At the beginning of the twentieth century, research and development was a highly guarded and elite practice. Imagine laboratories peopled by white-coated scientists who had passwords to protect the doors to their office. This kind of research and innovation was highly successful for a long time – it gave us electrocardiography, DNA fingerprinting, and many Apple products.

But with the advent of the internet and online collaboration, things like intellectual property, organizational boundaries, and the identification of new markets became a much more public and shared experience. The boundaries that once separated different disciplines, organizations (even competitors) began to dissolve and innovation opened up to become a much more collaborative process.

But how did this change come about? Why has crowdsourcing ideas, research, and talent from a global employee base become much more common even at the enterprise level?

Why did we move away from this closed model?

The boundaries that once separated different disciplines, organizations (even competitors) began to dissolve…

Henry Chesbrough (who popularized the term “open innovation”) posited that there were four main reasons why we moved away from closed innovation: “the increased mobility of skilled workers, the expansion of venture capital, external options for unused technologies, and the increased availability of high-capable outsourcing partners.”

Now, with a global workforce and the online tools that allow them to collaborate instantly, across language barriers from anywhere, engaging huge groups of employees in the innovation process is not only possible, it’s preferable to letting all the change happen behind closed doors with the folks in lab coats.

What is the value of employee-crowdsourced innovation?

Employee engagement programs that are focused on innovation have numerous benefits to the business, including:

  • Increased Net Income. One study showed that organizations with highly engaged employees achieve two times the annual net income than those organizations whose employees are less engaged. This is for a number of reasons, including improved productivity and customer satisfaction, but it’s also because many of the best new ideas that define the future of the business now come from employees no matter what their job description may be.
  • Decreased Turnover. Employee retention is an important aspect of a successful endeavor. The time and resources it takes to train and process new hires can be a drain on a business that does not commit to retaining those employees and seeing a return on those investments. If employees feel that they are a part of the changes that are happening in an organization, they are more likely to feel value and less likely to leave.
  • Improved Customer Sentiment. Employees are the life’s blood of almost every organization. If things are not running smoothly for employees – those setbacks often translate into setbacks for the end users. If employees are engaged, however, and that engagement results in new solutions and improved employee morale, that often leads to improved services for the customers, as well. Employee engagement programs that are digital, clear, fluid and fast please employees and that will lead to pleased customers.

    Optimized operational efficiency.
    Since almost 70% of innovation is focused on improving a business’s core offering, engaged employees can help streamline processes that are a drag on productivity.
  • And finally, even without the closed small groups of innovators, organizations that engaged employees found that they had an enhanced competitive advantage. Engaged employees see the value of sharing their ideas and then putting those ideas into action. Those ideas can offer value in a number of different areas: improved products or services, new programs, initiatives, or efficiencies, or even new organizational structures or markets.

How do you engage the next generation of employees?

But the workforce is changing at the same pace as the rest of business. By 2025, millennials will make up 75% of the workforce and top-line revenue growth will depend on the ideas of an engaged workforce. And Millennials are different than their predecessors. Engagement doesn’t mean that there’s an employee suggestion box and that everyone says they’re happy on the job. Employee engagement impacts programs, culture, and leadership. Specifically, employee crowdsourcing innovation programs must be digital, clear, fluid, and fast. But to learn more about how to achieve these qualities, we recommend that you read When Millennials Take Over: Preparing for the Ridiculously Optimistic Future of Business by Maddie Grant and Jamie Notter.

Fortunately, if you launch a free employee engagement program today, you automatically receive a free chapter from When Millennials Take Over. You can start impacting your bottom line and finding your competitive advantage today.

By Rob Hoehn

About the author

Rob Hoehn is the co-founder and CEO of IdeaScale: the largest open innovation software platform in the world. Hoehn launched crowdsourcing software as part of the open government initiative and IdeaScale’s robust portfolio now includes many other industry notables, such as EA Sports, NBC, NASA, Xerox and many others. Prior to IdeaScale, Hoehn was Vice President of Client Services at Survey Analytics.

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