In my first post on this topic, I looked at how prediction markets can work like a stock market — buying and trading “shares” that reflect a specific value, such as a ship date, sales forecast, and so on.  Another popular way to use prediction market technologies is an opinion forecast. Employees (or members of a community) can vote on the likelihood that an event will occur or the positive or negative impact of an event.   For instance, one person might enter a value range that indicates “I think there is a 25% to 45% chance that this will happen,” another person might think the probability is 40-50%, another may use wider or narrower ranges, etc.  In this variant of a prediction market, the “winner” is the person who comes closest to the final calculated aggregate percentage within the narrowest margin. For example, if the collective intelligence says the answer is 45%, then the user with the narrower range (40% to 50%) gets more points.

I happened to be in a room with a pair of scenario planning experts and a leadership development consultant during this informal discussion with Maurice Balick when we noticed the power of seeing others’ predictions. We’ve all used facilitation methods that rely on “dot voting” to display the collective wisdom in a room.  Dot voting is a great technique to use when there are multiple courses of action identified during a workshop or meeting and it’s important to narrow down the choices or see where people’s heads are at. Everyone in the room gets a certain number of colored adhesive dots and can use these as votes on particular topics or items. As dots accumulate on one or two of a long list, it’s easy to see where the room is, collectively.

Balick had previously explained that Newsfutures uses four “R”s as design principles in setting up prediction markets. These must be designed into the environment for successful adoption of prediction markets:

• Relevance - it has to matter to the company or participants
• Rewards - appropriate rewards (monetary rewards, stickers, tee-shirts) need to be in place
• Recognition - people who are the most successful should have “bragging rights”
• Relationship - the market must engender conversation

“Aha!” I said again (but only to myself this time). It comes back to relationships and conversations. While the specific value of the knowledge created by the collective wisdom provides value data to management (who must ultimately decide and act), the process of participating in this medium sparks conversations: it’s about getting people to see not just where they agree with others, but also to see that there are a range of positions possible. By seeking the outliers in estimating and rating, there is the opportunity for the isolated expert or group who may have special knowledge to be recognized and listened to.

When we facilitate a dot-voting session, it’s always important to understand the minority view. The workplace of the future is inclusive; tools like prediction markets  can leverage the necessary diversity.