bingham and Spradlin define this approach as Challenge
Driven Innovation, “an innovation framework that
accelerates traditional innovation outcomes by leveraging
open innovation and crowdsourcing along with defined
methodology, process, and tools to help organizations
develop and implement actionable solutions to their key
problems, opportunities, and challenges.”
This can be accomplished, they say, by remaking an
organization into a Challenge Driven Enterprise, where
problems or initiatives are articulated as challenges and
efforts are aligned with strategic goals, making sustained
performance improvement possible.
Bingham and Spradlin define the hallmarks of a Challenge
Driven Enterprise as follows:6
“Open” Business Model: Businesses focus their attention
on their true core competencies, orchestration and strategy
to deliver against their missions. They orchestrate networks
and ecosystems of customers, employees, partners, and
markets. These models are highly virtualized in order to
maximize innovation, agility, capital flexibility, and
shareholder returns.
White paper | March 2012 | Crowdsourcing | 6
6 The Open Innovation Marketplace: Creating Value in the Challenge
Driven Enterprise
“An ‘Open’
Business
Model
orchestrates
networks and
ecosystems of
customers,
employees,
partners, and
markets”
The Open Innovation
Marketplace: Creating Value in
the Challenge Driven
Enterprise

8. Talent Management: Think strategic virtual Human
Resource Management. These businesses not only
understand, but embrace key trends such as globalization,
social networking, generational shifts, and project-based
work. Further, they recognize the importance of
engagement with all their communities and the whole
world to drive new ideas, product development, innovation,
and even production capacity. This 21st-century evolution
of HR makes it more strategic than ever before and vital to
the success of the business.
Challenge Culture: Challenges are integrated into the
culture at all levels and in all functions. The needs and
barriers are well articulated and, where possible, portable.
Executives, managers, and team members are trained and
empowered to identify critical problems and issues and to
systematically manage these challenges through to closure
for the benefit of shareholders. They can be tackled
internally or externally as conditions best dictate. Challenge
cultures care only that problems are solved. Who solves
them and how is secondary to advancing the business
mission every day. Politics, “not invented here” attitudes,
and bureaucracy are not tolerated and eliminated as
inefficient and wasteful. Transparency, process integrity,
and measurement are vital and hold accountable all
significant projects, initiatives, and investments.
Recognition, reward, and promotion systems are aligned.
Orchestration skills are evident.
White paper | March 2012 | Crowdsourcing | 7

9. Case studies
These principles are demonstrated by the following case
studies which successfully use the mechanics of
crowdsourcing to breed innovation.
My Starbucks Idea
Starbucks’ first foray into the social media
space was its launch of MyStarbucksIdea.com.
The website, which allows users to submit and
discuss their ideas, vote on their favourite
ideas, and see ideas in action, puts a social
media spin on the traditional customer
comment card.
The site has generated over 100,000 ideas
from customers and partners since it
launched in March 2008. The site has received over one
million votes, registered more than 250,000 accounts, and
launched 150 ideas and counting. The site also provides a
forum for Starbucks to communicate about ideas it has
implemented and explain why it has declined some of the
ideas it has received. According to Matthew Guiste, director
of global social media at Starbucks, “It’s a very simple site,
and I think its simplicity is one of the reasons it’s been
successful.”
This open-sourced innovation model has produced such
varied ideas as the introduction of in-store recycling,
Starbucks canvas shopping bags, and more Starbucks in
the Netherlands.
White paper | March 2012 | Crowdsourcing | 8

10. LEGO Cuusoo
LEGO also launched a crowdsourcing venture in 2008 in
collaboration with Cuusoo, a Japanese partner of the LEGO
Group. The system allows LEGO fans to upload their own
idea for a LEGO product. The design is then voted on by
other fans. Once the idea receives 10,000
votes, the project gets a formal review and
a chance to go into production. The creator
receives a 1% royalty on net revenues from
the set.
The first Cuusoo project hit the shelves in
2011 – a limited-edition version of the
Japanese deep sea submersible, the
Shinkai 6500. The second, a Japanese
asteroid reconnaissance spacecraft called
the Hayabusa, was released in early March
2012. While the Shinkai took 420 days to
accumulate enough votes for a review
(1,000 were needed for the Japan-only
project), Minecraft Micro World, Cuusoo’s
latest project, chalked up 10,000 votes in
just 48 hours. What’s more, this third project will be coming
off the line in a record six months, compared to LEGO’s
typical two- to three-year turnaround. Minecraft will be
available in summer 2012.
So far, more than 700,000 videos of LEGO Cuusoo
creations have been posted on YouTube. And in a sluggish
toy market, LEGO Group sales rose by 17% in 2011 to US
$3.5 billion.
White paper | March 2012 | Crowdsourcing | 9

11. Dell IdeaStorm
In response to angry consumers whose growing discontent
for the Dell brand was gaining momentum and spreading
virally through the internet,
Dell invited participation
through a collaborative
environment called
IdeaStorm. With its “Where
your ideas reign”
positioning, IdeaStorm
aimed to contain negative
feedback and encourage
product development and
customer relationship
management.
Eighteen months after its
2007 launch, IdeaStorm
reduced unfavorable
comments from 48% to
under 20%. Actively
implementing a two-way dialogue helped Dell achieve
organizational goals and meaningful engagement with
customers as it listened and acted upon feedback.
Version 2.0 was launched in March 2012, which allows site
members to upload their personal photo, bio and social
networking links such as Facebook, Twitter, LinkedIn and
Google+. Idea posters will also have the ability to promote
comments on their idea that they believe add value by
considering it an “Extension” of their idea.
White paper | March 2012 | Crowdsourcing | 10

12. There have been over 16,903 ideas submitted, 736,384
votes logged, 95,221 comments added, and 491 ideas
implemented. Resulting innovations from IdeaStorm
include backlit keyboards, national call centres and blade
workstations.
Dell’s revenue increased 6% in fiscal 2008 to $61 billion,
after a modest 3% increase the previous year. Its earnings
per share increased by 15 percent to $1.31.
Conclusion
No longer used simply as a conduit for content creation,
brand engagement and problem solving, crowdsourcing is
maturing beyond the new model for innovation to become
a disruptive force that drives significant and enduring
change into business.
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13. Reference materials
Crowdsourcing.org Editorial – The Open Innovation
Marketplace
http://www.crowdsourcing.org/editorial/innocentive-
creating-value-in-the-challenge-driven-enterprise/3503
Clickz.com – Crowdsourcing and user-generated content
http://www.clickz.com/clickz/column/2098809/
crowdsourcing-user-generated-content
InnoCentive
http://www.innocentive.com
InnoCentive – The Open Innovation Marketplace
http://www.innocentive.com/open-innovation-marketplace-
creating-value-challenge-driven-enterprise
My Starbucks Idea
http://www.mystarbucksidea.com
My Starbucks Idea - Social Media & Open Innovation at
Starbucks with Matthew Guiste
http://www.youtube.com/watch?v=pjNM8drAqG0
LEGO Cuusoo
http://legocuusoo.posterous.com
Dell IdeaStorm
http://www.ideastorm.com
Dell Financial Reporting – Fiscal Year 2008 in Review
http://content.dell.com/us/en/corp/d/corp-comm/ir-FY08-
in-Review
White paper | March 2012 | Crowdsourcing | 12

14. For more information, contact:
Jean-Pierre Lacroix, President
Shikatani Lacroix
387 Richmond Street East
Toronto, Ontario
M5A 1P6
Telephone: 416-367-1999
Email: jplacroix@sld.com
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