The Homa Files

Excerpted from WSJ: “Best Buy Taps ‘Prediction Market’- Imaginary Stocks Let Workers Forecast Whether Retailer’s Plans Will Meet Goals”, Sept. 16, 2008

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When executives at electronics retailer Best Buy  want to know if a new product or idea is likely to succeed, they can seek the opinion of rank-and-file employees by turning to the company’s “prediction market.”

The market, called TagTrade, allows Best Buy’s workers to trade imaginary stocks based on answers to managers’ questions. The market’s judgment has often proved to be more accurate than the company’s official forecasts.

Associated PressTagTrade is open to all of Best Buy’s 115,000 U.S. employees. The roughly 2,100 of them who choose to participate get $1 million in fake money to trade for a nine-month period. The top trader in the period wins a $200 gift certificate.

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Best Buy isn’t the only company using prediction markets as a way to tap the knowledge of front-line employees. Web-search giant Google Inc. uses them to solicit forecasts on everything from how many users its Gmail service will attract to whether products will launch on time. Other companies that have experimented with them include General Electric,Intel Corp. and Microsoft.

Best Buy’s chief executive, Bradbury Anderson, …  drives decision-making down the corporate ladder and information up toward the top. Mr. Anderson says narrowing the gap between management and workers helps to make his company more nimble and responsive to customers, while boosting sales and profits.

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Full article:
http://online.wsj.com/article/SB122152452811139909.html#printMode

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This entry was posted on September 18, 2008 at 6:36 am and is filed under Internet - Soc Networking, Mktg - Product & Innovation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.