Is a combination of NEW WORK that enables employees to find their calling and where employees have the freedom for development and creativity, and FUNDING that rests on the principles of corporate crowdfunding where employees generate, assess and implement ideas for their organization.

IS YOUR WORKFORCE A COST OR AN ASSET?

It should not be a surprise that organisations should consider a stronger integration of their employees and utilize this resource more efficiently. Rather than see the workforce as a cost to organisations, employees should be valued as a resource generating value, not cost. It could be argued that organisations seeing their workforce as an expense have not yet uncovered the true potential of their workforce. This train of thought could be backed through the universal success formula by Sisney, who suggests that increasing integration of a system while maintaining energy consumed by a system, will allow systems to be more successful. Organisations gaining energy through integration while using less energy for its entropy will allow the system to withhold longer and deliver towards its predefined success (Sisney, 2012).

Facts on NEW WORK

  • Organisations seek innovation and talents to build a creative working class. (Pfeifer)
  • Organisations that utilize their employees better, have lower costs and prevail longer (Sisney)
  • A purpose-driven organization strongly influences the happiness of employees  (Cullen and Calitz)
  • Happiness influences employees commitment to tasks and identification with an organization. (Cullen and Calitz)

Challenges that organisations face

  • Only 17% of organisations are implementing forms of democratisation, while 70% work on home office opportunities. (Kienbaum New Work Pulse Check)
  • 72% of the 20 to 35-year-olds favour independent work and flat hierarchies. As a result, 40% of businesses had problems filling their open positions in 2015. (Zukunftsinstitut, 2018)
  • 70% of workers in 2030 will be Millennials looking for different working arrangements.(Tappin, 2016)
  • They seek purpose in their doing and focus on organisational identification is imperative (OID). (Jabagi et al., 2018)

Facts on Corporate Crowdfunding

  • Corporate crowdfunding taps on three distinct areas of organizational improvement:
    • employees work-life & working environment (Voigt and Jovanovic)
    • organizational resilience (Feldmann et al. 2014).
    • developing new products (Voigt and Jovanovic)
  • Perceived fairness result in higher contribution from participants: (Franke et al. 2013)
    • obtained rewards (tangible or not)
    • intellectual rights over the ideas
    • say in making the related decisions.

Issues with existing implementations

  • Employees may be prone to heuristic or system-1 thinking. Idea quality, novelty, relevance or feasibility of a project played a minor role to employees. (Feldmann and Gimpel 2016)
  • Existing Corporate Crowdfunding Systems are limited to donations or awards towards employees, Organisations rely on goodwill or one-off incentives to generate ideas.
  • Intrinsic motivation mostly is superior to extrinsic incentives. But extrinsic incentives can lead to significant increases in workers effort and employer profit. (Amabile)

New Work and Crowdfunding

And while, on the one hand, organisations are faced with the challenges of finding and retaining talents for their workforce, organisations are on the other hand confronted through automation to force innovation and, thus, are seeking ways to build a creative working class. The desire for a creative working class is leading to a renaissance of the concept of New Work. And the question remains how internal crowdfunding systems can follow the advancement and modifications that external crowdfunding systems have achieved.

The advancement of external crowdfunding, in general, is unparalleled with advancements in internal crowdfunding inside organisations. Existing corporate crowdfunding systems that have been studied are limited to donation or award types of crowdfunding systems (Muller et al., 2014). Some questions arise:

  • To what extent corporate money would influence crowds to make use of heuristic decision making (Simons, Feldmann 2014, 2016).
  • How far employees could invest their private recourses or capital to an organisation crowdfunding campaigns and what impact this would have (Gomez, Simons).

Lack of evidence exists, but corporate money does not necessarily have a different value to employees, as it is fictional, and it would not differ from any other form of value or currency that are distributed to employees to assess and make a judgment to back ideas. However, the question in regard to private money does pose an interesting thought in binding participants to their investments and driving participation. There is a common understanding among scholars, that intrinsic motivation is mostly superior to extrinsic incentives, which, in turn, can lead to significant increases in an effort by employees (Lazear, 1996). To some extent researchers state that the absence of rewards for extrinsic motivation or sharing success with the crowd could become counterintuitive (Voigt & Jovanovic, 2017).

While early stages of enterprise crowdfunding today draw on employees’ high intrinsic motivation, it can be assumed that if the aim of a campaign goes beyond simple participation, it would have an impact on participation. Thus, as an enterprise crowdfunding system develops over time, campaigns might become more demanding and potentially take on businesses’ critical challenges that might not be of high interest to crowds. Regardless of the development, a loss in interest from employees or lower intrinsic motivation could always occur and, therefore, it would require extrinsic tangible rewards to compensate for the loss of intrinsic motivation. Although a decline in participation has not yet been documented, there are studies that provide support in how extrinsic incentives can boost intrinsic motivation. A careless addition of tangible extrinsic rewards could quickly cause over-justification effects.

Introducing the “4 Forces” Concept

The relationship of identified factors for successful internal crowdfunding. The outcome for an internal corporate crowdfunding campaign can be comprised in the following computation: Mindset x Aim x Communication x Reward = Outcome. Each has an influence on the other and could possibly have a positive correlation with each other. Even the absense of one of these forces would have a negative impact on the remaining forces and a negative impact on the outcome of the internal corporate crowdfunding.

Goals and aims as a force have a substantial influence on the other forces. The type of campaign objective and aim reflects an organisational trust to its participants in achieving this goal and also says much about the mindset and culture inside an organisation. Goals and aims that are daring and challenging could have a very positive impact on the mindset and culture of an organisation. Goals and aims that are far-fetched could lead to rewards being unconventional and create an extraordinary motivation among participants.

It will be beneficial towards the outcome of an internal crowdfunding system if each of these forces is in balance with each other and not one force is substantially stronger or weaker.

To take a more practical example, if the goal is to create a product to achieve greater market share for an organisation in a market. The communication is continuous and transparent about the achievements of participants throughout the project and the mindset and culture of the organisation is profit maximisation, turnover and market share. If rewards are limited to awards and social recognition, then this campaign might be short-lived, because they could be considered as not fair by the participants and the internal corporate crowdfunding campaign might not deliver a valuable output for the organisation.

A phased approach: the “5 Level” Methodology

If an organisation decides to implement an internal corporate crowdfunding system that delivers the workplace of the future, then the four forces that were introduced would need to gradually increase over time. An organisation would be advised to slowly and gradually increase the level of the internal corporate crowd funding system by increasing each of the forces step-by-step. This brings a phased approach in delivering an organisation from the entry point of an internal corporate crowdfunding system to an advanced level. Ultimately, the organisation needs to closely monitor how the four forces are influencing and contributing towards the integration of an organisation’s internal entropy.

  • Level 1: Reward employees for participation and networking (ideation & selection)
  • Level 2: Reward employees for contributing skills during out of office (donation)
  • Level 3: Reward employees to allocate fixed worktime to projects (work rotation)
  • Level 4: Reward employees to support business critical projects (mission crit.)
  • Level 5: Reward employees to invest private resources (equity & lending)

Which level of internal corporate crowdfunding system can be used for what type of campaign or project? Level one for internal crowdfunding system is suitable to projects that are ideas in early stage, that not necessarily have an implementation plan. For campaigns that are geared towards clear formulated ideas, prototypes or even minimum viable products (MVPs), level two of an internal crowdfunding system would provide enough collaboration among employees of the organisation. Ideas that are in close proximity to a successful innovation could be supported by a level three type of internal crowdfunding system where an organisation provides a fixed time work on the development of the idea. Level four and level five of the internal crowdfunding system could be used on already completed innovations that need support in launching or scaling.

Building a New Work environment through corporate crowdfunding

In summary, a NEW WORK FUNDING system will shift a hierarchical and silo organisation towards a project and output-oriented organisation. The organisation itself will utilize a platform that provides rules and boundaries for employees to become creative in their workplace. An organisation will provide space and time as well as tools and networks for individuals to collaborate and create something beneficial for the organisation. An organisation will be wise to attract and retain the right talent with the right skills for its purpose. In some cases, it can be seen, that employees become prosumers while living in symbiosis with the organisation as the producing entity as well as with their personal life as the consuming entity which would be a shift from a top-down driven organisation to a more balanced and bottom-up influenced innovation and creative culture. As already highlighted from an article by the BBC, with the arrival of the millennials that will account for 70% of the workforce in 2030, a shift in what a workplace has to offer is apparent (Tappin, 2016). An internal corporate crowdfunding system is a feasible system that would allow a gradual increase in entrepreneurial creativity and tap on motivational synergy.

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