By Dr Michael Gebert, Crowd Mentor Network. Presented at Crowdsourcing Week Europe 2014. Learn more & join us at the next event: http://crowdsourcingweek.com/

1. CrowdSourcing
Innovation Models & involved Risk
Crowds Renewing Value Creation

2. CrowdSourcing
„People tend not to really look at the risks when making the decision to
crowdsource or not. Not really know (the risks).
They just go for it, with the benefits in mind.“

3. Main Risk Categories
Complexity of
relationship
The increased number of participants and diversity within the crowd can
increase the probability of risk in managing relationships within the crowd.

4. Main Risk Categories
Crowd-Control
+Effectiveness
Control is less attractive in crowds.
Referring to the effectiveness of the control measures, whether centrally located
or distributed through an intermediary platform.

5. Main Risk Categories
Coopetition
Refers to the effects or impact of co-innovating with competitors within a
joined crowdsourcing project and a larger mix and diversity of participants.

6. Main Risk Categories
Actor/Worker
interdependence
Crowdsourcing requires proxy, but not internal control. Risk arises due to the uncertainties that can
occur while coordinating with contributing actors. In crowdsourcing, the company relies on the
crowd as a supplier of ideas and solutions. The crowd has less at stake relative to the company.

7. Main Risk Categories
Replication of
business model
Crowds may gain access to business model data or related
insights, due to a larger number and diversity of participants.

8. Main Risk Categories
Loss of know-how
When the crowd is integrated in the innovation process, crowd actors may
acquire some key know-how and use it for their own purpose or even sell it to
the competition.

9. Main Risk Categories
IP risks
Companies may encounter serious IP risks by assigning
tasks to an anonymous crowd.

10. Main Risk Categories
Loss of certainty in
results
The crowd actor has less at stake for not contributing to the innovation process
and does not feel the responsibility and accountability for solving tasks.

11. Five categories of risk associated with radical innovation
Financial risk
Market risk
Organizational- and societal risk
Technological risk
Turbulence risk

12. Conceptual Risk Framework

13. Risk & User Engagement
Intrinsic motives
Ideology
Enjoyment, fun, recreation
Intellectual challenges, stimulation, interesting objectives
Learning, improving skills and knowledge exchange

14. Risk & User Engagement
Extrinsic motives
Company recognition
Reputation, enhancement of professional status
Sense of efficacy
User need, influencing the development process
Rewards

15. Risk & User Engagement
Social motives
Altruism, reciprocity, care for community
Friendships, “hanging out together”
Peer recognition

16. Adaption and Use of CrowdSourcing
Study 2012-2013 University of Glamorgan

17. Descriptive statistics on risk levels of Crowdsourcing

18. Risk Management Measures
Financial
Defining quality levels and fixed compensation for these levels
Entry evaluation of participants
Task replication
Ensuring greater participation
Behavioral screening
Tracking performance
Have people to facilitate process

19. Risk Management Measures
Organizational/ Societal
Copyright and service agreements
Building an “innovation mindset” within the organization
Voluntarily + mild force following
the rules and regulations

20. Risk Management Measures
Market and Consumer
Community Building (intrinsic)
Integration of gamification concepts
strong tears + leveled communication

21. Risk Management Measures
Technological
Clearly define task
Use collaborative rather than competitive model
Automated quality control
Build community of subject area experts

22. Risk Management Measures
Turbulence
Crowd moderation
Avoid crowdsourcing for sensitive areas such as HR policy
Restricting access by type of log-in
Anonymizing the data
Drive change for corporate culture and mindset
to an “innovation mindset” within the organization
!

23. Risk Management Measures
Creative
Behavioral screening
Define quality levels and fixed compensation
Copyright and service agreements
Break down a big project into very small bits

24. CrowdSourcing
Innovation Models & involved Risk
Crowds Renewing Value Creation
Dr. Michael Gebert
Crowd Mentor Network
!
#crowdsourcerisk