innovative collaboration for value creation

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Innovative Collaboration for Value Creation Sang M. Lee, David L. Olson, Silvana Trimi The Internet has provided many e-business opportunities. Some may question their societal value (eHarmony.com, CraigsList), and others may have provided tools to lead users astray (QuickenLoans, Ameriquest for subprime mortgages). Our social activity is radically affected by technology. Family gatherings are opportunities for all to tweet to their personal friends, thus avoiding talking to biological ancestors present in the room. If anyone does talk, questions about the weather anywhere on the globe, or scores for any currently running athletic event, can be answered in moments by those with the appropriate app. Facebook provides a means to post an edited view of our personal life, and select who in the world can see it. Other Web services provide users value through disintermedia- tion, enabling them to obtain cheaper airline tickets directly from airlines’ Web sites at the expense of the travel agency industry. For good or evil, the Internet enables people to connect across the world for just about any purpose imagin- able. Such connectivity has enabled crowdsourcing, wikis, and open source development. Some examples of this phenom- enon, along with specific examples of organizations, are pro- vided in Table 1. Goldcorp is a Canadian gold mining firm that was experi- encing declining productivity. In March 2000, Goldcorp soli- cited the public over the Web to examine geologic data provided by the company, and to submit proposals for locations to find 6 million ounces of gold on Goldcorp’s property. The top 25 finalists would receive over $500,000. The firm received 475,000 entries, from over 1400 individuals in 51 countries. The submitted solutions confirmed many suspected deposits, as well as identifying several new ones. In 2001, Goldcorp fol- lowed up the initial offer with an increased pool of $2 million. Procter & Gamble felt that the firm was not efficiently generating internal innovation for new products. Thus, Procter & Gamble started the open innovation brokerage firm Inno- Centive, opened its patents to outsiders if the patented idea had not been applied in three years, and developed intellec- tual property collaboration networks through marketplaces on the Internet such as yet2.com, a marketplace intended for generation of ideas. Threadless sells t-shirts online as well as in shops. Its merchandise is interactively designed via online competi- tion. The two founders met at an online design forum, where they participated in a t-shirt competition. They formed Threadless in late 2000 in Chicago. The firm has grown to include a number of spinoff companies. Threadless was sell- ing 60,000 t-shirts a month, at 35 percent profit, with fewer than 20 employees. Anyone with a valid e-mail address can join Threadless, gaining rights to vote on designs or to submit them. Threadless lets voting proceed for two weeks, and high-scoring designs are made available for sale on their Web site. T-shirts are sold for $10 or $15, profitable in great part because of low design costs (winning designs receive cash and gifts). Commercially comparable designs cost $2000 and up. iStockphoto, established in 2000 in Calgary, Canada, sells stock photography, animations, and video clips without roy- alty. Customers include marketing firms, exhibitions, book publishers, newspapers, etc. Anyone can contribute to the site after completing a form giving proof of identification and three sample photographs. The iStockphoto staff evaluates each submission, and once admitted, contributors can submit photographs with keywords. Clients purchasing the right to post photographs are charged from $1 to $50 depending upon resolution, size, and complexity (such as video clips). Those contributing content receive 20 percent of the fees obtained. Some contributors who maintain a long-term positive experi- ence with the site are included in the evaluation staff, and receive 40 percent of the fees generated by their work. We all are familiar with the last three entries in Table 1. Amazon provides its clients with valuable service via customer ratings of books and other products. They also have developed a system to utilize our behavior in the form of suggestion systems. YouTube is a platform for all of us to post our films, while American Idol provides one example among many of popular television shows that cost their producers very little. We will describe these contemporary collaborative activ- ities, focusing on examples where the ability of people to work together across the world, often on a voluntary basis, has led to creation of value. We will discuss how this new Organizational Dynamics (2012) 41, 7—12 Available online at www.sciencedirect.com jo u rn al h om ep ag e: ww w.els evier.c o m/lo c ate/o rg d yn 0090-2616/$ see front matter # 2012 Elsevier Inc. All rights reserved. doi:10.1016/j.orgdyn.2011.12.002

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Innovative Collaboration for Value Creation

Sang M. Lee, David L. Olson, Silvana Trimi

Organizational Dynamics (2012) 41, 7—12

Available online at www.sciencedirect.com

jo u rn al h om ep ag e: ww w.els evier .c o m/lo c ate /o rg d yn

The Internet has provided many e-business opportunities.Some may question their societal value (eHarmony.com,CraigsList), and others may have provided tools to lead usersastray (QuickenLoans, Ameriquest for subprime mortgages).Our social activity is radically affected by technology. Familygatherings are opportunities for all to tweet to their personalfriends, thus avoiding talking to biological ancestors present inthe room. If anyone does talk, questions about the weatheranywhere on the globe, or scores for any currently runningathletic event, can be answered in moments by those with theappropriate app. Facebook provides a means to post an editedview of our personal life, and select who in the world can see it.Other Web services provide users value through disintermedia-tion, enabling them to obtain cheaper airline tickets directlyfrom airlines’ Web sites at the expense of the travel agencyindustry. For good or evil, the Internet enables people toconnect across the world for just about any purpose imagin-able. Such connectivity has enabled crowdsourcing, wikis, andopen source development. Some examples of this phenom-enon, along with specific examples of organizations, are pro-vided in Table 1.

Goldcorp is a Canadian gold mining firm that was experi-encing declining productivity. In March 2000, Goldcorp soli-cited the public over the Web to examine geologic dataprovided by the company, and to submit proposals for locationsto find 6 million ounces of gold on Goldcorp’s property. The top25 finalists would receive over $500,000. The firm received475,000 entries, from over 1400 individuals in 51 countries. Thesubmitted solutions confirmed many suspected deposits, aswell as identifying several new ones. In 2001, Goldcorp fol-lowed up the initial offer with an increased pool of $2 million.

Procter & Gamble felt that the firm was not efficientlygenerating internal innovation for new products. Thus, Procter& Gamble started the open innovation brokerage firm Inno-Centive, opened its patents to outsiders if the patented ideahad not been applied in three years, and developed intellec-tual property collaboration networks through marketplaces onthe Internet such as yet2.com, a marketplace intended forgeneration of ideas.

0090-2616/$ — see front matter # 2012 Elsevier Inc. All rights reserveddoi:10.1016/j.orgdyn.2011.12.002

Threadless sells t-shirts online as well as in shops. Itsmerchandise is interactively designed via online competi-tion. The two founders met at an online design forum, wherethey participated in a t-shirt competition. They formedThreadless in late 2000 in Chicago. The firm has grown toinclude a number of spinoff companies. Threadless was sell-ing 60,000 t-shirts a month, at 35 percent profit, with fewerthan 20 employees. Anyone with a valid e-mail address canjoin Threadless, gaining rights to vote on designs or to submitthem. Threadless lets voting proceed for two weeks, andhigh-scoring designs are made available for sale on their Website. T-shirts are sold for $10 or $15, profitable in great partbecause of low design costs (winning designs receive cash andgifts). Commercially comparable designs cost $2000 and up.

iStockphoto, established in 2000 in Calgary, Canada, sellsstock photography, animations, and video clips without roy-alty. Customers include marketing firms, exhibitions, bookpublishers, newspapers, etc. Anyone can contribute to thesite after completing a form giving proof of identification andthree sample photographs. The iStockphoto staff evaluateseach submission, and once admitted, contributors can submitphotographs with keywords. Clients purchasing the right topost photographs are charged from $1 to $50 depending uponresolution, size, and complexity (such as video clips). Thosecontributing content receive 20 percent of the fees obtained.Some contributors who maintain a long-term positive experi-ence with the site are included in the evaluation staff, andreceive 40 percent of the fees generated by their work.

We all are familiar with the last three entries in Table 1.Amazon provides its clients with valuable service via customerratings of books and other products. They also have developeda system to utilize our behavior in the form of suggestionsystems. YouTube is a platform for all of us to post our films,while American Idol provides one example among many ofpopular television shows that cost their producers very little.

We will describe these contemporary collaborative activ-ities, focusing on examples where the ability of people towork together across the world, often on a voluntary basis,has led to creation of value. We will discuss how this new

.

Table 1 Examples of Crowdsourcing.

Innovation Type Reward Organization Application

Product/service innovation Paid Goldcorp Ideas for new gold mining sitesProduct innovation Paid Proctor & Gamble Open patent older than three years,

IP collaborative networkProduct innovation Paid Threadless.com Users submit designs, vote, winner gets free t-shirtsService innovation Paid IStockPhoto.com Photographers contribute photos, site

provides access to customers at low costMarket cognitionproduct rating/ profiling

Unpaid Amazon.com Unpaid product reviews, enabling profile suggestions

Ad-hoc community Unpaid YouTube Users post videosConsumer-developed product Unpaid American Idol Public votes for talent

8 S.M. Lee et al.

trend affects business, as many traditional industries such asnewspapers languish, while new industries based on collec-tive intelligence thrive, at least for now.

INTERNET-BASED COLLABORATION

Almost every great endeavor in history involved the collec-tive work of many people. Today, great buildings are con-structed through the paid work of organizations with manyemployees. Historically, not all such labor was paid. Some ofthis was voluntary, some coerced, and others a combinationof both. The pyramids of Egypt (as well as those of othercivilizations) are evidence of massive projects, involvingunpaid workers (not all voluntary). The Great Wall of China’slabor force was coerced for the most part. The cathedrals ofmedieval Europe were constructed in part with voluntarylabor motivated by religious factors (possibly some pyramidswere as well). Thus, a variety of motives have been presentfor such massive undertakings, with some involving voluntaryparticipation

Today, the Internet and digital technology have madecollaboration much easier, to an extent never seen before.Globally, there are 1.7 billion people connected to theInternet, who are communicating and collaborating witheach other for different reasons, from simple social commu-nication, to creating content, and to sharing new ideas andeven innovating to create new products and services. Today,there are new opportunities and ways to create value throughcollective intelligence, which businesses have alreadystarted to use. Collective intelligence involves collaborationamong people for monetary and/or non-monetary benefits.Examples are from internal communities within a singleorganization (such as proprietary software development),to external communities of professionals (such as opensource software developers) or any public community (suchas those for content-creation in Web 2.0; problem-solving; orinnovation). These new ways of creating value still need to beexplored by organizations, not only because their benefitscan be immense, but also because they are changing many ofthe fundamentals of business as-we-know-it and thereforebringing many new challenges. We illustrate this with twofundamentally different processes involved in softwaredevelopment: traditional, proprietary (cathedrals) and opensource (bazaars). The traditional cathedral approachrequired strict and closely controlled organization with manyrules and requirements. Raymond referred to the open

source approach with the term bazaar, implying a freemarket of ideas without central planning.

‘‘Cathedral’’ software development

The proprietary (cathedral) process begins with the creationof a software product by an individual or team (usually ateam) applying systems analysis to design, code, test, andimplement a product.

- A firm undertakes a software development project.

- The firm hires a team of developers.

- The development project is centrally managed.

- Code is developed and written in binary code so that itcannot be modified outside the firm.

- Clients buy and use the software product.

- If problems arise, clients inform the firm, which works onfixing the software.

Once the computer program is developed, it is locked sothat it cannot be seen or modified, and sold to clients.Intellectual property rights are protected, in that nobodyoutside of the proprietary organization is allowed to changethe binary code. If clients encounter problems, they informthe proprietary company, which works on fixing the problemand providing a patch or improved version of the code.

‘‘Bazaar’’ software development

Bazaar development of open source software relies upon acooperative, usually loosely formed group of software devel-opers who share interest in developing some specific product.As in the cathedral process, a variety of tasks need to beaccomplished. However, multiple individuals work togetherto get these tasks done, on a voluntary basis. So the processbecomes:

� The community of volunteers develops the code.

� Code is distributed to users.

� Binary code is created by users.

� Users use the software.

� If problems arise (or improvements thought of), users workon fixing them.� Users distribute improved software throughout their com-munity.

Table 2 Crowdsourcing Examples versus Raymond’s Collab-orative Business Models.

Cathedral Bazaar

Paid Traditional SoftwareCompanies Closed IP(intellectual property)Microsoft, IBM, Apple

Problem-solvingGoldcorpInnoCentive

InnovationThreadlessiStockPhoto

Labor outsourcingMechanical Turk

Free Copyleft/Open PatentIBM, Proctor & Gamble

Open SourceLinux

Content CreationWikipediaYouTube

Innovative Collaboration for Value Creation 9

In this process, little if any attention is given to profitabil-ity. The view is that knowledge is for sharing and the focus ison the development of better software and faster. The ideaof free labor in software development is free open sourcesoftware (FOSS).

The same basic idea extended to doing work outside ofsoftware development (usually product design, but in prin-ciple, many other areas) is crowdsourcing. In addition to thedifference in context, many crowdsourcing projects alsoinvolve monetary incentives for participation. Table 2 showspaid and free participation versus Raymond’s dichotomy ofcathedral vs. bazaar.

COLLABORATIVE VALUE CREATION

To describe the opportunities and challenges of collaborativevalue creation, we provide four instances of Internet-basedcollaboration for value creation: Linux software develop-ment and Wikipedia as examples of product creation frompublic collaboration for benefits other than monetary; Inno-Centive.com as a new business model, a marketplace broker-ing volunteers with paying sponsors; and Amazon’sMechanical Turk, a brokerage site that brings together thosewith questions and those purporting to have answers.

Linux

Linux is probably the most successful open source softwareproduct to date, adopted by many organizations (Cass Sun-stein stated that over one-third of servers linked to the Webwere using Linux). Linux is rated as having outstandingstability, capable of running without interruption as longas the hardware keeps working. Of the top 500 supercom-puters in the world, 376 were running on the GNU/Linuxplatform. Linux also provides excellent security, as its archi-tecture makes it highly difficult to insert harmful programs,and it is very difficult for virus code to pass undetected.

However, there are some drawbacks to this system: lack ofcommercial software support, lack of Linux drivers (hard-ware vendors do not always offer them), and lack of detailed

hardware specifications requirements. Furthermore, GNU/Linux is not easy to implement by the general population, asit is designed for computer-literate developers/users.

Nevertheless, today there are many means in the marketto overcome the above-mentioned challenges. Thus, manycommercial support organizations, such as Red Hat Enter-prise Linux and Mandriva, provide manuals and technicalsupport by telephone or e-mail, as do many noncommercialsupport organizations, such as Debian, Ubuntu, Fedora,openSuSE, Gentoo, and Slackware. Installing GNU/Linux israted as being as easy as with proprietary operating systems.There are a growing number of software products available torun on the GNU/Linux platform. Thus, IBM diverged from itsinitial policy of creating software that would only run on IBMcomputers into becoming a major supporter of open sourcesoftware (about $1 billion in 10+ years).

Wikipedia

One of the earliest examples of collective intelligence isWikipedia, developed by people performing tasks that com-puters cannot easily do, while linking that with computertechnology to provide a highly successful and effective ency-clopedia that has overtaken and overshadowed cultural iconssuch as Encyclopedia Brittanica. Wikipedia had a full-timestaff of five, while tens of thousands of volunteers contrib-uted to the content. Wiki software was introduced as a meansto make contribution and editing easier (wiki is Hawaiian forquick). Rules for Wikipedia are few, in the spirit of opencontribution. Anyone can author or edit content at any time,which is risky, but mitigated by the Wiki software’s ability totrack each change and recover prior versions if needed. Everymain page of the encyclopedia is tracked by a discussionpage, where contributors can explain their changes, andthose who disagree can express alternative points of view.

A wiki is a cooperative group effort to generate onlinecontent. Wikipedia was built through the cooperative effortof over one million volunteers. Wikipedia is the largest wiki inthe world. It attracts nearly 68 million visitors each month.The English version had nearly 3 million articles in August2009, with over 10 million users contributing.

As administrative work is required, there is a staff thatdevelops software, searches for copyright-free photographs,moderates conflicts, and searches for vandalism. Should editwars erupt (multiple users entering conflicting data anderasing each other’s entries), the staff makes a final judg-ment. Wikipedia has a general policy of neutrality, and whenedit wars occur, a ‘‘Stop Hand’’ appears, with the statement:‘‘The neutrality of this article is disputed.’’ Active debateshave separate talk pages available for deliberative discussionthat can take place between alternative sides to some issue.Should vandalism occur, readers are allowed to post ‘‘vand-alism in progress’’ to such pages. The administrative staff canblock particular IP addresses or user names.

Wikipedia issuesThe issue of quality is important. The openness of Wikipediaallows vandals to modify articles. The system is set up tomake errors and malicious insertions temporary. There havebeen a number of comparisons with hard-copy encyclope-dias, generally resulting in very slight advantages for thehard-copy sources with respect to errors, but with clear

10 S.M. Lee et al.

advantages for Wikipedia in terms of speed of developmentand the ability to make corrections.

A study by the science journal Nature compared 42 arti-cles across Wikipedia and Encylopedia Brittanica, concludingno particular difference in accuracy. This contention wasdisputed by Brittanica people, but Wikipedia clearly hasthe advantage of including more current information. As longas the commons shares accurate understanding of the topic,Wikipedia should be more accurate than the traditionalpaper-bound sources of encyclopedia.

Vandalism has occurred. Probably the most famous case ofvandalism involved a former editorial director of USA Today,John Seigenthaler, Sr. In May 2005 someone posted:

John Seigenthaler Sr. was the assistant to Attorney Gen-eral Robert Kennedy in the early 1960s. For a brief time,he was thought to have been directly involved in theKennedy assassinations of both John, and his brotherBobby. Nothing was ever proven.

Seigenthaler was of course not involved in the assassina-tion. While we may find this slightly humorous today, Sei-genthaler saw no humor in the posting. When he askedWikipedia if he could discover the perpetrator, Wikipediatold him that they couldn’t trace it. In 2006, it was discov-ered that over one thousand Wikipedia articles had beenmodified by staffers of U.S. congressional members toimprove their political content. In the academic world,students now have the potential to post some contentionand cite Wikipedia as their source. Overall, however, Wiki-pedia has proven able to clean up errors quite rapidly.

Business potential for wikipediaThere is great potential of the wiki idea in the field ofbusiness intelligence. Wikipedia demonstrates the abilityof the commons to cover many areas very quickly, with deepparticipation of many knowledgeable people, and consensusis often accurate on at least some issues. Businesses can thususe wikis for collaborative work, whether it is within adivision, across functional areas, inter-organizational alli-ances, or knowledge sharing through convergence of disci-plines. Sunstein names Walt Disney Co., Yahoo, OxfordUniversity Press, and the U.S. military as using private work-space wikis for employees to evaluate each other’s work,and credited wikis with reducing project times up to 50percent.

InnoCentive.com

Jeff Howe coined the term crowdsourcing, which is basicallyoutsourcing to the Internet crowd to solve a specific problem,create or design a product, or create information content.The idea of using customers to do work for a business has beenaround for a long time: vending machines in the 19th Century,self-service grocery stores in the 1950s, fast-food chains inthe 1970s, the Swedish furniture vendor IKEA, etc.

One of the expected benefits of drawing upon crowds ofpeople for solutions is that crowds offer the potential forgreater creativity. Today’s creativity is exhibited throughincreased spending on research, high-tech startups, the ven-ture capital system that feeds these startups, and whatRichard Florida calls a new social milieu all converging in anage of pervasive creativity permeating all sectors of society —

with volunteers performing more and more of the work ofbusinesses.

Examples of creativity created by crowdsourcing include:Hyatt’s online concierge service, where users provide localtravel tips, which other users rate; Unilever’s user forum,where mothers share experiences and vote on plot lines foronline comedy series, increasing brand awareness and loyaltyfor Unilever’s products. Lego invites customers to co-createdesigns of toy robots and construction models. Televisionseems to be currently dominated by shows based on userparticipation, to include reality shows such as Survivor,Biggest Loser, and American Idol.

This tapping of many people to accomplish work is showingup in governmental activities as well. President Obama direc-ted federal agencies to increase their use of incentive prizes tostimulate technological innovation. In December 2009, theidea was discussed by the National Institutes of Health (NIH)and the Defense Advanced Projects Research Agency (DARPA).NIH has sponsored a number of grants in collaborative, cross-sector efforts. DARPA used prizes in a 2004 contest to create anunmanned ground vehicle. They offered a $1 million prize tothe first team that could drive a robot over 142 miles of ruggedterrain in the California desert. DARPA estimated gaining $155million worth of free labor from participants. Collaborativeefforts have the advantage of minimizing groupthink by acces-sing multiple views. The Internet itself was developed from thecollaborative work of researchers from research institutionsand universities.

InnoCentive is a Web-based new business model, a mar-ketplace that links companies, academic institutions, publicsector organizations, and nonprofit organizations that haveproblems with a global pool of 160,000 Web users motivatedto provide solutions. InnoCentive (www2.innocentive.com)defines itself as a location where organizations turn to solveproblems that matter, fostering innovation and speed inidentifying novel solutions through open innovation. Thereare four categories into which challenges are classified.

1. Ideation challenges consist of broad questions seekingnew ideas. The public (solvers) can submit ideas, orsubmit third party information to which they hold rights,or submit public domain information (without use limits).

2. Theoretical challenges contain detailed solution require-ments. Usually, intellectual property rights transfer fromthe solution provider to the client organization, althoughsome clients prefer a non-exclusive perpetual license.

3. Reduction to practice (RTP) challenges request a highlevel of detail, but require solvers to submit validatedsolutions in the form of original data or physical samples.Clients are allowed to test proposed solutions. eRFPchallenges allow requests for proposals to the world.When solvers submit proposed solutions, clients evaluateresponses and select solvers for further details. Terms ofsubsequent contracts are negotiated for scope of work,duration, etc.

Client organizations pay InnoCentive to post the chal-lenges and also pay the winners of the solutions. Solversare not charged. InnoCentive uses a business model based oncrowd-sourcing. However, it is a hybrid where monetaryincentives are involved. In addition to InnoCentive, thereare numerous open innovation brokerage firms, including

Innovative Collaboration for Value Creation 11

such well-known organizations as NineSigma, Your Encore,and Yet2.com. Categories of research tasks include thosesponsored by corporations, nonprofit organizations, and gov-ernments. Corporations gain by tapping into the creativetalents of individuals offering their services. Not-for-profitorganizations gain by getting creative ideas while saving onstaff and budget. Governments gain by obtaining creativehelp while reducing tax bases and deficits. Individual parti-cipants get to work on interesting problems and receivingsome pay (at least potentially).

Amazon’s Mechanical Turk

Amazon’s Mechanical Turk was launched in 2006, and is nowmanned by some 200,000 workers, most in the US, who are paidquite low wages for using their free time to do work forcustomers. An example of the value provided by this site tolink those with time and skills with those needing help isPowerset. Powerset is a search site wanting feedback on itssearch results. Its director went to Amazon’s Mechanical Turkand obtained the services of 100 people rating results for twohours, costing Powerset an average of $2 an hour. After thispositive experience, Powerset started Dolores Labs, whichdeveloped algorithms to assess the accuracy and speed ofAmazon Mechanical Turks participants. One of Dolores Labs’customers used their site to categorize 10 million documents(such as sports, news, recipes, etc.). That firm estimated thatit would have cost them $30,000 to hire staffers to perform thiswork, but through Dolores Labs, the project cost only $2000.

An example of the participants who do work for theelectronic Mechanical Turk is a 28 year old high schoolgraduate eking out a living in Schaumburg, IL by teachingguitar. He supplements his income by working 15 hours perweek on Amazon’s Turk, doing such things as sifting throughWeb pages and tagging items for $3 per hour.

The Amazon site for Mechanical Turk consists of HITs(human intelligence tasks posted by potential customers)and ratings of participant workers (under Qualifications).Example HITs taken from the Web site in December 2010included the opportunity to identify Arabic dialect in text,with pay at the rate of $0.05 per phrase, sponsored by anindividual. This task included 14,196 different texts to ana-lyze. Further searching on the first opportunity yieldedfurther information about the task; it was for Arabic speakerswho understand different local Arabic dialects and coulddistinguish them from Fusha Arabic to identify how muchdialect is in each sentence, and to identify the specific Arabicdialect (classified by region).

Public solvers can find work in a variety of other areas, toinclude:

� Selecting correct spelling for given search terms.

� Translating form one language to another.

� Evaluating product similarity.

� Evaluating Web site suitability for a general audience.

� Rating search results for given keywords.

� Categorizing the tone of an article.

Mechanical Turk represents a platform used to bring thosewith time and specialty skills together with those needinghelp.

Downsides to collaborative work

As with anything new, there are downsides in collaborativework. Heinz attempted to tap the public for an ad contest in2007, soliciting videos to promote its catsup. They wereflooded with submissions, many of which violated technicalrequirements. Many were also of poor quality, or not goodfrom a marketing perspective. Heinz staff spent so much timeprocessing the submissions that it ended up costing as muchor more than a professional advertising firm.

Another drawback is that there is no control over what thepublic will submit. Chevrolet developed a Web site to enablethe public to take video clips and music, edit them to includetheir own words and create a customized 30-second com-mercial for the 2007 Chevy Tahoe. The response was a varietyof ads slamming governmental policy as well as the auto-motive industry. Chevrolet went along with the public, allow-ing satirical ads to remain in place.

CONCLUSIONS

There are many beneficial cooperative efforts enabled by openaccess to the Web. These include open source software in theinformation technology (IT) domain, but also idea generationoutside of IT. Linux provides an example of collaborativevoluntary effort using the Internet for communication in soft-ware development. Wikipedia is collaborative voluntary effortusing the Internet to share encyclopedic information. Both arefree labor. InnoCentive.com is a marketplace that provides aplatform for those seeking help to tap those with interest inhelping, but is not free labor. Mechanical Turk is an Internetbrokering site using inexpensive human labor to do intelligencework that technology cannot.

Crowds have a big advantage in widening the pool ofpotentially good ideas. Groupthink is not possible in crowd-sourcing. Conversely, crowdsourcing does not allow as muchdepth and intimacy as might be possible with small groups ofexperts. Crowdsourcing works well when tasks require highlevels of creativity with short time limits, but crowds spe-cialize in producing average results, with highly variablequality. Fiat, Dell, and American Idol are all examples wherecrowdsourcing was successfully applied to product develop-ment. Thus, while it is true that crowds will generate a widedistribution of quality ideas, it is also important to select thebest of the group, which can be a daunting task. Crowds havea big advantage in widening the pool of potential good ideas.

Crowdsourcing has generated the opportunity for busi-nesses to innovate via collaborative work within firms andalso tapping the public to develop new products or solveother problems. This has led to creation of exciting newbusinesses quickly and at low cost. Through examples, wediscussed how value is being created with collaborative workfor businesses. We also discussed some of the issues involved.The purpose was to describe ideas for potential businessvalue creation. To create value, technology needs to becombined with new ways of doing business. Crowdsourcingis one means of accomplishing that desirable end.

12 S.M. Lee et al.

SELECTED BIBLIOGRAPHY

Jeff Howe coined the term crowdsourcing in Crowdsourcing:Why the Power of the Crowd Is Driving the Future of Business(New York: Random House, 2008). In The Cathedral and theBazaar — Musings on Linux and Open Source by an AccidentalRevolutionary (O’Reilly & Associates, 2001), Eric Raymondcontrasted the traditional method of development with opensource approaches. Richard Florida described the new col-laborative work environment in The Rise of the CreativeClass: And How It’s Transforming Work, Leisure, Communityand Everyday Life (New York: Basic Books, 2003).

Cass Sunstein’s Infotopia: How Many Minds ProduceKnowledge (Oxford: Oxford University Press, 2006) discussedthe process of Linux open source software.

Don Tapscott and Anthony Williams Wikinomics: How MassCollaboration Changes Everything (New York: The PenguinGroup, 2006) considered the business impact of this phenom-enon of Internet collaboration. Yochim Benkler reported theNature study cited in The Wealth of Networks: How SocialProduction Transforms Markets and Freedom (New Haven,CN: Yale University Press, 2006). Howe and Tapscott andWilliams reviewed InnoCentive in their books. V. Barretdescribed Amazon cloud products, to include the MechanicalTurk, in ‘‘You Know It When You See It,’’ Forbes 183(6), 30March 2009, 48—50.

Sang M. Lee is the University Eminent Scholar at the University of Nebraska. He has served as a senior scientist forthe Gallup Organization and a consultant for several global firms. He has published more than 250 journal articlesand 40 books. He is a fellow of the Academy of Management, Decision Sciences Institute, and Pan-Pacific BusinessAssociation (University of Nebraska-Lincoln, United States; e-mail: [email protected]).

David L. Olson is the James & H.K. Stuart Professor in MIS Chancellor’s Professor at the University of Nebraska. Hehas published research in over 100 refereed journal articles, and has authored or coauthored 20 books. He is afellow of the Decision Sciences Institute (University of Nebraska-Lincoln, United States; e-mail: [email protected]).

Silvana Trimi is an associate professor of MIS at the University of Nebraska — Lincoln. She has published in a numberof journals including Communications of the ACM, International Journal of Production Research, Communicationsof the AIS, Information and Management, Industrial Management and Data Systems, International Journal ofPublic Administration, and others (University of Nebraska-Lincoln, United States; e-mail: [email protected]).