1. David Perry (Consensus Point)
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.
2. Dawn Keller (Best Buy)
Keller began her remarks by explaining how Best Buy management wants to become better at listening. There is an authentic passion for tapping into the best information available among the vast network of Best Buy personnel.
PM offer a powerful tool in this regard. PM fits with the Best Buy mantra of: “Have fun while being the best.”
Keller framed her remarks around how management has tried to educate the Best Buy workforce about PM and the evolution of PM implementation from a committed band of volunteers to senior management buy-in. Best Buy has opted for a “shot gun” approach rather than a “rifle shot” approach. Best Buy tends to run many parallel markets at once to see what sticks rather than trying a few targeted pilots. Consistent with many other speakers, Best Buy runs many non-business related markets to invoke interest and fun, noting that participation is key and must be continually cultivated.
3. Christina LaComb (General Electric)
LaComb set the stage for her comments by noting GE managements desire to implement reliable intelligence aggregation processes. PM offers one such technology.
GE management, to date, has had little interest in the forecasting applications of PM. Rather, they [want] methods for grappling with new technologies and other factors associated with disruptive change. So, in the GE setting PM takes on the nature of “preference markets” rather than “prediction markets.”
LaComb went on to describe lessons learned in the implementation of GE preference markets. Much of this information is available in a published case study.
LaComb stressed that: “Validation is a huge challenge.” To date, the validation most relevant in the GE environment has been “gut checks” from senior management.
Can prediction markets “grapple” with disruptive change, really? I view this forecasting tool as conformist, whereas inventions/innovations require a dose of anti-conformism.