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.

The WSJ piece floats the idea of innovation communities:

Companies that have successfully made innovation part of their regular continuing strategy did so by harnessing the creative energies and the insights of their employees across functions and ranks. That’s easy to say. But how, exactly, did they do it? One powerful answer, we found, is in what we like to call innovation communities.

Every company does it a little differently, but innovation communities typically grow from a seed planted by senior management—a desire for a new product, market or business process. A forum of employees then work together to make desire a reality.

Innovation communities tackle projects too big, too risky and too expensive to be pursued by individual operating units. They can be created with little additional cost, because no consultants are needed. After all, those in the midst of the fray already know most of the details relevant to the project.

We think innovation communities are a neat concept, but we also think you don’t need management overhead to create an innovation community; they already exist! Prediction markets provide another way to tap into innovative ideas from employees. Our Foresight platform has helped a number of customers create organization-wide innovation communities who participate in a prediction market, prioritizing ideas and then driving the best ones to the top of the list.

And this is what social predictive analytics is all about. Our platform unleashes employees in an already social environment and produces analytics provide forecasting guidance. Executives wind up with forward-looking indicators helping to identify real-time emerging risks and trends in demand management, innovation management, and major initiatives. And that’s why we have so many satisfied customers.

We suspect you’ve already got an innovation community. When you’re ready to deploy Foresight to harness social predictive analytics, let us know.

First of all, Almeida provides a pithy description of prediction markets:

A prediction market is a futures market in which a large group of people can express their opinion about the out coming of a certain event by buying shares from the answer that – according to the participant – is most likely to be correct. Prediction markets are increasingly implemented in enterprise environments.

The author then makes a list that reminds us of our own list of dos and don’ts:

• Invite as many participants as possible to the company’s prediction market: there is no relevance with regard to the accuracy of the out coming of the prediction market.
• In general, employees that have more knowledge on the subject need less explanation why you want them to participate. Also, more knowledgeable employees are more likely to keep participating when related questions are asked consecutive. This means that non-experts might need an extra stimulation to participate.
• Be aware of the ‘contradictory effect of the prediction market’ that might occur when non-experts are involved. It seems that they have different approaches to come to their decisions. While experts merely buy the shares of the answer they believe is most likely to be right, some non-experts tend to play a more strategic game.

You’ve been hearing us talk about the efficacy of prediction markets for a while, but what we offer is much more than just a platform. We know the platform, and we know how to make it effective in the enterprise. Which is why we offer extensive consultative services, from implementation through monitoring and management.

Finally, we hate spoilers, but we’re going to go ahead and give away the ending because we can’t help it:

Based on this research, we would like to recommend all companies to consider implementing a prediction market to support their decision making process in case predictions are a necessary part of the decision making process. We have proven with this research that – based on several data – a group of experts is not capable of making significant better predictions than non-experts.

Especially companies that have hired expensive experts to make forecasts about future events – such as turnover and product innovation – can save a lot of money, by just asking employees, suppliers and customers to make these forecasts for them. Even on a larger scale than previously researched, experts do not outperform non- experts significantly when using a prediction market to forecast.

If you’re an executive who needs better forecasting guidance, you don’t need an expert; you need experts in implementing prediction markets like Foresight. Our expert advice: call us.

Seth Godin has nicely summarized and extended the thesis of Chris’s talk:

The idea is one of those big ones, a simple one that will stick with you for a long time… Online video radically changes the reach and speed of the improvement cycle. Things like dance, snowboarding and TED talks keep getting better, and faster, because artists see the best and improve on it. Even more than that, it requires you to top what’s out there, or you’ll be ignored.

Now it’s our turn because we have a slightly different take. Chris’s talk focuses on how web video is accelerating the interpretive and creative process for people the world over. His examples are strong enough that we’re inclined to agree, but it’s not just video; it’s ideas. YouTube provided a remarkable interactive market for web video. Uploading and viewing were just the beginning. Now video is being recut, reedited, and remixed to create new movie trailers, music videos, and tutorials.

Our Foresight platform provides the same, fully participatory experience for our customers who leverage it. The crowds of employees who become participants in our customers’ markets are getting better at their jobs, sometimes because of the extent of web video. They’re digesting and communicating ideas all the time. And there’s no way that a single manager or even a top management team can possibly distill from the creative energy the best ideas with enough guidance to know what’s best, when it should be applied, and how soon it will work without help. Foresight is that help. It’s an example of managed crowd accelerated innovation.

After you’ve honed your dance skills from YouTube (in your office with the door closed, presumably) and you want to accelerate innovation in the enterprise, you’ll want to contact us.

J.C. Spender and Bruce Strong suggest “innovation communities” as a solution to harvesting employee innovation. Implementations of Foresight involve participants—often employees—in a market process that functions as an innovation community.

Dr. Spender and Mr. Strong’s ideal innovation communities include seven key characteristics:

• Create the space to innovate.
• Get a broad variety of viewpoints.
• Create a conversation between senior management and participants.
• Participants should be pulled to join, not pushed.
• Tapping unused talent and energy keeps product-development costs low.
• Collateral benefits can be as important as the innovations themselves.
• Measurement is key.

If you’d like to see an example of such an innovation community among our many customer successes, take a look at what Motorola accomplished using Foresight. We’re further expanding this concept through our partnership with Brightidea and their WebStorm interface. If you’re ready to create an innovation community within your organization, so are we.

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.

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.