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Special Report September 7, 2010, 11:30PM EST
Pitney Bowes, AT&T, and Electronic Arts are among the companies using software to tap workers' collective intelligence to solve problems, reduce costs, and find new markets
By Rachael King Pitney Bowes Inc., the maker of postage scales and mail-sorting equipment, needed to find a way to field customer inquiries without passing callers from one agent to the next.Yet rather than ask managers to come up with a fix, Pitney Bowes (PBI) executives put the challenge to the workforce. Within days, employees proffered a solution that the company then implemented. "It goes far beyond management deciding to change and to innovate, and there are so many good ideas that could be acted on that are with the people who are right there every day, dealing with customers," says Pitney Bowes Chief Executive Officer Murray Martin. A measurable increase in customer satisfaction was "almost immediate."
Under pressure to add growth while keeping research costs in check, companies are striving to get better at tapping in-house expertise. Pitney Bowes, AT&T (T), Cisco Systems (CSCO), Electronic Arts (ERTS), Wal-Mart Stores (WMT), and MetLife (MET) are using software and other tools to mine the collective intelligence of their workforce, organize the resulting suggestions, and then predict which ones are most likely to succeed.Pitney Bowes, which in the past used a suggestion box to get input from employees, now relies on a program called Idea Central from U.K.-based Imaginatik Plc (IMTK:LN). Since 2008, Pitney Bowes executives have asked workers to tackle 42 different challenges and received about 3,000 ideas. The company has implemented or plans to put in place about 700 of those, Martin says. About 10,000 employees of Stamford (Conn.)-based Pitney Bowes use Idea Central.
$250 Million Market
Companies spend an annual $250 million on collective intelligence tools, says Imaginatik Executive Vice-President Luis Solis, who estimates that the market is growing 15 percent to 30 percent a year.Video game publisher Electronic Arts (ERTS) wanted to do a better job predicting which games would succeed to more effectively allocate marketing dollars. So it surveyed employees using software from San Francisco-based Crowdcast. Forecasts based on that polling turned out to be more accurate than the company's own projections, according to Crowdcast CEO Mat Fogarty.
AT&T, the largest U.S. telephone company, uses software sold by Spigit Inc. to let employees generate ideas and bet on which ones will succeed. AT&T now has about 40,000 employees that have signed up for its internal network called The Innovation Pipeline. AT&T was among 164 companies that attended an Aug. 19 customer conference sponsored by Spigit in Half Moon Bay, Calif. "We wanted to democratize how we innovate at AT&T and take it out of the labs," AT&T innovation leader Patrick Asher said at the conference.
The company spends several million dollars a year on collective intelligence, Asher said. It has sought feedback in such areas as customer service and how to deploy Long-Term Evolution, a next-generation wireless technology, more rapidly. Each quarter, AT&T senior executives fund a handful of what they consider the best ideas.
Employee Participation
Measuring collective intelligence can be a struggle at companies whose employees won't participate or whose midlevel managers consider the efforts a waste of time. "You will have managers who don't really see it and you have to find a way of overcoming that and forcing it to occur anyway," says Martin at Pitney Bowes, where each business is required to post a challenge.To keep employees coming back, AT&T senior executives offer financial incentives, including a drawing to win $500, Asher said at the conference. The company also doles out virtual currency that can be used to bet on which ideas are most likely to succeed. Participation in The Innovation Pipeline surged to 17,862 in October 2009 from 4,082 in July of that year.
Another hurdle lies in keeping staffers from betting on the success of ideas—say, giving everyone a raise—that, while appealing to the rank and file, are unlikely to win management backing. At AT&T, employees lose virtual currency when they bet on ideas that don't prevail.
Martin also recommends being up-front and responding to every idea, including telling employees which ideas simply won't work. "They'd sooner hear that than nothing," he says.
Long-Term Innovation
Even ideas that result in incremental changes can make a bigger difference in the long run, says John Hagel III, co-author of The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion. People recognized as problem-solvers in one area can join with colleagues in other businesses or regions to tackle larger issues, he says. "Then, over time, you see teams coming together, people from very different parts of the world," says Hagel, also the co-chairman for the Deloitte Center for the Edge. "There's where you start to see the real innovation."At Pitney Bowes, managers issued a challenge to employees in the international software business, which prompted a conversation with colleagues in another division and ultimately led to three contracts worth 300,000 euros ($383,940). "It's people connecting and sometimes there are unintended consequences," Martin says.
Pitney Bowes welcomes ideas that can result in changes large or small. To entice employees to aim high, it created a competition called Innovation Idol, modeled on the talent-search TV show American Idol. The effort culminated in an event where backers of the six best promising ideas made onstage presentations to senior management. Martin, clad in a mask of Simon Cowell, the harshest judge on the TV show, was so impressed with the pitches that he chose to fund two of them on the spot.
King is a writer for Bloomberg Businessweek in San Francisco.
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