If you happened to see the Wall Street Journal piece on Best Buy Company’s use of its very own “prediction market,” then congratulations. You’ve tested out of this post and can use this time to catch up on other posts or simply lie your head down on your desk and rest quietly.
For the rest of you, this is an extremely interesting application of organizational social decision-making in our ever wikinomicked world.
Why should we care? Rather than the historical model of top-down decision-making, a corporate Predictions Market results in the opposite. In this model, rank-and-file employees (sorry bout that, but it sounds cool) guide, or at least influence, decision-making through the amalgamation of their opinions to any number of issues with which an organization deals.
Best Buy calls their predictions market TagTrade and, put simply (the only way I can generally put things), employees trade imaginary stocks based on questions posed by Best Buy managers. I won’t spend your valuable time explaining the program in detail, as you can read it here for yourself. (Dude, homework?)
What I will do is call attention to the fact that according to Best Buy and other companies that are starting to play with this forecasting model, it is often more accurate than executive forecasts. Now, aside from the glee that brings to my subversive nature, this is another opportunity to showcase what breakthroughs like Wikipedia, Digg and even Google – back in its pure, don’t be evil days – have been showing us. Group think isn’t the idea killer that management and organizational gurus have historically told us and, in fact, is gaining a following in the corporate world.
Do I find that pleasing? God yes. It’s democratic and speaks to my overactive sense of fair play. And were we to put that very idea into its own predictions market, my guess is that it would please many of the “investors.” Careful now, but this could lead to organizations ditching their “experts” and relying on the people in the organization, those with a much more vested interest in its success, to guide their decision-making.
Prediction Markets, similar to other social marketing outcomes, create one big organizational expert, who at this stage of the game is outperforming the traditional, data-sifting, forecast-modeling managers.
Does this mean we should create some sort of “representational corporation” that relies on strict populist decision-making? Perhaps throw Che on the Board of Directors while we’re at it? Certainly not. But what it does show us is that the Internet, by connecting 115,000 U.S. Best Buy employees to a simple forecasting tool, has once again added another option to any organization unafraid to embrace new ideas and provide an opportunity to embrace the popular management cliché that “our employees are our greatest asset.“