Crowdsourcing - a portmanteau of crowd and outsourcing - has been around for over ten years. In this interview, Oliver Foitzik describes the conditions under which companies can utilize the potential of the crowd and how crowdworking has developed over the years. Together with Katja Heumader, he wrote the article "Potentials of digitization: Using the intelligence of the many in the company" in the current volume "Mastering transformation projects with the Enterprise Transformation Cycle" written.

TCI Editor's note: Read also Part 1 of this interview - Exploiting the potential of digitalization through cultural change - Interview with Oliver Foitzik.

Crowdsourcing: calling up skills "on demand"

Beate Greisel: What structural effects does crowdsourcing have in companies?

Oliver Foitzik: Crowdsourcing or crowdworking means that the company no longer has to have the right resource for every activity or specialized knowledge. Instead, these skills can be purchased and accessed "on demand". Companies thus have a global pool of workers at their disposal.

Another prerequisite for crowdsourcing was that the cost of technical equipment fell. Even amateurs could now buy professional photographic equipment, for example, and achieve corresponding results. This gave rise to the iStockphoto platform, which offered high-quality photographs at a significantly lower price, putting professional photographers under massive pressure.

BG: Crowdworking and crowdsourcing have been based on digital technologies for more than ten years. Under what conditions can these working methods be used profitably for companies?

OF: As just mentioned, crowdsourcing allows specialist knowledge to be purchased on demand. This is also necessary because the knowledge base in companies is increasing and more and more specialist areas are becoming differentiated. It is almost impossible to cover all of this in-house. What's more, certain expertise is often required for one project - but completely different knowledge is needed for the next. Crowdsourcing offers a flexible and scalable solution to this problem. Compared to permanently integrated employees, the cost reduction is 50 to 90 percent.

However, certain requirements must be met for crowdsourcing to be used successfully: The tasks must be set unambiguously, targets must be clear and tasks must be able to be broken down into micro-tasks. However, this does not mean that only mindless tasks can be implemented using crowdworking - as is the case with Amazon Mechanical Turk, for example. On platforms like InnoCentive companies can post problems that the crowd tries to solve. The companies only pay for the solution - between 10,000 and 100,000 US dollars. Many challenges have already been overcome in this way that companies' research departments had previously struggled with.

BG: But crowdsourcing is also often criticized. For what?

OF: Trade unions criticize the outsourcing of work to low-paid freelancers who are not subject to social insurance contributions. In addition to social criticism, activities that are carried out with the help of the crowd must not be too complex. They must not require the cooperation of several experts, but must be able to be carried out independently and largely without any queries.

Flash Organizations: more complex organization for more complex projects

BG: Is there a solution to the problems mentioned?

OF: In 2017, a team from the Stanford University the concept of Flash Organizations. In response to criticism of crowdsourcing, the Stanford professors developed a model that enables companies to implement even complex projects with an open outcome quickly and effectively. With the help of IT-supported selection processes, the establishment and staffing of such an organization can be greatly accelerated.

Flash Organizations are "Temporary company". They have a hierarchical structure, fixed roles and assigned competencies. The rule is simple: a more complex organization is also able to handle more complex tasks.

Unlike crowdsourcing, the desired outcome is not predefined in Flash Organizations, but the approach is agile. This means that Flash Organizations can also be used for creative processes, problem-solving and innovation. The organization itself can also be adapted to the work processes and tasks can be redefined as required. Ideally, the workers try out what could work ("sandboxing") and then turn to the upper levels of the hierarchy to implement the changes.

BG: Those were mainly the advantages for the companies and the problem solving. But what about the employees?

OF: Flash organizations also have clear advantages over crowdsourcing in terms of employee motivation and the perceived meaningfulness of the task: Since the tasks are more complex for the individual, the employees work together in teams and communicate with each other and know the overall goal of the project, the employees' identification with the project is significantly higher. They recognize their contribution to the overall task and are more motivated.

Flash Organizations also have longer time horizons. This allows teams to adapt to each other and work more effectively. Flash organizations also allow employees to plan their careers over the longer term, develop their skills and qualifications and have a stable income. For these reasons too, the flash organization model is generally viewed positively by trade unions.

Dear Mr. Foitzik, thank you very much for the interesting interview.

The interview with Oliver Foitzik was conducted by Beate Greisel for the TCI editorial team.

"Mastering transformation projects with the Enterprise Transformation Cycle" - published August 2020

The Transformation Consulting International has been supporting national and international transformation projects in companies for many years. Based on this extensive wealth of experience in practical implementation, the second volume, entitled "The Enterprise Transformation Cycle", has been published after the first. "Mastering transformation projects with the Enterprise Transformation Cycle: successfully planning, implementing and completing projects" published by the renowned Springer-Verlag. As a continuation of the first volume, this one takes into account further wishes and suggestions from readers and presents concrete transformation projects and action situations of TCI experts in their daily application of the ETC. The editors of this 500-page volume are Mario A. Pfannstiel and Peter F.-J. Steinhoff. You will find numerous theoretical and conceptual contributions as well as practical case studies on the "Enterprise Transformation Cycle".

Source cover image: © metamorworks | Adobe Stock