Harnessing the Predictive Power of Employees

10 06 2008

During the last four years, a number of global firms have begun experimenting with internal prediction markets run among their employees. The primary goal of these markets is to generate predictions that efficiently aggregate the information from their own employees and augment existing forecasting methods.

 

Google is a great believer of prediction markets. In Google’s markets, participants begin with an endowment of artificial currency (called “Goobles” in Google’s case). Participants can use this currency to ‘purchase’, ‘securities’ that pay off in goobles if a specified event occurs. The events could be “Will Google open a Russia office?” How many users will Gmail have at the end of the quarter?”

 

One tangible benefit to the company is that the market allows Google to track how information disseminates in the company.

 

Arcelor Mittal, GE, Microsoft, Best Buy and Yahoo are among those who have adopted this technique for forecasting.

 

Now let’s see how long it takes for Indian companies to wake up to the value of the collective wisdom of their employees.

 

-G.Mohan.

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