1. Innovation
Idea Markets:
Unlock the grey matter
D
attaram had just taken over as the an open call. The concept has been present and
branch manager of the SME branch has been used knowingly or unknowingly since
of this large PSU bank since the last ages. It is based on the belief that a diverse col-
six months but had spent over 20 lection of independently-deciding individuals is
years at the bank. One of his biggest challenges likely to make decisions and predictions better
was in providing as fast a turnaround on credit than experts. Spurred by the benefits offered by
proposals as the new age private sector bank next web 2.0 technologies and the increasing accept-
door. He discussed with another SME branch BM ance of technology as a platform, many companies
in Delhi and designed a new process for credit are trying to use it to the fullest. The functioning
appraisals which had the potential to improve of stock markets is the most common example of
the TAT by 25% for all SME branches. With a lot crowdsourcing. The stock markets essentially eval-
of excitement he presented this proposal to his uate the stocks of companies based on the crowd’s
regional head, Prabhu. Prabhu though had his raja debnath perception on how good a stock is. Applying the
hands full with the launch of ten new branches in believes Idea same idea within an organization, we have a col-
the next quarter and did not wish to be bothered laborative innovation platform.
with Dattaram’s new project at that time. He told markets can There are many successful instances of idea
Datta that they would discuss the project after the help large banks markets, which have been deployed:
branch openings and pushed the project onto the l One of the most visible of these idea markets
to increase
pending list. The branch inauguration next quarter was started by Dell. Dell launched a website called
perfomance gap
was a grand success. Another 10 branches were to Dell IdeaStorm where customers can post their
be commissioned within the next quarter, and thus with smaller banks suggestions for business ideas / improvements
Dattaram’s TAT improvement project went onto expected from Dell, and in turn can promote
the perpetual pending list. or demote an idea. Dell manages this forum by
Dattaram too got used to operating with the channeling the discussions on ideas when they
sub-optimal process and life continued at the seem to go off track. The ideas garnering the
bank. Dattaram never again bothered to think of highest scores based on ‘promotions’ are generally
a better way to perform his job as getting Prabhu’s acted upon and the users know once an idea is
mindshare and approval was too daunting. Every implemented.
organization has its fair share of Dattarams and l Another leader, Nokia has a website named
Prabhus. Idea markets could be seen as a way ‘Ideasproject’
to give a voice to all the Dattarams and making which is
redundant all the Prabhus in our system. The built around
banking industry has one of the most educated crowdsourcing.
and largest employee bases. But the majority of Users are free to
this base is conditioned to think as workers rather post their ideas
than as intrapreneurs. and share their
innovations.
Idea Markets This in turn can
Idea markets use ‘crowdsourcing’ as its primary be picked up by
building block. Crowdsourcing, at its most basic Nokia or other
level, is about collaborative thinking towards a users to build
common goal. It is when a business or organi- on to deliver
zation takes a task usually performed by a desig- user centric innovations rather than the common
nated internal team or individual and outsources manufacturer driven innovations.
it to an undefined group of people in the form of l ‘Mystarbucksidea’ a website managed
40 Banking Frontiers December 2011

2. by Starbucks is truly shaping the way can suggest new product ideas and In conjunction to Idea markets,
forward for Starbucks. Customers can collectively evaluate those ideas through a banks would also want to look at Idea
share ideas, view other ideas, discuss market mechanism. Idea markets use idea management systems which allows
on them and vote on them, all the while stocks to represent new product ideas, let them to collect, track, and manage ideas.
letting Starbucks know what is important participants trade the stocks on a virtual Selected ideas are taken in for further
to the Starbucks customer. market place, and use the resulting stock analysis, implementation and more. It
l Closer home Infosys has taken a prices as indicators for the possible success also allows those participating in the
leaf out of crowd sourcing concepts and of the different new product ideas. project to volunteer to work on particular
embarked on a Talent Strategy program The Idea markets implementation is a projects and vote on which ideas should be
based on this principle. Faced with high six-step process starting from generation considered for investment and developed
attrition the company is drawing up its 2015 of ideas based on an open-ended or closed to the proof-of-concept phase. An idea
talent strategy through crowdsourcing ended question by the management markets implementation along with an
of ideas from amongst all its employees team. The questions can be as specific as idea management system forms the ideal
and then evaluating these ideas through a improvements on a feature of a service, combination for the innovation program
team comprised of a cross section of 100 or as open as invitation on ideas on a new in a bank to analyze the potential benefits
employees from within the organization. product, or product category. Dattaram’s of all incoming ideas and insights, product
This is in stark contrast to the traditional TAT improvement project would have management, strategic planning, sales,
top down approach. been an idea which he could have listed and processes improvements, and others.
l Funding Circle, a peer to peer (without requiring Prabhu’s approval) on
lending platform is another application of the idea market at his bank. wHy BotHer?
crowdsourcing, wherein users of the site All collected ideas are evaluated by Enough said, but why should any organiza-
the employees. tion bother to setup a collaborative interac-
Employees tion platform within its intranet? Truth being
in the SME told, there are benefits for both the company
department and the employees from such a platform. For
would have the organization, constructive employee
been interested engagement through a game-like environ-
to evaluate ment for fostering participation, strength-
Dattaram’s ened intrapreneurial culture, a feedback
idea. The basic and employee pulse detection channel and
principle behind identification of opinion makers are some
using the market key benefits. However, the key benefit is to
mechanism for be able to ask its employees key questions
idea generation and solicit ideas and answers from them.
is to exploit the The benefit of engaging with the external
powerofmarkets customer community is well known, and
determine the most viable borrowers and to efficiently evaluate a large number of we do not need to go into that here.
the rate at which the users would provide stocks, as the market mechanism stands Employees too reap benefits by getting
credit to them. The delinquencies on such out for its ability to aggregate dispersed reward and recognition opportunities, and
P2P platforms have generally been much opinions. There would be other ideas as greater job satisfaction through a say in the
lower than those for traditional banks. well which would be traded. At the end of decision making process of the company.
the period, the aggregating mechanism of More Dattaram’s will be unearthed and
How It works? the platform would highlight the idea stocks the Prabhu’s made redundant.
A perfect crowdsourcing application with the highest market capitalization. If Idea markets are deployed well
should have four characteristics that Dattaram’s idea would now float up to be large banks could start enjoying the
ensure a success story – diversity of opin- noticed by the SME Head who can then fruits of owning a large employee
ion about the said idea, independence in start a pilot implementation of the idea in and customer base and increase
formation of thoughts & opinion, decen- earnest. There could be other ideas which the per formance gap with the
tralization of sources of information, and may not be as easy to implement and may smaller banks.
a platform to quantitatively aggregate the require further resources in terms of time The author is senior manager, Business
information held by the crowd. and money which can be sanctioned by the Advisory Services, Ernst & Young. These are his
The objective of idea markets is to create senior management who play the role of personal views. He can be contacted on raja.
a virtual market where all participants venture capitalists within the bank. debnath@in.ey.com
Banking Frontiers December 2011 41