Crowdsourcing is often used to foster innovation, but in practice unlocking the wisdom of the crowd is easier said than done. Firms can be overwhelmed by bad or useless ideas, which can clog up the process and even lead a company astray. Many crowdsourcing campaigns offer prizes for winning ideas, but determining the optimal type (cash or non-cash) and size of the reward is a difficult task. There is also evidence that firms resist ideas, no matter how worthy, that weren’t invented internally.
How PayPal Gets Employees Invested in Innovation
An annual tournament allows employees to wager on the best ideas.
July 12, 2022
Summary.
Companies have struggled to crowdsource innovation. The problems they have encountered include a flood of bad or useless ideas. PayPal created a process that addresses this issue. It involves a blockchain-based token system that lets employees place wagers on ideas.
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New!
HBR Learning
Innovation and Creativity Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Innovation and Creativity. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Unlock your team's curiosity and willingness to take smart risks.