A combination of Better Bettors and Collective Wisdom Market

Better Bettors Hack - Formalize the betting governance. 

Most of us are likely employees, stewards not owners.  The money we are betting is our shareholder's or taxpayer's.  We need to bet it wisely.

To ensure good stewardship, this meant centralize and formalize corporate governance.  Ensure that a limited number of highly vetted, scrutinized, and trained people (e.g. senior executives) controlled the purse.

The increasing need for adaptation puts tremendous pressure on this model.  The “new idea” betting bandwidth is narrow.  Adaptability needs us to place a greater number of smaller bets to find the next winning “new idea”.  Yet, completely opening the betting window for all bets lacks the governance controls necessary for good stewardship.

How can we apply good governance on many, small bets?  And how do we then systematically increase our bets as our confidence in them increases.

One hack would be to systematize betting governance.  This would extend comments from others (Tom, Butch, Mike, et. al.), as it assumes there is some defined, governed level of resources allocated.

Crowdsourcing has been done (and done successfully) at ideation and idea popularity (i.e. liking and comments).  We could apply concepts used in scientific academia to use crowdsourcing to systematize betting.

There are three components to this.

• Funding Grants
• Separate Experimentation
• Peer Review

Funding Grants – everyone in the company gets some level of money to bet.  The level of money is determined by some combination of job grade, performance review, and ultimately past betting performance.  Successful bets return winnings.  The winnings would be some portion of the ideas benefit to the company.  The betting money would need to be in the budget.  One possibility would see the company shift a portion of an employee’s salary into betting money (which could be lost or returned plus winnings).  This highly incentivizes employees to make good bets and take this seriously (good stewardship).  Senior executives could then monitor these betting pools to increase the size of the bets, as the ideas prove out.

Separate Experimentation – in academia, theory and experimentation are normally separate activities done by different people.  You can win a Nobel Prize for coming up with a great theory or a great experiment.  Create a similar division for crowdsourcing testing and measuring “new ideas”.  The person that devises the test and measures the “new idea” would participate in the winnings.

Peer Review – This further extends the experimentation model.  New science is verified through peer review.  Experiments must be repeatable.  Similarly, people can participate in a “new idea” and its winnings by reviewing and replicating the results.  Confirming experiment results might participate a smaller weight than the experimenter.  Disproving an experiment would need to payout on in some fashion (i.e. anti-winnings), as such a review would avoid loss and risk to the company.

The idea

• Everyone gets to bet (may mean money shifted out of salary)
• Bets have winnings (or can be lost) based on the value to the company
• Winnings are split (in some to be determined fashion) between the creator of the “new idea”, the measurer of the “new idea”, the reviewer of the measurement of the “new idea”, and the bettors on the “new idea”
• Management moves large bets on winners

Collective Wisdom Market Hack

When allocating resouirces rather than decisons being amde by senior management, use a market mechansim to allow staff to decide which ones are the best options.  Allocate each employee a certyain number of units and get them to "invest" these in proposed activities or projects, with those recieving the greatest  "investments" being funded, and those under a critcal threshold being dropped.  This allows for the collective wisdom of the organisation to be brought to bear on the decision, and also menas that those who are at the sharp-end and have potentially the best perception of what is actually going on, will have a major input to decision making.

Extensions to this could (and probably should) inlcude allowing all staff to put forward their own ideas to be subject to the same investment mechanism (with a minimum level of peer support required to ener the market).

This approach could also deal with the monoploy of resource issue.