What Is the Crowd and How Will It Invent the Future of Staffing?

In today’s digitized world, where real-time interactions take place between individuals anywhere in the world, the notion of “the crowd” seems to be a contemporary phenomenon. Entrepreneurs, scientists and researchers increasingly rely on the power of crowds to solve complex problems. We crowdfund endeavors through sources such as Kickstarter, LendingClub and Dealstruck. Charitable causes seek financial backing by appealing to the altruism of investors in the crowd, using sites like GoFundMe. Right now, we’re even crowdsourcing cures for diseases. The reality, however, is that we’re just scratching the surface of what crowd-centric solutions can offer society, particularly as the sharing economy grows. So the question on most people’s minds becomes, what is the crowd?

The Crowd in Modern History

The contemporary concept of the crowd, as most of us consider it, grew from the concept of “crowdsourcing.” Around 2005, Jeff Howe and Mark Robinson, editors at Wired Magazine, coined the term after observing how businesses were leveraging the Internet to outsource work projects to a disparate and generally unrelated groups of individuals. Howe and Robinson concluded that a new model was emerging, in which companies were “outsourcing to the crowd.” Days later, the pair published their influential article “The Rise of Crowdsourcing,” laying the groundwork for what has become an increasingly crucial aspect of problem-solving and innovation for companies of all sizes and markets.

“Simply defined,” Howe wrote, “crowdsourcing represents the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call. This can take the form of peer-production (when the job is performed collaboratively), but is also often undertaken by sole individuals. The crucial prerequisite is the use of the open call format and the large network of potential laborers.”

Three years later, scholars and academic researchers joined the ranks and began promoting the philosophy of this “online, distributed problem-solving and production model” around the world, each one incorporating an expanding set of methodologies, rules and best practices. Yet one principle has persisted: by broadcasting problems to the public through an open call for contributions, a diverse team of amateurs and experts will deliver fresh perspectives, novel approaches and unique means for resolving issues.

Since that time, our notion of the crowd has expanded and evolved. From the roots of crowdsourcing sprang the popularity of crowdfunding, which originated as an alternative approach to mainstream business financing for entrepreneurial startups. It offered a lean and direct path for raising capital without drafting business plans, poring over market research, developing prototypes and then shopping the idea to investors, banks or venture capital firms.

As Fundable explains, “Crowdfunding platforms, on the other hand, turns that funnel on-end. By giving you, the entrepreneur, a single platform to build, showcase, and share your pitch resources, this approach dramatically streamlines the traditional model.”

And yet, crowdfunding has evolved, too. It’s not just a resource for entrepreneurs and business people. From helping a struggling family to selling a television project, countless organizations and individuals have turned to crowdfunding. It has grown to include donations-based, rewards-based and equity based methods.

Today, innovators continue to explore the potential power of the crowd. We even have crowd scientists. During the new president’s inauguration on January 20, crowd experts like Steve Doig, a professor at Arizona State University, were enlisted to settle the dispute about whether attendance was above or below average. Just as data scientists rose from the popularity of analytics, crowd experts have emerged in response to this new demand. And the demand is real. The proof can be seen in exploring search trends.

If we look at activity for crowdfunding and crowdsourcing between 2004 and the present, we can chart the explosive growth. The blue line represents crowdsourcing and red represents crowdfunding. What’s interesting is the noticeable spike in crowdfunding over recent years.

However, I believe the real story is in another query: What is the crowd? When we add that criteria to the same search, which is represented by the yellow line, we discover a dramatic surge. More people want to know what the crowd is -- what it can do, what potential it has in the future.

The Lost Origins of the Crowd

Crowdfunding and crowdsourcing don’t tell the full story of the crowd. Although many of us think of crowd-based outsourcing as a relatively modern business development, championed by the IT sector, organizational and governmental leaders have been tapping into the limitless potential of the crowd for centuries.

• In 1714, struggling to determine a method for measuring a ship’s longitude, the British government publicly offered a financial prize to any person who could devise the best solution.
• The Oxford English Dictionary (OED), published in 1884, was the result of 800 volunteers who catalogued words to create the first fascicle of the now revered dictionary.
• The iconic Sydney Opera House in Australia? Those expressionist-inspired shells that dot the edge of Bennelong Point in Sydney Harbour sprung from the mind of Jorn Utzon, the architect selected as winner of the 1957 design competition for the performing arts center.
• Don’t forget the 2001 launch of Wikipedia. Like the OED, this free Internet encyclopedia evolved from the efforts of volunteer contributors, who continue to create and edit the content of the growing knowledge repository.

Without realizing it, we’ve been tapping into the power of the crowd throughout history -- we just never gave it a name until recently. Consider some more recent examples of how we achieve goals and pioneer advances through the crowd.

• Linux is essentially a crowdsourced operating system. It was assembled in 1991 under the model of free and open-source software development and distribution. It’s been ported to more computer hardware platforms than any other operating system. In fact, it’s probably running your smartphone, DVR, video game console, network router, smartwatch or mainframe server.
• Business blogs like Forbes, which relies on non-employee contributors to publish business articles, is a thriving example of crowdsourced content.
• In 2005, the world saw its first crowdsourced documentary, “The American Revolution.” The film examined the role of media in cultural, social and political changes between 1968 and 1974. It focused on an underground radio station in Boston. To generate content, the filmmakers asked the public for archival contributions.
• BlueServo is a free website that (believe it or not) crowdsources security surveillance of the U.S. border between Texas and Mexico.
• CitySourced provides a mobile app that allows citizens to identify and report non-emergency civic issues. Similarly, Waze is a GPS mapping application that peer reports traffic conditions live through the feedback of other motorists.

New Crowds Appear

The crowd continues to evolve. One of the most stunning examples involves a complex medical dilemma and a puzzle game called Foldit. For more than a decade, an international group of scientists struggled to crack the molecular structure of a protein-cutting enzyme from an AIDS-like virus. They eventually designed a game that allowed players to manipulate molecular structures in a virtual environment. The sets appeared similar to colorful Tinkertoy pieces. The crowd solved the puzzle in less than 10 days.

This month, scholars at MIT’s Sloan Neuroeconomics Lab and Princeton University showed that crowd-based insights can reduce errors and increase accuracy by impressive margins. On January 25, Phys.org covered a recently published academic journal that demonstrated how researchers are pioneering new ways to harvest the wisdom of the crowd. The study, based on theoretical and empirical work, relies on something called the “surprisingly popular” algorithm.

“The new method is simple,” the journal explains. “For a given question, people are asked two things: What they think the right answer is, and what they think popular opinion will be. The variation between the two aggregate responses indicates the correct answer.” And the process has produced quantifiable successes in every scenario tested.

• Compared to polls based on simple majority votes, the “surprisingly popular” algorithm reduced errors by 21.3 percent.
• Compared to basic confidence -weighted votes, the algorithm reduced errors by 24.2 percent.

“The ‘surprisingly popular’ principle is not simply derived from the wisdom of crowds. Instead, it uses the knowledge of a well-informed subgroup of people within the larger crowd as a diagnostically powerful tool that points to the right answer,” writes Peter Dizikes of Phys.org. To illustrate, one of the tests involved a simple yes or no question: Is Philadelphia the capital of Pennsylvania? The crowd was tasked with predicting the prevalence of “yes” votes.

A large number of crowd members mistakenly assumed that Philadelphia was the capital. They answered yes and anticipated that others would respond the same. However, other members of the crowd knew that Harrisburg was the right answer. Yet, they also realized that many people weren’t aware of this, so they too predicted a higher likelihood of “yes” votes. Through the crowd, which included members with specialized knowledge and an acute awareness of public perception, the results were more accurate than traditional weighted-score surveys.

So what’s the point? It’s that we haven’t yet delved deeply enough into everything that crowd-based platforms can offer.

Crowd Resources as Human Resources?

There exists untapped potential in the same crowds for staffing professionals in need of fresh labor sources, regardless of skill sets, categories, jobs or industries. We believe there are vast marketplaces of talent waiting to be courted and engaged through these unconventional channels.

Ask yourselves, what are the top talent acquisition priorities of 2017? According to a comprehensive survey conducted by Talemetry, they all involve finding better ways to attract top talent:

• 71% of organizations need more candidates.
• 54% need more recruitment marketing tools.
• 45% would consider replacing their ATS for better recruitment marketing capability.

So why not broaden these concepts, bolstered by the limitless availability of the crowd? Through a “people in the cloud” outsourcing model, we have at our disposal an effective means for seizing labor arbitrage opportunities without incurring the same infrastructure costs as traditional outsourcing initiatives.

Until recently, the idea of using the crowd as a staffing model has been limited to theories or exclusive reliance on social media recruiting campaigns. Even the young technology tools serve merely to facilitate a process; they don’t, however, support the full servicing and management of the talent. In short, they don’t provide a source of crowd control. A Crowdstaffing model curated by staffing providers can deliver all the benefits of crowdsourcing strategies while imposing controls that assure compliance, giving companies the comfort to realize the advantages of crowd-based solutions. This is the next iteration of the crowd, and it’s the model we are using to invent the future of staffing. If you’d like to learn more, we’d love to discuss the boundless possibilities.