1. business and industrial

SparkX – Enterprise Crowdfunding
Spark innovation from bottom-up
Abstract
Decision-making on approval and budgeting processes for new projects tends to be top-down in most
companies. In contrast, crowdfunding uses the "wisdom of the crowd" to make funding decisions and is
successfully used in the public scope (e.g. Kickstarter). SparkX is an enterprise crowdfunding platform that
adapts this successful crowdfunding model to leverage its benefits in the enterprise context . This platform
complements the traditional top-down decision-making to allow employees to collaborate
on funding breakthrough ideas. SparkX helps to engage employees, promotes open innovation, revitalizes
the culture intrapreneurship and sparks collaborative innovation from the bottom up.
SPARKX – EN TER PRISE CROWD FUNDIN G
Employee engagement is a challenging issue for most companies these days. In a study of 142
countries, Gallup found that only 13% of employees worldwide are engaged in their work. All
employees have ideas, credible or otherwise, but very few, however, get an allowance and an
opportunity to act on these. Companies want to empower their employees to innovate, but many
innovative ideas fail to be realized, because they could not acquire needed resources. Decisionmaking on approval and budgeting processes in most companies tends to be top-down.
Therefore, submitting a project proposal to a review board could take months to get a thumbs up
or down and, if the project got approved, months more to fund and staff it. Idea management
should not just be one centralized instance which decides on viable ideas, instead it should
encompass the whole company.
Crowdfunding uses the "wisdom of the crowd" to make funding decisions: If employees (the
"crowd") invest enough of their allocated funds to reach a project's funding target, then needed
resources are committed and the project begins. Moreover, crowdfunding is not just about
acquiring resources, it is also about a company-wide exposure, feedback and validation of the
project, and empowerment and engagement of employees. Employees get involved by submitting
an idea, by critiquing it, volunteering and suggesting improvements, or by funding it. Submitters
set a funding target to cover the needed resources for getting the project off the ground and
realized. Crowdfunding platforms such as Kickstarter or Indigogo have proven to be
very successful in the public space, SparkX adapts this successful model to leverage its benefits in
the enterprise context.
The management decides on a budget pool per quarter (e.g. $100.000) that is used to allocate
internal resources to internal projects based on the crowdfunding approach. Thereby, every
employee gets a certain amount of a digital currency, called Sparks, per quarter to fund submitted
projects. At the end of every quarter, all pledged Sparks are matched with the available budget
and allocated to the projects. Only projects that attract a relatively large number of interested
people inside the company and, therefore, reach the funding target would receive the needed
resources. To reward employees for funding successful projects, those individuals receive
additional Sparks, based on the success of the projects, to have more influence on future projects.
Compared to existing idea management solutions, this platform shall be used for already
conceptualized, well-defined and, if possible, prototyped ideas that require resources for the next
step.
This enterprise crowdfunding approach promotes open innovation and puts employees in the
middle of the ideation process. SparkX complements the traditional top-down decision-making
with a new platform that allows employees to collaborate on funding breakthrough ideas.
Thereby, it democratizes the decision-making for a defined budget pool. This platform encourages
employees to think out-of-the-box and gives everyone inside the company with a great idea the
chance to have it seen and realized. Ultimately, SparkX helps to engage employees, revitalizes the
culture of intrapreneurship and sparks collaborative innovation from the bottom up.
Lukas Masuch, Henning Muszynski, Patrick Herholz
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