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Governing crowdsourcing for unconstrained innovation problems

By Michael A. ZagglArvind MalhotraOliver AlexyAnn Majchrzak

Crowdsourcing is a popular innovation method for problem-solving. To use crowdsourcing successfully, firms often constrain their problems by narrowing the problem formulation and thus pre-specifying the problem. The constraining sets a focus for the crowd’s search process for solutions. When the firm does not narrow the problem and problem formulations are vague (“submit all your ideas”), i.e., problems are unconstrained, crowdsourcing is deemed much less helpful because any solution is either trivial or solutions deviate too far and the firm is left with numerous scattered ideas without unclear relation to the problem. This conundrum limits crowdsourcing as an innovation method because it renders it not applicable for out-of-the-box thinking and radical innovation. 

In our study, we tried to refute this belief and demonstrate that, and how, crowdsourcing can be used for firms’ unconstrained problems, i.e., strategic problems that are not pre-specified, such as entering new markets with simultaneously developing new products. 

Our approach is that crowdsourcing contests need to be designed so that they “govern” the crowds’ behavior and thus influence the knowledge-creation process. Specifically, our proposed design for crowd governance consists of instructing the crowd participants, first, to verbalize their mental representation (i.e., their individual assumptions about the problems and facts they relate to the problem) in the crowd and thus sharing them with the other participants in the crowd, and second, to build on each other’s mental representation. Exposing each other in this way to alternative perspectives can lead to new, unanticipated, and potentially valuable ways of looking at the problem—even redefining the problem.

Our empirical investigation of 20 crowdsourcing contests with a total of 1720 registered participants and 2428 postings demonstrates that crowds governed in this way can solve unconstrained problems. Thus, our governance method can help the firm find solutions to problems that are by definition unconstrained in direction and outcome, such as seeking new technologies for markets new to the firm or even the world. The study also shows that governance should not be used when problems are constrained. Our implications are:

  • If the crowdsourced problem is unconstrained, our governance approach is recommended.
  • If the crowdsourced problem is constrained, avoiding governance is recommended.

Practitioners can use our governance design depending on which kinds of problems they want to solve with crowdsourcing. Unconstrained problems such as diversification, or relatedly, strategic renewal. The proposed governance design is appealing since it requires only a minimal intervention (only a “light touch”); thus, the design does not deter crowd participants from contributing. 

Overall, we extend crowdsourcing as an innovation method to unconstrained problems, where currently it is suggested that poor results are to be expected due to highly divergent views and opinions on the problem. This extends the range of problems that can be tackled with crowdsourcing as an innovation tool. 

Based upon:

Zaggl, M. A., Malhotra, A., Alexy, O., & Majchrzak, A. (2023). Governing crowdsourcing for unconstrained innovation problems. Strategic Management Journal.