Those people you've seen on the beach this summer were not necessarily the strangers you thought they were. The same goes for the people camping next to you at the provincial park. In grocery stores, in movie theatres and in the lineups at the gas station, it's possible that we are surrounded by co-workers with whom we will never have to attend a staff meeting, who won't use up all the paper in the photocopier, and who won't show up drunk at the company Christmas party.

Instead, these hidden human resources will contribute their time, energy and talent to projects that help build businesses. The companies that use them, meanwhile, are not "hiring" in the traditional sense but opening up their business processes to a model that uses technology to create a broader pool of labour. No, I'm not talking about outsourcing, where core functions are handed off to another company, often in another country. I'm talking about allowing everyday people all over the world to participate in an organization according to their interests and schedules. This is a model that some have dubbed "crowdsourcing."

I was introduced to the crowdsourcing concept earlier this year by Patrick Lor, executive vice-president at iStock Photo. The Calgary-based firm sells stock photography submitted by talented amateurs as well as professionals for a fraction of the price -- in some cases, one dollar -- of traditional stock image companies. It can afford to do that because it sources its content from the crowd, and pays them royalties depending on how popular their images become. When Getty Images purchased iStock Photo in February for $50-million (U.S.), crowdsourcing suddenly seemed a lot more credible.

Cambrian House, also based in Calgary, has made crowdsourcing the backbone of its business. It has created an on-line salon of sorts where budding entrepreneurs throw out ideas for a software product, which is then evaluated by a community of other developers. If the crowd decides it's worth pursuing, those with the right expertise help bring it to fruition. Cambrian House markets and sells the results, and pays everyone involved royalty points. Much like shares in a company, these points would turn into cash based on the success of the product.

If this sounds like the high-tech incubators that tried to nurture Google-sized businesses during the dot-com bubble, Cambrian House chief executive officer Michael Sikorsky insists on a few key differences. Incubators tended to take a stake in the companies they formed and, once they were deemed ready, let them fend for themselves. Crowdsourcing requires companies to take a more hands-on role in the lifecycle of their products.

"For a lot of the incubators, the benefit seemed to be in having a shared legal team or a shared receptionist," Mr. Sikorsky says. "We don't spin off companies, but just one type of idea. . . . We have very low emotional feeling towards our products. All the emotions are towards the business."

Crowdsourcing builds on the premise of open source software, where anyone can make their mark on the final application, but it proposes an economic reward system that could be applied to a variety of business scenarios. Think about YouTube, which allows users to send in video clips from TV, films or their own video cameras for posting on a single site. If it paid royalties for original content, it could become the world's first user-driven on-line broadcast network. Zazzle.com, which takes designs from users and puts them on mugs, shirts and posters, shows what happens when crowdsourcing meets merchandising. Threadless.com does the same thing with the apparel industry, creating shirts based on submissions from an army of freelance designers.

"When most people went to monetize open source, their thinking went back to 1950s businesses," Mr. Sikorsky says. "They were looking how to control everything. It's how we're executing that's innovative."

Crowdsourcing could not only have an impact on how products are created but how they evolve. New releases of software, for instance, may come out faster if the crowd working on it comes up with new features, speeding up the conventional R&D process. Businesses may become less reliant on focus groups or other forms of traditional market research because those using the products are also involved in their conception.

Although it could prove attractive in Canada, where skills are scarce and entrepreneurialism through small business is thriving, crowdsourcing is not likely to be pursued in isolation by many firms. Just as companies that outsource everything face management nightmares and companies that do everything internally grapple with high costs, this is a model to be used in moderation. It is a tool to be added to the mix, and one worth exploring, if only as a test of corporate culture. If your company can't make any room for crowdsourcing, what does that say about its relationship with customers, suppliers and partners?

The challenge for crowdsourcers is not only how well they manage the sales and marketing side of their business but how they differentiate themselves from competitors. If crowdsourcing becomes commonplace, how will they be sure to attract the best talent? Mr. Sikorsky says Cambrian House is planning on creating a community within the on-line game Second Life to connect with its audience of software developers, but for firms in other industries it might not be so easy.

To be a crowdsourcer, in the long term, is to be an impresario of creativity, nurturing an environment that invites ingenuity on a continuing basis. That's a tall order for a lot of companies, where dealing with the productivity and morale of salaried employees is difficult enough.

The real issue may not be whether we listen to the wisdom of crowds, but how we listen to them, and what we do about the things we hear. That's where the need to be innovative really begins. The last thing crowdsourcing should encourage is a herd mentality.

Source: theglobeandmail.com