Is that something you’ve said, or heard said in your company?    We’ve heard it from many of our clients and potential clients, and doubtless, most of us have experiences with collaboration attempts that started out OK, but somehow, well, fizzled out.

For example, perhaps someone set up a wiki for a group project.   People probably started piling stuff into it, but quickly it became disorganized, and hard to find what you wanted, so it fell into disuse and people went back to the old email-blast collaboration technique.   Or perhaps you had an idea management tool that was designed to capture everyone’s new ideas whenever they had them.  But it was always unclear what, if anything, happened to the ideas, so again, people stopped using it.

We’ve heard all these stories and many more, and often get asked “how is crowdsourced collaboration different?”  The answer is in the process.  If you’ve followed Chaordix, or attended any of our webinar series, you know we believe strongly that the crowdsourcing model, or process, that is applied for a specific crowdsourcing objective is as important as, if not more important than, the technology that supports it.

Successful crowdsourcing is way more than just getting people to suggest ideas to a common online area.    It’s a well thought-out (ahead of time!) process where there are specific stages of idea submission, enhancement, and selection by the crowd, a panel, or combinations of both.   It requires having specific goals for the crowd to accomplish.  It involves communication mechanism that provide just the right amount of information to keep people in the loop and participating, without overwhelming them.  It incorporates incentives that make participating rewarding and fun.   And its also about making the goal, process and incentives transparent, so everyone knows how it’s going to work, how long it’s going to take and what the outcome is going to be.  It’s about getting the crowd to collaborate with a specific purpose in a specific period of time, with a technology platform and moderation that provide the essential ingredients.

Successful collaboration doesn’t happen by just bringing people together and saying “collaborate”.  Successful collaboration happens by good design, knowledgeable implementation and ongoing moderation/oversight.

And the best part is, it feeds on itself.  If you run a successful crowdsourcing engagement, and the crowd sees the progress and results,  the crowd members are that much more motivated to participate again, and again.

So, if you’ve tried collaboration technologies in the past and they haven’t worked out the way you thought they would, think about why they might have failed and think about the process used (or lack thereof).   But certainly, don’t assume that crowdsourcing is the same.    Crowdsourced collaboration, implemented correctly,  is truly different (and it works.)

Those of you who have been following Chaordix know we worked with our partners 100% Open and Orange last fall on a crowdsourcing project called “Mobile Volunteering” in which we asked the crowd to brainstorm ways in which mobile devices could help people volunteer their time in five minutes or less, when they are on the go. There were hundreds of great ideas submitted and thousands of participants.

Orange just launched the results of that crowd enagement in a free iPhone app called Do Some Good which has 12 of the top ideas that came from the Mobile Volunteering crowd. We think it’s a great example of how crowdsourcing can help fast-forward new product/service innovation. And in this case, the application really fosters crowdsourced volunteering, by encouraging lots of people to donate small amounts of time, for example while they are waiting for their bus, or riding the train to work. In aggregate, all of those small contributions can add up to make a huge difference.

The Do Some Good app is available now from the iPhone App Store, and in the future will be on Android, Blackberry and Nokia. Definitely check out and download Do Some Good and tell your friends to join the crowd.

If you are among the many people and companies that are considering using crowdsourcing for the first time, after a bit of research you’ve probably started to realize that there are many considerations that you need to take into account. The good news is that while it may seem daunting at first, we’ve seen and worked on many, many highly successful first-time crowdsourcing projects.

But we’ve still seen too many companies get off on the wrong foot with crowdsourcing. Usually these are companies that make the assumption that crowdsourcing is as easy as setting up a site and asking a question. This leads them to make some poor decisions that affect the success of their crowd engagement.

If you are an open innovation champion (or market research or brand leader) in your organization, the goal of your first crowdsourcing initiative should absolutely be to generate a strong proof-point of how crowdsourcing can bring value to your organization. Companies who are successful with crowdsourcing are finding that it can drive incredible value. A recent study by McKinsey and Company concluded that there is high correlation between market share gain and companies that have adopted social collaboration techniques such as crowdsourcing with their internal and external networks.

So, it’s essential that your first step into crowdsourcing be designed for the highest chance for success. To help that happen, here are the top ways we see companies shoot themselves in the foot when getting started with crowdsourcing… so you can avoid them:

Focusing on cost rather than results. Rather than focus on achieving the desired outcome, people often focus on trying to do as a lowest cost pilot. Sure, in times of tight budgets, saving money certainly makes sense, but if you save money on something that doesn’t set you up to show success, doesn’t that work against you?

Assuming crowd recruitment is easy. Crowdsourcing doesn’t work without the right crowd; attracting your stakeholders (customers, employees, partners, general public) to participate is as important as anything else. Your crowd doesn’t have to be huge – many programs are highly successful with just a few hundred participants. But the world is noisy – people are asked to donate their time constantly, so even if you have an existing relationship with a potential group of participants, how you invite them in, incent them and keep them involved is very important. For your first program, it’s often better to work with someone who has experience with crowd recruitment.

Choosing the wrong first crowdsourcing topic. We’ve seen companies pick, as their very first topic, a challenge that has stymied their experts for years, or requires specific expertise that only a small number of people have. Sure, you want to hone your ability to use crowdsourcing to eventually address those demanding needs, but your initial goal should be to make it easy for lots of people to get involved. Pick a topic that almost anyone who works in your company, or is a customer, or a key stakeholder of your company can participate in, and one where the likelihood of showing value is high. These are topics such as ideas for new products or enhancements to existing products, new business models, ways to improve internal operations, or even better, something fun such as how to improve the corporate culture to make it a more enjoyable place to work. That’s something everyone will want to participate in, and add value!

Overlooking daily moderation. Crowd moderation is a critical ingredient of successful crowdsourcing. We’ve seen some companies get off to a good start, only to lose momentum because they tried to do it all themselves, often assigning the task of daily moderation to someone who has never done it before and already has full time responsibilities. What invariably happens is that essential moderation steps such as prompting discussions, answering questions and sending periodic updates to participants to keep them informed and coming back doesn’t happen, and participants come once but don’t come back again. Leaning on an experienced moderator can absolutely make the difference between gaining momentum and losing it.

You may have to do some significant lobbying for approval and budget to undertake your initial crowdsourcing program, and certainly you won’t want to negate all that hard work with a program that’s not likely to show the results you want. So when you sit down to think about that first campaign, align yourself with someone who has done it before.

For internal champions in larger organizations, we recently wrote about how to overcome resistance to crowdsourcing in enterprises , with some tips that have helped some to break through the resistance often put up by the legal departments or conservative senior management teams.

In a recent chat with a crowdsourcing-knowledgeable innovator within a large enterprise, he shared good honest dialog about the open innovation benefits he’s seen in his organization, and also the challenges he faces.   The two biggest challenges he mentioned are:  1)  getting other organizations inside the enterprise to embrace the concept of open innovation and get engaged, and 2) dealing with the resistance in the legal department in their organization.

These are common issues that we hear about frequently from innovation champions, and these issues beg the larger question:  How do you get rolling with open innovation in a large organization given the resistance?

I’m going to wager that if you have “innovation” in your title and you are in a larger enterprise, you have been contemplating just this question (and facing these challenges).  You’re not alone.

Start off with the right mindset:  Think of your initial crowdsourcing project(s) not so much as ones that will drive that “breakthrough idea” but more  to build the proof-points on which you can build.  You want to be as sure as you can that your initial crowdsourcing projects are successful, and it helps you to build that internal support you need to share the benefits of crowdsourcing enterprise-wide.  So how to you stack the deck in your favor?

Here is some guidance we often give to our clients and prospective clients with regards to their initial open innovation projects:

Start small

One of the major sources of resistance to open innovation inside of an enterprise is that it is unknown.  People don’t understand the open innovation process, and they don’t know what to expect from it.   So, to reduce that concern, start small.   For your first crowdsourcing initiative shoot for 300 – 500 participants, over a limited time period of maybe one to two months.   One of the things we’ve learned over the past five years is that you still can drive great results from a small but engaged crowd.  In fact, if done correctly the quality of the results would be difficult to surpass even with a much larger crowd.  More ideas aren’t always better.    Smaller crowds are easier to recruit, easier to motivate and easier to moderate, and will often display much higher than average participation levels.

Start simple

There are likely all sorts of potential applications for crowdsourcing and open innovation within your organization.  Some of which might involve solving complex problems that you’ve been having trouble with; problems that may be preventing business growth. So the potential payout is high.  But these types of open innovation challenges often have a lower success rate, and can require some specific expertise on the part of the crowd.   They are still worth doing, but not as your first open innovation challenge.  Rather think of challenges that have a much higher rate of success – such as challenges to enhance current products or services, improve business operations, or identify new business models, for example.  For each of these, a well-designed and executed challenge is almost guaranteed to yield valuable results, and provide the proof point you need.

Start Inside

As we’ve noted in past posts, crowds almost always behave very well in a crowdsourcing site, and respect IP and legal terms (we have yet to hear a report of a “stolen idea”).  Yet, we understand legal departments tend to worry about protection of IP and difficulties in transferring IP created to the company.   So we suggest you start “safe” by reaching out to an internal crowd.   Your company presumably has an existing relationship regarding IP ownership with your employees, and this can be reinforced with the terms of the challenge engagement itself.   While the IP relationship with external crowds is well understood at this point and the legal worry isn’t really justified, its usually much easier to get legal to bless an initial project with a “safe” internal crowd.   Plus you get the added benefits that internal crowds often participate at even higher rates  and you’ll build internal goodwill by allowing wider employee participation in something of meaning to the company.

Since you’ll be learning a lot from your first open innovation project as well, keeping it small, simple and inside means that you have to worry less about the project and can focus more on enhancing your own experience and expertise.   If you’ve followed Chaordix for a while, you know that another thing we’re fond of saying is “We make crowdsourcing simple”, and we mean what we say.    What ideas do you have for first steps with open innovation in 2011?

So, we’re not all that surprised to see Pepsi Refresh in the news again, only this time with allegations of voting fraud, as covered in The New York Times.

If you’ve been following Pepsi Refresh since the beginning, you remember that it was initially conceived as an alternative to doing Super Bowl ads.  In other words, it was conceived as a marketing and awareness program.  And most of the articles I’ve read mention that the program has been a “huge” success, not only because they’ve given away more than $20M to charities,  but because,  as Fast Company put it last week,   “Pepsi has received more positive PR than it ever could have by spending the same amount of money on advertising.”

Now don’t get me wrong.  I think it’s wonderful for a company to build its brand and get market awareness for doing good and being socially responsible.    Throughout the Refresh program though,  I’ve wondered if Pepsi has put enough thought into where the money goes, how it’s used, or even if it’s given fairly.

To do crowdsourcing “right”, it’s critical to care about the outcome and make it priority number one.   Also, if you run a campaign with a big prize you must recognize that, unfortunately, there is high likelihood that someone will try to game the outcome, and be prepared beforehand, not scramble to cover after the fact.

It’s important to care about the outcome because the entire design and execution of the campaign flows from there.  We always start by identifying the desired output from the crowd and work backward to design.  It just doesn’t work to do it any other way.  The model you use, the incentives, the crowd you engage, and many other considerations all flow from the desired outcome.

When it comes to gaming, your technology should have safeguards in place and reporting alerts to identify any suspicious activity so you can address immediately.  Yes, with good data access you can always eliminate the votes of suspected “gamers”, but its always better to nip it in the bud and either prevent gaming altogether or eliminate it when it starts.

One of the most fundamental concepts of crowdsourcing is that crowds can be remarkably intelligent.  So, if the playing field isn’t level for your crowdsourcing campaign, you should count on your crowd figuring out that it isn’t.    Better yet, make sure your campaign is designed right up front, with the right safeguards in place to help ensure that the playing field is level, otherwise it might come back to haunt you.  Pepsi might be finding this out the hard way, again.

From our friend Niel at Trada… awesome blog post which offers excellent insight, particularly the seven crowd learnings. A key point from our perspective: “In our model, we want the crowd to work together”… something Chaordix continually strives to make happen. – SK

Trada recently celebrated its second birthday. It’s been an amazing ride helping our company grow and learning – in real time – about the product that we’re making. Any good organization these days is a learning organization, and I think in general we have a pretty humble attitude about how far we’ve come. While we think we’ve innovated dramatically in the paid search space, we have many things to refine in the subtleties of our marketplace, advertiser onboarding, optimizer engagement, and service delivery.

One of the things that makes Trada both beautiful and complex is that it is multifaceted: it’s a marketplace, a crowdsourcing platform, a collaboration system, and a community.

And each of these elements has at least two sides: buyers and sellers in a market, the crowd versus the consumer, etc. This means that the interactions and incentives between each party must be perfected. The more types of parties or diversity of desires of each party you have, the more complex it becomes.

Since day one we’ve fundamentally believed that we could align paid search experts’ goals and advertisers’ goals to create a positive incentive system. I think we’ve done a good job of pointing people in the same general direction. We‘ve also had to invent – literally – mechanisms to overlay an incentive system on a complex paid search ecosystem – for example, how do you deal with differing bid prices in AdWords auctions? How do you deal with shared keywords or organize ad groups in a collaborative campaign? But while we’ve innovated a great deal, we have been learning. And today I want to announce the second generation of Trada and a concept we call Crowd Mechanics.

By now nearly everyone in the tech space is familiar with the term game mechanics. While it’s existed for a long time in various forms (video games, education systems, etc.) it has re-emerged in technology through location-based check-in services like Foursquare and SCVNGR. The basic concept of game mechanics is that human beings enjoy and are incentivized to keep engaging in a known system of achievements, rewards, levels, and other statuses. I call this technology dopamine – the constant small infusion of adrenaline into an experience that becomes addictive and behavior-changing. At the same time, crowdsourcing has emerged as a new and powerful way of getting things done and the industry has matured at a lightning pace. As an industry, we’re about five years old now (setting aside early outliers like Wikipedia, etc.) and we’re growing hugely. Trada and about 35 other crowdsourcing companies launched the Crowdsortium last month and I believe 2011 will see the first (if not many) crowdsourcing IPOs with LiveOps. An amazing run in just 5 years. But as an industry we’re learning a lot. How do you get crowds to work together? What incentivizes them? What is the right payment system for them? Do they need their own form of game mechanics? What happens when you introduce real money into an incentive system?

Yes, things are different when you’re dealing with real money and when you have a crowd. This is what I call crowd mechanics. The brief definition of crowd mechanics: the incentive and engagement system designed to drive outcomes in a crowd through individual and group incentives that include both monetary and non-monetary rewards, levels, and achievements.

I know this sounds like I’m throwing the kitchen sink into my definition, but its very important to understand how each element of crowd dynamics makes it very different from game mechanics. I’m not suggesting that one is more difficult than another to do well, but there are different variables in the mix that have to be considered. To start, let me explain what I think is the same between the theories:

I fundamentally believe that game mechanics and crowd mechanics share the same basic underlying DNA: they should understand and work with human behaviors. Humans are not one-dimensional, and thus motivation systems (just like the workplace) shouldn’t be one-dimensional either. I wrote a longer blog post about this, or you can watch a video of me talking about crowd motivation.

Now let me outline some differences that need to be considered:

Crowd Mechanics: Money

There is a lot of research that says, “people act differently when money is included in the incentive system”. What’s interesting is that the answer is not always “they work better”, nor is the answer “they work more poorly”. There’s a great TED video where Tad Pink talks about this, and Clay Shirky addresses this in his book Cognitive Surplus. Any way you look at it, money changes behavior. Crowd mechanics systems must contemplate what behaviors they may expect and think through how their crowd is compensated. When money is involved you broaden the general spectrum of behaviors you can expect to see.

On the positive end, you’ll get some people who live and die by working in your system. On the other end, you’ll get some abuses where people try to ‘game’ any incentive system you create. This isn’t any different from designing a sales comp plan or any other traditional comp plan. The comp plan must be designed to make it easier for someone to do what you want them to do (and make what they expect to make financially) than to skirt the system or abuse it. This dynamic doesn’t exist in game mechanics, so the spectrum of uses is much more constrained.

Crowd Mechanics: The Crowd

Depending on the type of crowdsourcing model a business uses, the final product is either the combination of work of other people (e.g. uTest, Trada, Wikipedia) or the best individual contribution from someone in the crowd (like Crowdspring). In our model, we want the crowd to work together. This is something we spend a lot of time on, and we’ll be introducing new features around this soon.

The best way to understand the dynamics of incentivizing the crowd over (or in combination with) the individual is to understand the ‘Tragedy of the Commons’ problem. For a survey on this topic and some suggestions about how governance systems are evolving to handle these situations, read the fantastic Governing the Commons by Elinor Ostrom.

What we’re learning about the crowd:

1) The crowd needs information about itself. Game mechanics has included this mechanism publicly, in the form of leaderboards, because it encourages people to compete with each other.

2) The crowd needs information about its goals. These goals are applicable at both at the individual level and the group level. This is a very subtle point because crowd mechanics gets interesting when some individuals in a crowd are hitting the goal – but some are not.

3) The goals need to be realistic. At Trada, the goal is an advertiser’s CPA. If this CPA is simply unattainable (you can’t get a 50% conversion rate to sales for visitors are your website on a $1000 product) then everyone loses. We’re learning a lot about making sure the advertisers’ goals are achievable as part of the “social contract” that exists between the crowd and its patron.

4) There need to be known group incentives that are substantive compared to individual incentives. For example, a “group win” should not pay someone 1/100th of what they make when they win individually. As much as possible, the group win should be more lucrative than an individual win.

5) Group wins, like individual wins, must reinforce a very small set of core incentive principles. In Trada, the CPA is king and almost all the rewards, achievements and levels are a reflection of this. Group rewards must be based on and reinforce the same core incentive structure.

6) Groups must be able to anonymously socially regulate themselves. We call this the “shoulder tap” – a mechanism where someone in a group can effectively say to someone anonymously “please check your work, it’s way above the goal”. This form of social regulation goes on all the time around us. As a matter of fact, I’m writing this from the ‘quiet car’ on an Amtrak train to NYC. A “shhh” on the quiet car is an example of social regulation and in most cases is anonymous enough that someone in the group is willing to do it.

7) There must be a rules-based regulator that can be called to enforce group behavior. Any group must know that there is a 3rd party regulator (e.g. the SEC, Wikipedia administrators, CJ’s network quality group) that has the power to enforce, in a non-subjective and rules based way, final arbitration policy when someone’s behaving badly in the group (including the patron – e.g. the advertiser – in our model).

There’s a lot going on here and part of the trick is to make the experience relatively seamless. One should be able to perform their work, expert or otherwise, relatively unencumbered by this infrastructure of crowd mechanics but also aware that it’s going on. This is one of the most difficult elements of any game mechanics or crowd mechanics system: that it should be a passive interface underneath the experience, not an interactive part of the experience. Part of what makes Foursquare work so well is the discovery of badges. This discovery element keeps you engaged and exploring the virtual landscape they have created. This applies to anything the crowd engages in.

I think we’ve come a long way at Trada and in the crowdsourcing industry. Our crowd mechanics release is just one of many steps we’re going to take to conquer a massive challenge and opportunity, and we’ll keep learning how to make it better for everyone. We hope everyone that interacts with Trada will give us feedback. We’re not standing on ceremony – and we’re definitely not standing still.

While adopting crowdsourcing for innovation certainly can lead to breakthrough ideas, solutions and crowd efforts, I believe there is too much focus on the breakthrough and not enough value assigned to the many other benefits of engaging your stakeholders using crowdsoucing methods. In fact, even if a breakthrough is unlikely, there are still ample reasons to begin crowdsourcing. Here are a few:

Seed concepts: If you are looking for that next great idea or solution, crowdsourcing will help you get there even if the crowd itself doesn’t come up with it directly. The crowd will definitely spur your thinking, get you out of your rut, and perhaps plant the seed of a new idea or concept that will blossom into the breakthrough idea you are seeking.

Market validation: All companies have hunches – but often don’t have the proof of whether their hunches are right or not. At a bare minimum, crowdsourcing will confirm some of the hunches you have, and even better, help you refine your hunches into market proven data points. Or it will warn you that your hunch is wrong and prevent a potentially costly mistake.

Organizational learning: Edward Boches of Mullen put it best when he said “The consumer has already decided. They are creating content. Any brand or marketer that doesn’t take advantage of that in a way that will work for them is crazy.“ Consumers are wanting to have a say in the brands and services they consume and that trend is only increasing. Recent episodes like The Gap’s logo re-do fiasco show that companies need to hone their ability to engage their crowds and benefit from the input they WANT to give you. If you don’t get good at it, your competitor will for sure. So start early and start now. Begin figuring out how your organization can tap its crowds, perhaps starting with your internal crowd, for competitive advantage. As with many things, with crowdsourcing improvement comes with experience, so jump in, and maybe seek the council of someone who has experience to make your first effort successful.

And there are other benefits such as gaining a much deeper understanding of your crowd – how emotionally connect to you brand are they? Building goodwill with the marketplace for seeking input and acting on it is another benefit. Establishing a connection that you could potentially re-use over and over again for different innovation and research purposes.

Certainly don’t stop seeking the breakthrough or game-changing ideas, but also don’t fully measure your innovation efforts based on whether it delivers that breakthrough. Look beyond to the other benefits, communicate them widely, and you’ll see how your open innovation efforts are propelling your organization forward.

In line with Earth Day 2010, Humanity Calls ran a two-month tournament to encourage support of environment-focused non-profits based on their worthiness as determined by the crowd. Ebay seeded the donation pool with $50,000 from their Ebay Green Team initiative. The donation pool was split among over 45 non-profits, with the top recipient receiving almost $10,000.

Non-profits could register for free and anyone could cast a vote for a non-profit just by logging in. Additional votes were earned by making donations and inviting others to participate. The tournament ran for two months and in that relatively short time had over 39,000 votes cast and managed to attract an additional $25,000 in individual donations to augment the seed pool.

Humanity Calls is a volunteer effort of 50 people (based out of Alberta) and Veer said they encouraged volunteers to take on roles that they were passionate about and leveraged their skill sets to make the best use of their volunteer crowd.

Veer said their aim was to deliver an easy way for non-profits and NGOs to benefit from crowdsourcing without having to do it on their own. They took inspiration from other programs such as Pepsi Refresh and Chase, but with a focus on making it micro, nimble and repeatable. He stressed that different crowdfunding and crowd philanthropy sites appeal to different people, so it’s important to have a variety.

Participating non-profits were encouraged to get out their votes from their supporters using social media – and it seemed to work – Humanity Calls had almost 200,000 visits during the month of June alone.

In the “what worked well” category, Veer thought the fact that they were able to quickly get 120 non-profit organizations involved without significant outreach, that they received a very positive response from all participants, and that they successfully made it easy for individuals to make a contribution were all signs that the model works.

Moving forward, he believes the approach could be improved by providing more information about the non-profits involved, essentially a short education element about each non-profit, so people might vote for a non-profit they were not familiar with before coming to the site. Similarly, he thinks that providing tools to allow participants to compare non-profits would be helpful in driving that same result.

Looking to the future, Humanity Call’s vision is to run a number of these types of tournaments with different non-profit focus, always with a large brand as the sponsor. Veer sees sites like Indigogo really picking up, the fact that its cheaper to start companies especially on the web, and that its easier for people to fund what they are passionate about as indications that many more efforts like Humanity Calls will spring up in the future. He advises individuals wanting to learn more about crowdfunding to look at the types of projects you want to fund, and the different means of funding available to you, such as Kiva, GrameenBank and MicroPlace.

Without a doubt, pioneering projects like Humanity Calls are blazing a path for new initiatives and with each project we learn more about best practices for tapping the crowd. What are your thoughts about how crowdfunding for non-profits organizations might be improved?

Anyone who’s  been to London, knows the phrase “Mind the Gap” which warns people riding the Underground to watch their step as they go from platform to train.

As I watched The Gap’s logo “update” unfold last week,  “mind the gap” seemed apropos as a caution for businesses: watch your step or you might get hurt.  In this case, The Gap has taken some steps with their logo that may hurt their brand.  It’s too early to tell how their brand will be impacted, but one thing is for sure, other brands can and must learn from it.

If you’ve been watching, you’ve seen how the story has been shaped by the public on platforms like Twitter and The Gap’s Facebook page:  The Gap introduced a new logo last week that received overwhelmingly bad reaction from both their customers and from the design community.   The overall reaction can be summed up as “how could they?”  How could Gap change their logo without getting approval from their market place?   Those in the brand world know this is reminiscent of another similar incident with Tropicana.   The good news for Gap – people have grown up with the Gap logo and have developed a very strong connection to it.  The bad news -the masses aren’t happy and that puts The Gap at risk of losing loyalty and brand respect.

There are three lessons that all brands can stand to learn from what The Gap is going through.

Lesson #1 – Don’t change your brand in a vacuum

Like it or not, the days of companies independently crafting and broadcasting their brands are over.  As more companies open themselves up, consumers are now empowered and increasingly expect to be involved in the brands and products they feel strongly about.  The silver lining is that crowd-powered insight and rich market understanding represents a great untapped asset for brands and can bring them closer to their marketplace. This direct input can dramatically lower the risk of backlash, and enhance the probability of a successful rollout for new products, ad campaigns, and yes, logos.

Lesson #2 – React quickly, get involved

Kudos to The Gap for getting this part right.  They were watching and very quickly saw that market reaction to their new logo was not positive.   They immediately recognized the misstep and embraced it as an opportunity.    This is a key skill all brand managers need to develop:  reacting quickly and getting involved with both positive and negative threads in the social media world.  Done well, negatives can be turned into positives, but you have to act fast.

Lesson #3 – Get it right the second time

Here’s where the jury is still out for The Gap.  When you trip, people will scrutinize your next steps closely.    In my opinion, they have already stumbled a bit by announcing last week that they would open themselves up to crowd input for a new logo, but today announced they’re just going to stick with the old logo.   I believe they are passing up on a tremendous opportunity.   Rather than turn this episode into a positive, they are condemning it  go down  in history as just another highly visible marketing failure, a la New Coke.  The Gap  had the world’s attention, and probably hundreds of thousands of people ready to get involved.   Instead, they are just walking away from the opportunity of  using it as a springboard for greater market interaction and involvement.

Today brands are a two-way relationship. Take advantage of the crowd’s desire to contribute and keep you relevant to the market and your brand will benefit.   If you still think you can steer your brand without market participation, well… mind the gap.

Originally posted at SimonMainwaring.com.   Follow Simon on twitter

As more brands embrace social media as a marketing strategy, many are racing to establish a sizable social footprint. For their marketers, that translates to creative briefs like, “How can you get me to a million Facebook fans fast?’ or “What bots can I use to fast-track my followers on twitter?” This inevitably begs the question: “What good are a million Facebook fans if they are not engaged and won’t do anything for the brand?’

Brands must work to inspire fan action, not merely seek fan acquisition. A thousand fans that share the same core values, that find a brand’s communications meaningful and that are willing to do, say or buy something for the brand are far more valuable than one hundred thousand passive members. In fact, if a brand is only after numbers, they are not only wasting their marketing dollars but the dynamics of social media will work against them. Consumers now look to brands for transparency, authenticity and accountability . That means a brand must show genuine interest in their community as Zappos, Ford, Dell, Nike, Pepsi, Old Spice and Starbucks have done. If they treat Facebook as yet another broadcast medium and twitter like direct mail, the only thing they will demonstrate is their total lack of understanding of social media dynamics.

The reason a brand builds a social community is to provide a fair exchange of value. The company offers something meaningful whether it’s product, service or cause related, and that generates goodwill and loyalty that effectively puts the community to work for the brand through word of mouth advertising. Yet if a brand is simply rushing to hit a “magic number” and has no intention of genuinely engaging with their community, that’s what consumers will share with their friends and peers doing more harm than good.

Social media is not a numbers game. It’s a relationships game. If you’re not interested in your community, they won’t be interested in you. So work out what’s meaningful to your brand and share it with your community. What consumers want is an emotional connection. Once they get that, they’ll build a community for you.

Do you think most brands are building communities the right way? Of are they simply managing perceptions?

(Chaordix editor’s note: We believe that crowdsourcing is one of the best ways to invite fan action from your community members.)