The US unemployment rate has reached its lowest point in decades, and competition to attract top talent is at an all-time high, preoccupying the minds of many global CEOs. A recent McKinsey Global Institute study suggests that employers in North America and Europe will require 16-18 million more college-educated workers in 2020 than are going to be available.

At the same time, in a world of Amazons, Apples, and other disruptive technologies, consumers have become accustomed to exceptional experiences, making it harder than ever to truly wow them. As a result, developing new business models to better appeal to and serve customers is a top priority for CEOs around the world.

In this market, ambitious enterprises are thinking about how they can use the power of the crowd — insights from the people who know their businesses best — to beat the competition. The answer lies in bringing together crowds of employees, customers, and partners to ideate and drive innovation. This type of crowdsourced innovation can be a powerful thing. In fact, it can help businesses get ahead by producing engaged employees, bettering customer experiences, and driving cost savings that directly impact the bottom line.

Here is how crowdsourced innovation — the process of inspiring, collecting, and accelerating ideas from employees at scale — can lead to better employee engagement, improved customer experiences, and positive business impact.

Valuable Contributors Are More Engaged

With companies under significant pressure to attract, develop, and retain talent, employee engagement has become a growing priority. More and more organizations are turning to the innovation process to support this objective by addressing the key drivers of engagement.

Communicating company strategy and getting employees involved in the entire innovation process enables organizations to ask employees for their ideas on addressing key business challenges. When employees are empowered to make valuable contributions to the success of the organization, they feel more fulfilled, motivated, and engaged.

Companies can further encourage engagement by recognizing employees for their contributions through the crowdsourced innovation process. Simple acknowledgments and endorsements provide the social status, gratification, and feedback that motivate employees to continue engaging in the innovation process.

Get Customers in the Crowd for Better Results

More engaged employees are fundamentally more likely to be more committed to delivering exceptional customer experiences. This is critical in the digital era, where customers have greater flexibility and more options than ever before. Employees who engage in the crowdsourced innovation process are more invested in the direction of the business and, therefore, more committed to driving results through better customer service.

The crowdsourced innovation process yields better results for customers in more direct ways as well. A more diverse, extended crowd is better equipped to solve customer problems. An extended crowd comprising people beyond the usual team that would work on a specific project includes more people with varying insights based on their diverse experiences, backgrounds, and ways of working. This mix of perspectives can spark more creative ways of thinking, leading to more effective solutions to customers’ challenges.

Many companies are even involving customers in the innovation process, asking for their direct insights and ideas on how to overcome specific challenges. Bringing customers into the crowd produces more powerful results, and it improves the long-term client relationship by demonstrating that the company is listening.

The Crowd Builds Value for the Business

Put simply, better, more diverse ideas from a bigger crowd can have a significant impact on the bottom line. This could be a direct financial impact resulting from breakthrough ideas brought to market, or it could be indirect value through improved engagement, culture, and collaboration.

By harnessing the power of the crowd, an organization can make innovation a part of its identity, woven into every part of its business and ecosystem. To maximize the advantage gained from crowdsourced innovation, companies need to consider who is in their crowds. Sheer numbers aside, greater value is unlocked when organizations embrace diverse populations across the enterprise and beyond.

In a market in which employees and customers have more choices, businesses are wise to look both within themselves and their wider ecosystems to harness the power of the crowd and beat the competition.

Scott Raskin is CEO of Spigit.

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