A conversation with Steve Rader, founder and CEO of Crowd Resources Consulting

Throughout his experiences as a consultant and at NASA, Steve Rader focuses on the use of crowdsourcing to generate innovative ideas and unlock improvements. He believes that crowdsourcing innovation is one of the most powerful tools an organization can have. 

I’m always curious to learn how and why people become interested in innovation. Through chatting with Steve, I learned this happened for him in 2009 after reading Jeff Howe’s book Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business. This is when he really became interested in open innovation, and realized crowdsourcing was going to change everything. He joined various crowdsourcing platforms to learn about how they worked and why people were motivated to take part in them.

Ten years later, he founded Crowd Resources Consulting LLC, helping provide organizations the resources to leverage crowd-based expertise and solutions. He also serves as Deputy Manager of NASA’s Center of Excellence for Collaborative Innovation (CoECI), collaborating with crowdsourcing communities and using prize and challenge-based methods to create innovative solutions for NASA and the US government.

Steve also spent the first 11 years of his life in Zambia where his parents were missionaries – and continues to include international travel in his current life, speaking and lecturing at conferences, workshops, and universities around the world. 

I had the pleasure of speaking with Steve about what’s crucial in open innovation, and how crowdsourcing and crowd-based challenges are the most effective methods for generating novel ideas and solving problems. We also chat about some not so effective methods. Steve says the idea of the crowd and tapping into the “capacity of everyone” is how to discover massive improvements. Reading Jeff Howe’s book was that pivotal moment in his career:

“What I was seeing in these challenges and reading case studies was that’s exactly what Crowdsourcing was bringing to bear. It was discovering those really big improvements, those really big changes, finding the stuff in technology that’s happening and putting it to bear in meaningful ways.”

Steve Rader

There is no silver bullet

To Steve, innovation should always be measured by “the tangible value it brings to an organization.” He says that true innovation is made up of the 1% idea (or spark) and the 99% perspiration necessary to bring that idea to life. He thinks it’s important for organizations to measure their current performance, and then compare that to the gains brought by innovations to truly understand the value. There are also side benefits that innovation can bring, such as employee learning, employee upskilling, employee motivations, etc. he says. These should be tracked and recognized as well.

When I asked him what his innovation silver bullet is, he answered honestly. “I wish there was a silver bullet.”

He elaborated by explaining that the most important thing for any organization trying to make innovation happen is to learn about it and understand it first, before diving in.

“Innovation at its core is about people and if you want their innovative ideas and contributions, you have to be very careful. Most organizational cultures have little patience for ‘out of the box’ thinking and people are used to their ideas being slammed.  As a result, when asking for people’s ideas, you are asking them to be vulnerable.”

As an organization, taking time to understand those dynamics will truly pay off with regards to learning how to tap into internal innovation possibilities. “On the open innovation side, you have to learn about how crowdsourcing really works if you want to tap into the global innovation capacity of crowds. That means learning about curated crowds, platforms, incentives, and much more. Crowdsourcing innovation is one of the most powerful tools an organization can have, but using it without understanding will usually not get you the good results.”

The Combinatory Effect and Open Innovation

A phenomenon Steve calls “the combinatory effect” is crucial in open innovation. It’s the idea that something average or steady-state for one group, team, or industry, could be transformative to another. The idea that technologies can be applied across multiple industries, meaning each industry is innovating in a different way. He uses the example of taking drones or machine learning or Blockchain and combining that with other technology to come up with something unique.

It’s naturally going to be difficult for organizations and industries to recognize that a specific technology could actually be valuable to them, because this is already occurring across many different industries, and people within their own silos would have no idea it even exists. The opportunity here lies within sourcing people that can identify overlaps in technical areas, Steve says. For example, Industry A comes up with a new way to use machine learning and robotics together, and then someone identifies this would actually also be useful to Industry B if the context is shifted slightly to apply to them. Suddenly, a 3X or 5X performance enhancement is possible.

This idea can be applied on a smaller scale too. It doesn’t have to be applied cross-industry, but could also be within an organization. Let’s take the idea of open innovation, which Steve defines as going outside of a traditional model. A version of open innovation could be going outside of your team and sourcing ideas from other areas of a company. This is a way to break down organizational silos.

He referenced some examples from his role at NASA: “NASA has an internal crowdsourcing platform called NASA@WORK – it’s 26 thousand NASA employees where we’ll post a challenge and try to find out what the NASA hive has to offer. And it’s really great for breaking down silos and people will give ideas. Mainly, it goes to what exists already. They are mainly telling you what they already know and you just didn’t know that was out there. But the open model works for all of that. It’s going beyond the traditional sources. And the bigger you make your open, the better.”

Steve speaks at NASA.

Other companies utilize versions of this method as well – 3M’s Innovation Center puts whiteboards outside the bathroom, so that scientists working on different projects with different expertise have an opportunity to discuss, collaborate, and generate great ideas together.

This is why Steve finds crowdsourcing so valuable – a direct result of this process is a combination of disciplines, ideas, technology and skill sets participating that can’t be found anywhere else. And a result of that combination can lead to massive transformation, positive improvement and problem solving.

No Suggestion Boxes

The combinatory effect and crowdsourcing is not to be confused with the suggestion box, which is something Steve says is a well-intentioned idea but not the best way to access innovative ideas from an organization. Internal crowdsourcing platforms used as a suggestion box is a way many organizations gather anonymous feedback, ideas, and requests.

Steve explains some of the main drawbacks to this method:

  • The people running the suggestion box are usually part of HR and don’t have the technical expertise or background to address the feedback directly.
  • More technical experts (IT, engineering, etc.) are then often looped in to evaluate as the subject matter experts and as a result, their valuable time is now no longer spent on important projects they were working on, but rather on examining the suggestion box ideas.
  • Many of the people that put in suggestions don’t own the problem or fully understand the problem, leading them to have solutions that potentially neglect nuances of what the experts would see. The experts then become frustrated because they’re likely looking at ideas that might not work, or the original person doesn’t fully understand the technicalities behind the problem.
  • Then, more and more people are brought in (and higher up people), creating a snowball effect of managers getting upset because now all these people are spending time looking at the suggestion box instead of the work that makes the company money.
  • Eventually, this leads to company-wide unnecessary frustration because innovation was promised as a result of the suggestion box, but the main result to leadership looks like the process generated a bunch of ideas that won’t work (often overshadowing the handful of ideas that might actually add value).
  • The rest of the company also feels frustration, since they were told to come up with ideas and suggestions, but nothing was done with them.

One way to help mitigate these frustrations, according to Steve, is to only do specific challenges and only ask specific questions.

 “When we do it, the person that’s asking the question, the challenge owner, has to actually be able to implement the solution. And if they can’t do it all themselves, and they have to go to the IT department to help them, [then that IT] person needs to be a stakeholder as well up front. Don’t go in after with somebody because you won’t have all the constraints. Doing a little bit of problem analysis upfront always helps and makes sure it’s not too big of a problem. What we really want the model to do, and what’s been successful, is we want to tap into the knowledge that’s really already there.”

Frame-breaking to promote innovative thinking

Another method Steve utilizes is “frame-breaking” – an idea to help promote out of the box thinking. Steve first encountered this method through a professor at Rice University who was doing innovation consulting. “It is basically like problem analysis…if you really want innovation, you need to be able to start understanding what are all your assumptions [are] and what if you assume those go away…maybe they’re more easily toppled than you think, or maybe by not thinking about if I’m not constrained in that way or what if I don’t have that holding me back, what could I do? And then that idea could potentially unlock something that is feasible.”

One other idea Steve referenced from trainings is to ask people to take some time and brainstorm ideas about what would make the problem worse. Then ask them to go through their list and circle all the things they are currently doing. “And inevitably, people are doing like 10 to 15% of their lists. Easy wins, just stop doing the things that make your problem worse.

It’s the curse of knowledge. Sometimes what we know is the very thing that prevents us from seeing the alternative.

Utilizing micro-purchase challenges 

Something else unique that came up in our discussion that was the use of “micro-purchase” challenges, another form of crowdsourcing. Steve “prototyped” this as a method of executing open innovation challenges on Freelancer, at lower cost compared to standard challenges.

This idea for micro-purchase challenges came about through a big contract where most of the challenges were ~$50K. When one online community didn’t make the deadline for the contract, Steve jokingly said “The only way I could actually do business with you is if I could pay for it on a government credit card, which our limit is $3,000.” And they said “Let’s do it.” It ended up being a huge success and the whole cost was $3K.

Research from Harvard says by setting a prize amount too high, it’s possible to scare off the people who truly have the innovative ideas and necessary contributions. When the prizes are dauntingly high, it will attract mainly proven experts or only those with the confidence to pull it off. Therefore, Steve set up a pilot on Freelancer, where freelancers can build their reputations on contests. He ran multiple challenges on the platform and found that the people were extremely passionate, driven, and wanted to help, without requiring huge prizes or massive amounts of spend. “It’s gotten us really to discover the world of freelance as well as what the Crowd can do and what the combination of those are.”

Steve pairs his passion for crowdsourcing, crowd-based challenges, and out of the box thinking to create and promote innovation. The power of the Crowd can help create massive improvements and is one of the most important tools an organization can tap into when done correctly. Steve founded Crowd Resources Consulting to help other organizations realize and unlock this power, which is something truly unique in today’s global economy.