CrowdSourcing

http://innovateonpurpose.blogspot.com/2009/04/what-do-crowds-know-about-innovation.html

That article mentions a few programs that are using the wisdom of the crowds theory as a tool for innovation. Mentioned are Dell and IBM which run IdeaStorm and Idea Jam respectively. They all solicit thoughts on projects in the works or novel ideas from their users. The thought is that if they involve consumers in the company's innovation, a. they'll find a "golden nugget" every once in a while, and b. they'll move more product because the consumer feels involved in the company. One other interesting side product of this system is information cascades. In these forums, many times people will latch on to a particular idea and any radical or different idea will be pushed aside.

The article doesn't expand enough on the susceptibility of these methods to information cascades, in my opinion. It has been my experience that forums tend to produce a few highly visible participants whose opinions can greatly influence those of the crowd. People often parrot these opinions to get included in the group and feel accepted, even though they haven't given the actual content much thought. Eventually, certain thoughts get passed on as 'obvious truth', even though they aren't. Also, participants in topic-based technology or hobby forums- of which the abovementioned are probably a part of- tend to represent a small, very biased fraction of the population, which will restrict the diversity of input to begin with.

Although the benefits may be incremental, the payoff may make it worth it. It might be comparatively inexpensive to host such a system (unless the manual labor needed to sift through postings gets too high), and the marketing value of being open to anyone and everyone's input may work to offset the cost. This is probably more of a marketing innovation than a new significant contributor to product development