Innovation contests are becoming widespread as executives seek the next great innovation. Crowdsourcing has become a popular way to create a dynamic contest and uncover new ideas.
"Innovation contests are a specific application of the 'crowdsourcing' phenomenon," says Cheryl Druehl, assistant professor of information systems and operations management at George Mason's School of Business. "Internet enabled-platforms have enabled crowds of people and firms to come together and generate creative solutions to business problems. Given this decentralization of the problem-solving process, innovation contests can lower the search and R&D costs for businesses."
The word crowdsourcing was coined in 2005. It is a blended word from "crowd" and "outsourcing." Whereas outsourcing is the contracting out of a service by a particular business, crowdsourcing differentiates itself as work being done by an undefined public rather than a specific group. And often this public is from an online community, many times with the help of social media.
Anant Mishra, assistant professor of information systems and operations management at George Mason's School of Business, notes that, "the notion of innovation contests or crowdsourcing is not new. A frequently-cited historical example is the Longitude Prize contest that was held by the British Parliament in the early 18th century. Open to the general public with a prize of up to £20,000, the goal of the contest was to find a practical method for accurately determining the longitude position of a ship in transoceanic voyages. As another example, in 1795, Napoleon launched a contest with a prize of 12,000 francs for anyone who could invent a way of preserving food for his army."
While blind contest formats, where individuals submit their entry without any knowledge of other entries, are commonplace, unblind contests have been gaining traction in recent years. In an unblind format, contestant submissions and feedback are viewable by all contestants causing the information available to change throughout a contest.
Imagine if you could see the submissions of other applicants and the judges' feedback to these submissions? Would that change what you submitted and when you submitted? What if others could see your entry? Would you be concerned about idea theft?
"In an unblind format, contestants must weigh the cost of revealing their submissions against the benefits of learning and improvement of their submissions through emerging contest information. Contestants act strategically," says Druehl.
Druehl and Mishra, along with Jesse Bockstedt from the University of Arizona, have been researching the implications of unblind innovation contests to determine how a contestant's problem-solving behavior in these contests influences their chances of success.
The researchers analyzed problem-solving behavior among contestants in terms of how they make submissions to a contest, for example:
When does a contestant begin participation?
How many submissions does a contestant make?
How long does a contestant participate?
This study provides new evidence that the process of problem solving has significant implications for a contestant's success.
How to Win?
"We were particularly intrigued with the finding that contestants who started their participation in the contest earlier won more often," says Mishra. "We expected that winning contestants would more likely adopt a wait and watch policy and delay their participation in a contest to minimize their loss of intellectual property. Instead, we found that these concerns may be traded off in favor of greater engagement with the contest environment and early feedback on their own ideas."
The findings also emphasize the notion that more ideas may not necessarily always be better. The research team found that a quality-quantity tradeoff exists in such contests. Submitting more ideas provides contestants with an opportunity to revise and improve upon their earlier submissions, but only to a certain point.
Druehl notes that "having a lot of competing creative ideas can make it difficult for a contestant to distinguish between more and less promising ideas and may represent a lack of focus and a diluted message being communicated through submissions."
The researchers go on to suggest several insights for effective design and management of online innovation contest platforms.
To encourage the highest quality submissions, contest holders and platform providers in unblind innovation contests may want to develop design guides and submission mechanisms that promote "successful" problem-solving behaviors, including recommending early submissions and staying active over a larger portion of the contest.
Mishra says, "Design choices related to information structure, such as the amount of transparency in submissions and feedback mechanisms, should be considered important parameters in the implementation of online innovation contest platforms."