A great example to demonstrate the benefits of the firm as a collaborative community. Creating an internal stock market to suggest and invest in ideas to improve the business beyond the imagination of the leadership team
I love it when you stumble across a new way for proving the value in collaboration and sharing knowledge.
The New York Times has published an article ‘Let Everyone Have Ideas’ describing a company that has implemented an internal ‘stock market’, giving employees ‘opinion currency’ to invest in ideas they support. They can even volunteer to work on the projects and receive real financial rewards should the idea lead to a new product or cost saving for the company.
What a brilliant way to get people actively involved in improving the company’s prospects. The following paragraphs sum up the power of the idea:
We’re the founders, but we’re far from the smartest people here,” Mr. Lavoie, the chief executive, said during an interview at Rite-Solutions’ headquarters, “…So we created a marketplace to harvest collective genius.”
Mr. Marino, 57, president of Rite-Solutions, says the market, which began in January 2005, has already paid big dividends. One of the earliest stocks (ticker symbol: VIEW) was a proposal to apply three-dimensional visualization technology, akin to video games…
Initially, Mr. Marino was unenthusiastic about the idea “I’m not a joystick jockey” but support among employees was overwhelming. Today, that product line, called Rite-View, accounts for 30 percent of total sales.
“Would this have happened if it were just up to the guys at the top?” Mr. Marino asked. “Absolutely not. But we could not ignore the fact that so many people were rallying around the idea. This system removes the terrible burden of us always having to be right.”
Just brilliant! Could Rite-Solutions have predicted the potential value in advance? Never. But this system trusts the wisdom of the crowd and provides a clear way of measuring results and rewarding the contributors. Imagine if they had instead followed the traditional path of requiring employees to ‘do’ and managers to ‘decide’. Their sales would be 30% lower than they are today.
If only more CxOs could be so inspiring. This is a great example to show how a culture of participation trumps the traditional command-and-control hierarchy in an information economy. How often do employees come up with an idea to improve a system, only to be flattened by their managers? Imagine if they could instead float the idea on a stock market…
Thanks to Rajesh Jain for highlighting the article in his Emergic blog.
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