Internal online communities can provide a much needed less formal yet officially sanctioned channel for information flow. In a global organization, even when management does a very good job of publishing news of current developments, employees want confirmation, as rapidly as possible, from one another about what they perceive or fear, about what their clients are asking and doing.

In a crisis, consistency of message is critical and senior management can establish the message and set a tone but front line employees must adapt that message for their clients in their regions. Opening a forum to collect and share these adaptations can accelerate the sharing of solutions and provide an early-warning system for problems. (In this situation a forum moderator becomes even more important since in the midst of a crisis people are focused of dealing with the problem rather than documenting how they dealt with it.)

By providing an opportunity for sharing information which is not tightly controlled by the corporate communications department, the company supports employees and has a better chance of learning about their concerns, the problems they are facing and what they are doing about it.

We invited all 52 participants to invest in the “stocks” of any of the ideas under development. Participation was completely optional and had no bearing on their performance in the program. In the seven weeks the market ran, over 2/3 of them actively traded, which, for a first-time market is an extremely high participation rate. Of course it helped that many of the participants are professional traders.

A handful of program alumni from the previous year also traded. Though it wasn’t a large group, they were paying attention to the innovative ideas coming out of the program and they were offering their insights - two objectives that are difficult to motivate in people who don’t have a stake in the outcome.

Because the ideas on which the participants were trading might take months or even years to come to market, we could not make the final valuation of the stocks dependent on, say, generated returns. Instead we asked the senior executives to “grade” each proposal on a specific set of criteria including strategic alignment, revenue or cost savings potential and thoroughness of the presentation. The aggregate grade became the final price. So in effect, traders were betting on how the senior executives would respond to the projects.

The market predicted which two ideas the senior executives liked the best. It also predicted three of the top five projects and four of the bottom five projects. So, this limited sample indicates that a group of young high-potential employees representing a broad cross section of roles, locations and functions, can think like their leaders.

For future iterations we are considering breaking out the various project criteria as separately traded stocks. This makes the market more complex but should provide better feedback on whether the market is indicating, for example, that people believe the idea is a good one but the team didn’t pitch it very well. We also plan to encourage earlier and more active participation by a wider group of stakeholders and alumni.

Our clients told us that this first experience with a prediction market opened their eyes to the power of collaborative tools for innovation. There is no question about this becoming a regular part of our programs and we are already discussing wider applications.

I am pleased to announce that this week we’ll be launching a prediction market as part of the innovation program Mohr Collaborative is running for one of our large financial services clients. My colleague Art Hutchinson (who blogs regularly about prediction markets, most recently here) and I have worked with David Perry of Consensus Point to provide the market technology. Participants in the current year’s program as well as program alumni will trade on the ideas in development. As many of our participants are professional traders, there is virtually no learning curve. I will write more as the market develops.

Earlier this season on Boston Legal, Denny fired an associate because she was fat and got sued for wrongful termination…

Nancy: But I wasn’t too fat for you to hit on?
Denny: Well no, because I like chubby sex but I never asked you to dinner.
Emma: Did you hear that?
Nancy: I only heard ca-ching, ca-ching.

Alan successfully defended Denny on the grounds that he was simply protecting himself from “catching” obesity, citing research reported on the front page of the New York Times. Last week my colleague Art Hutchinson pointed me to this conversation with Nicholas Christakis who, with his colleague James Fowler, published the research paper.

In the article, Christakis clarifies what Boston Legal so artfully took the extreme.

The real explanations for the obesity epidemic are exclusively socio-environmental — things having to do with the increasing consumption of calories in our society: food is becoming cheaper, the composition of food is changing, there is increasing marketing of foodstuffs and the like. Also, clearly, there has been a change of rate at which people burn calories due to an increase in sedentary lifestyles, the design of our suburbs, and a whole host of such explanations.

We are not claiming that such explanations are not relevant. No doubt they are all part of the obesity epidemic. We are just saying that networks have this fascinating property whereby they magnify whatever they are seeded with. And so if you can get something going in a networked population like obesity, it can spread.

I’m interested in what this tells this about how we learn. Learning is embedded in our network and “getting something going” in the network is how learning happens.

Christakis also explains that his research produced more evidence that the way obesity or other phenomena spread is by changes in perceptions about what is acceptable or appropriate, that is, norms, rather than simple copying of behaviors. Patti Anklam, a colleague and expert on networks wrote:

His research indicates that it’s the norms that are most influential because, as he says, “they can fly through the ether” whereas for behaviors to propagate we need to be physically together.