Idea Markets
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Idea markets use crowdsourcing to unlock innovation within organizations. They allow employees to suggest new ideas, evaluate each other's ideas through a virtual marketplace, and use the results to indicate which ideas may be successful. Several large companies have successfully implemented idea markets, allowing customers and employees to propose and vote on new products and services. Idea markets give all employees a voice and make redundant approval processes, helping unlock innovation across an organization.
Idea Markets
- 1. Innovation Idea Markets: Unlock the grey matter D attaram had just taken over as the an open call. The concept has been present and branch manager of the SME branch has been used knowingly or unknowingly since of this large PSU bank since the last ages. It is based on the belief that a diverse col- six months but had spent over 20 lection of independently-deciding individuals is years at the bank. One of his biggest challenges likely to make decisions and predictions better was in providing as fast a turnaround on credit than experts. Spurred by the benefits offered by proposals as the new age private sector bank next web 2.0 technologies and the increasing accept- door. He discussed with another SME branch BM ance of technology as a platform, many companies in Delhi and designed a new process for credit are trying to use it to the fullest. The functioning appraisals which had the potential to improve of stock markets is the most common example of the TAT by 25% for all SME branches. With a lot crowdsourcing. The stock markets essentially eval- of excitement he presented this proposal to his uate the stocks of companies based on the crowds regional head, Prabhu. Prabhu though had his raja debnath perception on how good a stock is. Applying the hands full with the launch of ten new branches in believes Idea same idea within an organization, we have a col- the next quarter and did not wish to be bothered laborative innovation platform. with Dattarams new project at that time. He told markets can There are many successful instances of idea Datta that they would discuss the project after the help large banks markets, which have been deployed: branch openings and pushed the project onto the l One of the most visible of these idea markets to increase pending list. The branch inauguration next quarter was started by Dell. Dell launched a website called perfomance gap was a grand success. Another 10 branches were to Dell IdeaStorm where customers can post their be commissioned within the next quarter, and thus with smaller banks suggestions for business ideas / improvements Dattarams TAT improvement project went onto expected from Dell, and in turn can promote the perpetual pending list. or demote an idea. Dell manages this forum by Dattaram too got used to operating with the channeling the discussions on ideas when they sub-optimal process and life continued at the seem to go off track. The ideas garnering the bank. Dattaram never again bothered to think of highest scores based on promotions are generally a better way to perform his job as getting Prabhus acted upon and the users know once an idea is mindshare and approval was too daunting. Every implemented. organization has its fair share of Dattarams and l Another leader, Nokia has a website named Prabhus. Idea markets could be seen as a way Ideasproject to give a voice to all the Dattarams and making which is redundant all the Prabhus in our system. The built around banking industry has one of the most educated crowdsourcing. and largest employee bases. But the majority of Users are free to this base is conditioned to think as workers rather post their ideas than as intrapreneurs. and share their innovations. Idea Markets This in turn can Idea markets use crowdsourcing as its primary be picked up by building block. Crowdsourcing, at its most basic Nokia or other level, is about collaborative thinking towards a users to build common goal. It is when a business or organi- on to deliver zation takes a task usually performed by a desig- user centric innovations rather than the common nated internal team or individual and outsources manufacturer driven innovations. it to an undefined group of people in the form of l Mystarbucksidea a website managed 40 Banking Frontiers December 2011
- 2. by Starbucks is truly shaping the way can suggest new product ideas and In conjunction to Idea markets, forward for Starbucks. Customers can collectively evaluate those ideas through a banks would also want to look at Idea share ideas, view other ideas, discuss market mechanism. Idea markets use idea management systems which allows on them and vote on them, all the while stocks to represent new product ideas, let them to collect, track, and manage ideas. letting Starbucks know what is important participants trade the stocks on a virtual Selected ideas are taken in for further to the Starbucks customer. market place, and use the resulting stock analysis, implementation and more. It l Closer home Infosys has taken a prices as indicators for the possible success also allows those participating in the leaf out of crowd sourcing concepts and of the different new product ideas. project to volunteer to work on particular embarked on a Talent Strategy program The Idea markets implementation is a projects and vote on which ideas should be based on this principle. Faced with high six-step process starting from generation considered for investment and developed attrition the company is drawing up its 2015 of ideas based on an open-ended or closed to the proof-of-concept phase. An idea talent strategy through crowdsourcing ended question by the management markets implementation along with an of ideas from amongst all its employees team. The questions can be as specific as idea management system forms the ideal and then evaluating these ideas through a improvements on a feature of a service, combination for the innovation program team comprised of a cross section of 100 or as open as invitation on ideas on a new in a bank to analyze the potential benefits employees from within the organization. product, or product category. Dattarams of all incoming ideas and insights, product This is in stark contrast to the traditional TAT improvement project would have management, strategic planning, sales, top down approach. been an idea which he could have listed and processes improvements, and others. l Funding Circle, a peer to peer (without requiring Prabhus approval) on lending platform is another application of the idea market at his bank. wHy BotHer? crowdsourcing, wherein users of the site All collected ideas are evaluated by Enough said, but why should any organiza- the employees. tion bother to setup a collaborative interac- Employees tion platform within its intranet? Truth being in the SME told, there are benefits for both the company department and the employees from such a platform. For would have the organization, constructive employee been interested engagement through a game-like environ- to evaluate ment for fostering participation, strength- Dattarams ened intrapreneurial culture, a feedback idea. The basic and employee pulse detection channel and principle behind identification of opinion makers are some using the market key benefits. However, the key benefit is to mechanism for be able to ask its employees key questions idea generation and solicit ideas and answers from them. is to exploit the The benefit of engaging with the external powerofmarkets customer community is well known, and determine the most viable borrowers and to efficiently evaluate a large number of we do not need to go into that here. the rate at which the users would provide stocks, as the market mechanism stands Employees too reap benefits by getting credit to them. The delinquencies on such out for its ability to aggregate dispersed reward and recognition opportunities, and P2P platforms have generally been much opinions. There would be other ideas as greater job satisfaction through a say in the lower than those for traditional banks. well which would be traded. At the end of decision making process of the company. the period, the aggregating mechanism of More Dattarams will be unearthed and How It works? the platform would highlight the idea stocks the Prabhus made redundant. A perfect crowdsourcing application with the highest market capitalization. If Idea markets are deployed well should have four characteristics that Dattarams idea would now float up to be large banks could start enjoying the ensure a success story diversity of opin- noticed by the SME Head who can then fruits of owning a large employee ion about the said idea, independence in start a pilot implementation of the idea in and customer base and increase formation of thoughts & opinion, decen- earnest. There could be other ideas which the per formance gap with the tralization of sources of information, and may not be as easy to implement and may smaller banks. a platform to quantitatively aggregate the require further resources in terms of time The author is senior manager, Business information held by the crowd. and money which can be sanctioned by the Advisory Services, Ernst & Young. These are his The objective of idea markets is to create senior management who play the role of personal views. He can be contacted on raja. a virtual market where all participants venture capitalists within the bank. debnath@in.ey.com Banking Frontiers December 2011 41