PRIZE DESIGN *

Using Prizes to Foster Engagement, Innovation and Entrepreneurship

Lars Hasselblad TorresVermont Leadership InstituteMay 1, 2014

Spotted

Why [are] all these highly intelligent, well educated youngsters not putting their brains to good use by solving real-world problems. Instead they’re building technology to solve trivial issues.

@hermioneway on TNW*

*http://thenextweb.com/entrepreneur/2011/07/13/the-problem-with-silicon-valley-is-itself/

Benefits of prize challenges

• Establish an important goal without having to choose the approach or the team that is most likely to succeed;

• Pay only for results; • Highlight excellence in a particular domain of human

endeavor to motivate, inspire, and guide others; • Increase number and diversity of the individuals,

organizations, and teams that are addressing a particular problem or challenge of national or international significance;

• Improve skills of the participants in the competition; • Stimulate private sector investment that is many times

greater than the cash value of the prize; • Advance a mission by attracting more interest and

attention to a defined program, activity, or issue of concern; and

• Capture public imagination and change the public’s perception of what is possible.

What is an inducement prize?

A rigorously defined competition process that, as the result of a contest period, makes an award of cash prizes for the accomplishment of a feat, often within a limited time-frame.

Background conditions

Design for Development

A creative, results-oriented community of practice that will “get” the call, engage, and bring energy to the effort.

Challenge Driven Innovation

Recognized approach to accelerating research and development while mitigating risk by tapping creativity in crowds.

Grand Challenges Galvanize international attention and aspiration around some common purpose.

Enabling policy environment

Provision of broad authority and legitimacy for aspirational, experimental tools and approaches to innovation.

Open Innovation An approach to problem-solving emphasizing networks, transparency, and cooperation.

Culture of “Creative Competition”

Rise of new ‘net centric platforms that empower creatives to access markets, compete for resources

Prize typology

Purpose & OutcomeRecognition Stimulation Solution

Winner take all

• Goal is encouragement and celebration.

• A single winner selected for past achievement in a field or discipline.

Rank order

• Goal is ideation and mobilization.

• A limited sequence of winners selected based on design criteria.

Proportional

• Goal is research and development focused.

• A series of winners are selected for relative achievement based on solution criteria.

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Prize examples

Prize Purpose Features Award

Nobel PrizeRecognize great individual and shared achievement in a field.

Invitation-only nomination process, proposal selection by respective Nobel committee.

10,000,000SEK

Lemelson-MIT Prize Recognize an inventor who has made significant breakthroughs.

Open field, peer nomination, tiered judging process, patent requirements.

$500,000

CurryStone Design Prize Advance and inspire work of emerging “social design pioneers” improving lives.

Anonymous jury review of Invitation-only nominations.

$100,000

Buckminster Fuller Challenge

Implementation support for integrated strategy addressing a complex human problem.

Open application process, multidisciplinary jury review.

$100,000

MIT Global ChallengeChallenge young engineers to tackle barriers to human well-being in underserved communities.

Problem marketplace, solver community, focus on impact. Judges recommend winners, amounts.

Up to $15,000

GE Ecomagination Challenge

Open call for breakthrough ideas for home energy creation, management, and use.

Judge panel selects among entries for merit, technical validity, innovation, impact.

$200,000,000

Saltire PrizeStimulate development of technologies that harvest marine energy at a large scale.

First-past-the post prize to team demonstrated specific results in power generation.

£10,000,000

ALS Biomarker Prize4LifeAccelerate the discovery of a disease biomarker that will benefit medical field.

First-past-the-post prize to an individual or team for achievement based on board vote.

$1,000,000

DARPA Grand ChallengeAccelerate the development of a fully autonomous vehicle for battlefield use.

Open tournament-based prize competition over four years, with increasing complexity.

$2,000,000

Rec

ognition

Stimulation

Solution

When to use a prize*

* From McKinsey, “Using prizes to spur innovation” (2009)

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OutcomeImpactDisseminationSolutionProblem

Potential Prize Targets

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The innovation pipeline

Five prize design considerations

1.Specify outcomes. Make the call for participation as clear as possible from the get go. Use a clear technical description of the desired outcome (not solution) and know the gaps in current market delivery. Consider participant outcomes.

2.Know your audience. Knowing who you want to reach, how, and with what “ask” is central to building momentum and an effective discovery process.

3.Build for discovery. Innovation is often about the adjacent possible. Develop a process that fosters combinations of insights across disciplines to produce something new.

4.Right-size the purse. Make the prize sufficient to reward effort. This isn’t all about price - it can include prestige, publicity, market creation, and more.

5.Timeframe. A clear sense of timing will motivate and lose actors. Balance the discovery timeframe against dedicated resources, urgency, and “stickiness”.

Six prize design stagesStage Purpose Outcome(s)

1. Define Develop clear and compelling descriptions of the opportunity to solve a problem. Think about places to parallel process innovation, stack new approaches against traditional. Define the market potential for success. Use this process to define evaluation indicators.

Brief data-rich statement (3-4 paragraphs) describing the problem, context, and what success looks like. A set of evaluation indicators.

2. Validate Engage experts and stakeholders in providing assessment and guidance on the definition statement.

Revised statement describing the problem, context, and definition(s) of success.

3. Design Identify key goals for the prize aka desired outcomes. Generate process roadmap and accompanying internal and external workflows needed to drive toward success, and timeline.

Statement of key outcomes, process map, key decision points, workflows, and timeline.

4. Build Develop and implement necessary program assets such as partnerships and MOU’s, staffing structures, online presence and tools, marketing and communication assets.

Launch infrastructure including key messages, communication assets, work platforms, staffing structure.

5. Implement Launch prize. Ensure significant resources put to key messages, a clear call to action, and clear pathway to participate. Key pieces include:a. Recruit appropriate participants through a well-planned outreach and engagement strategyb. Decide the winner through a fair, transparent, and constructive selection process that is rewarding for entrantsb.2 Importantly, if there is no winner, implement plan to relaunch the prize or shutter itc. Build traction for process by announcing winner(s) visibly, energetically, and with an eye toward agency and participant dividend

A well-defined prize process that delivers a fair and engaging experience for participants.

6. Evaluate Using indicators developed early in the prize design process, carry out an assessment of how the process worked for key stakeholders and staff. Use for reports to community and process improvement.

An assessment document that outlines key metrics and stakeholder evaluations of success for the prize in meeting its objectives.

Five roadmap considerations

•Market uptake. If its a “solution” prize, understand the potential for the market uptake and dissemination of successful solutions. Plan to put agency resources and technical assistance toward this end after the prize contest.

•Design for engagement. Consider the enormous potential to create an innovation marketplace - a place where skills and ideas are naturally shared and connected - an how that can be leveraged over time, beyond the prize.

•Solver community. Understand range of potential solvers and ensure that necessary administrative procedures and supports are in place to make an award for success.

•Caretaking. Prizes can be stiff processes. Agencies can transform them into robust community building and learning processes through feedback, mentoring, connection making, celebration.

•Champion results. Regardless of whether the prize was a success or failure, have a plan to communicate the outcomes, lessons learned, and key insights - including feedback from participants.

Evaluate ImplementBuildDesign ValidateDefine

What is the problem to be solved?

What is the case that this problem is significant?

What activities will drive toward the desired outcome?

What platform, tools, and resources are required?

Who needs to know about the prize, and how will you reach them?

How well was the problem solved?Were outcomes achieved?

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Time

Carefully assess and lay out the time requirements foreach stage of the prize design process

Carefully assess and lay the resource requirements -human and financial - for each stage of the prizedesign process

Prize design sequence

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Thank You

Lars Hasselblad Torres

802-917-1788

lars.torres@state.vt.us

@VermontOCE