According to an adapted excerpt from the recently published The Wall Street Journal Essential Guide to Management, The Innovator’s Dilemma is an influential book among several major CEOs. For executives who are concerned that they’ll miss “disruptive innovations that opened up new customers and markets for lower-margin, blockbuster products,” we’ve got a solution: Foresight.

Adding a bit more context from Alan Murray’s piece:

Even the best-managed companies aren’t protected from this destructive clash between whirlwind change and corporate inertia. When I asked members of The Wall Street Journal’s CEO Council, a group of chief executives who meet each year to deliberate on issues of public interest, to name the most influential business book they had read, many cited Clayton Christensen’s “The Innovator’s Dilemma.” That book documents how market-leading companies have missed game-changing transformations in industry after industry—computers (mainframes to PCs), telephony (landline to mobile), photography (film to digital), stock markets (floor to online)—not because of “bad” management, but because they followed the dictates of “good” management. They listened closely to their customers. They carefully studied market trends. They allocated capital to the innovations that promised the largest returns. And in the process, they missed disruptive innovations that opened up new customers and markets for lower-margin, blockbuster products.

Information is being generated at ever increasing speeds. Executives hoping to draw lessons from those profiled by Christensen would do well to realize that thought leadership is all around them. Our Foresight platform facilitates innovation management by extracting collective thought leadership from throughout (and, if the business case requires it, beyond) the corporation.

More Murray:

Information gathering also needs to be broader and more inclusive. Former Procter & Gamble CEO A.G. Lafley’s demand that the company cull product ideas from outside the company, rather than developing them all from within, was a step in this direction. (It even has a website for submitting ideas.) The new model will have to go further. New mechanisms will have to be created for harnessing the “wisdom of crowds.” Feedback loops will need to be built that allow products and services to constantly evolve in response to new information. Change, innovation, adaptability, all have to become orders of the day.

We have the “new mechanism.” For us, it’s not new. It’s a stable, mature platform in its sixth major release with several examples of customer success to show for it.

We’re working hard to ensure that executives are equipped and thereby empowered to solve enterprise problems in important domains:

• forecasting, where Foresight offers strong guidance capabilities
• brand identity and brand development
• innovative disruptions

Over the coming months, we’ll be exploring ways that today’s executives can demonstrate collective thought leadership. If you need a solution to the innovator’s dilemma, give us a call.

Gartner has released their Hype Cycle for Social Software, 2010 report. We agree that the interest and meaningful use of prediction markets are on the rise. In addition, Sherrilynne Starkie has an excellent summary of the identified trends.

She identifies two of our strengths in trends on the rise:

Idea Marketplaces: enable organisations to source innovative ideas, technologies, products and services by connecting them to innovators and solution providers from around the world.

Social Analytics: the process of measuring, analysing and interpreting the results of interactions between brands and consumers and/or businesses across digital channels in the context of specific goals and objectives.

Sliding into Gartner’s infamous Trough of Disillusionment, though, are prediction markets, sandwiched in between mobile social networks (aka Facebook) and unified communications (aka IP telephony and video conferencing):

Prediction Markets: are speculative markets created for the purpose of making predictions. Assets are created whose final cash value is tied to a particular event (e.g., will the next US president be a Republican) or parameter (e.g., total sales next quarter). The current market prices can then be interpreted as predictions of the probability of the event or the expected value of the parameter. Prediction markets are thus structured as betting exchanges, without any risk for the bookmaker.

We agree that prediction markets are maturing, and our customers continue to use our versatile platform to make better decisions earlier. We’re glad Gartner is conducting detailed analysis of this important enterprise software domain, and support the forward movement towards mainstream business use. We also know the importance of services and already offer them to our customers—something that Gartner projects does not happen until technologies reach the slope of enlightenment.

Fortunately, the versatility of our Foresight platform—which allows for idea management, social analytics, and decision markets—has us and our customers and partners optimistic about the future.

In addition to following James Surowiecki’s views on the ‘wisdom of crowds’, we also keep up with Ross Dawson–futurist, entrepreneur, and best-selling author. He spoke a few weeks ago at Creative Sydney’s Crowds + Collaboration event, sharing new perspectives.

You can find slides of his talk here, and there’s an elaboration of Dawson’s thinking on crowdsourcing at MyCustomer.com, from an interview after the Sydney event. He distills the state of the market of tools and platforms into six categories:

• Distributed innovation platforms
• Idea platforms
• Innovation prizes
• Content markets
• Prediction markets
• Competition platforms

You might have an idea which was our favorite:

Prediction markets bring together many opinions to predict the future, often based on “stockmarket-type” mechanisms, which provide a value of a particular prediction that you can buy or sell to make points or potentially money as a result of it going the way you correctly predict. One of the longstanding corporate users of this is Oracle. “For enterprise software companies it is notoriously difficult to forecast sales,” explains Dawson. “For many reasons, the sales pipeline that is put into CRM systems is often inaccurate. However, if you then ask the salespeople to predict what the sales are going to be for that quarter and you aggregate all of their opinions, you can get a far more accurate view of what the actual sales are going to be.”

Google is another user of prediction markets, using its employees to predict which of its innovations and new projects are most likely to be successful. “These are tools that actually aggregate many opinions through the classic ‘wisdom of the crowd’ in order to make more effective corporate decisions,” adds Dawson.

Futurists who understand the value of prediction markets must be onto something…