March 26, 2006
Under New Management
Here's an Idea: Let Everyone Have Ideas
By WILLIAM C. TAYLOR
LIKE many top executives, James R. Lavoie and Joseph M. Marino keep a close eye on the stock
market. But the two men, co-founders of Rite-Solutions, a software company that builds advanced —
and highly classified — command-and-control systems for the Navy, don't worry much about Nasdaq
New York Stock Exchange
Instead, they focus on an internal market where any employee can propose that the company acquire a
new technology, enter a new business or make an efficiency improvement. These proposals become
stocks, complete with ticker symbols, discussion lists and e-mail alerts. Employees buy or sell the
stocks, and prices change to reflect the sentiments of the company's engineers, computer scientists and
project managers — as well as its marketers, accountants and even the receptionist.
"We're the founders, but we're far from the smartest people here," Mr. Lavoie, the chief executive, said
during an interview at Rite-Solutions' headquarters outside Newport, R.I. "At most companies,
especially technology companies, the most brilliant insights tend to come from people other than
senior management. So we created a marketplace to harvest collective genius."
That's a refreshing dose of humility from a successful C.E.O. with decades of experience in his field.
(Mr. Lavoie, 59, is a Vietnam War veteran and an accomplished engineer who has devoted his career
to military-oriented technologies.)
Most companies operate under the assumption that big ideas come from a few big brains: the inspired
founder, the eccentric inventor, the visionary boss. But there's a fine line between individual genius
and know-it-all arrogance. What happens when rivals become so numerous, when technologies move
so quickly, that no corporate honcho can think of everything? Then it's time to invent a less top-down
approach to innovation, to make it everybody's business to come up with great ideas.
That's a key lesson behind the rise of open source technology, most notably Linux. A ragtag army of