Now, GE has reached out to the market intelligence of their consumers by launching GE’s Healthymagination Challenge. Their $100 million investment in R&D and social business stands to change the ways that enterprises innovate in today’s globally connected economy. In a recent article from Forbes.com, “GE’s $1 Billion Cancer Project: Raising the Bar on Social Business“, Forbes points out that GE is choosing to forego traditional ROI metrics as they invest $100 million in an effort to promote a new culture of innovation. In many ways, they are putting their money where their mouth is and are taking a giant leap forward to support a new model for innovation.

For those companies that choose to look to the crowd as GE has done, there has to be an understanding of the tools needed to achieve success. Prediction markets and preference markets are examples of just such tools. Backed by powerful algorithms, prediction and preference markets provide structure for the innovation process. They are extremely useful for capturing ideas, sorting ideas, and for engaging a diverse audience in a social dialogue about those ideas. Without such tools, companies can quickly become overwhelmed when they open their innovation pipeline up to the crowd.

At Consensus Point, we offer not just the tools but also a consultative approach that has led our clients to success. To learn more about our work with GE or about our innovation process, we invite you to explore our site.

Several weeks ago, the CMO of a company I am involved with in Europe sent me a note pointing out that an agency was offering “hundreds of marketing ideas” to help the company build its business for only $25,000. “Surely we can’t lose; it’s worth a shot,” he said. Two days later, back in the U.S., I found myself discussing the merits of the “executive creative director versus the crowd” with the head of an advertising agency and a journalist.

What are the facts? Well, there are literally hundreds of companies on the Web and in the real world that wield the power of the crowd. The idea is relatively simple: Usually the process involves issuing a brief, which is then submitted to the “crowd,” which then offers ideas for free. Each person who contributes hope that his or her idea will be used. The winner takes all, (in most cases a relatively low fee) and for the client: an idea. Maybe my colleague is right: It would appear the buyer couldn’t lose.

Jez Frampton, the author, then presents what appears to be a cautionary tale about the crowd:

It is the ability to select and profitably execute an idea that delivers greatest value to the organization. This supports the old adage that success is 5% inspiration, and 95% perspiration. It is a strong argument for the ‘editor’ otherwise known as the creative director, and for a well-managed and controlled process. These happen to be two things that are notably absent from crowd-based approaches.

Our guess is that Mr. Frampton is possibly not aware of the potential for crowd-driven idea management. Maybe he hasn’t seen a demo of Foresight, our prediction market platform that is capable of comprehensive idea management.

Experience so far would suggest that the crowd can certainly speed the “exploration” of an idea. It can add richness and context. it can create fast and efficient stimulus for consumer research and could (if my creative director friend gets it right) become a useful “extra head” in the room. It could certainly change the shape (and the operating approach) of the creative side of the marketing sector, but will it replace the need for the expert partner? That remains to be seen.

We’ve seen it. Because we have Foresight. And so does Motorola, where we’ve been helping them manage ideas with great success (which CFO.com recently noticed).

Mr. Frampton ought to send his CMO friend our way. We could help him out with idea management as his “expert partner.”