Sunday, March 26, 2006

Here's an Idea: Let Everyone Have Options

In the article: "Here's an Idea: Let Everyone Have Ideas"
http://www.nytimes.com/2006/03/26/business/yourmoney/26mgmt.html?_r=1&oref=slogin
it discusses a novel method that Rite-Solutions came up with for finding,
encouraging and developing new ideas and products within their company.
They basically created an internal stock market where each proposal becomes
a stock that can be bought or sold. The value of a "stock" beomes a proxy for
the worth of the idea or product.

Sometimes that works great, but there is also great risk in the idea.
If the stock market always worked (i.e. was "efficient"), we'd all be rich.
But as anyone who lived through the internet bubble can attest, the
stock market doesn't always get it right, and there is no guarantee that
the same effect won't happen with an internal market for ideas.

http://www.fool.com/news/commentary/2006/commentary06030211.htm
The stock market crash following the Internet bubble destroyed portfolios and dreams. The Nasdaq alone fell from 5,000 to below 1,200 -- a nearly 80% decline. And that's only the average. Many stocks became essentially worthless. The tragedy wasn't in the numbers, though -- it was in the effect those losses had on people. Many investors were completely wiped out, losing money they'd been saving for years.

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