Enterprise 2.0: Can firms use crowdsourcing within the organization?

Today, let me present the last post of the Crowdsourcing series. I will try to answer the question: why and how companies can use crowdsourcing?

First, let's try to understand what are the shortcomings of older technologies? In general, we distinguish channels (e.g. email and person to person messenger) and platforms (e.g intranet and corporate site).

Channels present a low degree of community and cannot be accessed by others. Platforms, on the other hand, allow only a small group to generate or approve the content; visit to platforms leave no traces and only a small percentage of people’s output winds up on a common platform.

McAfee (2006) described a case of German investment bank Dresdner Klein- wort Wasserstein (DrKW) using 3 communication tools:

• Blogs
• Wikis
• Messaging software

The investment bank's blogs include interactions, the outputs, and the people involved. Anyone in the company can read them. Any episode of knowledge work is widely and permanently visible to all. McAfee (2006) later suggested that these technologies can facilitate knowledge work in ways that were not possible before by creating a collaborative platform that reflects the way work really gets done.

Before introducing blogs and wikis knowledge workers felt that current technologies are not doing a good job of capturing knowledge. While all knowledge workers surveyed used e-mail, 26% felt it was overused in their organizations, 21% felt overwhelmed by it and 15% felt that it actually diminished their productivity.

Components of Enterprise 2.0 technologies

Search

For any information platform to be valuable, its users must be able to find what they are looking for. However, it is not always the case. In the Forrester survey, less than half of respondents reported that it was easy for them to find what they were looking for on their intranets.

Links: between pages, reflect the opinion of people

Google made a huge leap forward in Internet search quality by taking advantage of the information contained in links between Web pages. Links are an excellent guide to what’s important and provide structure to online content. In this structure, the “best” pages are the ones that are most frequently linked to.

Authoring: creates content

Internet blogs and Wikipedia have shown that many people have a desire to author — to write for a broad audience. Blogs let people author individually, and wikis enable group authorship. When authoring tools are deployed and used within a company, the intranet platform shifts from being the creation of a few to being the constantly updated, interlinked work of many.

Tags: better categorization of content

The Forrester survey revealed that after better searching mechanisms, what experienced users wanted most from their companies’ intranets was better categorization of content. Some sites on the Web aggregate large amounts of content, then outsource the work of categorization to their users by letting them attach tags — simple, one-word descriptions.

Extensions: “if you like this, you will probably like also..”

Moderately “smart” computers take tagging one step further by automating some of the work of categorization and pattern matching. They use algorithms to say to users, “If you liked that, then by extension you’ll like this.” Amazon’s recommendations were an early example of the use of extensions on the Web.

Signals: when new content of interest appears (e.g. RSS).

Even with powerful tools to search and categorize platform content, a user can easily feel overwhelmed. New content is added so often that it can become a full-time job just to check for updates on all sites of interest.

Corporate social networking

…is the use of technology to help employees identify:

• Who knows what
• Who is interested in what
• Who wants to contribute to what...

in the interest of improving the business of the firm.

There are plethora of tools that employees and companies can use for that. E.g.

• Profile based sites (e.g. Google+, Facebook)
• Discussion forums
• Tools that analyze emails, instant messaging and virtual spaces to identify social networks
• Tagging tools
• Mashup tools (combine info from different sources)
• Quick connection tools such as Twitter, instant messaging
• Co-generation tools such as wikis
• Expertise location and sharing tools

Firms may use these tool to achieve different goals, e.g. connecting people, training and new hire orientation. However, there are couple of principles that companies need to be aware of:

• People engage in things they find interesting. Tools help determine what people are interested in and connect people with similar interests.
• Co-generation of ideas is done by people “serving themselves”. This is promoted by making it easy to add and share info.
• Under-explored relationships will surface when people, data and applications are circulated and tagged.

Source: McAfee, Andrew P. "Enterprise 2.0: The dawn of emergent collaboration."Management of Technology and Innovation 47.3 (2006).

The contribution revolution: Why do people contribute?

There are many ways how people can contribute and help companies build their ecosystem.

• Shoppers on Amazon automatically contribute to a recommendation system by making purchases, rating items, sellers and by leaving comments and sharing experiences. Today, information will decide about your competitive advantage, so it is important to design your business to benefit from collecting data of users' actions by product.
• Del.icio.us allows users to organize their bookmarks and create from that a web index that they use for suggestions to other, similar users. In this case, practical solution is driving number of contributions - users get reasonable immediate reward - they getting their bookmarks organized.
• Users of Google+, Facebook and Twitter can benefit from interacting with others, being part of a community. Social reward is the driver behind most of the interactions. It took Facebook and Twitter, 4 and 5 years respectively to reach 100M active users globally, and Google+ crossed this milestone in just a year. This only shows the power behind social interaction. 
• Reputation is another strong contribution driver. Desire for public recognition is widely use by Wikipedia. They proofed that millions people working together can produce high quality articles and entries. 
• YouTube leverages self expression desire and it is on fire at the moment. 800M people are watching 4B hours a month on YouTube. Every minute there is over 72 hrs of video uploaded.
• Last but not least, altruism can also be a driver of contribution. People want the truth to be heard. If they get exceptional service in a good restaurant - they want to reward it by sharing their experience on Yelp! and recommend it to other people.  

Crowdsourcing, attention and productivity

There is a very interesting article by Huberman, Romeo and Wu (2009) exploring possible reasons why do people contribute and upload their videos on YouTube without any payment. It is said that people who behave rational would free ride on the production of others. Huberman et al. suggest that for contributors, videos are private goods – and the payment is attention.

A 2007 survey by McKinsey found that content creators’ desire for fame was their primary motivation for uploading videos. Other motivations cited were the desire to help others and to have fun. In terms of profiting from their videos, some users were open to the idea of compensation sharing, but that was not a primary driver.

Users of YouTube are contributors; they contribute and get attention and public recognition as a reward. As a result the productivity of the contributors depends on the number of views and/or downloads (the attention). The more views contributors received in one period, the more videos they uploaded during the following period. On the other hand lack of attention may lead to decrease in the number of the uploads.

What should YouTube do? Should they pay people for uploading their videos on their platform? In my opinion, the idea of monetary compensation, as suggested by the study of McKinsey, should not be followed by YouTube. According to Vohs, Mead and Goode (2008) the concept of money changes personal and interpersonal behavior (you can read more here: Impact of activating the concept money). People can start behaving like under monetary market rules, i.e. the individuals’ level of effort is influenced by the amount of compensation. Monetary markets are highly sensitive to the magnitude of compensation, whereas social markets are not. Under social market conditions, the effort is shaped by altruism and the amount of compensation is irrelevant.

Source: Cook, Scott. "The contribution revolution: Letting volunteers build your business." Harvard Business Review 86.10 (2008): 60-69.
Huberman, Bernardo A., Daniel M. Romero, and Fang Wu. "Crowdsourcing, attention and productivity." Journal of Information Science 35.6 (2009): 758-765.Vohs, Kathleen D., Nicole L. Mead, and Miranda R. Goode. "Merely activating the concept of money changes personal and interpersonal behavior." Current Directions in Psychological Science 17.3 (2008): 208-212.

Impact of activating the concept money: A fine is a price

Let me start with the summary of the experiment by Vohs, Mead and Goode (2006) to illustrate the impact of activating the concept money.

Day care centers operate between 7:30am and 4:00pm. When a parent doesn't arrive on time to collect a kid, one of the teachers has to wait until the pick up.

Day care center decided to impose a fine on parents that arrived late. As a result, a steady increase in the number of parents coming late was observed - almost double after a month (sic!). When the fine was removed, number of parents coming late remained at the same high level.

Why was there an increase in the behavior being punished?

The introduction of the fine changed the perception of people regarding the environment in which they operate. Before introducing the fine parents may have interpreted the action of the teacher in the first period as a generous, non-market activity. They thought "I should not take advantage of it".

With the fine, a new perception has been introduced: "I can buy this service". There was no guilt or shame for parents to be late.

It needs to be underlined that even after the fine was removed, the mindset, perception didn't change. Social relationships are not easy to reestablish. As Vohs, Mead and Goode (2006) argue "once a commodity, always a commodity". As a result, long term negative effect was observed. 

The psychological consequences of money

Vohs, Mead and Goode (2009) argue that "money makes people feel self-sufficient and behave accordingly" 

In their paper the they describe 9 experiments to showcase the impact of activating the concept money.

For the experiment the used screen savers with sentences including words such as salary (vs. neutral words), or screen savers showing money (vs. fish or no screensaver).

They observed that reminders of money led to reduced requests for help and reduced helpfulness towards others. Participants reminded of money preferred to play alone, work alone, and be more distant. Activating the idea of abundance of money made people work significantly longer before asking for help (relatively to restricted amount of money). 

When the experimenter asked for help, participants reminded of money volunteered to help for 25 minutes on average, vs. 42.5 in the control group. Participants reminded of money spent ½ as much time helping a confused associate. They also donated less money to the student fund.

Activating the concept of money

Merely activating the concept of money changes personal and interpersonal behavior.

"After people are reminded of money, they show improved memory of exchange-related information, prefer exchange-based relationships, and follow equity rules".

Managerial implications

Money has been said to change people’s motivation (mainly for the better) and their behavior toward others (mainly for the worse). The results of experiments suggest that money brings about a self-sufficient orientation in which people prefer to work alone and don't ask for help.

So, dear Managers if you want your teams to work better together, stop bringing up the concept of money every time in your motivational speeches. 

Source: Vohs, Kathleen D., Nicole L. Mead, and Miranda R. Goode. "Merely activating the concept of money changes personal and interpersonal behavior." Current Directions in Psychological Science 17.3 (2008): 208-212.Vohs, Kathleen D., Nicole L. Mead, and Miranda R. Goode. "The psychological consequences of money." science 314.5802 (2006): 1154-1156.