The Collaborative Economy Enables Resiliency for Corporations

Bamboo Dream
Above Image: Bamboo is resilient by being both rigid in maintaining its structure, while also being flexible enough to bend during a variety of weather patterns.

Most of the coverage of the collaborative economy has focused on what it means for consumers (Airbnb, Lyft, Uber) but what does it mean to corporations?  This post will answer that question.  Companies that tap into the crowd for instant workers (oDesk or Taskrabbit for business), or to unlock their idle inventory to it into cash (Liquidspace, Shardesk), or to tap into the crowd for new services (Crowdspring, Uservoice), can benefit significantly from reduced costs, unlocking new business potential.

[Corporations that tap into the crowd benefit from new product offerings, unlocked idle inventory, and reduced risks]

Over the past few months, I’ve been focused on the Collaborative Economy, the next phase of social business that involves the sharing of goods and services.  In prior posts, I’ve discussed how it has impacted the luxury vertical, and even goods and products.  Now let’s explore how it impacts a corporation’s workforce, talent, and resources.  To describe the movement, which we call the Collaborative Economy, I define it as:  “An economic model that is characterized by shared ownership and access between corporations and the crowd.”

Here are five examples of how companies can tap the crowd in many business functions:

  1. A company can tap into an on-demand workforce using Taskrabbit for business, or oDesk for coding, office admin, writing, and pretty much any other service.
  2. A company can instant-lease their unused desks to travelers or other companies who need meeting and workspaces furnishings, using SharedeskLiquidspacePivotdesk and others.
  3. An executive who needs a quick, clean, place to work in New York can quickly access meeting rooms on demand at Breather room or access an Uber to get to a key meeting.
  4. Marketers who want to infuse consumer-created content that’s trusted and cheap can use Mass RelevanceLiveFyre, or About Echo to integrate social content into their digital marketing on demand .
  5. Research & Development teams can tap into the crowd to generate new ideas for products using UservoiceSalesforce Ideas, or listening to their communities in Communispace, Passenger or Vision Critical.

Four Impacts to Corporations as they join the Collaborative Economy

I see at least four major benefits that traditional organizations will gain by joining the Collaborative Economy.

  1. Quickly expand or contract workforces.  Popup companies mean corporations can assemble a team on-the-fly, at low cost and lower risk.  For most companies, staffing is the highest cost of operating.  Companies who properly tap into this on-demand workforce can always stay ‘right sized” by adding staff on demand as needed.  Expect new forms of contract groups to emerge that work well in tightly-collaborative teams, akin to virtual agencies.  Expect the future of work to continue to move towards “individual enablement.”  Future workers can serve many masters as they offer specific niche skills.  Expect that knowledge management, core institutional knowledge, and a permanent team that drives company strategy to still be key in-house resources.
  1. Activate unused resources to generate incremental revenue.  Companies can generate new revenue by activating unused inventory and assets such as unused real estate. They could also outsource idle workers into workplace marketers, serving other partners and corporations.  Instead of laying-off skilled people, why not loan or lease them to other companies until you need them again?  Often, physical locations are the second-highest cost to corporations.  These can be utilized as crowd resources by turning them into rent on-demand to other partners and corporations.  It works in reverse as well with companies renting from others, reducing overhead and the liabilities associated with managing multiple properties.  Expect the Regus model to eventually be extended to management consulting firms, companies with seasonal businesses or companies that have many locations, like retail.
  1. Reach new markets through new business models.  Corporations that have idle resources, inventory or products, can activate these resources and rent to new markets on demand.  For example, Bloomingdales, Nordstrom, and other high end retailers can benefit from replicating the business model of Bag Borrow and Steal, which makes high-end purses available to a whole new class of on-demand consumers.  Don’t sell a product once, sell it a hundred times.  I’ve listed many new models emerging just for the luxury market.  Corporations that have idle, consumable inventory, such as food, can shift to Eat Feastly, a growing consortium of local chefs at home.  Unsold cars sitting on dealership lots can be put to rent like Toyota Rent a Car or BMW’s version.
  1. Tap the crowd for new innovation of goods and services.  Finding, hiring and retaining creative people are difficult things to do.  Instead, seek new models that enable desk-sharing that brings “creatives” together to work when they are available, at your office, spreading some of their ideas and energy to those around them.  Pepsi, which used Mass Relevance, was documented  tapping into the broader crowd by aggregating their messages to improve digital and real-world marketing.  Take, for instance, models like Kickstarter or Quirky that tap into the crowd to fund and source new ideas.  This is the next form of innovation.  Software providers like Spigit, Crowdtap, BrightIdea, also enable corporations to glean these opportunities on their own branded platforms.

The Future: The Crowd Becomes the Company

I see three distinct phases as corporations take to the collaborative economy.  While they all warrant posts and research of their own accord, here’s a sneak peek:

  • Phase 1:  The sharing startups will unveil APIs for new growth.  Like oDesk, expect new APIs to be available from Airbnb, Lyft, Taskrabbit, Liquidspace and others that connect social media management systems like Sprinklr, Expion, Spredfast, Hearsay, Adobe, Oracle, Lithium, and Salesforce.  Together they will enable corporations to manage inputs and outputs of the collaborative economy.  For example, last week I was briefed by oDesk, which has a number of APIs that enable their customers to manage large batches of tasks of their vast supply of on-demand workers.  oDesk shared with me that they see opportunities for even more developers to engage, expanding their market share with new applications, unlocking new value propositions that traditional corporations have yet to realize.  I expect that, as the sharing startups mature, they’ll unleash these APIs, just like Facebook, LinkedIn, Microsoft and Google have done.
  • Phase 2:  A new era of Collaborative Economy Enterprise Software will emerge.  Don’t expect these startups and social media management systems to be the only game in town.  There’s already a broad range of enterprise software, such as Uservoice, Get Satisfaction, Oracle, Salesforce, Lithium, and Adobe, that offers enterprise-level collaboration of media and ideas.  I expect a new class of software to emerge that enables branded marketplaces (like Airbnb) for corporations to manage their own two-sided marketplaces of buyers and sellers so as not to have to rely on the sharing startups.  I wrote a post, putting out a call to the market, identifying this “blue ocean market,” but no providers having emerged as yet.
  • Phase 3:  Corporations will tap into the crowd for non-crucial goods and services.  In a not-so-radical vision of the future, expect that the most resilient corporations will start to engage the crowd for non-essential business functions in their attempts to reduce their overhead.  In this scenario, it will be difficult to tell the difference between customers and employees.  Companies that tap the crowd for most of their business functions will reduce costs, maximize productivity on demand, and might end up with the only remaining long-term assets being an ecommerce system and a brand, which should directly translate to more profits for shareholders.  In the future, the on-demand, creative, and resilient crowd actually becomes the company, reducing risks and costs while providing the opportunity to increase profits. 

Closing Thoughts: The Collaborative Economy Can Make Corporations Resilient.

Corporations have an opportunity to tap into the same sharing behaviors we are seeing in the consumer market.  I’ve given you a definition, clear examples, insights, and a roadmap for future phases.  Companies who tap into the crowd will reduce costs, some forms of liability, and can generate new revenues by activating existing resources and collaborating for new value creation.  The crowd makes corporations resilient.

Related Resources

Image by Jeff Garris, used under Creative Commons


10 Replies to “The Collaborative Economy Enables Resiliency for Corporations”

  1. So great to look at collaborative consumption from a corporation point of view! Another example: using corporate cars, taxi service and shuttles more efficiently. Employees could share company cars or rides to different locations. But the company could also let non-employees book empty seats in corporate shuttles, rent their company cars, or use their private chauffeurs or taxi service when available.

  2. Aha that’s a great point. Enterprise Holdings briefed me, they provide many of these options for corporations. They’ve carpool, vanpool, and instant access to rides. Thanks for bringing this up.

  3. Great sketch of your current thinking Jeremiah.

    For phase 2, I would argue that we’ve seen many examples of two-sided marketplaces already with digital content: istockphoto, TurboSquid and GrabCAD to name a few.

    For Phase 3, the thought of a company merely bing a brand + ecommerce system seems a little think (and I acknowledge you were describing an extreme end of a long and complex spectrum). You use the language of Sustainable Development, so let’s go there: three forms of capital – 1. financial, 2, ecological and 3. social – leaving 1-2 on the sidelines for another day… I think that one of the biggest areas that the industry could use your further exploration and framing is around the arbitrage of social and financial captial, and specifically, who “the crowd” realizes value in an equitable way in the ecosystem that you describe.

    A few things:

    * there is an implied assumption that the capacity and talent of the crowd is infinite. It isn’t.

    * there is an implied assumption that the crowd is highly motivated and engaged to participate, essentially for free. It isn’t.

    * Current engagement techniques, like access to content, advocacy programs and employing game mechanics to sustain engagement will not scale to meet the demand of the volume of work you are implying

    * Lastly – just looking at game mechanics and member reputation needed to incent and engage the community to the degree approaching the scale you describe: once you start to quantify the value of an activity and provide it as a feedback loop into the system, it shapes behavior and expectations. Said another way – if you quantify to someone that there $10,000 worth of participation yields access to a $1,000 service, it creates a negative and destructive feedback loop.

    There are bright spots currently out there – working examples of tapping the crowd and rewarding in an equitable way – giffgaff in the UK comes to mind.

    My main point here being – if we expect “the crowd” to shoulder the work burden of the sharing economy, we need to do a much better job of quantifying, communication and delivering value back to the crowd.

  4. Where do company culture and continuous improvement stand amidst all this?

    With increased flexibility regarding workforce, the company culture is at risk both from high turnover and from permanent employees who are leased out identifying themselves less with the company.

    There are multiple cultural ways to success, but they are not compatible with each other. Or will company cultures converge because of increased workforce flexibility?

    Similar questions arise regarding continuous improvement. How can we do a little better every day as a company, unless we have continuity and cohesion? Improvements are not achieved immediately, they are grown step by step. Furthermore, what is the definition of an idle worker, ready for leasing out? Why can’t he be used to improve the company?

    I have not gathered statistics (I would love to see some though), but there is at least anecdotal evidence that suggests that it is companies with a strong culture and cohesion that are successful. I am thinking, for example, Lean companies of which Toyota, Southwest Airlines, and Amazon are some prime examples.

    It is important to note that the percentage of empowered workers in such companies is quite high, so there are fairly few positions that can be switched around on-the-fly.

    New business models based on sharing and new ways to use the crowd for innovation and feedback are almost certain to emerge. There is a clear need for these. However, I am not all that convinced that what you call a resilient company is in fact an effective company.

  5. Jeremiah,

    Glad to see you are shifting over to the B2B collaborative economy discussion. Our team is working with several partners to ensure our clients maximize management of inputs and outputs and your post highlights how we are playing a catalyst role in shaping the B2B collaborative economy via brand and customer data API integration into our Marketing Insights Technology Module. The goal is to give our clients a holistic view of the customer journey and industry indicators in one integrated dashboard so they can optimize resource flow and spend through notification triggers, data filtering, analysis and synching. It™s a massive goal but in the collaborative economy it is achievable.

    Keep sparking us on, Jeremiah!

    CEO, @Expion

  6. Bill, these are great additional points, a few responses

    Yes, the most extreme example in the future is a company tapping into the crowd for all elements possible, I realize we’re a long way off from that, but expect that to eventually occur to some early adopters.

    Noted on all your responses how there are limitations to crowds, from reputation to positive returns, to payment to crowd participation.

  7. Thanks Peter! It’s B2B2C in nearly all cases that I’ve seen. That’s what happens when the crowd starts to collaborate with corporate business functions. I look forward to our continued dialog to understand more about how Expion and your clients will use the Insights Technology Module to connect with the crowd.

  8. Good article..Here is an example: websites allowing folks to use Social media ID’s to login or comment are examples of collaborate commerce…as they share “data”(new currency of Information Age) with each other which is sold to company(ies) that use for targeting ads seen on the websites folks(and their social network) visit….Era of Competitive Commerce is Getting transformed into Era of Collaborative Commerce.. creating Social Business Networks..Just my 2cents

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