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Harvard Business Review

How PayPal Gets Employees Invested in Innovation

Harvard Business Review recently posted an article written by Gerry Tsoulakis, Associate Professor of Information Systems, on PayPal’s process of crowdsourcing innovation with their blockchain-based token system.

Gerry Tsoukalas

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Values in Action at PayPal's Global Innovation Tournament - Photo Courtesy of PayPal

July 12, 2022

Harvard Business Review recently posted an article written by Gerry Tsoulakis, Associate Professor of Information Systems, on PayPal’s process of crowdsourcing innovation with their blockchain-based token system.

When firms are offered too many ideas, the line blurs between useful and impractical ones, making the crowdsourcing process sometimes overwhelming. To combat this, employees at PayPal participate in a “Global Innovation Tournament,” acting as investors in the final round. This gives employees the opportunity to strategically craft and invest in ideas, helping to ensure that the best ones rise to the top.

“More specifically, the prospect of competition in the investment round appeared to affect the quality and quantity of the submissions. Two-thirds of respondents believed the investment round increased the overall level of competition.”

Gerry Tsoulakis

Through a contest-based approach, employees can place wagers on the best ideas and earn tokens with their efforts. The annual tournament has had remarkable success for PayPal, and the 2022 contest should be no exception.

Gerry Tsoukalas is an Associate Professor in Information Systems at Boston University Questrom School of Business, a Senior Fellow of the Wharton School, University of Pennsylvania, a research fellow of Cornell University’s FinTech Initiative and a Fellow of The Luohan Academy (Alibaba Group). His research examines how to manage and design new technology platforms, particularly in the blockchain and fintech areas. His work has appeared in leading academic journals, including Management Science, Operations Research, and M&SOM. He serves on the editorial boards of Management Science and M&SOM as Associate Editor.