Crowdsourcing & Open Innovation

This note outlines the structure and content of a seven-session module that is designed to introduce students to the fundamentals of innovating with the "crowd." The module has been taught in a second year elective course at the Harvard Business School on "Digital Innovation and Transformation" and is aimed at students that already have an understanding of how to structure an innovation process inside of a company. The module expands the students' innovation toolkit by exposing them to the theory and practice of extending the innovation process to external participants.

This chapter contrasts traditional, organization- centered models of innovation with more recent work on open innovation. These fundamentally different and inconsistent innovation logics are associated with contrasting organizational boundaries and organizational designs. We suggest that when critical tasks can be modularized and when problem- solving knowledge is widely distributed and available, open innovation complements traditional innovation logics. We induce these ideas from the literature and with extended examples from Apple, the National Aeronautics and Astronomical Agency (NASA) and LEGO. We suggest that task decomposition and problem- solving knowledge distribution are not deterministic but are strategic choices. If dynamic capabilities are associated with innovation streams, and if different innovation types are rooted in contrasting innovation logics, there are important implications for firm boundaries, design and identity.

The purpose of this article is to suggest a (preliminary) taxonomy and research agenda for the topic of “firms, crowds, and innovation” and to provide an introduction to the associated special issue. We specifically discuss how various crowd-related phenomena and practices—for example, crowdsourcing, crowdfunding, user innovation, and peer production—relate to theories of the firm, with particular attention on “sociality” in firms and markets. We first briefly review extant theories of the firm and then discuss three theoretical aspects of sociality related to crowds in the context of strategy, organizations, and innovation: (1) the functions of sociality (sociality as extension of rationality, sociality as sensing and signaling, sociality as matching and identity); (2) the forms of sociality (independent/aggregate and interacting/emergent forms of sociality); and (3) the failures of sociality (misattribution and misapplication). We conclude with an outline of future research directions and introduce the special issue papers and essays.

From the late 1990s to 2006/2007, Samsung Electronics moved from one of 170 TV manufacturers to gain dominant TV market share year over year from 2007-2013. As digital technologies increasingly converged in 2013-2014, the industry faced new questions: What was the future of TV? The case considers Samsung Electronics TV Group's product development processes, as the company's mobile and TV offerings increasingly converged and consumer demands and behavior pushed the historically clear boundaries of product, content, engagement and interaction.