Earlier this year, Nashville-based health care learning and research company HealthStream announced that Jim Daniell, one of its board members and one of the company’s earliest clients, would not stand for re-election to the board. At press time, HealthStream’s search to replace him was ongoing.

HealthStream has a female board director in Linda Rebrovick, a longtime IBM executive, KPMG partner and currently CEO of Consensus Point, an innovator in enterprise prediction market software serving the red-hot forecasting sector. Rebrovick’s connection to CABLE and other organizations positioned her well to help HealthStream’s board identify qualified female candidates—and she was only too happy to do so. With the new SEC regulations in place requiring that boards disclose efforts to nominate a diverse pool for open board seats, it was no doubt welcome information to the otherwise all male HealthStream board.

HealthStream CEO Bobby Frist expresses a strong desire to increase diversity on his board, in part by citing statistics that show a high correlation between board diversity and the performance of a company.

“We subscribe to that notion as a full board and as individual board members,” Frist says. “The candidate pool we’ve recently created exhibits a diversity of experience and background and thought.”

Frist says there have been “huge advances” in recent times in bringing qualified diverse candidates to the light, in no small part because of organizations like CABLE, ION and others that have ramped up efforts to organize resources in such a way that board searches can achieve greater diversity.

In part due to HealthStream’s success in its current search, Frist scoffs at the notion that there are not enough qualified diverse candidates to sit on boards.

“For me, that perspective also has a lot to do with what companies mean by being quali- fied, because you can be a student of business in many ways. You don’t have to have been involved in a big company. That, to me, doesn’t make you the best-qualified candidate. So there may be some problem in the way people are defining their qualifications that would open up the definition to more candidates if they thought of it slightly differently.”

While Frist agrees that the gears have moved “very slowly” in regard to corporate board diversification, he believes the overlay of increased SEC disclosure requirements, greater awareness and more education will result in a more rapid pace of change in the next three to five years than in the last few.

“With any major push like this, education comes first,” Frist says. “Change will follow.” That’s no guarantee that HealthStream will choose a diverse candidate in its current search. Nor should there be. “The key is to have a good and diverse candidate pool, and I’m confident we have achieved that,” Frist says. “But the number one priority is selecting the most qualified candidate from the broadest qualified pool. Think of it in those two ways, and I’m confident we’ll get the right person.”

There’s also a brief interview with Linda:

What can women do to improve the situation?

Women can make it known that they are interested. Much of it is just putting yourself in the candidate pool. Second, be sure that you have a development plan. Sit on a nonprofit board. A private company board. Work your way up. Attend a corporate board member event. Get a mentor, someone on a corporate board, to guide you through the type of development you need to become more prepared. Try to get in a position in your company where you are managing a P&L, because financial expertise is really important.

What can companies do?

Companies need to decide that diversity is a qualification that is a priority in their searches and then they need to tap into CABLE or ION [or other outlets] and identify candidates. Clearly, they’ll be very impressed if they take the initiative, make it a commitment and go find these resources.

Thanks to Nashville Post for covering this issue, and thanks to Linda for being a great leader!

Erin on what we do:

Consensus Point companies — clients include General Electric, Best Buy and Qualcomm — can post a question to the online market, such as whether a particular project will be completed on time. Participants then can answer the question, betting a certain number of points on an outcome depending on their confidence level. Correct answers return more points, lead to higher standings on the market’s leader board and possibly other rewards or incentives for the participants while helping executives more effectively manage the business.

And an excellent first Q&A:

How do prediction markets differ from other types of forecasting models or decision tools used in business today?

Traditionally, all these prediction models are algorithms that take historical patterns that say this is what happened in the past, and we’re going to extrapolate that this pattern will continue in the future. That’s how forecasting systems have worked forever. And they’re very successful when you have a historical pattern.

What they can’t do is detect early-warning indicators that, while this has always happened in the past, something’s changed. So that’s the power of what we have, the ability to be your eyes and ears on the ground  every minute, minute by minute. So as the leader of a company, I know I’ve got the facts as they stand today as I’m trying to make a decision.

Other good questions:

• What is the user experience like for market participants?
• What incentives do companies use to encourage participation and correct answers?
• Do you have any good examples of how a prediction market has helped one of your customers?

For Linda’s answers, go read the whole interview. But we’ll leave you with her thoughts on our local impact:

We’ve got to get more companies like this in Nashville. This is a traditional California company. The California [venture capitalists] understand these companies and put money behind them. The California companies network the executives and help each other get into other [opportunities]. We don’t yet have that here.

I was chair of the Nashville Technology Council, and I’m on the Nashville Entrepreneurship board. I’m trying to get us to become a hub of some sort as it relates to new and exciting innovative social media and enterprise 2.0 technology. This is the next wave, and we ought to have these companies in Nashville.

It’s fun to be at an exciting technology company with a great CEO! Especially fun because we have great customers. If you’d like to become a great customer, contact us.

Our goals with this release are:

• continuing to make the user experience flexible to specific business situations and needs, as well as user preferences
• improving management analytics reports by turning data into information for business leadership

And here’s what’s new:

User Interface Updates

New Confidence Interface — For both point and stock metaphor markets, participants will have a new way to increase or decrease confidence in any question or stock, streamlined from the previous process. The entire participant interaction may now be done via a bidirectional slider that allows users to increase or decrease confidence and see the resulting consensus. The interface also dynamically provides feedback to the user on the impact of their vote in addition to their maximum payout or value potential assuming they are moving the consensus in the correct direction.

The Advanced option allows participants to enter a number of units/points directly. For stock metaphor markets, this is also where limit orders may be placed. Once the answer is submitted, the participant has the opportunity to enter a private comment regarding their trade.

Security Enhancements — System security has been enhanced with additional encryptions. As a result, users will no longer be able to retrieve their forgotten password, but rather will be asked to ‘reset’ their password.

Decision Dashboards — As part of additional reporting and analytics capability enhancements in the administrator application, specific users may be granted access to enterprise dashboards. The dashboards provide a snapshot view of the market’s activity, trends, associated business value, and comments.

Administrator Updates

Custom Fields — Administrators may now create and manage custom fields of information for traders, stocks and categories. These custom fields may store additional information beyond what is standard in the application. For example, a ‘Department’ field might be created to track which department the trader belongs to in the organization. The management of custom fields is located under the ‘Settings’ area of the admin application.

The addition of custom fields is important because now business leaders can run a range of reports on aggregated bits of business intelligence.

Reporting enhancements — Additional reports have been added to the reporting section in the admin application. To accommodate the additional reports, the reporting navigation has also been modified. The additional reports include the ability to view the data along several dimensions, including any custom fields that have been defined in the market.

This release is now generally available with the Foresight platform and will be deployed to existing customer markets within 30 days.

For instance, Cisco used the conference to announce an Enterprise 2.0 solution called Quad and shared that the net benefits of Cisco’s own internal use of Web 2.0 collaboration solutions were more than $1B in FY09. Cisco Quad leverages existing technologies such as Unified Communications and Telepresence and expands with business focused flip video and social software. To us, this seems like it is collaboration from the application down through the architecture.

Other items of interest:

• Andrew McAfee discussed some concepts from his book, Enterprise 2.0, and revealed that Gartner predicts that as of 2010 social software is an enterprise reality. This, of course, is backed up by McKinsey survey results on Enterprise 2.0.
• nGenera announced a human-centered enterprise collaboration solution, called Spaces, designed in collaboration with IDEO. Spaces includes a user configurable interface and plug-in architecture, allowing data access via interactive mini applications. This strikes us as collaboration from the middleware/web services layer out.

We’re already wondering what features Enteprise 3.0 will have. If you’d like to set up a market to test your ideas on that front, let us know.

On Friday, Prediction Markets Cluster kicks off their Collective Intelligence Summit in Seattle. This year’s theme is “Leading Enterprise Social Media and Prediction Markets.” We attended last year’s summit in Chicago and enjoyed seeing one of our customers present.

This year, Christel Alvarez, our lead Account Executive, will be representing us to discuss prediction markets in the enterprise. Those who attend can expect to hear her discuss strategies for making prediction markets successful in enterprise applications through the rule of three: a combination of consultant, customer, and Foresight.

If you’re interested in the power of collective intelligence for competitive advantage, we hope to see you there!

As organizations move through later phases of the innovation process, costs and risks increase. Our Foresight platform can help mitigate risks in these later innovation phases and enable your crowd to efficiently and quickly prioritize the best investments that will yield the highest return for your company. In a later stage of Brightidea’s crowdsourcing solution, the ability to accelerate innovation provides a key competitive advantage.

We’re excited about having a successful case study of our open API for Foresight, and we’re also excited about partnering with an industry leader to be able to offer a comprehensive solution to an important customer need in an increasingly complex world, where successfully managing ideas is more important than ever. If you’re as excited as we are, we hope you’ll want to know more.

“Integrating objective thinking from top industry leaders, innovators, and leading academics, as well as the Logica community of consulting experts to gain in-depth insight, will enable us to spot trends ahead of time for our clients. Providing them with a way to read the market will offer them an additional competitive advantage,” commented Amanda Mesler, Chief Client Officer, Logica. “Consensus Point brought us a technology platform and market-leading solution to create a dynamic collaborative forum.”

Logica FutureScope is the name of the Logica prediction market to guide the provocative and insightful observations regarding the ecosystem in order to enhance business growth and productivity. The predictions are focused around sustainability, future IT and cloud services, and security. You are invited to join us to offer your thoughts at www.logicafuturescope.com

“We are thrilled to be working with Logica on their thought leadership initiatives,” said Linda Rebrovick, Consensus Point’s CEO. “We are confident our unconventional capabilities will offer Logica and their customers a uniquely rapid and robust lens into the future, which could never be accomplished with traditional research methods. Prediction Markets are the new leader in modelling social intelligence-based perspectives on any degree – on any scale.”

About Consensus Point, LLC – Consensus Point, is the leading provider of enterprise prediction markets serving corporations and government. Consensus Point helps their customers tap into the intellectual capital of their most valuable assets, their employees and customers, to reduce the risk of uncertainty, improve revenue through accurate forecasts of products and services, and manage projects with immediate insight into future completion dates and budgets. For more info, please visit www.consensuspoint.com.

About Logica – Logica is a business and technology service company, employing 39,000 people. It provides business consulting, systems integration and outsourcing to clients around the world, including many of Europe’s largest businesses. Logica creates value for clients by successfully integrating people, business and technology. It is committed to long term collaboration, applying insight to create innovative answers to clients’ business needs.

Logica is listed on both the London Stock Exchange and Euronext (Amsterdam) (LSE: LOG; Euronext: LOG). More information is available at www.logica.com.

Contacts:
Linda Rebrovick
615-319-2034
linda@consensuspoint.com

Louise Fisk, Logica
+44 (0)7798 857770
louise.fisk@logica.com

We enjoyed Tina’s presentation on prediction markets, and we’re glad that someone reported back to the FEI blog about her presentation:

In a solid FEI Champions presentation to complement James Surowiecki’s keynote address, practitioner Tina Brown-Stevenson, Sr. VP Innovation and Information Group at Ingenix, talked through the implementation of a prediction market at Ingenix. As a lead-in to the details of the specific practical application developed at Ingenix, Ms. Brown-Stevenson drew upon examples from Mr. Surowiecki’s book The Wisdom of Crowds to outline the foundational philosophical elements for Ingenix’s overall approach.

We won’t complain when a neutral third party favorably compares us to Surowiecki. Tina shared some findings from several prediction market uses and confirmed that the size of the crowd is not what is important— as markets can be accurate with as few as 24 participants. Tina confirmed what Surowiecki talks about in his book— it is the independence and diversity of the crowd that enables prediction markets to be on average more accurate than a subject matter expert. Tina also shared the Ingenix approach to adjusting the interface to their constituent needs. While many public companies, such as Best Buy and Motorola, have found the traditional stock metaphor to be adopted well within their cultures, we adjusted the Ingenix interface to something easily understandable for Ingenix participants, both internal and external. Demonstrates the flexibility of our Foresight platform!

For Rami’s presentation, he shared his notes with us from the panel on innovation adoption. He described Motorola’s idea collection system and explained why an idea market was needed: to identify the best ideas by leveraging the “crowd.”

For Motorola, the value of our Foresight platform boils down to three ‘Rs’ in the enterprise:

• rewards: mostly intrinsic, e.g., collaboration, helping the company, helping others, forming relationships, learning)
• recognition: via leader boards in the market and built-in social media tools
• recreation: fun, like a game; easy to use with low barriers to entry; competition; social media access to enable “viral” messaging.

If you’d like a sense of the kind of bottom line value these three Rs offered Motorola, CFO.com has covered that topic.

We’re glad we went to the conference, and we’re glad that two of our customers are on the front end of innovation through their use of Foresight.

His thesis is in progress, but he’s already revealed these findings:

• Prediction markets gather more information and more diverse information compared with BEKK’s existing processes.
• While BEKK’s existing process typically gets information for senior employees and top management only, prediction markets also allow junior employees to express their opinions.
• Prediction markets give feedback from a more diverse set of employees than the existing process.
• Prediction markets seem to be a a good supplement to the existing process — and a lot faster.

We’re excited that our platform can support academic work of this nature, suitable for immediate application in the enterprise. Best of luck to Per on completing his thesis!

They start with a helpful description of prediction markets:

Prediction markets are online markets that build on the principle that markets serve to aggregate the beliefs of multiple traders to generate a forecast. For example, at any given time, a stock price is the aggregate collective belief of the traders of the company’s expected future earnings allocated to the share. Like the stock market serves to assign a price to the future estimated earnings of a stock, “prediction markets” assign a value to a belief about the future or a prediction.

The author of the article, Dr. Ajit Kambil, Global Research Director of Deloitte’s CFO program, quickly gets into how and why this concept can be of tremendous value to CFOs:

CFOs can use prediction markets to reduce uncertainty. Begin by considering the greatest areas of uncertainty that affect your organization. Is it the sales forecasts in a particular business segment? Is it the differences in sales across regions? Is it the cost of a critical resource such as oil? Is it the timely completion of a particular project? Is it uncertainly about whether a project will be within budget; and the variance if it is not?

More:

The first issue CFOs should consider is the value of resolv- ing a particular uncertainty. Can, for example, knowing the delay of a project enable cost savings or other benefits? Can having better sales forecasts enable the company to confidently pay down debt? Rank-ordering uncertainties that need to be resolved, based on the value of resolu- tion, identifies a priority list of potential prediction market applications.

Frankly, we’d encourage CFOs and even board members or other C-level executives to read the whole thing [PDF].

Dr. Kambil cautions:

The technology is easy and widely available. The design of a program with incentives, recruitment of participants, good forecasting questions, and alignment to a company’s culture may not be easy to achieve. While many prediction market vendors are probably too ready to sell you their market and technology as a solution, what is really important is their capacity to support the organizational acceptance of the technology.

We, of course, offer comprehensive services with our Foresight platform, as well as robust support.

Linda Rebrovick, our CEO, was happy to share her experience with Ajit as he prepared the article.

If you’d like us to share our experiences with prediction markets and foresight, just ask!