Some Companies Are Playing to the ‘Crowd’

When the economic downturn forced Dassault Systèmes SolidWorks Corp., a Concord, Massachusetts-based software company, to reduce its budget in 2009, Jeff Ray, the CEO, made it a group decision.

He tried an online version of “crowd sourcing”—an approach to group decision-making that taps the collective intelligence of the staff rather than just the executive team. Using custom software, employees responded online with budget suggestions and commented on co-workers’ ideas.

The staff had two weeks to make cost-cutting suggestions, which were vetted by Dave Stott, the chief financial officer, who had final say on implementation. To participate, staff members had to select a screen name, but most people used their actual name, Stott says. Employees could choose to respond anonymously if they preferred; participation was voluntary.

About 300 of the 800 domestic and international employees proposed 100 cutbacks that included eliminating summer outings and holiday parties, cutting back on Web conferences and reducing business travel. The company saved $30 million, including $8 million by slashing business travel, and didn’t lay off a single employee. Not every staff idea was implemented, of course. For example, the company rejected a job-sharing suggestion.

Why use crowd sourcing? Stott says the executive team wanted the staff’s “ideas and buy-in and wanted to give them ownership of the problem.” Previously, the company had used crowd sourcing effectively to elicit customer feedback on new products. It created a dynamic atmosphere throughout the company where everyone “started thinking twice about spending and finding better ways to do things,” Stott says.

Crowd sourcing can boost productivity and raise morale because staff members feel involved in problem-solving, rather than passive recipients of executive decisions. “We involved everyone in the process because we’re all going through it,” Stott says. “It also reinforced our culture of transparency.”

Crowd sourcing can also prove to be efficient and speedy. The entire staff has long contributed projects at USAA, the San Antonio-based insurance and financial services company targeted at military personnel, but, in the past, collaboration took considerable time. With crowd sourcing, ideas can percolate within a day or two after a project or problem is posted online.

It took only five months this year for USAA to implement 44 ideas triggered by crowd sourcing, according to Mick Simonelli, who is assistant vice president at USAA. For example, one idea led to streamlining the mortgage process, reducing paperwork and increasing productivity.

USAA provides four criteria for crowd sourcing suggestions including increasing revenue, reducing costs, improving member benefits and making processes more efficient. Simonelli says crowd sourcing works best when the challenge presented is clearly defined and includes detailed direction.

What’s more, if management asks employees for problem-solving ideas, it needs to report back on them and act on some. “Anyone who does a good job at crowd sourcing responds to each and every suggestion,” says Stephen Shapiro, author of The Little Book of Big Innovation Ideas.

He also warns that employers should be alert to the risk that employees will submit inappropriate or confidential responses. At DS SolidWorks, for example, some staff conveyed confidential information, Stott says. In the future, he adds, the company will urge staff to be more discreet.

Workforce Management, November 2010, p. 6 — Subscribe Now!