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The Mutopo Social Production Landscape Report

document Distributed Knowledge, Open Innovation

The Social Production Landscape Report
The Social Production Landscape

The Social Production Landscape Report

The Social Production Landscape
As organizations increase their use of social media, we believe social production is the next step to start new conversations and solve complex, shared problems. We define social production as the process of working with people outside your organization to create products, services and communications. Social production is not new – technology firms have been using these ideas for more than a decade, why do we believe this is now relevant to more organizations? The August 2010 McKinsey Quarterly Report pointed to ten tech-enabled business trends to watch, including collaboration at scale, distributed co-creation, and making the network the organization. Forrester Research covers social co-creation and their July 2010 research suggests that 61% of US online adults are willing co-creators. Some organizations have made large commitments to social production like My Starbucks Idea or P&G’s Connect & Develop, open source projects like Wordpress or Mozilla, and mass customization tools like NikeID or Spreadshirt. However, we are interested in one-time “creative challenges” because these are ways for organizations to experiment and test social production. In this report, we explore data from a sample of almost one hundred creative challenges from organizations like Disney, Mini, Samsung, GE, Amazon, the City of New York as well as a number of smaller organizations.

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The Social Production Landscape Report

Who is using social production
From open source code to application programming interfaces (APIs), software still leads thinking on opening up and collaborating. In more recent years, media properties have joined the conversation so it’s no surprise to see them topping the list as the most active organizations with challenges like National Geographic’s travel photography contest and Disney’s James and the Giant Peach daydream illustration contest. Number of Challenges by Sector
Media Technology Retailer Nonprofit/NGO Government Luxury Food & Beverage Automotive Telecom Energy Transportation Financial Services Consumer Packaged Goods Business Services Airline

20% 19% 14% 12% 8% 6% 5% 4% 3% 2% 1% 1% 1% 1% 1%

However, non-profits and governments are also taking advantage of a new way to connect with talent. Cycling out of Poverty is asking engineers and product designers to create a bicycle for use in Africa, and New York City’s government is holding a challenge for artists to create artwork to beautify construction sites. Luxury brands are also finding creative ways to work with their fans and creative communities. For example, Prada used a creative challenge to create a comic book heroine for its new Swing line of sunglasses, Jeffrey Campbell is sourcing new shoe designs and Hugo Boss is looking for creative ideas for out-of-home advertising. Different views of intellectual property. Why are some industries rushing ahead while others do nothing at all? One critical issue is intellectual property. For example, the

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The Social Production Landscape Report

intellectual property considerations when developing packaging designs or out-of-home advertisements are different to creating a new product line in the consumer packaged goods industry or a design in the aerospace industry. Organizations are learning to decompose tasks and manage intellectual property risk through working agreements – for example ensuring that work created will automatically belong to the organization or that they will have specific rights to license work.

How social production is used
The types of tasks vary widely in terms of time requirements and complexity – we were not surprised to see graphic design challenges at the top of the list, since many of these tasks require low time commitments. However, we were surprised by the number of product design and architecture challenges such as the MINI x Fatboy leisure product challenge and the Brussels Courthouse redesign competition. Number of Challenges by Category

Graphic Design Product Design Visual Communication Programming Ideation Architecture Photography Moving Image Illustration UX Design Writing Strategy Fashion Design 3D Modeling Music Animation 1% 2% 3% 4% 4% 4% 5% 5% 5% 5% 7% 10% 10% 10% 12%

13%

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The Social Production Landscape Report

Significant time commitments. Graphic design contests tend to focus on work that can require relatively smaller time commitments. However, some of the product design, programming, motion picture and architecture challenges require very large time investments, often from teams rather than individuals. This suggests that organizations are finding ways to work on very complex challenges with people outside their organizations.

Financial incentives for participation
The most common incentive is cash. Sometimes this takes the form of a cash prize awarded to a few winners. In other cases, compensation can also take the form of licenses, revenue shares, funding commitments or contract awards. Contract awards are particularly common in architecture, perhaps because architecture has a long history of challenge and contest formats.

The energy sector is structuring prizes in the same manner the data is somewhat skewed by the presence of two large energy projects, GE’s $200M funding commitment to improving the power grid and a $5M challenge to redesign a power plant. The actual prize payouts are smaller: the GE prize is $100,000 and the DownEast power plant redesign awards a $50,000 lump sum and a revenue-share contract. However this funding commitments signal clear intent to take the best ideas forward. Regardless of prize structure, these industries are willing to commit resources to open design projects whereas many are not. Retail, despite sponsoring nearly 15% of the challenges in this study, awards prizes an order of magnitude smaller. Most cash prizes do not exceed $10,000, aside from the commercial design challenge for the Amazon Kindle and the Shakespeare and Company writing contest (in partnership with the de Groot foundation) offering $12,000 and 13,000 respectively.

Compensation can also take the form of licenses, revenue share funding and contract awards.

We found large incentives in the technology and telecom sectors, with brands like Samsung and Nokia offering programming competitions with more than $100,000 in prizes. Large government projects are primarily architecture challenges, with both cash prizes and contract awards.

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The Social Production Landscape Report

Cash Incentive Averages (in US Dollars)

Energy Technology Telecom Government Consumer Packaged… Nonprofit/NGO Media Airline Retailer Food & Beverage Automotive Luxury 154,786 100,000 72,786 10,800 8,167 8,075 5,000 4,750 3,925 415,654 403,333

102,000,000

Different commitments to creative challenges? Technology companies have been organizing challenges for some time and are used to working with developers to create, test and expand their offerings. Architecture projects are, by nature, large expenditures, so prizes reflect the larger efforts required. Are other sectors’ reluctance to spend large sums on challenges because this format is relatively untested, or because the tasks they are doing are less focused on getting work done, versus generating communication or PR value? In our analysis the larger financial incentives tend to be associated with both prizes and follow-on opportunities to realize the work. Organizations like GE are committed beyond awarding ideas – they have signaled clearly that they have the means and intent to take the best ideas forward. We believe this dramatically expands interest in participation and expect to see other industries adopt similar models as they attempt to attract more talent.

Non-financial incentives
Many contests offer incentives other than cash or funding commitment. Exposure to other potential clients, free products or services, trips and unique experiences, and the opportunity to do good are all being offered as prizes.

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The Social Production Landscape Report

Relative use of non-financial Incentives

57.30% 35.96% 34.83% 25.84%

Fame

Stuff

Experience

Good

Some projects offer fame as a prize, either explicitly (such as a magazine spread in the Outdoor Photographer contest) or implicitly (such as having your name attached to the Brussels Courthouse redesign). Free product is common, as consumer brands use creative challenges to build relationships with customers. Unilever is offering free product from several of their brands, such as Ben & Jerry’s (no doubt many people value this more than cash), and The American is offering cameras as prizes. Unique experiences and trips are also popular: the top prize in National Geographic’s photo contest includes a photography assignment in Bhutan with a National Geographic photographer, and Ripcurl is offering surf trips.

Non-financial rewards were offered in nearly all challenges.

Social good can be a powerful motivator, and often goes hand-in-hand with fame. People looking to hone their skills on spare-time projects may be more likely to participate if the project is for a good cause. There has been a marked rise in NGOs such as the Poultry Project and Cycling out of Poverty using open design to solve social problems.

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The Social Production Landscape Report

Advancing the brand of me. Are opportunities for exposure and new business development increasing in value as people focus on their own brands? One challenge asked photographers to shoot an artist for her album cover; the artist requested free work in return for introductions to her friends for the possibility of further work. Exposure can be a worthwhile incentive, but larger organizations in particular can risk appearing cheap if financial incentives are too low.

Social production communities and platforms
A new type of online community [see appendix for full list] regularly engage their communities to work on specific tasks. Many of these communities and tools have been created in the last five years, which may explain why only about one third of creative challenges work with communities and platforms. Challenges working with existing communities and platforms

Energy Consumer Packaged Goods Airline Automotive Media Retailer Food & Beverage Technology Luxury Telecom Nonprofit/NGO Government 0% 0% 0% 17% 28% 46% 40% 56% 67%

100% 100% 100%

Many organizations that don’t use a creative community handle their challenges using simple tools like e-mail and file submission forms. Brands that choose to work with social production communities get access to increasingly sophisticated tools and processes. In addition, these communities help to solve an important problem – recruiting talent to work on their challenges.

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The Social Production Landscape Report

The role of creative communities. Creative communities have existed online for over a decade: core77, one of the largest design and creative communities, was started in 1995. People come together to socialize, learn, share work and find full or part time jobs, but in recent years some of these communities have begun facilitating work directly in the form of project. Will people prefer to work with emerging creative communities versus working directly with brands? It is hard to tell – certainly brands have a large impact on people’s willingness to participate, particularly as they consider non-financial incentives, but there might be some benefit to maintaining contact with a creative community across different projects. In addition, we expect that community organizers will be able to focus on the development of the specific tools and processes and many organizations will prefer to benefit from these specialized skills in much the same way as they have relied on traditional outsourcing firms, consultants and agencies.

A first look at the social production landscape
This is our first look at how social production is being used. Specifically, we looked at challenge formats versus sustained open innovation programs, marketplaces or open source projects. We found that while media and technology organizations appear most active, government, NGOs and luxury brands are embracing social production as well. While graphic design and visual communication are traditionally associated with these types of challenges, we also found that product design, architecture, software development and ideation are popular challenge tasks.

Participation is the new brand loyalty - Yves Béhar.

In some cases, the focus is solely on completing a task by attracting a broad group of talent, while in other cases, additional objectives include finding new ways to engage communities as well as generating content and stimulating conversations. While the most common incentive for participants is money, other incentives are common, including opportunities for fame or publicity.

Most organizations appear to be creating their own tools and working with their own communities, with about one third working with emerging platform and community

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The Social Production Landscape Report

providers. One of the big questions will be how organizations choose to work with people outside their organizations - professional services firms like agencies, consultancies and outsourcing organizations have managed this work in the past. However, new types of communities and platform providers are taking on some of this work, too. How will traditional professional services organizations respond?

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The Social Production Landscape Report

How this report was created
The Social Production Landscape uses data from 89 creative challenges from www.asmbl.us. The data set analyzed in this report was collected from June 1 2010 to August 24, 2010. Challenges meet a number of criteria such as requiring more than $1,000 in compensation. Challenges do not include ongoing open innovation programs such as My Starbucks Idea or P&G’s Connect & Develop, open source projects like Wordpress or Mozilla, or mass customization tools like NikeID or Spreadshirt.

List of challenge communities and platforms
Following is a list of challenge communities and platforms used in the challenges evaluated for this report: Behance, Brightidea, challengepost, Designboom, HeyPublisher, Hypios, Ideabounty, Innocentive, jovoto, Mofilm, myoo, OpenIDEO, Poptent, Shicon, Talenthouse, Victors & Spoils, Zooppa

Social Production Landscape by Mutopo is licensed under a Creative Commons Attribution 3.0 Unported License. Permissions beyond the scope of this license may be available, contact us at http://www.mutopo.com.

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Summary As organizations increase their use of social media, Mutopo believes that social production is the next step to start new conversations and solve complex, shared problems.

Mutopo defines social production as the process of working with people outside your organization to create products, services and communications.

Description In this report, Mutopo explores data from a sample of almost one hundred creative challenges from organizations like Disney, Mini, Samsung, GE, Amazon, the City of New York as well as a number of smaller organizations.

The goals of the Social Production Landscape Report are to:

+ explore how organizations are using social production

+ understand different approaches from incentive structures and task types to technology platforms and the role of existing online communities

+ encourage thinking about how social production can be used to achieve communication and product/service development objectives

Tags: Collaboration, Crowdsourcing, Mutopo, report, Social Production, social production landscape

Posted by Marco Torquati

Apr 09, 2011 07:30 am GMT Viewed 3094 times

Author: Shaun Abrahamson / Mutopo Source

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