Panelists agreed that prizes and challenges can be powerful tools for leveraging resources and driving change, but there are also some definite dos and don'ts. Many of these apply to any sponsoring organization, but there are also special considerations for government agencies.
- The problem to be solved must be clear and well defined, with clear, measurable, and objective rules. Panelist after panelist hammered this point home. "This is the first step, before the competition," said Charlie Brown, formerly executive director of Ashoka Changemakers. "Everybody should be able to tell when someone has won," said Diamandis. And, Sonal Shah, director of the Office of Social Innovation and Participation, pointed out that it is critical to get these questions right: “What is the problem we are trying to solve? Will this prize actually take us in that direction?”
- Agencies must make sure authority and budget are in place. Though they are encouraged, there is no controlling cross-agency authority that authorizes prizes and challenges. The Office of Management and Budget has recently issued guidance for agencies that are considering using prizes and challenges as a part of their fulfillment of the Open Government Directive and to achieve other important policy goals. Melissa Patterson, the OMB attorney who drafted the guidelines, said that it is important to understand that authority varies from agency to agency. "Talk to your general counsel early and often," said Patterson. U.S. Chief Information officer Vivek Kundra said he hoped that would change. "Looking forward, we are looking at how to have that authority across agencies."
- Challenges should be open and transparent. Do not underestimate the effort it will take to remain fair. Peter Lee, director of the Transformational Convergence Technology Office at DARPA, described a challenge where the agency hid red weather balloons in various places in the continental U.S. and asked teams to try to find them. Some of the teams tried to hack DARPA's servers, while others spread purposeful disinformation. The antagonistic responses were expected and a part of the design (meant to simulate war fighting conditions) but even so, "ensuring absolute fairness is hard," said Lee. "It took much more time than we expected."
- Prizes don't have to be money. People who enter challenges do not only do so in order to get a financial windfall. Some enter for other reasons. A nonmonetary prize that creates recognition can stimulate innovation - as can a contest that promises winning ideas will actually be used. For example, the President's SAVE award was a contest open to all federal employees in late 2009. The call was for the best idea to "save taxpayer dollars and make the government perform more effectively and efficiently." The person submitting the winning idea would have the opportunity to present the idea to President Obama face to face, and the idea would be included in the 2011 budget. Indeed, the notes from one breakout session small group read, "prizes have to offer more than $."
- Use the public for the right purpose. There are many stories (some apocryphal) of inappropriate ideas rising to the surface of contests as the result of groups gaming a voting system or for other reasons. Furthermore, voting systems often result in the most creative solutions being dismissed. It is not clear that making final evaluations is the right use of Web 2.0 tools when it comes to such contests. Harvard Business School professor Lakhani said, "The public is good at generating ideas. It is not clear they are good at choosing winners."