The best ideas come from the janitor …

Turn problem-solving into an internal market, where
staff with the best ideas earn the richest rewards.

 

In 2000, Goldcorp Inc. famously published online geological data on its 50-year-old mine and surrounding properties in Red Lake, Ont., in a desperate bid to solicit ideas for turning around its troubled operations. The gambit succeeded; independent geologists submitted proposals for profitably exploiting ore bodies. Yet in the years since, few have followed Goldcorp’s example of crowd-sourcing. The obvious reason is competitive: you don’t want to divulge company secrets to rivals — unless, like Goldcorp then, you have nothing to lose.

But there are opportunities to deepen the idea pool without giving away sensitive information, argue Hind Benbya and Marshall Van Alstyne in a paper recently published in the MIT Sloan Business Review. They push for creating an “idea market” within your employee base, whereby anybody, from the janitor to the chairman, can submit suggestions for solving a problem in return for a reward.

In “How to Find Answers With-in Your Company,” Benbya and Van Alstyne review the experiences of 50 organizations that have implemented an internal idea market, among them Eli Lilly, SAP, Fujitsu and the World Bank. Specialized knowledge silos or even multidisciplinary teams can become bottlenecks when the number of problems or questions requiring answers is vast, they explain. “By contrast, an internal market is the information equivalent of just-in-time production. The platform helps people pull information and contacts when needed.”

What the authors mean by platform (and the reason why idea markets are a fairly recent tool) is essentially a secure IT network for employees over which problems can be disseminated and brainstormed. The reward for participating employees is typically a virtual currency redeemable for cash, prizes or even charitable contributions.

Some companies’ idea markets work better than others, however. The value of the rewards, the researchers argue, should vary according to the idea’s organizational benefit. Otherwise, you end up with a million solutions to problems of little significance. Another pitfall is information hoarding. When a car-lease company covered in the study solicited ideas from its sales staff this way, participants resisted sharing their knowledge or collaborating with each other, which was one of the aims of the exercise. Better results come from offering absolute awards (triggered when reaching a set goal) rather than relative ones (when it’s winner take all), so there’s an incentive to help others.

While such formalized idea markets are hard to find among Canadian employers, some companies reward idea generation as part of a broader employee reward scheme. “We’ve given out large rewards on the order of a few thousand dollars’ worth for people who’ve brought up ideas,” says Sanjay Singhal, CEO of software developer Fusenet, based in Oakville, Ont. In five instances, the company offered equity participation to employees who ended up working on the new product or venture.

As the authors acknowledge, internal markets require scale. Smaller enterprises typically have to look for answers beyond their own walls. “When I run idea markets, I always bring in outsiders,” says John Sutherland, a consultant based in Markham, Ont., who assembles teams with varied expertise to address growth-constraining problems. Outsiders bring an entirely fresh perspective and don’t focus on reasons an idea won’t work, he says. “Having said that, if you’re an IBM and you’ve got 450,000 employees from different cultures, you’ve got lots of perspectives to draw from.”

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