We have all become familiar with popular crowdfunding platforms such as Kickstarter over the past year. Now IBM provides us with an interesting example of how a company can put the concept to work inside the corporation. For years, IBM has tried to nurture innovation through various special structures and processes, recognizing that traditional resource allocation processes in large, complex organizations often stifle breakthrough ideas. For instance, David Garvin and Lynne Levesque wrote a famous Harvard Business School case study about IBM's Emerging Business Opportunities program developed by Bruce Harreld and others about a decade ago.
Now, IBM has brought crowdfunding inside the firm to nurture innovation. At this point, they are focusing particularly on ideas that can improve the way work gets done internally. It will be interesting to see if they apply the concept to product innovation as well. Here's an except from an article in Fortune about the new program:
As with Kickstarter, IBM employees can get involved by submitting an idea, by critiquing it and suggesting improvements, or by investing in it. Submitters set a funding target to cover the cost of basic coding, architecture, and testing. They can also enlist teams of IBMers who volunteer their expertise to help develop projects that interest them. Employee backers support proposals they like by voting in $100 chunks (up to a maximum of $2,000 per employee) that come out of a $300,000 fund supplied by the CIO Lab. "Once the total amount of support reaches $25,000, we fund the project and move forward with it," says LeGoues.
IBM reports that more than one thousand employees have participated, and twenty proposals have been funded to date. I'm encouraged that a large firm such as IBM would embrace this novel concept and apply it to their work. Large firms often struggle with innovation for a wide variety of reasons, as we all know. Leaders at such complex firms must find special ways to surface new ideas, vet them, and fund the best ones. Perhaps crowdfunding in this way may become a key tool for supporting intrapreneurship in large organizations.