Lecture before the RAND Corporation, re: INCENTIVE ENGINEERING - video of lecture is also available at... http://youtu.be/mjULNBc-5ZQ

1. THE HISTORY OF PRIZES
“OPEN INNOVATION”
PRIZE HISTORY TIMELINE*
1714 1775 1795 1895 1900 1919
1567 2012
BRITISH ALKALI NAPOLEAN CHICAGO DEUTSCH ORTEIG
LONGITUDE PRIZE FOOD TIMES-HERALD PRIZE PRIIZE
PRIZE PRESERVATION PRIZE FOR AUTO
PRIZE MOTORS
CHARLES LINDBERGH CROSSES THE ATLANTIC RAYMOND ORTEIG
9 TEAMS
SPEND $400K
“TO WIN $25K”
* Knowledge Ecology International, Research Note 2008:1 (http://url.ie/dzyk)

2. A PRIZE RENAISSANCE
“THE ANSARI X PRIZE”
$1BB+
$100MM
$10MM
$2.5MM
CREATING LEVERAGE: 26 different approaches proposed from a wide range of entrants („96-„04).
ARCA SPACE TRANSPORT DA VINCI PROJECT CANADIAN ARROW ROCKET PLANE
ARMADILLO AEROSPACE STAR CHASER PABLO DELEON
26 TEAMS / 7 NATIONS
SPEND $100 MILLION TO WIN $10 MILLION
“VIRGIN GALACTIC LEASES WINNING TECHNOLOGY”
3 BILLION+ MEDIA IMPRESSIONS
MOHAVE AEROSPACE VENTURES WINS $10 MILLION

3. PRIZE GROWTH & EXPERIMENTATION
“SUCCESS STORIES & CAUTIONARY TALES”
*
(1970-2009)
* McKinsey & Company (2009), “And the Winner Is…” (http://url.ie/dzyj)

4. PRIZE INVESTMENT
“VENTURE PHILANTHROPY & INNOVATIVE GOVERNMENT”
Source of New Prize Capital (since 2000)*
GROWING
SEGMENT
* McKinsey & Company (2009), “And the Winner Is…” (http://url.ie/dzyj)

5. A PRIZE TYPOLOGY*
“REWARDING OR AWARDING”
* Morgan, J (2008), “Prize Induced Innovation.” innovations, MIT Press, 3(4). (http://url.ie/dzym)

6. A PRIZE TYPOLOGY*
“A SHIFT IN AWARENESS”
Before 1991 After 1991
* McKinsey & Company (2009), “And the Winner Is…” (http://url.ie/dzyj)

7. A PRIZE TYPOLOGY*
“IDEATION OR DEMONSTRATION”
* Morgan, J (2008), “Prize Induced Innovation.” innovations, MIT Press, 3(4). (http://url.ie/dzym)

8. A STANDARD PRIZE TYPOLOGY
“FOUR QUADRANTS”
ACADEMICS,
ADVOCATES & ENTREPREURS,
KEY OPINION INVESTORS &
LEADERS RISK-TAKERS

9. PRIZE OUTCOMES
“TODAY‟S DISCUSSION”

10. PRIZE PLANNING & DEVELOPMENT
“DRIVING INNOVATION & CHANGING PUBLIC PERCEPTIONS”
FEEDBACK
Ux

11. PRIZE PLANNING & DEVELOPMENT
“PRIZE INCENTIVES & OTHER DRIVERS”
FEEDBACK
Ux

12. PRIZE PLANNING & DEVELOPMENT
“NEW MINDSHARE & MEDIA”
FEEDBACK
Ux

13. PRIZE PLANNING & DEVELOPMENT
“CREDIBILITY & COVERAGE”
FEEDBACK
Ux

14. PRIZE PLANNING & DEVELOPMENT
“ENGINEERING THE PLAYER EXPERIENCE”
FEEDBACK
P
Uxx

15. PRIZE PLANNING & DEVELOPMENT
“VERTICAL VALUE”
FEEDBACK
FEEDBACK
P
Uxx

16. PRIZE PLANNING & DEVELOPMENT
“LATERAL VALUE”
FEEDBACK
FEEDBACK
P
Uxx

17. THE ARGUMENT FOR OPEN PRIZES
“WHO ARE PRIZE SOLVERS?”
TOXICOLOGY
DRUG PATHOLOGY
FRACTAL ALGORITHMS
DISCIPLINE + 3o
DISCIPLINE + 8o
DISCIPLINE + 9o
DISCIPLINE + 4o
DISCIPLINE + 5o
DISCIPLINE + 6o
DISCIPLINE + 7o
DISCIPLINE + 10o
CHRYSTALLOGRAPHY
$25,000.00
NEW CHEMICAL
COMPOUND
WINNERS ARE 6 DEGREES OR MORE
SEPARATED FROM THE TARGET DISCIPLINE
KEY TRAITS OF PROBLEM SOLVERS: Winners are technically or socially marginal to problem
domains (increasing distance between problem domain & personal expertise).
EFFECTIVE TRAITS OF PRIZE DESIGN: The more intellectually diverse the pool of competitors the
more likely problems get solved (in science women are more likely to win).
“Problems exhibiting high uncertainty (multi-dimensional inputs) benefit most from contests.”

18. ENSURING TRAINSPARENCY & FAIRNESS
“NORMALIZATION”
OBJECTIVE CRITERIA SUBJECTIVE CRITERIA
TRAIT RUBRICS (HOW IS CONTENT JUDGED?):
STATISTICAL NORMALIZATION:
5-10+
Reviews/Proposal

19. SUBJECTIVE CRITERIA
“OPEN, FAIR & DILIGENT”
SUBMISSIONS NORMALIZATION BANDWIDTH JUDGING
(PROPOSALS) (REVIEWS PER PROPOSAL) (TIME TO JUDGE) (REVIEW PANELS)
10 JUDGES
5 REVIEWS/PROPOSAL 1 HOUR/PROPOSAL
20 PROPOSALS (10 PROPOSALS/JUDGE)
(100 REVIEWS) (100 HOURS OF JUDGING)
(10 HOURS/JUDGE)
5 REVIEWS/PROPOSAL 3 HOURS/PROPOSAL 10 JUDGES
20 PROPOSALS (100 REVIEWS) (300 HOURS OF JUDGING) (10 PROPOSALS/JUDGE)
(30 HOURS/JUDGE)
25 JUDGES
5 REVIEWS/PROPOSAL 3 HOURS/PROPOSAL
100 PROPOSALS (200 PROPOSALS/JUDGE)
(500 REVIEWS) (1,500 HOURS OF JUDGING) (100 HOURS/JUDGE)
100 JUDGES
5 REVIEWS/PROPOSAL 3 HOURS/PROPOSAL (100 PROPOSALS/JUDGE)
200 PROPOSALS
(1,000 REVIEWS) (3,000 HOURS OF JUDGING) (300 HOURS/JUDGE)

20. SAMPLE PRIZE MARKETING CAMPAIGN
“AT WHAT COST?”
$ $ $ $ $
(A B C) D E $10+ MM (USD) MEDIA BUDGET

21. OUTREACH TACTICS & COMMUNICATIONS
“TIGER TEAMS & NETWORKING”
INDUSTRY
ASSOCIATIONS
LOCAL
GOVERNMENT
REGIONAL
SUBJECT AUTHORITIES
MATTER
EXPERTS
NONPROFITS
ACADEMIC
FOUNDATIONS
INSTITUIONS
COMMERCIAL
INTERESTS INVESTORS PHILANTHROPISTS
EMPLOYERS
CREDIBLE
CONNECTORS COMMUNITY
ACTIVISTS
BUSINESS
INCUBATORS

22. TRACKING PRIZE OUTCOMES
“MEASURING AGAINST GOALS & OBJECTIVES”

23. A PRIZE PROCESS
“STAGES & GATES”
REFERRAL MODULE REFERRAL NETWORK
1 (NETWORKING INTERESTS) (VIRAL DISTRIBUTION)
REGISTRATION MODULE REVIEW PROCESS
2
(FORMALIZING INTEREST) (ADMINISTRATIVE)
CONTRACT: PART ONE Y/N
3 (MEDIA RIGHTS/WARRANTIES)
REVIEW PROCESS
(LEGAL & COMPLIANCE)
CONTRACT: PART TWO
4
(COMPLIANCE)
Y/N
SUBMISSION MODULE
51
(RECEIVING PROPOSALS)
REVIEW PROCESS
(CRITICAL)
52
VARIABLE DATA SET
Y/N
6 AWARD MODULE
(TRANSFER/CEREMONY) AWARD

24. MAPPING THE PROCESS
“SUPPORTING DOCUMENTATION”
STAGE TWO: Teams Registering to Compete…
1 REFERRAL MODULE REVIEW PROCESS
(CAPTURING CANDIDATES) (ADMINISTRATIVE)
REGISTRATION MODULE Follow-up
2
(SCREENING CANDIDATES)
SUPPORTING DOCUMENTATION:
REGISTRATION
PACKAGE
(AGREEMENT)
N/Y
 Agreement
NEGOTIATE
TERMS
Ensures:
Compliance;
PASS TO Media Rights;
SUBMISSION Logistics.

25. INSPIRING A PRIZE CULTURE
“START WITH UNDERSTANDING BASIC MOTIVES”