MIT Sloan Management Review Article on Developing Innovative Solutions Through Internal Crowdsourcing

As organizations look for better solutions to their everyday problems, many are encouraging their employees to use their experiences to develop new ideas and play a more active role in the innovation process. Whether the issue involves improving hiring practices, deciding which new products or services to offer, or creating better forecasts, companies including AT&T Inc., Google Inc., and Deutsche Telekom AG have turned to what’s known as internal crowdsourcing.1

Although external crowdsourcing, which involves soliciting ideas from consumers, suppliers, and anyone else who wants to participate, has been widely studied,2 internal crowdsourcing, which seeks to channel the ideas and expertise of the company’s own employees, is less well-understood. It allows employees to interact dynamically with coworkers in other locations, propose new ideas, and suggest new directions to management. Because many large companies have pockets of expertise and knowledge scattered across different locations, we have found that harnessing the cognitive diversity within organizations can open up rich new sources of innovation. Internal crowdsourcing is a particularly effective way for companies to engage younger employees and people working on the front lines.

About the Author

Arvind Malhotra is the H. Allen Andrew Professor of Entrepreneurial Education and professor of strategy and entrepreneurship at the University of North Carolina at Chapel Hill’s Kenan-Flagler Business School. Ann Majchrzak is the USC Associates Chair in Business Administration and a professor of data sciences and operations at the University of Southern California’s Marshall School of Business, in Los Angeles. Lâle Kesebi is the chief communications officer and head of strategic engagement at Li & Fung Ltd. Sean Looram is executive vice president at Li & Fung.

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