Can in­ter­nal crowd­fund­ing help com­pa­nies find their best ideas?

Finweek English Edition - - FEEDBACK - WAL­TER FRICK

Crowd-fund­ing plat­forms like Kick­starter and Indiegogo have proved adept at chan­nell ing f und­ing to in­no­va­tive new prod­ucts and projects, of­ten by pre­vi­ously un­known in­ven­tors and de­sign­ers. Can larger com­pa­nies em­ploy the same type of sys­tem to find and fund in­ter­nal in­no­va­tion?

IBM has been ex­per­i­ment­ing with ‘en­ter­prise crowd-fund­ing’, in which the com­pany gives its em­ploy­ees a small bud­get and en­cour­ages them to com­mit it to projects pro­posed by their col­leagues. The ex­per­i­ments are the sub­ject of an aca­demic pa­per by IBM re­searchers, and the re­sults have been promis­ing, with a few sur­prises: crowd-fund­ing may help im­prove morale, for in­stance. I spoke with one of the au­thors, Michael Muller, about what he and his team have dis­cov­ered. What fol­lows is an edited ver­sion of our con­ver­sa­tion.

Q: Tell us a bit about the ex­per­i­ments with crowd- fund­ing at IBM.

A: IBM has been in­ter­ested in find­ing dif­fer­ent ways to sup­port in­no­va­tion in­side of com­pa­nies – in­side of IBM and in­side of clients com­pa­nies – for a long time. When we bring it in­side the en­ter­prise, what we call en­ter­prise crowd fund­ing, sev­eral things are dif­fer­ent.

Num­ber one, we don’t have peo­ple use their own money. An ex­ec­u­tive al­lo­cates a bud­get to the par­tic­i­pants in the ex­per­i­ment. In our first case, a vice pres­i­dent in re­search al­lo­cated $100 to each of the 500 peo­ple in his or­gan­i­sa­tion. There was a web­site that was in­spired by In­ter­net crowd-fund­ing web­sites, where mem­bers of the or­gan­i­sa­tion could pro­pose projects, and mem­bers of the or­gan­i­sa­tion could take their $100 and spend it on each oth- ers’ projects. The trial lasted about a month and the funds were avail­able on a use-it-or-lose-it ba­sis, mean­ing you could only spend it on some­body else, not on your­self. And at the end of the trial, if you didn’t spend the money then you didn’t get to keep it. A sec­ond trial in re­search was at IBM’s Al­maden re­search cen­tre [in San Jose, Cal­i­for­nia]. The third trial was in a rel­a­tively large IT part of IBM,

roughly 5 500 peo­ple strong.

Q: What kinds of projects were funded?

A: Many ad­dressed a bunch of tech­ni­cal chal­lenges that we have been hav­ing. I don’t think they were new in­ven­tions here so much as they were mak­ing tech­nol­ogy avail­able so that peo­ple could have new thoughts around the tech­nol­ogy,

which would then lead to in­ven­tions, we hoped. In the first re­search project peo­ple had said that they needed ac­cess to a mi­cro­task­ing site – an ex­am­ple of this would be Me­chan­i­cal Turk – and it was hard to ne­go­ti­ate how to do those pay­ments through the stan­dard IBM chan­nels. It was funded and the vice pres­i­dent moved heaven and earth to get that through the IBM pur­chas­ing or­gan­isa- tion. And I have seen con­fer­ence pa­pers based on the data that were col­lected through the use of that par­tic­u­lar setup. In that case, not only did the project go through, but it’s en­abling use­ful re­search.

Q: There were also some other projects that ad­dressed morale is­sues and the cul­ture.

A: Sev­eral of the pro­pos­als had to do with things that peo­ple would have to do to­gether in or­der to par­tic­i­pate in it. One was “af­ter­noon bev­er­ages”. It was at a stan­dard time and if you came for af­ter­noon bev­er­ages you [were] go­ing to talk to your peers and net­work. Another was sim­ple small- scale pieces of ath­letic equip­ment, gen­er­ally speak­ing for shared use. The theme seemed to be over and over again, “We’ll do this to­gether, we’ll use this to­gether, we’ll talk to each other, we’ll meet each other.” Q: What was par­tic­i­pa­tion like?

A: We ran this re­ally not know­ing what to ex­pect. We knew the stan­dard fig­ures for so­cial me­dia, where about 10% of the peo­ple would be pretty ac­tive or at least some­what ac­tive. Then 90% of the peo­ple would maybe oc­ca­sion­ally con­trib­ute or mostly look around to see what was go­ing on. We had those kinds of ex­pec­ta­tions in mind, and what hap­pened re­ally sur­prised us: We had well over 45% par­tic­i­pa­tion.

We had thought, well maybe it’s go­ing to be the case that the higher you are in the or­gan­i­sa­tion, the more inf lu­en­tial you are, the more likely you are to get fund­ing. We found the re­verse, ac­tu­ally. Peo­ple as high as IBM fel­lows were mak­ing pro­pos­als that did not get funded; it was re­ally grass-roots. Since then we have done two other tri­als, and in one of them the ef­fect of rank in the or­gan­i­sa­tion was a com­plete wash, no sta­tis­ti­cal ef­fect at all.

Q: You found con­sid­er­able par­tic­i­pa­tion across geo-gra­phies, cor­rect?

A: Un­like the two re­search groups, the IT group from the third ex­per­i­ment was ge­o­graph­i­cally dis­trib­uted across 29 coun­tries and a bunch of dif­fer­ent divi---

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.