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March 27, 2006

Harvesting Collective Genius

Sunday’s NY Times has a way tasty article from Bill Taylor (co-founder of Fast Company) about how Rite-Solutions is insourcing ideas from all its employees rather than outsourcing ideas or relying solely on the ideation generation from a few big-brained internal executives to move the business.

Rite-Solutions has created an internal idea stock exchange where employees can suggest the company invest in new technology, enter into a new business channel, implement a cost-efficiency initiative ... etcetera. Submitted ideas become mock stocks and employees read an “expect-us” (not a prospectus) detailing how the idea can benefit the company. These ideas-turned-stocks are then listed in the Rite-Solutions “Mutual Fun” board where every employee is given $10K in stock market fantasy funds to buy, sell, and trade in the ideas they believe Rite-Solutions should focus on.

Pretty cool, huh?

Now, check out the congregation is smarter than the preacher sentiment from James Lavoie, one of Rite-Solutions co-founders:

"We're the founders, but we're far from the smartest people here. At most companies, especially technology companies, the most brilliant insights tend to come from people other than senior management. So we created a marketplace to harvest collective genius."

In another article, Lavoie explains the reasoning behind Rite-Solutions “Mutual Fun” idea this way …

“We believe the next brilliant idea is going to come from somebody other than senior management, and unless you’re trying to harvest those ideas, you’re not going to get them. That’s why we give everybody an equal voice, and a game to provoke their intellectual curiosity.”

The “Harvesting Collective Genius” reminds me of the Idea Revolution which Alan Robinson and Dean Schroeder wrote about in the way worthy IDEAS ARE FREE book. In this book, Robinson and Schroeder make the business case for the internal insourcing of employee-generated ideas. Worthwhile snippets from this book include:

“Every employee idea, no matter how small, improves an organization in some way. It is when managers are able to get large numbers of such ideas that the fill power of the idea revolution is unleashed.”

”Ideas are free. Employees become allies in solving problems, spotting opportunities, and moving the company forward, to the benefit of all. And when managers decide to let their employees think alongside them – and no longer seek to go it alone – they will have joined the Idea Revolution.

”This empowerment starts a virtuous cycle. As employees see their ideas being used, they begin to feel valued as part of the team and become more involved.

”Small ideas are the best source of big ideas. A big problem or opportunity frequently manifests itself through a host of smaller signs or symptoms, each of which might be seen individually by different people in different places at different times. What might seem to be a small idea could in fact be addressing a facet of this larger issue. This bigger issue can often be discovered by probing with the right questions.”

Small ideas tend to stay proprietary, since there are no mechanisms for competitors to find out about them, and even if they do, the ideas are often situation-specific and so cannot be copied. Because of their proprietary nature, they accumulate into a considerable cushion of sustainable competitive advantage.”

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Listed below are links to weblogs that reference Harvesting Collective Genius:

» Harvesting Collective Genius from Strategy Central
Check out this cool idea over at the New York Times. The two co-founders of Rite Solutions, a software company with a very specialized business, have developed an internal market where any employee can propose that the company acquire a [Read More]

» Co-creation from John Winsor
I was planning on writing a post today about the great Sunday New York Times article entitled, Here's an Idea: Let Everyone Have Ideas, written by Bill Taylor, co-founder of Fast Company. The article, about Rite-Solutions internal co-creative innovatio... [Read More]

» Harnessing Your Creative Team from SCHMITTblog
Great article in Sunday's NY Times (Here's an Idea, Let's let Everyone Have Ideas) about companies that are tapping into the creativity of their employees -- getting beyond the idea that the founder/CEO has all the great ideas and should [Read More]

» Marketing Mindset Mashup from Casual Fridays
johnmoore of Brand Autopsy referred to a NY Times article in his post, Harvesting Collective Genius. The article outlines how Rite-Solutions uses an internal stock exchange for the submission of ideas in which employees invest part of their allocated ... [Read More]

» Idea flow from Web X.0
John Moore of Brand Autopsy posted an excellent story a couple of weeks ago on how Rite-Solutions harvests ideas from its own employees. The quote (of a quote) which I personally liked the best is from James Lavoie, one of [Read More]

» The Ways We Innovate from New Persuasion
During the past few weeks here at New Persuasion, we’ve been talking a lot about innovation. Innovation is a tricky subject – while there is no arguing about how essential it is, we all seem to have different definitions or [Read More]

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If you follow the concepts of the Wisdom of Crowds, the Generous Web, Mosh Pit Innovation, or Harvesting Collective Genius you believe in the power of ideas bubbling up. Yet, few companies create an environment conducive to idea s... [Read More]

Comments

Good points. Ideas are bigger than any ego. I call it superflow when flow is great in a group.

Coming up with an idea is the easy part. As the Rite-Solutions guys point out, not all ideas thrive ... they come up against serious opposition (sometimes even from the CEO), they make us lose sleep, hair and other things we hold dear. But good ideas are also like axes, they give us the energy to break down doors and barriers, they make us tell the stories we need to tell and get to the people we need to.
So while the ideas are free ... making them something more tangible is going to cost you, but its worth it.

"Small ideas tend to stay proprietary, since there are no mechanisms for competitors to find out about them, and even if they do, the ideas are often situation-specific and so cannot be copied. Because of their proprietary nature, they accumulate into a considerable cushion of sustainable competitive advantage.”

Hmm, Small is the New Big + The Wisdom of Crowds = Marketing Mindset Mashup.

I'll have to blog on that Friday.

TThere is nothing new in this and it is certainly a big WOW for the employee customer! Employees make or break a company it is their sweat and hard work, insight and on the spot street smarts that usually generates the cash flow and saves the company from disasters.

What they are doing is nothing new, but a way to capitalize in the market on developing an old topic in a new way, well almost new. Their have been other pioneers who dared to tread on what business was unwilling to do and that was recognize the value of their employees, the “silent customers” or partners if you prefer. They are partners in action, but without the rewards.

There are a couple of other articles along these lines that are also worth reading and those who care might want to take a look.

The first is the "The Silent Customer" found at "The Customer Development Center.
http://www.customerdevelopmentcenter.com/articles/Customer%20Feedback%20and%20Satisfaction/silent_cust.htm”>

and another dated January 15, 2006 at the "Customer Service What?" blog called "Internal Customer Service". http://cdccustomerservice.blogspot.com/2006_01_01_cdccustomerservice_archive.html

Here's a bit of backstory on Bill Taylor's article...

Bill heard about Rite-Solutions at our annual summit last October where Jim Lavoie was a storyteller. [Bill Taylor was too]

Jim's video is posted on our website. I encourage you to check it out. His presentation was just fantastic.

http://www.businessinnovationfactory.com/video/index.php?st=lavoie

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