The archive · Work & Ways of Doing · Operational decision · 2006–2011
Rite-Solutions runs an internal idea stock market called Mutual Fun
Employees trade $10,000 of opinion money on ideas that open at $10 a share — 15 implemented ideas became 20% of revenue.
Rite-Solutions
What it had to solve
Rite-Solutions builds systems for submarines and classified technology, the kind of high-stakes business that usually runs rigidly top-down. Co-founders Jim Lavoie and Joe Marino had spent years in command-and-control companies where, Lavoie says, someone's value was defined by the box they sat in rather than the insights they had.
How it works
Rite-Solutions is a Rhode Island software company whose co-founders Jim Lavoie and Joe Marino built it as the opposite of the command-and-control firms they had endured for decades. In Lavoie's words, he had spent 30 years in highly structured organizations where good ideas could only flow from the top down and a person's value was set by their box, not their insights.
Their answer, Mutual Fun, is an internal stock market for ideas. Any employee can propose that the company acquire or develop new technology, enter a new business or improve an internal process; the proposal becomes a stock that begins trading at $10. Every employee gets $10,000 of opinion money on their first day to buy the ideas they believe in — and can volunteer to work on a project they are backing.
Trading rewards were tied to performance from the start: employees whose portfolios back successful ideas receive real money, aligning the incentive to support good ideas with the company's interest in acting on them. Lavoie argued that at most technology companies the most brilliant insights come from people other than senior management, so Mutual Fun exists to harvest collective genius instead of waiting for the org chart to speak.
Why it lands
- Ten thousand dollars of play money makes support measurable: a popular idea's price rises, an ignored one falls, and managers see demand before committing resources.
- Because staff can volunteer to work on the ideas they buy, the market doubles as a talent signal — people put their time where they put their money.
- Tying real cash rewards to successful portfolios keeps the game from being a toy: employees are incentivized to fund ideas that actually help the firm.
- The stock ticker frames every proposal as a venture, so half-baked ideas enter the community and get shaped by informal interest networks without management supervision.
What it did
By the time the figures were reported, Mutual Fun had generated 50 workable ideas for new products, services and processes, and more than 15 of them were in the marketplace — together worth about 20% of Rite-Solutions' total revenue.
What you can take
A market prices ideas more honestly than a suggestion box: when employees stake opinion money and can join the work, half-baked ideas get polished by self-organizing networks, not a queue.
Since then
By the time the outcome figures appeared, Mutual Fun had produced 50 workable ideas for products, services and processes, and more than 15 of those were in the marketplace, generating about 20% of Rite-Solutions' total revenue. The New York Times covered the experiment in 2006, and it became a standard exhibit in management writing about incentive alignment: Aplia used it as a teaching case for economics students, asking how an internal market compares with stock options or bonuses based on current earnings, and warning about herding behavior and underperforming stocks.
Sources
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