This New Kind of Kickstarter Could Change Everything

IBM is giving money to its employees for crowdfunded projects

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Richard Drew / Associated Press

What if you got to decide your company’s next big project instead of the boss? Some companies are beginning to cede the reins of control to their workers, and they’re looking to an unlikely source as inspiration: crowdfunding platforms like Kickstarter.

Crowdfunding has risen to prominence in recent years as a way for great ideas from ordinary people to receive both attention and financial backing. Now businesses are trying to adapt this model for corporate use, launching Kickstarter-like internal websites through which employees can pitch new ideas and fund them using actual company money.

IBM has been one of the most prominent organizations to experiment with enterprise crowdfunding. The company has developed its own crowdfunding platform, dubbed iFundIT, that employees in its IT department use to develop and pitch potential projects and company purchases. Workers are given up to $2,000 of IBM money that they can use to fund the projects they believe have the most potential. Project creators, who come from all levels of the company, can promote their ideas on the organization’s internal social network.

It’s a more dynamic alternative to the typical process in which a review board of higher-ups decides how to allocate department dollars. “The project dollars are real dollars. The outcome is real spending,” says John Rooney, IBM’s Manager of IT Strategy. “So typically in corporate IT, we’re working top-down. This is trying to take that and turn it around and work from the ground up.”

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So far about 1,000 employees in 30 countries have participated in two rounds of IBM crowdfunding. The program has received about $300,000 in seed money from the company. Twenty projects have been successfully funded so far, costing between $10,000 and $30,000 on average. Successful projects are typically apps and software that can increase office efficiency. A note-taking tool called Blink, for example, was successfully funded because it’s useful during conference calls, Rooney says.

This corporate crowdfunding model builds upon both the classic suggestion box and more modern initiatives like Dell’s IdeaStorm platform, through which customers can present, vote and comment on ideas they’d like to see Dell implement. The crowdfunding model, though, allows participants to express a wider range of interest than just a binary vote. “This is almost a form of monetized voting,” says Gordon Burtch, a professor of information and decision sciences at the University of Minnesota who studies crowdfunding. “I can express my intensity of preference for the idea by putting in $100 rather than $10 compared to somebody else.”

IBM plans to expand the use of iFundIT to more employees in 2014 and create social and mobile applications to make the program more engaging. The platform could eventually be packaged and sold to other companies , too. Some of IBM’s corporate products, like the social network software Connections, begin as internal tools to boost the company’s own efficiency.

It’s unclear how quickly other firms will adopt similar models, Burch says. There’s a high perceived risk in giving everyday employees control over limited company dollars. Trusting the crowd isn’t necessarily a natural fit for extremely hierarchical office environments. “It’s sort of a complete mental shift in terms of how they’re allocating their money,” Burtch says. “Traditionally they would have control over their money and dictate what happens next, but now they’re handing the money out and trusting that the employees know what they’re doing.”

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Still, If IBM’s model spreads (and Burtch believes it will), it could make it easier for low-level employees to have their ideas heard in the workplace. And employers might benefit by having a more engaged workforce. “It gives employees more voice in what that work environment looks like,” Rooney says. “It not only changes the nature of the work, it changes a bit of the relationship that employees feel with IBM.”