September 19, 2007 by jimstogdill
Replace the JCIDS Process with Prediction Markets?
Ok, this might be a crazy idea…
I’ve been involved in a wide number of conversations related to a broad spectrum of mission / C2 -oriented IT programs over the past few years. Some of these programs have, or appear to be, succeeding, and some of them have failed or seem to be failing. The striking thing, is that there was often a sense of secret consensus about what was going to happen well before it did. “This program is critical” vs. “this program doesn’t have a chance in hell of succeeding”
In the case of the programs that seem to be doomed, there are often a number of reasons. The wrong technology, not speaking to a real warfighting need, etc. The scary thing is that even when everyone seems to think a program is doomed, it often continues out of sheer momentum. “It took five years to get this program funded, if we kill it now it will take five more years to get its replacement funded; better to try to get something useful out of all this.”
For a variety of cultural and process-oriented reasons, the normal wickets don’t seem to be able to fix this problem; in fact it is more likely that they contribute to it – the sheer number of wickets perversely contribute to the momentum of doomed programs.
So, what to do? Use prediction markets.
Give lots and lots of people accounts in a prediction market. Warfighters, acquisition pro’s, technologists in industry, business development people, trade magazine writers, … or even better yet, make it an open market and let people “buy in.” But in any case, get a wide ranging group of people who might have an interest or some expertise, give them (or let them buy) $10,000 virtual dollars and let them buy success or failure futures on all DoD programs at typical milestones.
Then… if a program is early in its life-cycle and the futures market is pummeling it; reward the nay sayers by either killing it and growing their accounts or make some significant mid course corrections to fix the problems. Such a market, especially if trades are anonymous, might be much more accurate at predicting the real potential for success at each stage in a program’s life-cycle.