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Collective Intelligence Executive Report


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We live in an increasingly social world, where advancements in
technology are changing how we buy, how we work and how
we connect with others. Expanding and overlapping social
networks are enabling individuals to express opinions, share
expertise with a greater audience and shape decision-making
processes on a global scale. Can an organization that chooses
to ignore the insights of employees, customers and business
partners expect to thrive?

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Collective Intelligence Executive Report

  1. 1. IBM Global Business Services Social BusinessExecutive ReportIBM Institute for Business ValueCollective IntelligenceCapitalizing on the crowd
  2. 2. IBM Institute for Business ValueIBM Global Business Services, through the IBM Institute for Business Value, developsfact-based strategic insights for senior executives around critical public and privatesector issues. This executive report is based on an in-depth study by the Institute’sresearch team. It is part of an ongoing commitment by IBM Global Business Servicesto provide analysis and viewpoints that help companies realize business value.You may contact the authors or send an e-mail to for more information.Additional studies from the IBM Institute for Business Value can be found
  3. 3. IntroductionBy Eric Lesser, David Ransom, Rawn Shah and Bob PulverCan an organization, operating in today’s interconnectedand interdependent environment, overlook the insights of its global ecosystem and stillexpect to thrive? Social technologies are increasing the ability of companies to tap intoCollective Intelligence – the distributed knowledge and expertise of individuals locatedinside and outside the formal boundaries of the enterprise. Applying this knowledge candeliver tangible benefits in developing new products and services, sharing best practices,distributing work in new, innovative ways and predicting future events. This studyhighlights a number of approaches for applying Collective Intelligence, howorganizations can determine and select the appropriate audiences for these efforts, andhow they can address the common risks and challenges of this emerging capability.Introduction vocation, affiliation or organization status. As organizationsWe live in an increasingly social world, where advancements in look to become “social businesses,” tapping into the thoughtstechnology are changing how we buy, how we work and how and opinions of the marketplace becomes even more critical.we connect with others. Expanding and overlapping socialnetworks are enabling individuals to express opinions, share Fortunately, the opportunity to more effectively apply Collec-expertise with a greater audience and shape decision-making tive Intelligence – the aggregated knowledge, insight andprocesses on a global scale. Can an organization that chooses expertise of a diverse group – has become a reality. As indi-to ignore the insights of employees, customers and business viduals become more adept and comfortable sharing thoughtspartners expect to thrive? and ideas in virtual spaces, companies can use these insights to address critical business challenges. Harnessing CollectiveFor many organizations, the answer is no. In a global environ- Intelligence can play an important role in generating newment where innovation cycles are shrinking, customer expecta- ideas, solving age-old problems, disaggregating and distrib-tions are rising and talent is becoming more distributed, uting work in new and innovative ways, and making better,companies are seeing the need to more effectively apply the more informed decisions about the future.knowledge and experience of individuals, regardless of their
  4. 4. 2 Collective IntelligenceThrough our research, extensive client experience, and 3 Key study findings indicate that successful Collectivein-depth conversations with a broad range of academics, Intelligence efforts need to:vendors and companies that have explored Collective Intelli- Address sources of resistance, including operational • gence techniques, we see three areas of guidance for organiza- challenges, conflict with existing charters, perceived losstions: of control, and shifting roles and responsibilities Integrate Collective Intelligence into the work • 1 Collective Intelligence enhances business outcomes by environment, both technologically and culturally improving how organizations access the untapped Act on what is discovered, communicating value and • knowledge and experience of their networks to: outcomes to both the organization and the individual. Discover and share new ideas • Augment skills and distribute workload • Applying Collective Intelligence Improve forecasting effectiveness. • Collective Intelligence can be applied across a number of business objectives to:2 Central to the success of Collective Intelligence initiatives is • Identify new opportunities to differentiate your organization the ability to target and motivate the right participants, or serve new markets considering the need for: • Tap into outside skills and experiences to deliver on business Knowledge – contextual awareness of the problem to be • imperatives solved • Predict outcomes of today’s increasingly complex business Diversity – sufficient breadth of experience to bring a range • challenges. of perspectives and views Disruption – willingness to challenge current thinking. • Solicit new ideas for products, service Discover and offerings, cost savings, business process or business model innovation share new ideas Tap into outside skills and Predict outcomes of today’s Collective experiences to deliver on increasingly complex Intelligence business imperatives business challenges Improve Augment skills forecasting and distribute effectiveness workloadSource: IBM Institute for Business Value..Figure 1: Collective Intelligence approaches connect knowledge and experience to where it is most needed to address today’s businesschallenges.
  5. 5. IBM Global Business Services 31. Discovering and sharing new ideasCollective Intelligence methods provide compelling frame- The Economist gets novel media ideas by challengingworks to solicit new ideas for products, service offerings, cost readers (and others) in new wayssavings, business process innovation or new business models. The Economist magazine was looking new ways toTraditional approaches for capturing these insights, such as engage its global readership and participants in its Ideasfocus groups, surveys, product feedback forums or suggestion Economy conference series. To accomplish this, theboxes, are often resource-intensive, time-consuming and lack magazine worked with online crowdsourcing organizationthe breadth of audience to create an optimal solution. Further, InnoCentive, which helped create a challenge in whichthey do little to engage participants in the sharing and The Economist’s readers and members of InnoCentive’s community of participants could identify innovativeco-creation process, and often fail to provide feedback or solutions to contemporary problems.connect individuals’ contributions to business outcomes. Through its “Ideas Economy” website, and in preparation for live conference events, the joint team from TheBy using a number of emerging and existing approaches, Economist and InnoCentive posed a series of challengesenterprises can use networks of employees, customers, business to develop new ideas around a variety of topical issues,partners, consumers, external experts and others to: such as healthcare information and biologic solutions for climate change.• Identify new disruptive offering ideas Challenge winners were given monetary awards and• Provide ways to improve business processes and increase interviewed as part of live events, resulting in video efficiency assets and other publicity. The challenges provided• Develop product enhancements based on end-user and important media opportunities and content for The Economist and created new business opportunities for customer feedback the winners, including media visibility and exposure to• Use co-creation to deepen customer engagement and potential investors for their ideas.1 strengthen brand loyalty.These approaches include:Contests and challenges: This is an approach where opportuni-ties or problem statements are presented to members of the “The quality and the volume of [responses] wecrowd, who compete to provide a winning solution. Individuals got back was just extraordinary. In each of theor groups of participants work simultaneously to submit theirideas or problem solutions for adjudication by the organization cases so far we’ve had very high-qualitysponsoring the challenge. In some cases, submissions are responses. People take the InnoCentive processranked and scored among fellow participants. Successful seriously, and respond accordingly.”contests and challenges require careful problem definition tobreak the business challenge into clearly articulated compo- Justin Hendrix, Vice President, Business Development and Innovation, The Economistnents for participants to tackle. Using this technique, organiza-tions, such as The Economist (see sidebar), have accessed a broadrange of expertise – often outside their core competencies – todiscover unique solutions to difficult problems.
  6. 6. 4 Collective IntelligenceCollaborative design markets: Using a web interface, partici- Virtual ideation and dialogue: This is a process by whichpants can take basic images of items such as t-shirts, purses, or individuals come together in a virtual environment to discusseven cars, and customize them using colors, patterns and and share insights on specific topics. The ideas can be posed byaccessories to create a variety of original designs. These designs leadership, individuals or communities within the organization.can then be commented on, rated and ranked to identify those Within the discussion (which can be ongoing or defined for amost popular and likely to succeed in the market. Using this specific period of time), participants are able to propose,approach, companies, such as Coach (see sidebar), can engage a comment on, refine and, finally, evaluate and rank ideas. Whenbroad range of creative individuals, often outside the organiza- these rankings are aggregated using analytics, organizationstion, by giving them a voice in the design process. can more easily identify the common themes and prioritize future investments. Organizations, such as Citi’s GlobalSome organizations, such as t-shirt company Threadless, have Transaction Services (see sidebar), have found this technique totaken this concept of the collaborative design markets and be valuable not only in soliciting ideas and opinions, but also inmade it the central focus of their overall business model. engendering a sense of connection and engagement among theParticipants from the Threadless community of over 1.5 larger workforce.million members submit designs and vote on which designsshould be printed. By tapping into the energy and creativity ofthe community, Threadless is able to identify early trends andsales opportunities and is assured of a market, because the Citi engages in a global discussioncommunity also includes a large percentage of its customers.2 Collaborative online events that bring individuals into a virtual discussion often provide insightful information. By giving employees, partners, or customers the opportunity to share thoughts, interact and participate in polls and facilitated discussions, companies can uncover a myriadCoach redefines the online focus group of ideas across diverse business units, organizationalOne alternative to generating new ideas is to provide pre- levels and backgrounds.designed templates or components that can be This was the experience of Citi’s Global Transactionassembled into new products. Fashion designer Coach, Services division, which was looking to tap into thewanting to reach a new and younger audience, used this knowledge of employees across the business and aroundapproach in an online contest that allowed participants to the world to validate its business strategy and identifycreate their own Coach tote bag designs. The platform further opportunities to improve client service and grow.provided simple tools for participants to choose and Citi created a collaborative event, or Jam, that was openlayout tote styles, graphics and colors. Other customers to over 20,000 people in 96 countries. Over 6,000were encouraged to rate and comment on the designs. employees from 88 countries registered for the 55-hourPrizes were awarded based on the popularity of a design event. The average participant engaged in the dialogueand ranged from small gift certificates to a hosted party for four hours. Following the event, organizers usedat a Coach retail store, a $2,500 shopping spree and $500 analytics to link different sections of the discussion andcash/scholarship. The company received 3,200 entries in mine comments for additional insight.less than six weeks. The designs from the contest that According to Mei Li Tan, Managing Director for Globalwere placed into production resulted in increased sales Franchise Initiatives, the Jam not only tapped theand enhanced customer satisfaction.3 collective wisdom of employees at all levels across the business to validate future direction and strategies, but also enhanced employee engagement as their ideas were heard and incorporated into business action plans and initiatives.
  7. 7. IBM Global Business Services 5[The Jam] also helped our employees extendtheir network of connections and improve El Paso Exploration & Production connects technical ex- perts to share knowledge, build skillscollaboration across time zones and El Paso Exploration & Production (E&P) Company, aorganizational constructs with common leading provider of natural gas and related products, applies the concept of communities of practice across itspurpose. They appreciated the opportunity to workforce. Before 2009, the company was organized intohave a candid conversation with senior operating divisions, with each division having its own siloed reporting structure.executives and influence where we are going.” In 2009, the company underwent a transformationMei-Li Tan, Managing Director for Franchise Initiatives, Citi Group designed to improve technical communication and make employees more accountable for their work. The resulting change eliminated the technical silos and reorganizedCommunities of practice: Communities bring together indi- business areas around specific properties. As part of thisviduals with a common interest, craft or profession to develop transformation, employees specializing in a givenand share knowledge, best practices and new ideas. Collabora- technical discipline began reporting across differenttive platforms are often used to support these communities by teams within the organization. However, El Paso E&Penabling social networking, fostering open dialogue and executives were concerned this new reporting structure would degrade knowledge flow and expertise alignmentfacilitating virtual communication. Bringing people together within each technical discipline.through communities creates a sense of connection andcommon context for individuals working in different geogra- The company launched an aggressive knowledge management program with communities of practice as itsphies and organizational units. Although companies have been centerpiece. Networks of excellence were created aroundapplying the principles of communities of practice for a number each of the company’s disciplines (such as geoscience,of years, more recently we are seeing organizations, such as El drilling, land use, drilling, and facilities), providing anPaso Exploration & Production (see sidebar), incorporating the environment where technical specialists couldknowledge of communities into the company’s day-to-day collaboratively solve problems, develop technical standards, and identify and share best practices.operations to improve business processes and outcomes. Although primarily focused on face-to-face community activities within headquarters, to leverage expertise available from field-based or regional offices, El Paso implemented collaborative tools that enabled employees to communicate and share best experiences and knowledge across operational units. This platform included employee profiles, a database of skills/expertise, location mapping, case studies and other pertinent information. As a result of these communities of practice, El Paso saved US $1.2 million in its first year by sharing knowledge and experiences on how to lower direct costs, decrease cycle times, or improve productivity. In addition, the networks of excellence improved employee skills assessment and capacity building.4
  8. 8. 6 Collective Intelligence2. Augmenting skills and distributing workload Distributed question and answer (Q&A): This approachCollective Intelligence not only allows an organization to involves posting or distributing questions in a virtual forumgather ideas and input from a wider range of people, but also that can be answered by one or more individuals. Participantsto apply the talents of a distributed workforce, or talent can comment on and suggest improvements to answers, whichmarketplace, to realize those ideas. By disaggregating work, can then be rated by the originator of the question or othertasks can be assigned to individuals with the highest corre- participants. Organizations such as IBM (see sidebar) havesponding competency, either inside or outside the firewall, found that, by distributing the workload of Q&A, they canpotentially improving quality. Activities can also be accom- reduce support costs, improve response time to operationalplished in parallel, reducing time to completion. Techniques requests or common questions and then capture these Q&Acompanies are using to distribute work to individuals include: dialogues in an easily searchable repository, thus enabling social learning.Parallel task processing: This is an approach used to decon-struct complex problems into smaller or simpler tasks thatindividuals can complete in parallel. These include anythingfrom labeling large numbers of uncatalogued digital photos IBMers get things done more quickly and accurately when(see sidebar) to writing software code. Platforms that enable they answer each others’ questionsparallel task processing, such as Amazon’s Mechanical Turk and For more than a decade, IBM has provided a self-serviceTopCoder, provide the ability to screen for certain skills or technical support portal for employees to find answers toexpertise and track the performance of individuals completing common questions and technical support issues. However, the IBM Helpdesk was looking to further reduce coststasks. Organizations benefit from the rapid completion of tasks, while improving the ongoing accuracy of its knowledgeoften at significantly lower overall cost for similar quality. base. All employees accessing online help areas are now encouraged to review responses for accuracy by commenting on the content and suggesting modifications.Using the crowd to tag unlabelled digital photo libraries Though changes are moderated, anyone discovering aPhoto-tagging startup Tagasauris and photography new solution to an unanswered problem, errors or missingcooperative Magnum Photos recently launched a beta information can simply edit the entry and add theapplication for the immense task of identifying the content necessary remediation. This distributed Q&A systemand subject matter of photos in the Magnum library that improves the quality of frequently encountered IT issues,have no description or identifiers.5 while reducing load on the helpdesk.6Currently, nearly half of the 500,000 photos in the onlinelibrary fall into this category. Magnum asked its nearly350,000 Twitter followers to help with this task. Participantsare sent a notification when a new photo is available toreview, access the application, and tag and reference thecontent of photo. Once the tags from several participantsagree, the photos are then considered tagged and undergoa quality assurance process before being added to theonline searchable repository.Participants are rewarded by being able to see photos fewothers have seen. Magnum is also looking at otherrewards, such as exclusive greeting cards or calendarssigned by the photographers of the photos they identify.
  9. 9. IBM Global Business Services 7Serious games: Online simulated game environments enable 3. Improving forecasting effectivenessparticipants, acting independently or in teams, to apply their Beyond developing existing ideas and knowledge, Collectiveknowledge and problem solving skills to provide solutions to Intelligence can also be applied to predict the outcomes ofcomplex business problems. This approach leverages the vast future events. Aggregating the diverse perspectives, knowledgeexperience of game mechanics, which include skill level and insight of front-line employees, partners and customersattainment, specific goals and tasks, and group problem provides a window into the future, enabling organizations tosolving. By providing real-world inputs (such as live supply- make more informed, evidence-based decisions that canchain data) and observing behaviors and outcomes from the complement traditional forecasting simulations, organizations can adjust actual processes andsee tangible results. Organizations such as the University of Prediction markets: Markets are used to improve forecastingWashington have used these games to solve complex chal- and predict outcomes where traditional approaches arelenges (see sidebar). incomplete or insufficient. Participants are given virtual tokens or currency to invest (or divest) in the likelihood of future events or outcomes, such as for the likelihood of a particular product’s future success, project milestone date, or even for aCitizen scientist gamers solve decades-old problem in political or legislative outcome. Organizations interpret thethree weeks number of tokens or market prices as forecast probabilities.Online gaming techniques have allowed scientists at the Using analytics, participants are rewarded based on theUniversity of Washington to address a challenging accuracy of their predictions when compared to others andbiomedical research problem.7 Following the failure of a how they match actual outcomes. Recognition often includeswide range of attempts to solve the crystal structure of anenzyme related to retroviruses, the scientists developed a non-monetary awards and points-based leaderboards where theprotein-folding game called “Foldit” to recruit the help of top “predictors” are recognized for their accuracy.citizen scientists to produce accurate models of theprotein. In “Foldit,” anyone can learn simple foldingtechniques and manipulate virtual molecules.More than 57,000 individuals from a variety of educationalbackgrounds and locations participated in the game.Within three weeks, participants in the game had solved apuzzle that had vexed scientists for years, providingimportant insights into the development of new retroviraldrugs.8
  10. 10. 8 Collective IntelligenceUsing prediction markets, companies such as Google, Arcelor- While we have grouped the Collective Intelligence methodsMittal and Best Buy have estimated outcomes as diverse as according to the business challenge they address, it isfuture sales, base-material supply, store openings and product important to recognize that these methods are not mutuallysuccess.8 Since market participants share their insight as exclusive. Organizations wanting to take advantage of Collec-immediately quantifiable values, the organization can continu- tive Intelligence are not committed to using just one identify trends, reflecting fluctuations as employees make In many cases, the most appropriate approach to solving thebuy or sell decisions on an ongoing basis. As James Surowiecki, business challenge may involve a combination of methods. Forwho popularized the concept in his 2004 book, The Wisdom of example, a Collective Intelligence initiative might start with anCrowds, states, “The anonymity of the markets and the fact that idea generation approach, such as a virtual discussion, tothey yield a relatively clear solution, while giving individuals an highlight potential opportunities. Then it might use a predic-unmistakable incentive to uncover and act on good informa- tion market to identify opportunities likely to solve thetion means that their potential value is genuinely hard to problem and create the most impact, such as increasingoverestimate.”9 revenue or improving customer satisfaction. Getting players on the field – targeting and motivating participantsForecasting financial outcomes at a Consumer Products Across the techniques we investigated, one common theme wascompany the need to carefully identify the individuals or groups whoseA Consumer Products company we interviewed used knowledge and expertise constitute the “collective” in Collec-prediction markets to supplement its overall financialforecasts. The company found its forecasts to be tive Intelligence and, once identified, how to provide the rightinconsistent. It looked for ways to innovate forecasting motivations for them to participate.while still respecting the existing, formal process, as wellas cultural and securities compliance concerns. Sourcing the crowdTo explore how prediction markets could support its While each target population will differ based on the businessforecasting, the company partnered with solution provider problems to be solved, a number of important concepts wereCrowdcast to create a prediction market that focuses on highlighted by our study participants. Each of the Collectivekey areas of the financial forecasts. The company invited Intelligence methods requires a minimum number of activethe extended team of those involved in the forecasting, participants to generate sufficient valuable insights. Forapproximately 50 people, to participate in the market. example, in communities of practice, our experience suggestsThe company’s core financial analyst team compared that at least 20 to 30 people are necessary to have enoughresults from the prediction market with forecast numbers interactions to maintain the group engagement; for ideafrom its existing approach, which helped uncover specificareas of discrepancy for discussion and focus.10 generation and ideation events, this number may stretch into hundreds, if not thousands, of individuals. Ultimately, the appropriate number of individuals to be targeted will be based on three important factors, as shown in Figure 2:
  11. 11. IBM Global Business Services 9 Knowledge: Is there a sufficient pool of knowledgeable individuals to address the problem? Familiarity and contextual s Op to r en knowledge of the subject being explored may be required to up isr pa have an informed opinion or perspective. Without that D perspective, participation may represent mere speculation. rt / n rs ic tio iso ipa Diversity: Is there enough diversity in the participants so that A dv up nts a problem is explored from a variety of perspectives and not Di r Dis dominated by a single point of view or bias? For example, if vers only the project team was invited to participate in a prediction Business ity market on the likelihood of meeting project timelines, the challenge market would only reflect what is already in the project plan and could miss extenuating circumstances. Disruption: Are there individuals able to provide a disruptive Es St ak M ge perspective that can lead to breakthrough thinking? Disrup- /S Knowled eh ol tors are individuals who are willing to challenge assumptions am de te rs and the status quo with independent thought and are often ore C forward thinkers. Even with a sufficient amount of diversity, the need for individuals who can mitigate groupthink or herd mentality by going “against the grain” can drive a deeper, Source: IBM Institute for Business Value. more complete solution to Collective Intelligence problems.Figure 2: Three important factors dictate the size of the Collective Motivating for participation and engagementIntelligence target participant group: knowledge, diversity anddisruption. Following identification of potential participant populations, sponsors of Collective Intelligence initiatives need to focus on encouraging individuals to share their insights, expertise or“The number one thing that we strive for is take on specific tasks. From our discussions, motivatingpure diversity. Even though 61 percent of our participants requires clear articulation, not only of the value of their contributions to the organization, but also in the value toregistered network have Masters and Ph.D.s individual participants themselves. From our research, we seethe other 39 percent don’t, and they’re the importance of incorporating both extrinsic motivators,entrepreneurs, they’re policy guys, they’re such as money or performance measures, and intrinsic motivators, such as satisfaction, loyalty or personaleverybody. We want all of them.” enjoyment.11Dwayne Spradlin, CEO of InnoCentive
  12. 12. 10 Collective IntelligenceWe found that when Collective Intelligence activities involve Motivating participants can also become a challenge whenindividuals from outside the organization and require a working with internal participants such as employees andsignificant amount of participants’ time and effort, there is contractors. While small extrinsic rewards, such as gift cards oroften a need for significant monetary rewards. Many of the t-shirts, provide incentive for some individuals to participate incash rewards for broad-based contests involve tens of internal Collective Intelligence activities, we see a range ofthousands of dollars; in some cases, such as the Netflix such efforts that rely primarily on more intrinsic motivators.Challenge for developing an improved movie recommendation Many participants are motivated by the increased visibility ofalgorithm, the reward was US $1 million.12 Small tasks, their contributions to their peers, by the possibility of newhowever, may require only a few cents per transaction. This networking or career development opportunities, or throughtype of reward is a relatively simple extrinsic motivator with acknowledgement that their opinions are being heard bydirect linkage between the actions required and the reward. decision-makers. Individuals are increasingly aware that forward-thinking organizations value not only knowledgeableThis is not to say that intrinsic motivations do not apply to employees, but also those who share their knowledge andexternal Collective Intelligence initiatives. Competitive spirit, insight with others.peer reputation, a common purpose or work for the good ofothers can also be clear motivators for Collective Intelligence How the nature of the motivation is impacted by the level ofinitiatives involving partners, customers and others outside the complexity of the problem being solved – the effort required toorganization. As mentioned earlier, the protein folding game solve it and whether the participant is inside or outside the“Foldit” relies on a global group of individuals interested in organization – is detailed in Figure 3.citizen science and gaming. In her recent book, Reality isBroken, game designer Jane McGonigal explains that serious Trust is another key factor in motivating participants identifiedgames offer huge potential for Collective Intelligence because by many researchers and thought leaders. This trust can take aof the ways in which games motivate by providing exhilarating variety of forms, including:rewards, stimulating challenges and epic victories.13 Ms.McGonigal, Director of Games Research & Development at 1. Ideas suggested will be respected and the effort ofthe Institute for the Future and Creative Director for Social contributing will be valuedChocolate, also references other serious games, such as “World 2. Agreed upon sharing of intellectual property ownership willWithout Oil” and “Evoke,” which apply the energy and be adhered toemotional engagement of gaming to important societal issues. 3. Participant feedback will be acknowledged and acted on.
  13. 13. IBM Global Business Services 11 Kick-starting Collective Intelligence Motivating techniques initiatives – three keys to success Key study findings show that successful Collective Intelligence Complex/unstructured • Employee reputation • Significant financial and career initiatives address sources of resistance, integrate collective advancement intelligence into the work environment and act on what is discovered.Nature and complexity of • Sense of social good collection insight Address sources of resistance and risk • Peer reputation • Public reputation Senior executives who have heard of Collective Intelligence, or the related term “crowdsourcing,” are now anxious to explore it and understand how their organizations can benefit. Ironically, we see the most opposition in middle management layers, Simple/structured • Gift cards, t-shirts • Competitive spirit where resistance comes from those responsible for the work that Collective Intelligence initiatives can best enhance. In many cases, work can be accomplished with fewer resources Internal External and with shorter lifecycles. However, if initiatives do not Participant source deliver on this promise and fail to quickly realize return on Source: IBM Institute for Business Value. investment (ROI) and other benefits, they will lose both momentum and senior management support. Figure 3: Techniques for motivating participation. Whether a Collective Intelligence initiative is a one-time event Operational challenges or part of an ongoing transformation, such initiatives require a Study participants detailed a number of tactical objections and careful period of trust-building to ensure participants are concerns encountered by organizations looking to implement engaged and participating. This could include such activities as Collective Intelligence and provided recommendations for communications that reflect an open, collaborative culture of addressing them. They include: knowledge sharing, clear demonstrations to participants that their contributions are valued and will be acted upon and/or • We won’t get enough participation to make the results useful: the use of reputation or moderation techniques to immediately Participants stressed the importance of identifying and clearly recognize and discourage unwanted behaviors that could communicating a value proposition that reflects the business damage the level of trust. objectives and the value to participants. In addition, encourage creativity and participation by providing an open, supportive and positive environment. • Participants will only debate and not come up with actionable solutions: Ensure that the Collective Intelligence implementation supports action, either in terms of functionality, or through the help of facilitators that guide the conversation toward actionable goals.
  14. 14. 12 Collective Intelligence• Participants may not spend enough time or be involved long enough At both senior and middle management levels, loss of control, to really get to the heart of the matter: Facilitate the dialogue to is another significant barrier and spans three dimensions: engage or re-engage participants in the exchange by linking to emerging trends and popular ideas and by requesting specific • Performance and quality additional details or input. Model behavior and identify and • Decision making communicate a desired minimum amount of participation. • Awareness and communications.• Only experts can solve this problem for us: Involve experts in the design and setup of Collective Intelligence initiatives; By engaging teams in new ways and more frequently involving however, stress the importance and value that the crowd can people from outside the team or even the organization, bring in terms of diverse experience. managers are concerned they will lose management control• We might lose or have conflicts associated with intellectual property: over those doing the work and that work quality may suffer Seek agreement on pre-established terms of participation and through reduced performance management leverage. A recent be clear about intellectual ownership. Manage participant study by the IBM Institute for Business Value on Creative expectations of the outcomes. Leadership identified the importance of leaders who are open• Games can be played on personal time, I need employees to be to novel ways of accomplishing their goals and who can productive and get their work done: Explore the value of serious unleash the creative energy in their organizations by becoming games to your organization in engaging your employees in more participative, sharing their ideas and encouraging team new and different ways for learning and teamwork. members to do the same.14 This requires a shift in how managers lead their workers by using influence and creativeConflict with existing charters and loss of control motivation rather than the force of control to get work doneMost large organizations today have specific roles or teams effectively and to a sufficient standard of quality.responsible for ideation, innovation or offering enhancement.For an executive to say these groups need to change their Managers often feel Collective Intelligence methods reduceoperating models and shift the collection of ideas and enhance- their power to make decisions within their mandate. Collectivements “to the crowd” may be interpreted by some managers Intelligence methods often break down the silos and hierar-that they are not doing their jobs. These managers may infer chical structures existing within many organizations, leavingthey lack the skills and creativity to perform or their decisions managers in unfamiliar territory. Senior leadership needs toare biased or not trusted by senior management. work with managers to help them understand how Collective Intelligence can help improve decisions, forecast accuracy and risk mitigation, as well as how those benefits can improve managers’ individual performance.
  15. 15. IBM Global Business Services 13Study participants were also concerned about the loss of His group now supports business units, teams and corporatecontrol over awareness and communication around the management in running a variety of Collective Intelligenceoutcomes of a Collective Intelligence initiative. By engaging initiatives by helping them clearly articulate the problem,larger numbers of participants in solving business challenges, identify their audience and analyze the impact of theirCollective Intelligence can expose an organization to risks initiatives.15concerning who is aware of a particular prediction or proposedsolution and the impacts these can have on the organization’s Integrate Collective Intelligence into your workpublic reputation, product launch cycle or project success. environment Although Collective Intelligence initiatives have been ongoingIn all of the these situations, organizations seeking to integrate for a number of years, the efforts of many of our studyCollective Intelligence initiatives into their business should participants were in the early stages, with limited initialmanage the range of participants (e.g., internal/external, investment and support. While some were able to rely oncross-department, etc.) to fit the parameters of the challenge existing investments in collaborative platforms, others turnedand ensure participants are aware of their legal and moral to using third-party software-as-a-service platforms to runresponsibilities, including compliance with regulatory agencies, collaborative events or prediction markets. These serviceslocal law and code of conduct. allowed companies to quickly get an initiative off the ground without having to invest time and resources to integrate aImportance of new roles and responsibilities Collective Intelligence solution into their existing IT platform.In conjunction with a shift in leadership roles and styles,Collective Intelligence introduces the need for new roles and Depending on the technique involved, Collective Intelligenceresponsibilities as it is integrated into an organization’s culture initiatives seem to be on two paths: fixed-duration eventsand operations. These include: focused on a specific project and ongoing dialogues as part of a more holistic approach to integrate Collective Intelligence• Moderators to encourage participation and make connections into the business. As these initiatives and approaches become across multiple discussions or ideas more pervasive and persistent, this integration with corporate• A focal point and designated resources to coordinate strategies and systems will become more important to provide collection and analysis for further development context and visibility to the initiatives. Both Collective• A sponsor and champion to drive and execute the desired Intelligence vendors and corporate application providers are transformation. evolving their offerings to allow this system-level integration. The evolution of Collective Intelligence techniques, solutionsFor example, in communities of practice, the roles of and platforms will be closely watched, as they hold greatcommunity champion and moderator become key to facili- potential to accelerate innovation and competitive advantage.tating knowledge exchange and encouraging participation.Several organizations are also creating centers of expertise toassist in the use and adoption of Collective Intelligencemethods. For example, in our interview with Trent Tilbury,Group Lead for Applied Innovation and Sustainability,Finance, for Westjet, a major Canadian airline, he describeshow his group has become a hub for Collective Intelligence.
  16. 16. 14 Collective IntelligenceAct on what you discover Getting startedFor many organizations, the virtual suggestion box concept (an Collective Intelligence is a powerful resource for creatingearly attempt to harness Collective Intelligence) has been top-line growth, driving efficiency, improving quality andunsuccessful because of a significant disconnect between the excellence, and building a better employee climate. Organiza-innovative ideas submitted and corporate strategy. Perhaps one tions considering adding Collective Intelligence as a businessof the most important components of Collective Intelligence capability need to ask themselves the following questions:efforts is the need to provide feedback to participants, both onactions taken and on the value of individual contributions. • What are our strategic business objectives, and what types of insight can help us compete or differentiate ourselves in theIn idea generation efforts, the organization needs to make sure market?participants are aware of the most important results of the • Considering the audiences we may want to involve in aCollective Intelligence effort and how it would use the ideas to Collective Intelligence project, how can we motivate them todrive improvements. Similarly, for prediction markets, organi- share their insights with the organization?zations need to inform individuals of the relevance and • How do we capture knowledge and connect individuals inaccuracy of their predictions and provide clear understanding new and cost-effective ways?of how the organization uses these predictions to improve • What technology tools do we need to support this capability,business decisions. Without this continuous learning effort, our and who is best positioned to help us take advantage of thesestudy participants felt that individuals would not only miss out tools?on opportunities to improve their contribution, but would alsobe more reluctant to participate in future efforts. Regardless of the approach taken to infusing Collective Intelligence into the fabric of an organization, the key premiseThe potential integration of Collective Intelligence extends is that it enables organizations to take advantage of thebeyond the technical and cultural realms. Much like the potential of their ecosystem’s intellectual capital to dynamicallyanalytics required to structure the associated recognition, address business challenges. As Tom Malone, Robertrewards and reputation systems, the underlying social data Laubacher, and Chrysanthos Dellarocas from the MIT Centeritself presents organizations and their constituents with a rich for Collective Intelligence conclude in a 2009 article, “Therepository of valuable, contextual information. This data can be early examples of Web enabled Collective Intelligence are notfurther analyzed to enhance expertise location and knowledge the end of the story, but just the beginning. As computing anddiscovery, thus expediting customer support, self-service or the communication capabilities continue to improve, there will bedynamic formation of project teams. It can also augment a myriad of other examples like these in coming decades.”16workforce analytics and talent management programs.Tracking and recognizing these new performance measures As organizations acknowledge and are more willing to leveragewill acknowledge individuals’ contribution and help organiza- the intelligence of their employees, customers and businesstions optimize their resources. partners, Collective Intelligence will become an increasingly important mechanism to engage these networks to identify new and valuable opportunities, solve challenging problems and rapidly implement exciting innovations.
  17. 17. IBM Global Business Services 15To learn more about this IBM Institute for Business Value David Ransom is IBM’s Global Business Services lead instudy, please contact us at For a full catalog Canada for Social Business, Knowledge Management andof our research, visit: Collaboration. He has nearly 15 years of experience organizations improve employee effectiveness through collaboration, knowledge sharing and informal learning. MoreBe among the first to receive the latest insights from the IBM recently David has focused on the adoption and use ofInstitute for Business Value. Subscribe to IdeaWatch, our advanced social networking and collaborative technologies andmonthly e-newsletter featuring executive reports that offer portals in a variety of sectors including Government, Financialstrategic insights and recommendations based on IBV Services and Telecommunications. He can be reached atresearch: Rawn Shah is a Social Business Strategist for IBM Collabora- tion Solutions with a focus on developing Social CRM and Social Selling practices. He is the author of seven books, hisAuthors latest being Social Networking for Business (Pearson/WhartonEric Lesser is the Research Director and North American School Publishing, 2010) with a detailed focus on modelingLeader of the IBM Institute for Business Value, where he how to organize work through social computing and Collectiveoversees the fact-based research IBM undertakes to develop its Intelligence methods. He also writes the Connected Businessthought leadership. Previously, he led IBM Global Business blog for Forbes (, focusingServices’ human capital management research and thought on the business impact of social technologies and the changingleadership. His research and consulting has focused on a nature of how organizations do work. He can be reached atvariety of issues, including workforce and talent management, management, collaboration and social networkingand the changing role of the HR organization. He can becontacted at Pulver is a solutions architect and technologist in IBM’sIndustry Solutions Lab at the Watson Research Center in NewYork. In this role, he consults with C-suite executives on howcurrent and emerging technologies in analytics and socialbusiness can help them address complex business challenges.Bob has almost 17 years of varied business and technicalexperience including large-scale supply chain, CRM and ERPprocess transformation projects, and has been deeply involvedin IBM’s internal innovation management and CollectiveIntelligence initiatives. He can be reached at
  18. 18. 16 Collective IntelligenceExecutive Sponsors: Notes and sourcesDenis Brousseau, Vice President, Global Business Services, 1 IBM Institute for Business Value interview with TheGlobal Organization and People Leader Economist.Kristen Lauria, Vice President, Social Business Marketing, IBM 2 Kielstra, Paul, “Networks for thinking: Developing ideasCollaboration Solutions and forming opinions in the digital age,” A report from the Economist Intelligence Unit, 2011.Contributors: 3 “Design a Coach Tote” Brickfish. http://www.brickfish.Nick DeFilippis, Social Business Marketing Strategy, IBM com/fashion/Coach?tab=overview, as accessed October 25,Collaboration Solutions 2011 “On Our -Radar: -Design a -Coach -Tote -Contest”.Scott Neuman, Director, Social Business Marketing, IBM Fabsugar Solutions Coach-Tote-Contest-1766945, Accessed October 25, 2011- 1766945Daniel Roddy, Associate Partner, IBM Institute for BusinessValue 4 Trees, Lauren. “Building the Knowledge Management Program at El Paso Exploration & Production.” APQC.Sai Wing Ho, IBM Sales and Distribution 2011.David Millen, Research Scientist, IBM Research 5 Interview with Panos Ipeirotis, Associate Professor,Daniel Gruen, Research Scientist and Manager, IBM Research Information, Operations, and Management Sciences, SternJoan DiMicco, Research Scientist and Manager, IBM Research School of Business, New York University. September 30, 2011; Background information from: “Magnum PhotosThe right partner for a changing world Asking for Volunteers to Help Tag Their Online Archive.”At IBM, we collaborate with our clients, bringing together Tim Barribeau, NYU; and insight, advanced research and technology to give index.html. Accessed on October 25, 2011.them a distinct advantage in today’s rapidly changing environ-ment. Through our integrated approach to business design andexecution, we help turn strategies into action. And withexpertise in 17 industries and global capabilities that span 170countries, we can help clients anticipate change and profit fromnew opportunities.
  19. 19. IBM Global Business Services 176 IBM Institute for Business Value analyis based on IBM 12 “Netflix Price Rules.” Netflix. employee help desk interaction. rules Accessed on October 25, 2011.7 Moore, Elizabeth Armstrong. “Foldit game leads to AIDs 13 McGonigal, Jane. Reality is Broken. The Penguin Press HC. research breakthrough.” cnet. September 19, 2011. http:// January 20, 2011. 14 Lombardo, Barbara J. and Daniel John Roddy. “Cultivating leads-to-aids-research-breakthrough/; Official Publication: organizational creativity in an age of complexity: A Nature Structural & Molecular Biology, 2011, doi:10.1038/ companion study to the IBM 2010 Global Chief Human nsmb.2119, Published online: 18 September 2011; Boyle, Resource Officer Study.” IBM Institute for Business Value. Alan. “Game solve molecular puzzle that baffled July 2011. scientists.”Cosmic Blog. MSNBC. http://cosmiclog.msnbc. thoughtleadership/ibv-organizational-creativity.html molecular-puzzle-that-baffled-scientists, Accessed on 15 Interview with Trent Tilbury, Group Lead for Applied October 25, 2011; AFP. “Online games crack AIDS enzyme Innovation and Sustainability at Westjet, September 15, puzzle,” Yahoo Games. 2011. plugged-in/online-gamers-crack-aids-enzyme- 16 Malone, Thomas W., Robert Laubacher and Chrysanthos puzzle-161920724.html, Accessed on October 25, 2011; Dellarocas.“Harnessing Crowds: Mapping the Genome of Hickey, Hannah. “Gaming for a cure: Computer gamers Collective Intelligence.” MIT Center for Collective tackle protein folding”. EurekAlert! August 4, 2010. http:// Intelligence. February 2009. tions/CCIwp2009-01.pdf php Accessed October 25, 2011.8 Surowiecki, James. “Crowdsourcing The Crystal Ball.” Forbes. October 15, 2007. http://www.forbes. com/2007/10/13/james-surowiecki-prediction-tech- future07-cx_js_1015wisdom.html. Accessed October 26, 2011.9 Surowiecki, James. The Wisdom of the Crowd. Doubleday. May 25, 2004. p. 222.10 Interview with Collective Intelligence study participant, Consumer Products company.11 Gardener, Robert C. and Wallace E. Lambert. Attitudes and Motivation in Second Language Learning. Newbury House Publishers, Inc. 1972.; Boudreau, K. and K. Lakhani. “How to Manage Outside Innovation.” MIT Sloan Management Review. 2009. the-magazine/2009-summer/50413/how-to-manage- outside-innovation/
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