using the crowd to develop and assess business opportunities

Using the crowd to develop and assess business opportunities

Carsten Lund Pedersen (Industrial PhD fellow) & Mathias Faaborg (TDC Group)

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- Applications and experiences in TDC A/S

Timely firm responses to ambiguous issues are essential..

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“Firms often fail to anticipate and suddenly discover that a fleeting

opportunity has been missed or that survival of a product line is threatened. Typically, at the ‘moment of truth’ neither the causes nor the possible responses are clear; the firm confronts an unfamiliar and often threatening event” (Ansoff, 1975, p. 22).

… but stakeholder crowds can help us predict issues.

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- A snapshot of the current data collection in TDC A/S*

*As the data collection is ongoing work-in-progess, the specific results and measures are expected to change.

Surprising insights from data already collected in TDC.

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TENTATIVE FINDINGS*:

1) Both frontline employees and customers have surprisingly accurate estimates of certain performance measures, when they are aggregated to a crowd level.

2) Frontline employees are slightly more accurate in

estimating the recommendation score than customers.

3) The most accurate estimates are obtained when the

estimates of both customers and frontline employees are

combined.

4) A case for aggregating stakeholder insights.

5) ”Diversity trumps ability” (Page, 2007).

*The data collection is still work-in-progress.

It is the crowd that is correct – not the individuals.

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- Explanation for this phenomenon: Signal and noise

= Actual recommendation score

= Average of crowd predictions

Planning, Doing and Learning: The need for interaction.

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Andersen (2013)

Crowds can also assess business opportunities…

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Crowd Approval Score = Internal Fit x External Fit.

The model is based on firms striving to maintain a coherent fit with the environment.

The multiplicative relationship penalizes a lack of both internal and external fit – and rewards the synergy of having both.

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Internal fit

Crowd Approval Score

… and further develop chosen initiatives in an ongoing and iterative interaction with relevant managers.

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•Employee ideas.

•Management ideas.

•External ideas.

Ideation

•Crowd Approval.

•Cluster analysis.

• Identification of segments.

Assesment • Initiative chosen by crowd.

•Management adjusts based on analyses.

Selection

• Crowd ranks features.

• Conjoint analyses.

Development

What are the possibilities in

TDC A/S?

Experiences and prospects of using crowds

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Wisdom of one vs. Wisdom of the crowds

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June 29, 2007

“Apple has attracted much attention at first, but they have still remained a niche

manufacturer. That will be in mobile phones as well”

A. Vanjoki Chief Strategist, Nokia