Crowdsourcing vs. Open Innovation: What’s the Difference?

What’s the difference between crowdsourcing and open innovation? This is a more complex question than you might expect. Here’s a deeper look at how these two concepts differ.

Crowdsourcing Vs. Open Innovation

The key difference between these two approaches is the audience. With open innovation, you might reach out to your entire company. Sometimes friendly rivals in the same industry, share ideas and get perspective on something. Crowdsourcing is when you open it up to the public, usually starting with your customer base, to get ideas or to perform tasks. Both can be incredibly powerful, but which is right for which situation?

Who Are The Stakeholders?

Start with who has the most skin in the game. For example, some ideas, like internal process changes, need to be a matter of open innovation. Because they can touch many different departments. If, for example, you’re changing how you manufacture something, it’s not just the design team who should weigh in. But the departments handling the nitty-gritty of making things, shipping them, and finding parts.

If you’re consumer-facing, and one of the key stakeholders is your consumers, then crowdsourcing is a better option. You’re likely getting ideas and comments from your customers anyway, through email, calls, and client communications. By engaging with their input and asking for more, your customers know you’re listening, and that’s crucial to your company’s success.

An idea can come from anywhere.

What’s The Challenge?

Another factor to consider is the challenge you’re trying to overcome. Crowdsourcing takes work when the challenge is abstract or hard to explain outside your industry. So open innovation might make more sense in that situation. For example, it’s difficult to make international shipping problems or ergonomics fascinating to the wider public, as a rule. Although the right explanation can go a long way.

If it’s a challenge with a “hook,” some sort of need that catches attention. Or one where your customers will have to regularly deal with the answer you come up with. It’s worth involving outside parties to see what they think. It can be as simple as asking “So, what would you like to see with the next release”? or asking your customers how they use your products. Sometimes you find surprising answers that you hadn’t considered or ancillary markets you want to bring forward.

How Will The Solution Be Used?

Another point is to consider where your ultimate implementation will wind up. That both guides you to other stakeholders in the process and also helps determine from whom you most need the input. Just like you’d never take a product to market without at least a little testing, you need to consider how you’re going to use the end result. If it’s got an impact on others, it’s worth getting their perspective.

Finally, remember that this isn’t an either/or proposition. Some ideas start out with open innovation, and over time it becomes clear that crowdsourcing needs to be used to develop at least one aspect of them. And sometimes crowdsourcing is great for creating the raw idea, but then it needs to be shaped and refined by open innovation. As long as you keep the lines of communication open, and identify who the stakeholders are, you’ll be able to deliver great ideas. To get started, get a demo.