Why Your Company Should Use the Kickstarter Model to Innovate

Why Your CompanyHere is an excerpt from an article written by Michael Schrage for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.
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In an impressively short time, Kickstarter has quickly become the go-to high-impact mashup of crowdsourcing sensibility and entrepreneurial endeavor. If you’ve got a genuinely creative idea -— or even a “me, too with a twist” — Kickstarter’s “crowd funding” platform offers a genuinely innovative way to finance creativity and innovation. Since its 2009 launch, Kickstarter claims that more than 4.1 million people have pledged over $619 million to fund over 41,000 projects. It’s exciting.

But Kickstarter’s inspiration and effectiveness at facilitating “just-in-time creative communities” — or what has also been described as “impulse patronage” -— poses a provocative challenge to the C-suites of global organizations worldwide: Where are their Kickstarters? Why aren’t leaders tapping the crowdfunding capabilities of their own innovation ecosystems to stimulate their people and ideas?

The Kickstarter model should be a part of the innovation infrastructure of every global enterprise that takes intrapreneurial creativity and coherent corporate culture seriously.

Internal venture capital and skunk work projects are nothing new. Corporate behemoths — like IBM and its innovation jams, 3M’s open innovation efforts
and Procter &Gamble’s connect + develop programs — are constantly looking for ways to cost-effectively leverage their scale while safely exploring potential innovation opportunities. Many of these initiatives enjoy some success; most do not.

But one inherent challenge — flaw? — in the overwhelming majority of the innovation initiatives I’ve seen is how intrinsically compartmentalized, segregated and silo-ized they become. They’re creative and/or innovative efforts appealing to creatives and innovators. They’re not designed to appeal to the organization — let alone its ecosystem! — at large.

Moreover, funding for innovation overwhelmingly comes from “budgets” rather than any discretionary funds held by individuals or small teams. “Impulse patronage” looks and feels like impossibility to anyone who isn’t a manager with a cash-flow-positive P&L and the courage to take a chance. The idea that employees could contribute their own money to help kickstart a provocative proposal is organizational heresy. Perhaps it should be. But what if a slice or sliver of people’s compensation was denominated for Kickstarter-esque discretionary financing? Why not make the organization a marketplace that creates the option to tap not “the wisdom of crowds” but the “excitement of employees” or the “perceptions of personnel”?

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To read the complete article, please click here.

Michael Schrage, a research fellow at MIT Sloan School’s Center for Digital Business, is the author of Serious Play
and the new HBR Single Who Do You Want Your Customers to Become? To read more of his HBR, please click here.

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