The stock chart above compares an even more interesting set of potential futures for our four intrepid competitors (plus one) - for the five competitors now positioning for the next round of contract awards, supposedly coming in May - the GSA Networx Enterprise contract, which also includes a team led by Level 3 Communications in addition to the four bidders for the Universal contract.

So seeing the news this morning, I thought it'd be fun to run a Prediction Market on which of the five companies above would be the biggest winner in the GSA Networx Enterprise contract, which is supposed to be awarded in May. I set it up at Inkling and the feed from their site should be depicted above so please setup a username on InklingMarkets.com and then give us your opinion on whom you think will come out the winner in May.(read more)

 

News came in this morning that the world's largest telephone bill (the one for the U.S. Government) will be split between three companies - AT&T, Verizon and Qwest - but the most conspicuous snub came for Sprint, which GovExec details well in the excerpt below:

"Award of the Networx Universal contracts is a historic moment at GSA, and reflects our goal of providing transformational products and services to our federal customers at the best prices available in the marketplace," said GSA Administrator Lurita Doan. "I look forward to working with our new industry partners to provide the best possible service and value to our customer agencies and the American taxpayer."

Networx Universal will provide voice, IP, wireless, satellite and IP-centric services to 135 federal agencies at locations spanning 191 countries, and is expected to transform the current federal telecommunications system.

Sprint, which currently supplies about 30 percent of all government telecommunications services, was shut out of the new contract. The company's federal branch serves the Defense, Homeland Security, Transportation, Veterans Affairs and Interior departments, and the Federal Reserve and the Federal Deposit Insurance Corp. (read more)

In looking through my notes from the Yahoo PM confab, I saw some intriguing bits and pieces gathered from all of the PM practitioners there I did not speak to in my original post.

It would seem that PM's, as with any new process that threatens the status quo and embedded processes, get the most push back and lack of acceptance from those in the middle tiers of an organization. The top-tier really like PM's because they get essentially unfiltered information, knowledge, analysis and opinions from the first-tier, and the first-tier likes them because they get a direct venue to those in the top-tier. The mid-tier (read middle management here) are the ones who are generally (but as in all generalizations not always)the ones most opposed to PM's, and are the most threatened (a perceived threat to be sure, but sometimes very real nonetheless) by them, for the very same reasons the others really like them.

This is true, again in general, within any organization trying to use or implement new processes and or changes. The new ways threaten the perceived role of the mid-tier professionals, who see as part of their roles the gathering of information and the feeding of knowledge, analysis and opinion up to the top tier (read senior management here). They see their role and influence (and yes, power) being reduced whenever they are put out of the loop. You can read any number of essays, books, papers, etc. about this, but it happens, and it happens in almost all organizations, public, private, government agencies, etc. In these same publications you can also read many tools and techniques to avoid this, or actually use management jujitsu to turn it around.

But what was striking in the confab was the absence of any awareness of these ideas. Perhaps they are aware of them and just did not have time to speak to them, or, perhaps not. As an example, I wonder what would happen if within the organizations that said they were having the most trouble with this real issue tried to enroll the mid-tier into using the PM as a key business tool, sponsoring the tool, and understanding what they had to gain by doing so? Anyone had any experience in doing this?

Well, as my first conference on Prediction Markets this one left me a little puzzled, even with James Suroweicki and Robin Hanson there in person. So here are my thoughts, questions, and reactions to what was presented, talked about, questions asked and examples thrown out to us.

What seemed a way to learn about the concept and applications, successes and failures, ended up being a way for Google, Yahoo and other vendors to tout a process they just happened to have new tools for. The 4 hours seemed to be for the "true believers", and really glossed over PM 101, even though presentations by both Surowiecki and Hanson were meant to address the basics of the concept.

Reps from Microsoft and HP really had the most valuable lesson for me - they have been testing prediction markets in various forms and for various business functions, but neither are using them to make real business decisions at the group, department, business unit or corporate level. Yes, the markets can be very accurate, more so in many cases than internal and external "experts" (PM's are cheaper, too!), but no, they aren't taking over from the more entrenched ways of forecasting and decision making.

I heard a lot about how to get people to trade in the market, pros and cons of real money vs. other forms of "payoffs" (social standing and reputations), how to address the issues of risk attitudes and "quality" of trading over time (people getting it right, or close to it).

One really useful set of thoughts came from Adam Siegal of Inklingmarkets.com - lessons learned as to why PM's will fail within any group:

1. No concept of what a PM is
2. Using software that is too complex and not easy to use, to set up, trade in and run a market
3. Market structure was wrong
4. Asking for an opinion - questions must be quantifiable, even if just yes or no
5. Description or rules of the market not clear/understood by the trading populous
6. Questions posed are biased
7. Time frame of the market is too long - apathy over time and the market becomes static
8. No information is available for the traders to make a reasonable judgement - trades are based on information and knowledge (duh!)

Now this last one really struck me - I thought the whole idea in a PM was to bring out hidden tacit knowledge in an organization in a way to focus it on an issue or challenge to meet a specific business need. It would seem that there is a issue here of simply bad selections of the trading group members. I would also say there is a real issue on selected traders vs. self selected traders?(read more)

I had been planning on talking about Prediction Markets and their power to transform decision making as evidenced by their application to the midterm elections yesterday, plus, one of my favorite sites for commentary on highbrow issues of all sorts - Slate.com - was publishing a special feature on the subject of futures exchanges.

But then, just a few minutes ago, my brother Derek let me know Donald Rumsfeld stepped down as Secretary of Defense (depending on your political stance, either a few years or a few hours too late to help Republicans) in an entirely predictable move following the crushing defeat handed to the GOP in yesterday's midterm elections.

How could anyone reliably predict such an outcome you may ask? Why, prediction markets, my dear reader - that's how.

In fact, the leading PM site on such matters predicted this very thing - the Tradesports contract expired at 100.0 just a scant few seconds later. But first, the announcement on Rumsfeld:(read more)