Group items tagged

The most popular post I’ve written to date is a review of prediction market software. Today’s post is going to be the same, but for idea/innovation software (henceforth referred to as innovation software). Trying to even find and identify all the different types of innovation software is difficult because of the different ways people and companies think about innovation. Prediction markets are straightforward; they’re futures markets, so the software is largely the interface between the user and the order book on the database. That is not at all so for innovation software. Different people think about innovation in different ways, which I referred to in a previous post. The list below is likely not complete, but I believe it does pick up the major players.

Sheep aren’t that knowledgeable; they are trading for any number of reasons, and are the “noise” in the marketplace. Wolves take advantage of that, and consequently they look for markets with lots of sheep. With better information, the wolves will easily have plenty to “eat.” The net result is that those noisy markets are accurate markets.

Perry shared many lessons learned, and chose to focus people’s attention on the pitfalls of PMs (in addition to their power). Implementation can take a long time. It’s a change management process. Asking the wrong questions can be a killer, but often the right questions emerge after trading begins. Poor incentive structures is the #1 killer, according to Perry. Don’t suppress the reputational incentives associated with PMs. Be explicit and transparent about how traders will be compensated.

Every senior executive knows that business decisions are seldom better than the information behind them. Yet although it is usually lower-level employees who interact directly with the customer, decision makers rarely ask them how, for example, new products will fare. Leaders therefore deprive themselves of information that could enrich their analysis and reduce the risk of ivory tower decision making. Some executives understand that valuable information lies scattered around the organization but don’t know how to retrieve it. Others don’t even try, perhaps for hierarchical reasons or because they suspect they might get answers colored by the desire to second their real or assumed viewpoint.