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CROWDSOURCING:
A BUSINESS MODEL
GAME CHANGER
Dr. Michele Osella
Head of Business Model & Policy Innovation Unit
@MicheleOs...
CSW Summit Venice 25th March 2015
THE HARSH REALITY
Joy's Law
“No matter who you are, most of the smartest people work for...
CSW Summit Venice 35th March 2015
PROBLEM SETTING
‘Not invented here’ syndrome,
coupled with managerial ‘turf
wars’, tends...
CSW Summit Venice 45th March 2015
OPENNESS AS EMERGING PARADIGM
Openness occurs when
“companies recognize that
not all goo...
CSW Summit Venice 55th March 2015
OPEN INNOVATION
By adopting open innovation,
the boundaries between a
company and its en...
CSW Summit Venice 65th March 2015
THE STARK CONTRAST 1.0
Old guard New guard
Innovation paradigm Closed innovation Open in...
CSW Summit Venice 75th March 2015
OPENNESS AS THE ‘NEW NORMAL‘
Business
Citizen science
Science 2.0
MOOCs
Open Access
Crow...
CSW Summit Venice 85th March 2015
THE KING OF OPENNESS
CSW Summit Venice 95th March 2015
CROWDSOURCING IS NOT NEW
Trailblazing crowdsourcing
in action
In 1936, Toyota held a
con...
CSW Summit Venice 105th March 2015
CROSSING THE CHASM…
‘Exploration’ phase
Isolated experiments conducted by
enthusiasts a...
CSW Summit Venice 115th March 2015
THE CROWDSOURCING SPACE
CSW Summit Venice 125th March 2015
CROWDSOURCING FOR ENTERPRISES
Fertile soil for private sector business models
CSW Summit Venice 135th March 2015
CROWDSOURCING AS A BUSINESS MODEL
“Crowdsourcing has changed from a buzzword to a busin...
CSW Summit Venice 145th March 2015
CROWDSOURCING AS INNOVATION LEVER
CSW Summit Venice 155th March 2015
THE STARK CONTRAST 2.0
Old guard New guard
Approach to crowdsourcing Incremental Radica...
CSW Summit Venice 165th March 2015
BM A – INNOVATION CONSUMPTION
CSW Summit Venice 175th March 2015
BM B – BRAIN ATTRACTION
CSW Summit Venice 185th March 2015
BM C – SOCIAL PRODUCT DEVELOPMENT
CSW Summit Venice 195th March 2015
BM D – LABOR AS A SERVICE
CSW Summit Venice 205th March 2015
WHO IS LAGGING BEHIND?
Mainly companies that are:
• large
• complex
• hierarchical
• lo...
CSW Summit Venice 215th March 2015
BIG PHARMA: A FRIGHTENING RULE OF THUMB
Moore’s Law
The number of transistors incorpora...
CSW Summit Venice 225th March 2015
AUTOMOTIVE: A HEIGHTENED INNOVATION PRESSURE
Background
Automotive as a mature,
asset-i...
CSW Summit Venice 235th March 2015
NEW AVENUES FOR LAGGARDS
How can laggards
overcome inertia?
CSW Summit Venice 245th March 2015
A TWIST FOR LAGGARDS?
Need for
‘ambidexterity’
Employees have to take care of the
curre...
CSW Summit Venice 255th March 2015
THE ‘GOLDEN CIRCLE’ OF INDOOR CROWDSOURCING
Exploit untapped
innovation potential,
empo...
CSW Summit Venice 265th March 2015
THE ‘TABLEAU DE BORD’
Progress in crowdsourcing exploration
No crowdsourcing Internal c...
CSW Summit Venice 275th March 2015
CONCLUSIONS
“The mind is like a parachute.
It doesn't work
unless it's open.”
Frank Zap...
CSW Summit Venice 285th March 2015
Thanks for
your attention!
We believe in collaboration as a powerful source of innovati...
CSW Summit Venice 295th March 2015
CONTACTS
Dr. Michele Osella
Head of Business Model & Policy Innovation Unit
Istituto Su...
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Crowdsourcing: A Business Model Game Changer

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Keynote speech given at CrowdSourcing Summit Venice 2015

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Crowdsourcing: A Business Model Game Changer

  1. 1. CROWDSOURCING: A BUSINESS MODEL GAME CHANGER Dr. Michele Osella Head of Business Model & Policy Innovation Unit @MicheleOsella #CSWVenice Venice, 5th March 2015
  2. 2. CSW Summit Venice 25th March 2015 THE HARSH REALITY Joy's Law “No matter who you are, most of the smartest people work for someone else” Bill Joy – Co-founder of Sun Microsystems
  3. 3. CSW Summit Venice 35th March 2015 PROBLEM SETTING ‘Not invented here’ syndrome, coupled with managerial ‘turf wars’, tends to originate non- communicating silos with knowledge rarely flowing between departments. Tons of disparate, independent and accessible ideas – going beyond the voices of traditional elites of indoor and outdoor experts – await consideration. Useful knowledge today is widely distributed and no company – no matter how capable it is or how big its R&D labs are – could innovate effectively on its own. New inputs are required. Silo trap ‘Usual suspects’ trap Self-sufficiency trap Inside the company Inside & outside the company Outside the company Solution space
  4. 4. CSW Summit Venice 45th March 2015 OPENNESS AS EMERGING PARADIGM Openness occurs when “companies recognize that not all good ideas will come from inside the organization and not all good ideas created within the organization can be successfully marketed internally.” Henry Chesbrough
  5. 5. CSW Summit Venice 55th March 2015 OPEN INNOVATION By adopting open innovation, the boundaries between a company and its environment – including customers, suppliers and competitors – become porous.
  6. 6. CSW Summit Venice 65th March 2015 THE STARK CONTRAST 1.0 Old guard New guard Innovation paradigm Closed innovation Open innovation Motto ‘The lab is our world’ ‘The world is our lab’ Knowledge sourcing approach ‘Not invented here’ syndrome ‘Best from anywhere’ Innovation patterns Centralized and monocentric Distributed and polycentric Prominent R&D activity Knowledge creation Knowledge connection Source of competitive advantage Technical excellence Absorptive capacity Attitude towards IP Ownership and protection Selective sharing Role of customers Passive recipients Potential active co-innovators Innovation funnel surface Impermeable Porous
  7. 7. CSW Summit Venice 75th March 2015 OPENNESS AS THE ‘NEW NORMAL‘ Business Citizen science Science 2.0 MOOCs Open Access Crowdsourcing Crowdfunding User co-creation Open Government Open Data E-Participation Open source software Open hardware Open standards Open contents Internet-only Cross-cutting phenomenon at societal level ‘Tipping point’ Triple helix
  8. 8. CSW Summit Venice 85th March 2015 THE KING OF OPENNESS
  9. 9. CSW Summit Venice 95th March 2015 CROWDSOURCING IS NOT NEW Trailblazing crowdsourcing in action In 1936, Toyota held a contest to redesign its logo, receiving 27,000 entries.
  10. 10. CSW Summit Venice 105th March 2015 CROSSING THE CHASM… ‘Exploration’ phase Isolated experiments conducted by enthusiasts and visionaries ‘Exploitation’ phase Powerful approach to problem solving widely recognized among pragmatists
  11. 11. CSW Summit Venice 115th March 2015 THE CROWDSOURCING SPACE
  12. 12. CSW Summit Venice 125th March 2015 CROWDSOURCING FOR ENTERPRISES Fertile soil for private sector business models
  13. 13. CSW Summit Venice 135th March 2015 CROWDSOURCING AS A BUSINESS MODEL “Crowdsourcing has changed from a buzzword to a business model” Financial Times (2012)
  14. 14. CSW Summit Venice 145th March 2015 CROWDSOURCING AS INNOVATION LEVER
  15. 15. CSW Summit Venice 155th March 2015 THE STARK CONTRAST 2.0 Old guard New guard Approach to crowdsourcing Incremental Radical Dependence on the crowd Low High Role of crowdsourcing in the business model Peripheral Vital Locus of crowdsourcing in the company Back-end Front-end Customers’ perception of the crowd Transparent Visible Business model novelty Evergreen Groundbreaking Size of the company Large Small Industry Mature Thriving Longevity of the business Incumbent Newcomer Management style Codified, hierarchy-based Lean, reputation-based
  16. 16. CSW Summit Venice 165th March 2015 BM A – INNOVATION CONSUMPTION
  17. 17. CSW Summit Venice 175th March 2015 BM B – BRAIN ATTRACTION
  18. 18. CSW Summit Venice 185th March 2015 BM C – SOCIAL PRODUCT DEVELOPMENT
  19. 19. CSW Summit Venice 195th March 2015 BM D – LABOR AS A SERVICE
  20. 20. CSW Summit Venice 205th March 2015 WHO IS LAGGING BEHIND? Mainly companies that are: • large • complex • hierarchical • long-running • in mature industries
  21. 21. CSW Summit Venice 215th March 2015 BIG PHARMA: A FRIGHTENING RULE OF THUMB Moore’s Law The number of transistors incorporated in a chip approximately doubles every 24 months. Eroom’s Law The number of new drugs approved per dollar spent on R&D has halved every 9 years since 1950. Computer science Pharmaceutical industry
  22. 22. CSW Summit Venice 225th March 2015 AUTOMOTIVE: A HEIGHTENED INNOVATION PRESSURE Background Automotive as a mature, asset-intensive industry resting happily on the plateau of productivity. Innovation pattern Innovation process usually seen as restricted to the boundaries of the firm. ‘Comfort zone’ ‘Pressure zone’ Background Automotive industry trapped by sectorial crisis, fierce competition and sizable sunk costs. Innovation pattern Call for a discontinuity in the way innovation is generated and turned into profits.
  23. 23. CSW Summit Venice 235th March 2015 NEW AVENUES FOR LAGGARDS How can laggards overcome inertia?
  24. 24. CSW Summit Venice 245th March 2015 A TWIST FOR LAGGARDS? Need for ‘ambidexterity’ Employees have to take care of the current business (exploitation), while coping with tomorrow’s changing demand (exploration) in a creative and adaptable way. Challenge of workforce engagement According to The Economist Intelligence Unit (2010), 84% of senior leaders say disengaged employees are considered one of the biggest threats facing their business. However, only 12% of them reported doing anything about this problem. Workforce empowerment Workforce engagement Indoor crowdsourcing Dispersed workforce of big companies considered as a crowd Risk mitigation
  25. 25. CSW Summit Venice 255th March 2015 THE ‘GOLDEN CIRCLE’ OF INDOOR CROWDSOURCING Exploit untapped innovation potential, empower and engage the workforce, mitigate risk Intrapreneurship, diversity, purpose, co-opetition, codification, reward Indoor crowdsourcing calling upon different divisions, departments and units
  26. 26. CSW Summit Venice 265th March 2015 THE ‘TABLEAU DE BORD’ Progress in crowdsourcing exploration No crowdsourcing Internal crowdsourcing Full-fledged crowdsourcing (internal and external) Achievements Silo trap Usual suspects’ trap Self-sufficiency trap Achievements Silo trap Usual suspects’ trap Self-sufficiency trap Achievements Silo trap Usual suspects’ trap Self-sufficiency trap
  27. 27. CSW Summit Venice 275th March 2015 CONCLUSIONS “The mind is like a parachute. It doesn't work unless it's open.” Frank Zappa
  28. 28. CSW Summit Venice 285th March 2015 Thanks for your attention! We believe in collaboration as a powerful source of innovation. We consider interdisciplinarity as a genuine multiplier of opportunities. We are optimistic.
  29. 29. CSW Summit Venice 295th March 2015 CONTACTS Dr. Michele Osella Head of Business Model & Policy Innovation Unit Istituto Superiore Mario Boella E-mail: osella@ismb.it Twitter: @MicheleOsella LinkedIn: linkd.in/MicheleOsella Web: www.ismb.it/michele.osella

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