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Can you crowdsource strategy?

09.16.2013
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Many aspects of professional life have been crowdsourced over the past decade.  From research and development at places like Innocentive to software development at the likes of Top Coder.  One area that has remained largely absent from this field however has been that of business strategy.

Is strategy something that can be a collaborative endeavour?  Is it so important to an organisations success that outside influence cannot be sought?  Most evidence would suggest yes, but there are a few outliers that suggest otherwise.

Before we explore more though, what are the benefits of opening up strategy to a wider audience?  The most obvious is that you get a much wider range of input into the whole process.  Being able to call upon varied experience is almost certain to make any strategy better, especially in a complex world that often overwhelms the capabilities of those at board level.

It has also been shown however that opening up the strategic process works wonders in terms of securing buy-in.  Research from Insead earlier this year highlighted this fact, revealing that the most effective way to disseminate strategy is to involve people in its formation.

A prime example of this in action is the innovative IT company HCL.  They felt that their business planning process had grown far too slow and laborious, so decided to open the whole process up.  They decided to make the business plan from each business unit abide by three distinct principles:

  1. make peer review a core component of strategy evaluation
  2. create radical transparency across units
  3. open up the conversation to large cross-sections of the company

Traditionally business planning at HCL had been the preserve of the most senior executives at the company.  They opened that all up via an online platform called My Blueprint.  The new platform saw each of the 300 HCL managers posting their business plans online, together with a commentary of them.  Each of the 8,000 HCL employees was then free to comment and provide feedback on the plans, an opportunity that was not passed up.

Not only did this process ensure a high amount of feedback and input into the planning process, it also encouraged managers to ensure the plans they submitted were top notch.  The degree of public scrutiny they’d be exposed to acted as a strong motivation for producing high quality work.

Strategic idea markets

Other innovative approaches to the planning process include the idea market created by software company Rite Solutions.  Employees launch their ideas internally almost like an IPO, with a prospectus outlining their idea and how it will create value for the company.  Employees are given $10,000 in play money to invest on the internal idea market, backing projects they think will work, thus sending the value of stock in each idea (set at $10 upon launch) up or down.  The money naturally flows to the projects that are attracting support internally.  As soon as the idea hits the top 20, it receives seed money from the company to bring it to market, with those who supported the idea given a reward in the way of share options or a cash bonus.

Middle managers as curators

Several studies have shown the important role middle managers have in the dissemination and implementation of strategy, and there is a risk that by opening up the planning process they will feel left out of the loop.  A nice way of avoiding this issue is to fully involve them in the process, by asking them to lead and curate the discussions as they happen.  By acting as community managers they will play a strong role in guiding discussions and ensuring they stay on the right track.

It takes courage to bring more people and ideas into strategic direction setting. Senior executives who launch such initiatives are essentially using their positional authority to distribute power. They’re also embracing the underlying principles—transparency, radical inclusion, egalitarianism, and peer review—of the Web-based social technologies that make it possible to open up direction setting.

It nevertheless marks a significant shift in the role of executives, from all knowing decision makers to curators of knowledge and talent within their organisations.  Their role will shift to providing just the right environment for the talent within their companies to thrive.

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