To a packed audience, Harvard Professor Karim Lakhani delivered a compelling keynote speech on the history and future of crowdsourcing, followed by a panel which included Dwayne, Jeff Howe (who was widely credited with inventing the term “crowdsourcing”), Doron Reuveni (CEO of uTest), and Daniel Sullivan (President of Appswell). Jim Savage, a partner at Longworth Venture Partners, moderated the panel.

The folks at uTest have kindly posted the videos online. Click on a link to view:

     * Keynote: Accessing the Ideas Cloud via Crowdsourcing

     * Panel, part 1: Crowdsourcing Defined

     * Panel, part 2: The Crowdsourcing Business Model & Sweet Spots

     * Panel, part 3: Managing the Crowd & Crowdsourcing Challenges

Many thanks to the Crowdsortium team, as well as the sponsors – Appswell and uTest – for putting on a great event. The InnoCentive team looks foward to participating in future events.

In today’s InnoCentive Insider, Peter Lohse talks about the curious fact that many Challenges are awarded to Solvers with expertise outside of the Challenge field.

It has been more than six years since I joined InnoCentive and I continue to be fascinated by the business model and the success we have with delivering solutions to our Clients. Our success rate overall was around 30% at the end of 2005 and is now quickly approaching the 50% mark (on average, for Theoretical and RTP Challenges). We do not have an empirical basis yet for comparing this outcome with the effectiveness of internally focused solution efforts. However, considering that many of the Seekers had been unsuccessful in finding a solution to these problems on their own, I would say the solution rate is quite spectacular.

Much of the praise for this success goes to our Solvers. They are the brains, experimenters and composers behind the winning proposals. The Client Services Team at InnoCentive is in the privileged position to be a first hand witness to our Solvers’ tremendous creativity.  Each of us has seen hundreds of successful submissions, hence we have a pretty good understanding of how a proposal should be formulated to have the potential for winning an award. These learnings are available to all of our Solvers through the InnoCentive newsletter or through this Blog. For example recent postings from my colleagues Lisa Reinhold, Eugene Ivanov and Michael Albarelli provide valuable insights in this regard.  While we believe that Solvers who follow these guidelines will submit proposals which are more likely to be successful, we recognize that factors other than the form of a Solver submission will have an influence on winning an award. It’s some these other factors that I would like to discuss.

The Study

In 2005 we teamed with up Karim Lakhani and Lars Jeppesen, both working at MIT’s Sloan Business School at the time to conduct a study on the effectiveness of problem solving at InnoCentive.  In this study, regression analysis was employed to correlate solution success with Challenge characteristics like Challenge type, award size and posting period.  In the context of this study we also conducted a web-based survey to examine Solver motivation in the solution finding process.  The study design and results have been published as an HBS working paper which is freely available on the internet at www.hbs.edu/research/pdf/07-050.pdf. Please note that this study considers Theoretical and Reduction to Practice Challenges only.  The Ideation and eRFP Challenge were only launched later and were not part of this study.

The study results were very well received by many with an interest in open innovation.  They presented one of the first attempts to quantify and analyze success when sharing information about difficult and unsolved scientific problems to large group of “unknown” outsiders. 

What it Means for Solvers

Besides the insights  the study provides to organizations which consider a “broadcast setting” for solving problems, I think that there are a number of findings which should also be interesting to problem Solvers: 

• One of them was that problem solving success was found to be associated with the ability to attract specialized Solvers with a range of diverse scientific interests.
• Related to this, and perhaps not quite as intuitive, successful Solvers solved problems at the boundary or outside their fields of expertise, indicating a transfer of knowledge from one field to another.

This latter finding is based on the self-assessed distance between the Solver’s field of expertise and the discipline of the Challenge.  The increase in probability was small (ca. 10%) but significant.  Even though somewhat counter-intuitive, I think it makes sense that somebody who is an outsider to a field can look at problem with fresh eyes and is less bothered by the do’s and don’ts which might prevent insiders from submitting a truly revolutionary solution proposal.

The Aftermath

After the results had been published in 2006 the study was regularly cited in the press, blogs and on websites as a reference to success in an open innovation setting. In some cases though, the results were interpreted a little too enthusiastically for my taste.   For example, one blog commented on the finding of cross-pollination saying that  “….chemists were better suited to solving life biology problems and vice- versa …”  – a statement which is pretty far from reality in my view.  I think there are many problems where cross-pollination can be important e.g. Challenges where new materials are sought and where solutions from many disciplines including chemistry, biology, material science, physics etc. may apply. However, that a biologist contributes effectively to an organic synthesis Challenge is rather unlikely unless that biologist has a deep understanding of the structure formalism and reactivity concepts used in organic chemistry.  The same holds true vice versa for the chemist.

What it Really Means for You

To me a likely reason that submissions from outside of the Challenge discipline have a somewhat increased probability of success is that the Seeker had probably already tried many approaches which are common sense within the discipline of the Challenge.  So, when a Seeker works with InnoCentive they expect new and unusual perspectives and are probably more likely to reward the new and unconventional proposal.  Of course, being different does not necessarily mean that the proposed approach is a solution. What is important is that the solution is different but also relevant to the problem. Hence demonstrating the relevance of a Solver’s different perspective to the Seeker’s problem is critical to success in our view. Those Solvers who explain clearly and in detail, step by step, as to why the proposed approach meets the requirements of the Challenge will more likely become award winners. Not surprisingly the results of the study also show that the time invested by the Solver in developing the solution is significantly and positively correlated with winning an award.

In Summary 

In summary, new and unconventional ideas are important for success.  InnoCentive is the Seekers’ platform of choice for harnessing these.  However, submitting an “unconventional” proposal is not enough; the proposed solution needs to be carefully matched to the Seeker’s needs.  In other words, Solvers need to commit to a carefully drafted solution proposal which explains in detail how the proposed approach can help the Seeker. In my experience, it’s often those well explained proposals which also emanate the Solver’s passion for the presented solution which are the ones which will be successful eventually. 

More studies like the one cited above are underway and perhaps some of you who are reading this have been contacted in the past for your input. I want to thank those who have shared their experience. We are grateful for the input and will take the steps necessary to improve our platform and processes to the benefit of all stakeholders involved.

Peter

Dr. Karim Lakhani:
I worked with Lars Bo Jeppesen from the Copenhagen Business School along with InnoCentive staff to understand the effectiveness of the problem solving process at InnoCentive.

Most problem solving involves effort by the problem holder to search for the relevant knowledge that will help create an effective and workable solution. However, many studies have shown that this search for knowledge is quite “local,” i.e. problem holders only access knowledge that they are familiar with and rarely do they go outside of their fixed views of the problem or personal knowledge bases. With InnoCentive – the problem holder is actually doing a “broadcast search,” i.e. they broadcast their solution requirements to the whole world – with the hopes of finding someone that has the relevant knowledge that can help create the solution. The problem holder goes from being a problem Solver to a solution seeker.

Our study examined 166 Challenges that were broadcast on InnoCentive. We combined this with a web-based survey of InnoCentive Solvers. We found that as the number of unique scientific interests in the overall submitter population increased, the higher the probability that a Challenge was successfully solved. In other words, diversity of potential scientific approaches to a problem was a significant predictor of problem solving success in InnoCentive.

We also found that InnoCentive solvers were motivated as much by intrinsic motivation factors (learning, joy of problem solving, intellectual challenge etc) as they were by winning the award money. Both were significant correlates with being a successful Solver. However, there was a negative correlation between these factors thus some Solvers are motivated by fun and others by money!

Finally InnoCentive achieved a ~30% solve rate with the Challenges posted – while there is no empirical research available to judge its effectiveness – conversation with R&D executives indicate that this solve rate is quite high.

LM:
You mentioned the following in the recent New York Times article this week

Dr. Lakhani said his study of InnoCentive found that “the further the problem was from the Solver’s expertise, the more likely they were to solve it,” often by applying specialized knowledge or instruments developed for another purpose.

…

For example, he said, the brain might be thought of as a biological system, but “certain brain problems may not be solvable by taking a biological approach. You may want to cast it as an electrical engineering approach. An electrical engineer will come in and say, ‘Oh, here’s the answer for you.’ They have not thought of themselves as being neuroscientists but now they can approach the problem from the point of view of electrical engineering.”

Can you elaborate on this idea?

KL:
Yes this was quite a surprising finding for us – but it makes sense if we think about it. In our survey we asked the Solvers if the problem they created a solution for inside their field of expertise, at the boundary of their field of expertise or outside their field of expertise. The regression results showed that the further the Solvers rated the problem was from their own field of expertise the more likely they were to have solved the problem! So InnoCentive Solvers were actually bridging knowledge fields – taking solutions and approaches from one area (their own specialty) and applying it to other different areas. We have often heard that innovation occurs at the boundary of disciplines and now we have systematic evidence that this indeed is the case at InnoCentive. History of science is filled with such episodes, for example molecular biology was established by the movement of physicists into biology. They brought with them their tools and understandings of particles and applied it to biology.

In a more general sense, as Scott Page from the University of Michigan has shown in his book “The Difference,” problem solving requires the application of heuristics and perspectives. In many cases a problem that is difficult under one heuristic/perspective pair may be relatively easy – even trivially easy – under a different heuristic/perspective pair. The key is the application of a variety of “different” approaches to the problem – so that the “home field” for the problem does not end up constraining the solution. So my neurological example shows that sometimes brain problems may be better solved with an electrical engineering approach instead of a biochemical approach. Indeed most of the cutting edge treatments for epilepsy now involve electrical engineering and signal processing approaches.

LM:
I’ve heard from many of our Solvers say that they are thrilled to be able to work on challenges both inside and outside their disciplines. Often, they tell me they could not put a Challenge down once they read it, because they knew they had a chance of solving it, even though they knew they might not win the award. Open Innovation is truly changing the way people can work, around the world, not to mention the way that companies innovate. How do you see this playing out in the innovation space, in the next 5-10 years, as Solvers begin to tap into these kinds of opportunities for work?

KL:
Open source software really showed the way in how innovation can be democratized. Many R&D executives now realize that there is a tremendous amount of knowledge outside their own organizations. The challenge is to find a way to access this knowledge and engage the minds of many people in the problem solving process.

Open source software has radically changed the practices and business models in the software industry. I expect that open innovation approaches as practiced by InnoCentive and others will do the same for R&D and other fields. Solvers will find an increasing willingness by some of the most proprietary research organizations to experiment and then regularly use outsiders in their innovation process. I expect to see that leading organizations will be very transparent about the innovation problems they face and their willingness to engage people from all fields and disciplines.

LM:
Surely the face of innovation is changing quickly. What would you say to the InnoCentive Solvers, about their role in innovation today?

KL:
Its really my privilege to observe and study such a fundamental shift in the way we think R&D should be done. InnoCentive Solvers have shown the presence of a large and effective scientific community that is typically not accessed by firms – I sincerely hope that R&D organizations figure out how to tap into this vast pool of talent and knowledge.

In addition, the participation of non-profit foundations on InnoCentive is also very exciting. Many of the toughest challenges we face in the sciences, medicine and environment will require creative solutions that cross boundaries. The willingness of the non-profits to try alternative innovation models shows the importance of the InnoCentive Solvers from a variety of fields in the problem solving process.

LM:
I’d like to conclude by asking you what you’re working on these days? Is there anything you’d like to share?

KL:
Overall my research agenda looks at distributed and collaborative technical problem solving. I am trying to develop empirical evidence and frameworks that help us understand under what circumstances do we choose open vs. closed problem solving regimes.

One project I am pursuing in collaboration with InnoCentive is to better understand what makes problems solvable? While we know that the problems that attract diverse problem Solvers are more likely to be solved – I am trying to understand what is it about the problem itself that attracts diverse problem Solvers in the first place? If InnoCentive Solvers have any ideas – I would love to hear them. Please contact me at krl@hbs.edu

LM:
Thanks very much Dr. Lakhani. Readers we also welcome your comments and discussion here, just add a comment below.