Crowdsourcing a Company: Is It Feasible?

Could the future of work look a bit like a sophisticated flash mob? Two Stanford University faculty members suggest that it’s possible to put together a virtual group of strangers that can successfully fulfill a complex business mission.

The two professors, Melissa Valentine, a management science expert, and Michael Bernstein, whose specialty is computer

Organization chart for True Story. Credit: Michael Bernstein/Stanford University

science, started with the premise that information technology makes “flash organizations” — highly structured groups of people — feasible. Typical crowdsourcing techniques work well for convening a number of people, all of whom have one task in common: raising money for a charitable cause, for example. Once the task is finished, the group disbands.

The idea of creating large, purpose-built, temporary organizations on the fly is not novel. Movie production teams are a good example. Individuals with specific skills like acting, directing, sound recording, costuming, and many others come together. Each team member knows how to play his or her role in the organization. When that role is complete, the individual is free to leave and find another temporary team to join.

A recent example is Gigster, a company that uses artificial intelligence to match software developers with a client’s project. Gigster bills itself as “the world’s engineering department,” providing a purpose-built software development team.

The Stanford researchers’ experiment is broader and more sophisticated than these earlier examples. They developed a software platform, Foundry, which enables development of flash organizations with built-in structure. The platform “knows” the organization chart and the skills employees will need. Foundry can recruit staff by emailing qualified members of a freelancer site.

The researchers tested their hypothesis by building their own organization and to task the organization with design and development of a story-telling game and mobile application dubbed True Story. The temporary virtual “company” had multiple departments: the content division to develop copy for the game cards, software developers, graphic designers, game testers.

Cost is one reason employers have not adopted this model. Recruiting, hiring, and training staff for each of multiple projects is prohibitive. Valentine and Bernstein posit that technology is lowering these costs. “Computation, we think, has an opportunity to dramatically shift several costs in a way that traditional organizations haven’t realized,” Bernstein said. “It’s way easier to search for people, bargain and contract with them.”

The True Story experiment succeeded because it satisfied three conditions: the availability of excellent data and adequate computing power; the use of well-defined roles; and, surprisingly, the presence of middle management. This last need is counter to the trend in many organizations to flatten out and eliminate middle managers.  At True Story, the managers had to read the text on the game cards, decide what was good, and figure out how to get staff to improve the quality.

The True Story model relies on the availability of freelancers who, by definition, work for themselves. Job security — in the form of the next gig — is not guaranteed, although project managers and those with high-value technical skills should fare well. This model does not provide jobs for low-skilled workers.

Bernstein points out that flash organizations work best with a well-defined start and stop point, such as the successful roll-out of a product, so they probably will not push other kinds of organizations out of the world of work. He acknowledges that concern over a life lived solely as a freelancer is legitimate, though.

“This could be a potent force among many in the future,” he said. “From a policy perspective, we have to figure out how to empower labor when contracts last a few minutes or a few weeks.”

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Interview with Michael Bernstein