What would happen if a business were to apply the principles of open source software development to its approach to management. New ideas and insights would bubble up from the ranks, not senior management. So says one of William C. Taylor’s sources in a fascinating article in today’s New York Times.
Recognizing that its employees were smarter than its managers, Rite-Solutions, a Newport, RI-based software company implemented an internal idea market where employee ideas become “stocks” that other employees can “buy” and “sell” with US$10,000 in “opinion money” based on their assessment and support of the idea.
“Most companies operate under the assumption that big ideas come from a few big brains: the inspired founder, the eccentric inventor, the visionary boss. But there’s a fine line between individual genius and know-it-all arrogance. What happens when rivals become so numerous, when technologies move so quickly, that no corporate honcho can think of everything? Then it’s time to invent a less top-down approach to innovation, to make it everybody’s business to come up with great ideas.”
Employees vote their enthusiasm with their “opinion money” or by volunteering for specific projects which yield real-money dividends to the participants if the project is successful.
And make no mistake; the open-source approach to management is working and yielding huge returns: senior management was “unenthusiastic” about one of the earliest idea stocks, but “support among employees was overwhelming.” The idea was productized and today accounts for 30 percent of total sales.
“‘Would this have happened if it were just up to the guys at the top?’ Mr. Marino [Rite-Solutions president] 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.’”
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