Crowdsourcing Is an Excellent Resource for Entrepreneurs and Startups, But It Needs a Special Kind of Leadership

Published on March 31, 2022

An intriguing meteorological paper on crowdsourcing using ‘citizen scientists’ was published last week. Ed Hawkins, Professor of Climate Science at Reading University, and his team of co-authors tell the remarkable story of a crowdsourcing project that occurred during lockdown in 2020. The UK National Meteorological Archive has over 5.28 million handwritten observations recorded by weather enthusiasts over two centuries. A decision was made to digitalize these records to help climate scientists increase the accuracy of weather forecasting. The mountainous task was to manually transcribe over 66,000 handwritten sheets. Such an undertaking would ordinarily take months to complete. Professor Hawkins took a crowdsourcing approach. He posted images of the handwritten notes using a research platform called Zooniverse and asked for volunteers to help transcribe them. Over 16,000 lockdown volunteers stepped forward to help. This army of volunteers entered over 100 million keystrokes and completed the task in just 16 days.

This kind of collective effort is mentioned in Aristotle’s Politics, and volunteer researchers helped to compile the first Oxford English Dictionary (OED) in the 19th century, but it has reached full potential in the digital age. Jeff Howe coined the word crowdsourcing in a 2006 article for Wired. Rather than outsourcing challenges to third party companies or countries, crowdsourcing is part of a collectivist tradition that utilizes the wisdom of crowds.

Why is Crowdsourcing Good for Small Businesses, Entrepreneurs, and Startups?

The benefit of crowdsourcing includes:

  • Easy access to global freelance talent
  • The promotion of diverse ideas
  • A shared experience with customers

It can be a useful research and innovation approach for cash-strapped entrepreneurs, small businesses, and startups. There are three reasons for this:

  1. It is a convenient and straightforward process in the digital age. Approaches range from contacting and polling social media contacts to using the latest crowdsourcing platform.
  2. It is a quick solution. The citizen science project took just 16 days to complete. Research suggests the wisdom of crowds can produce a faster and more accurate solution than relying on a lone expert. This is illustrated by James Surowiecki in The Wisdom of Crowds. He analyzes the popular game show, Who Wants to be a Millionaire. In his findings, the audience gets the answer right 91% of the time in the ‘ask the audience’ lifeline compared to the ‘phone a friend’ option where a knowledgeable friend gets the answer right 65% of the time.
  3. It is cost-effective. Using crowdsourcing as an innovation and problem-solving tool allows access to global talent without retaining full-time staff on the payroll and paying additional office costs.

Crowdsourcing is a key strategic lever for a growing business. It is also proving to be an essential innovation strategy for global companies. Major brands such as IKEA, Gucci, FedEx, Procter and Gamble, Lufthansa, and Starbucks use crowdsourcing platforms. Vodafone’s business blog forecasts that crowdsourcing will overtake traditional R&D and outsourcing by 2025.

How to Lead a Crowdsourcing Project

Crowdsourcing projects present unique challenges for any leader because the objective comes about through the wisdom of crowds that the leader does not directly manage. Antagonists of crowdsourcing argue that this means less control and a possibility of inconsistent outcomes. But this doesn’t have to be the case. It is possible to create the outcomes you need with the right attributes and mindset. It just requires a different approach to leadership. Leading through volunteer networks and collectives requires a more open and agile leadership style than the “old approach to leadership”, which is directive and controlling.

Three Attributes of Crowdsourcing Leadership

1. Making Connections

As I argued in my first book, Constructing Leadership 4.0: Swarm Leadership and the Fourth Industrial Revolution, modern collective leaders are not directors but connectors. Malcolm Gladwell coined the term connector to mean the “social glue” of the organization – someone who is well-connected and gets things done through others. In the context of crowdsourcing leadership, that means you are not directing through hierarchies and chains of command but connecting people and ideas. The crowdsourcing leader creates an environment for ideas to flourish and flow. Crucially, leaders need to select the right crowdsourcing platform and make important resourcing decisions.

2. Creating a shared vision 

Crowdsourcing leaders who rely on the input and energy of others need to provide direction without being directive. The trick here is collaborating with others and building the project’s vision together. In On Becoming a Leader, Warren Bennis uses a mountaineering analogy. He says mountaineers don’t climb mountains from the bottom-up but the top-down: “They look at where they want to go, and work backward… once you have the summit in view, you figure out all the ways you might get there.” The crowdsourcing leader helps the group visualize the summit to know where they are going and figure out how to get there.

3. Mentoring the system

Leading a collective effort requires a different mindset. Crowdsourcing leaders are no longer initiators or decision-makers but guides and mentors. In my latest book, The Nature of Business Transformation: A Swarm Intelligent Approach to Reinventing Organisations, I tell the story of Daimler AG, who transformed their approach using Agile Scrum to create what they called a swarm organization. These were leaderless innovation hubs where groups of people worked on core challenges. The CEO and other senior leaders dropped their traditional titles and mindsets and became mentors and enablers.

Conclusion: From Alpha to Beta

Crowdsourcing is an excellent way to drive collective innovation, problem-solving, and decision-making. It is used in many ways – even rescuing Ukrainian civilians from war zones. Small businesses, startups and entrepreneurs can capitalize on this approach by embracing the emerging crowdsourcing platforms and technologies. But this requires a different leadership approach. Traditional leaders are known as alpha leaders. They are transactional leaders who usually sit at the top of an organizational hierarchy and are the source of ideas and decision-making. Crowdsourcing is in a collective and system leadership tradition and requires an alternative structure and mindset. It needs beta leadership which is a more collaborative and responsive leadership. Beta leaders lead through collaborative networks rather than hierarchies and support and mentor the collective system to innovate and reach decisions. In crowdsourcing, the crowd is a diverse and innovative energy that savvy beta leaders know how to work and harvest.

Ric Kelly is a Columnist at Grit Daily. He is the author of Constructing Leadership 4.0: Swarm Leadership and the Fourth Industrial Revolution  and has spent over 25 years developing some of the world’s most inspirational and successful leaders in both the public and private sectors. His new book The Nature of Business Transformation: A Swarm Intelligent Approch to Reinventing Organisations is out now.

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