The 2nd key success factor of innovation management

When developing your innovation initiatives, you too often run the risk of getting trapped inside processes rather than creating value. Technicalities and bureaucracies enslave you, absorbing your energies and leaving little time to make things happen. We’ve seen than your people’s engagement is critical, but so is process efficiency.

We’ve learned that the wisdom of your crowd is invaluable to make your efforts effective. In his book, The Wisdom of Crowds: Why the Many Are Smarter Than the Few, James Surowiecki explains that, ‘under the right circumstances, groups are remarkably intelligent and are often smarter than the smartest people in them.’ This means that your organisation can find the answers to many of its current challenges by harnessing your people’s ideas and experience.

Your people need to trust the process and get constant feedback. The procedures have to be clear, from idea generation through to content validation and idea evaluation, selection, crowdsourcing, implementation and acceleration – based on task bidding to identify the most appropriate resources. Only then can you have true peer collaboration. Exago makes sure this runs smoothly.

Different evaluation mechanisms, such as voting, multidimensional rating and prediction markets allow for a more proficient process, as well. We have adopted a sophisticated model of prediction markets that generates, screens and selects ideas. Processing high volumes of information, these prediction markets are the most efficient and transparent way to select the best contributions out of the vast array submitted by participants in idea management platforms.

The US Patent Office has officially patented our ‘System and method for adjusting asset value and availability in data records, for mitigating speculative trading in a prediction market’. This model encourages relevant participation and promotes the best process output in idea management initiatives.

But there’s a third key success factor of innovation management. We’ll see that next.

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Pedro do Carmo Costa, Exago’s director and co-founder
pcc@exago.com

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Photo: markusspiske@pixabay.com

Online platforms are powerful innovation enablers – the building blocks to produce outcomes. But they won’t stand on their own. If you want to create a true innovation culture, you need to have as many people as possible participating in the process. You need to manage those tools efficiently.

The typical suggestion box mechanism in which participants’ activity gets restricted to submitting ideas is certainly not up to the challenge. The forum model – where people can submit and comment on other people’s ideas – also has its limitations.

Your participants need to get involved in the evaluation and selection processes, as well. This is the only way to boost the scope of your target and to convince people their contributions are valued.

Idea management software, functioning as an ‘idea market’, has proven to be highly effective at unleashing your people’s and communities hidden innovation potential, crossing all boundaries. Geared to reaching goals, this gets each person to engage and participate more over time, whether you’re seeking to improve performance, find new products and methods or develop a widespread, collaborative culture of innovation.

These platforms can collect everyone’s ideas and insights, regardless of individuals’ geographical dispersion, when carefully designed to:

  • Be flexible and customisable to several languages and different look-and-feel;
  • Be inclusive, motivating different types of people;
  • Be transparent, so that participants understand the rules and constraints;
  • Provide (immediate) feedback for people to remain engaged and understand how they can improve their participation;
  • Provide social interaction, since sharing, competition and collaboration are decisive stimuli motivating people to contribute;
  • Have clear incentives and recognition mechanisms;
  • Be entertaining – using gamification mechanics, that make the process more attractive and sustainable.

Following these guidelines, we base our solutions on expert services and a software platform that mimics a stock market – all can submit, comment and next invest in the ideas they believe in, and be recognised and awarded for creating value. Using gamification, this model keeps adoption levels high over time.

Additionally, we use and recommend the adoption of prediction markets mechanisms. They allow dealing visibly with high volumes of information, typical in multinational organisations, and make decision-making more efficient, harnessing your community’s collective intelligence.

# Make participation inclusive
# Make work fun – gamify
# Use prediction markets’ powerful evaluation engine

Pedro do Carmo Costa, Exago’s director and co-founder
pcc@exago.com

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Market efficiency – experience drives calibration

Exago’s platform was built on a market mechanism that resembles a true financial market. Idea Market allows users to submit ideas and then trade on them, “investing” in good ideas and rejecting poor ones.

Companies enjoying the experience of this system can assimilate knowledge over time to improve their markets at later stages. This facilitates more effective and engaging communication to users, creates incentive models that are more appealing, and makes idea validation more straightforward. It results in a learning process, which is translated in more efficient markets.

While participants learn how to use Exago’s platform they are accumulating and sharing their knowledge and expertise. In response to company insights and communication (feedback) they become more aware of their actions and the objectives of the initiative, thus refining their investment decisions. Bo Cowgill from Google’s predictive market team said that, “Two and half years after launch, [trades] were better calibrated than the ones in the beginning. The market as a whole also got smarter.” (Source: The Promise of Prediction Markets: A Roundtable, in McKinsey Quarterly)

The learning process is dynamic and requires the full commitment of company and participants to reach optimal levels. If this dynamism is achieved, the company will reap the rewards!