Wikinomics is about a perfect storm
being formed in the marketplace by four big ideas: Being Open, Peering,
Sharing, and Acting Globally.
Concepts such as open source software serve as a framework for
examining how the free flow of information among a large number of
geographically and intellectually diverse individuals can contribute to
increased business opportunities and better results. Wikinomics is a
new mode of production. Once it is shown that a diverse crowd can
create an encyclopedia or software product that is of high quality,
Tapscott and Williams provide examples of other things that can be
created through mass collaboration. Examples include airplanes,
electric toothbrushes, and even highly specialized technical
information like the location of gold in a mine. Organizations are
capturing the collective wisdom of the crowd to become more efficient
and more profitable.
The idea of closed business systems in which companies protect their
ideas and intellectual property at all costs is giving way to a more
open way of doing business in which ideas and information are shared
openly.
1.Wikinomics
The title of chapter 1, as well as the title of the book, seems too
close in tone (economic theories) and title to Freakonomics, by Levitt
and Dubner, published just the year before to be a coincidence and the
reliance on the “wiki” term to represent an entire social, technical
and collaborative revolution is a bit strained. But possible
coincidence and metonymy aside, this chapter is about the 4 linchpins
of book’s premise: Being open rather than proprietary, leveraging the
use of peers rather than hierarchical management, sharing intellectual
property for the common good, and looking global for markets and
resources rather than only in-company or in-country. Each of these are
discussed with some examples from industry and the spin is on how each
of these is beneficial to the society...as it tries to pry open the
mind of the reader to look for the benefits of this model.
2.Perfect Storm
This chapter is a
little disjointed with two significant angles: 1) it sets up the
storyline that the connection of technology and global economies are
being exploited by the Net Generation and 2) it's almost a synopsis of
the entire book, covering examples of peering, wiki workforces,
prosumers, b-webs, etc. In essence, there is a potential of a "perfect
storm" where a broad assortment of elements are coalescing to force
massive changes to the social and business world as we know it.
To open, the author's lead-off story is an example of how Sony's
"rootkit" software tried to limit copies of their music CDs, but ended
up with a public relations debacle because of the pressure that
demonstrated the influential power of bloggers--an example of shared
social muscle via the Web. The angle the author is taking is that not
only may the old school thoughts of proprietary software and copyright
materials be outdated, but the pressure from the users of the Net is a
potent force that is attacking the old-school model of closed economic
models. Although he confuses the terms Internet and Web, the point of
his New Web section points out that the use of the Web technologies has
moved from static pages to all sorts of sharing and collaborative
approaches, with flickr, craigslist and blogger as leading examples of
these online communities. The web is no longer a "static" space with
"surfing" as the goal, but a community that focuses on sharing,
collaborating and socializing...as he calls it, the "world's biggest
coffee house" (p. 39).
The author also talks about the changing demographic model as a key
influencer of the changing Web. The shared spaces (mySpace) for social
interaction, distrust of news media & the reliance on
peer-reporting (blogs, wikis), and the youth of the U.S. identifying
themselves as "content creators" all point to massive changes in the
social power of the Web. And while these changes are mostly attributed
to the Net-Generation, they are being felt up-and-down the demographic
groups. Online social networking is now a way of life for a huge
portion of society, with its broader ramifications yet unknown.
The chapter wraps up with his "globalize or die" warning that the old
hierarchal business models are coming under attack--and any firm that
doesn't globalize (and streamline, and innovate) will collapse under
it's own structural weight and its slow, plodding approach. The
discussion of business-webs and Coase's law points to the fact that
with the broad access of resources outside a firm that are readily
accessible (via tools such as Google, eBay, or Craigslist), keeping a
large vertical structure of information, talent, and other resources in
a firm makes it less agile and more likely to be toppled by it's more
nimble, web-reliant competitors. Its possible that many newly-forming
international b-webs (clusters of businesses that aggregate over the
web) may unseat the current industrial behemoths of today.
3.Peer Pioneers
Long Live Peer
Produced Open Source. The authors' almost evangelical stance on open
source code and peer production presents a decidedly cock-eyed look at
the people, tools and processes of this phenomena. Some earlier books
(such as Cluetrain Manifesto published in 2000) pointed to many of
these same changes, but any references to earlier works are rare or
absent. Regardless, for those not familiar with the Linux operating
system and the Apache Web Server software, this is an interesting read.
The chapter talks about a few key leaders in this field, but the
references and quotes seem limited. The bottom line is that open source
and peer produced solutions are here to stay, so adapt.
Peer producing is a model of developing various goods and services
(predominantly software as of today) that relies on volunteers
congregating around a need and developing solutions that are neither
owned by firms or individuals nor developed primarily from within a
firm's R&D organization. This results in a product designed,
debugged, shared and supported primarily by a dynamic, ad-hoc
collection of Internet-accessible talent. The product would then be
available with some type of public license that allowed a level of
"fair use" of the product to be bundled with other services or products
offered by a firm.
Not all products and services are ideal for peer production. A program
or project that allows for "chunking" of the work or provides for
add-on support is ideal for this model. The more monolithic the
application, the less likely it is a good candidate for peer
development. Also, a critical mass of supporters needs to be interested
in staffing or volunteering for the development tasks. The book
indicates that there are thousands of peer developed tools being worked
on, but other than php, Linux, Apache, Firefox and MySql, none have
reached the critical mass and peer participation for massive market
adoption. Some peer produced niche solutions (like Medsphere, p. 83
& 85) are showing potential, and the future may yet yield more.
Will the world embrace this new Open Source, Peer Produced approach, or
is there only a limited space where this fits? The authors downplay the
support challenges, the ever-changing code base, the multiple and often
divergent variants of these products, and the incompatibility of
add-on/bolt-on software to specific versions. And the necessity for
some level of code-talented support needed to effectively support and
patch the systems and to critique the various versions, patches and
enhancements was not discussed at all. But maybe the key thought on
open source is the last quote from IBM's Joe Cawley, "...if you don't
do it, your competitors will. And then where will you be?" (p.96)
4.Ideagoras
Ideagoras are places
where millions of ideas and solutions change hands in something akin to
an eBay for innovation. But with this concept comes a major shift in
thinking about research and development and intellectual property
ownership. Speed to market or "time based competition" may very well be
the ultimate catalyst that drives many organization to at least
consider Ideagoras.
According to the Encyclopedia of Management, the term time-based
competition came into use with its appearance in a 1988 Harvard
Business Review article entitled "Time--The Next Source of Competitive
Advantage" by George Stalk, Jr. It was further defined in a series of
articles and books written by consultants from the Boston Consulting
Group.
Time-based competition is a broad-based competitive strategy which
emphasizes time as the major factor for achieving and maintaining a
sustainable competitive advantage. It seeks to compress the time
required to propose, develop, manufacture, market and deliver its
products. In order to do this, the firm must change its current
processes and alter the decision structures used to design, produce and
deliver to the customer. Ongoing innovation is needed to excel at this
in just about every industry.
Time-based competition appears in two different forms: fast to market
and fast to produce. Firms that compete with to-market speed emphasize
reductions in design lead-time. In other words, the firm has the
ability to minimize the time it takes to develop new products or make
rapid design changes. Products fifty percent over budget but introduced
on time have been found to generate higher profit levels than products
brought to market within budget but six months late. Also, this form
allows firms to gain a market edge by being able to consistently
introduce more new products or large numbers of product
improvements/variations faster than its competitors, thereby dominating
the market.
While the "burning platform" driving the change may very well be the
high cost of time-based competition there is still a personal level of
contribution that must be dealt with. Somehow in the era of Ideagoras
the individual must receive credit for contribution in a way that works
for the individual and organization. Another challenge for the growth
of Ideagoras is the desire to protect ideas during this period of rapid
global market expansion. The discussion of Harnessing Ideagoras which
begins on page 108 provides some initial thoughts on the current
marketplace which has only a few buyers and sellers of ideas; that for
now does not attract the amount of investment needed to allow Ideagoras
to grow like many of the other wikinomic segments have. The bulk of the
Chapter touts the progress P&G has made in this arena and describes
how yet2.com and InnoCentive leverage this new wikinomic approach to
idea exploitation. (DG)
From Marsha's posting in the BB: A great quote from P&G CEO
nails the concept of Ideagoras: "Someone outside your organization
today knows how to answer your specific question, solve your specific
problem, or take advantage of your current opportunity better than you
do. You need to find them, and find a way to work collaboratively and
productively with them." This might be the indication of the burning
platform Don referred to.
5.Prosumers
“Consumers are also
the producers, or the prosumers” (p. 125). In Second Life, 3,100
residents average NET profit of $20,000 per year. They are among the
most active (obviously) of participants who transact in this virtual
environment. These are the consumers of the Second Life product who, in
turn, produce Second Life items for sale (in Linden, the currency of
SL) hence becoming the center of the prosumer evolution.
“Communities are forming every day in part because the technology enables it,” writes David Pescovitz, senior editor for
Make,
regarding the DIY phenomenon around products. “People get big thrills
from hacking a product, making something unique, showing it to their
friends, and having other people adopt their ideas” (p. 129).
Among popular DIYs, uppermost is the “mashup” – a mix of existing music
or video and original content resulting in a “mashed-up” creation. If
businesses realized the opportunities, they would encourage remixing.
People who engaged in this sort of creativity spend inordinate amounts
of time producing stuff that promotes their developing skills at
creating something.
However, there is a problem: “…according to copyright law, mashups are
illegal…” (p. 139) and record labels do what they have to do when they
discover one: stop it and shut it down. Unfortunately, this tends to
discourage mashup creators (or "force" them further underground [or
would that be deeper into virtual reality?]). Yet, the end product, the
mashup, can actually serve as no cost marketing. If only the industry
would decide how to leverage the activity rather than repress it.
The Next Generation expects to participate in designing the stuff
they’ll consume--be it food, furniture or fun stuff. It will behoove
manufacturers to encourage that collaboration.
6.New Alexandrians
Looking back in history to the
5th Century, The Great Library of Alexandria was a mecca of learning,
science, new thought, art, history, and much more. It represented one
of the largest knowledge centers which had ever been created. After the
library was destroyed, it would take many years before such a
collection of works was brought together again.
Today, as a result of collaboration, the internet, access to
information, that "the stock of human knowledge now doubles every five
years" (152). This human creation is in addition to the virtual
libraries that are now becoming accessible to the public to view.
Libraries such as Harvard, Oxford, and Stanford are now providing
scanned copies of books for the public to access. This New Alexandria
described in chapter 6 is as much about the ease by which we can now
access information, but also the creation of knowledge. (Lek)
This chapter focuses on collaborative
science …."Sharing for Science and the Science of Sharing". There is a
lot of good information about how the web is an enabler for science
collaboration, and many ideas for how an organization can take
advantage of open science. The authors argue
that information sharing system is not a new; it’s been around
thousands of years and that we can get benefits from collaborative
knowledge through internet and online community. We’ve entered the age
of collaborative science and on this basis the authoris introduce a new
business model called the New Alexandrians. The New Alexandrians create
a new model of collaborative science that will reduce the cost and
rapidly accelerate technical advancement in their industry.
Characteristics would be Collaborative open access production of scientific knowledge . Their strategy is that Industry
should collaborate with universities and researchers in open projects
that are win-win situations. Scientific knowledge should be left open
and the applications proprietary. Examples organizations cited are
Google Print, Human Genome Project, Single Nucleotide Polymorphisms
(SNP) Consortium, Intel’s Open University Network.
7.Platforms for Participation
It
is said that it all began during a house hunt in the Silicon Valley.
Paul Rademacher wanted a house near his office at DreamWorks Animation.
Tired of the maps and the thousands of Google search results, he create
a site that combines classified ads (from craigslist.org) with Google
maps and called it housingmaps. This was one of the Web’s original
mashups.
Though some may maintain that combining existing data and software is
“recombinant” (p.185), the utility of the concept was dramatically
exemplified as worthwhile in the aftermath of Katrina. While efforts to
find missing family members were taking place and various governmental
and non-profit agencies were (separately) trying to help, a group of ad
hoc volunteers from across the country concocted Katrinalist: a website
was a response to the numerous “find-your-loved-ones-here” Web sites
set up by everyone from the Red Cross to Yahoo and many evacuee help
groups countrywide.
David Geilhufe, on Friday September 2, along with some tech savvy
volunteers decided to make order out of chaos (p. 186). They authored
an open source data spec and ultimately, by Monday evening, September
5, thousands of entries had been process en route to 650,000. People
looking for friends or relatives could enter a name, address or zip
code to search and get an instant list. More than 1,000,000 searches
were conducted immediately after the tool went live. Disaster sometimes
brings out the best in people and those with the heart and the talent
tend to contribute in their own ways.
Open platforms chapter, key points: Open platforms are enabling
widespread participation creating innovative and valuable products.New
technology applications evolve and emerge; radical decentralization
creates tricky working environments; and, these will remain open only
so long as stakeholders are compensated for their contributions (“Don’t
expect a free ride forever!”) (p. 210)
“Platforms for participation…embod[y] all of the wikinomics principles:
openness, peering, sharing, and acting globally" (p. 212).
8.Global Plant Floor
Chapter 8 centers around how to engage
an enterprise produce goods and services effectively on a global basis.
The case studies are around upgrading aircraft (Boeing), motorcycle
manufacturing in China (Lifan), and designing and innovating
automobiles (BMW).
The focus is around the massive
potential of collaborative tools. The authors share examples of how
taking this approach can empower people that are dispersed all around
the world and enable them to work together effectively in producing a
coordinated result from a collaborative effort. Also highlighted is the
value in the hyperconnection of technology and tools that allow
populations to create virtual working spaces that are accessible and
available anywhere in the world. Using a wiki as an example of this,
the authors share how this can open up new opportunities to individuals
seeking others to partner and collaborate with on large-scale projects,
some worldwide. The authors summarize around the value of
differentiating through global collaboration. “…there will be handsome
rewards for those who learn the subtle art of weaving together the
skills and competencies of disparate players to create globally
integrated ecosystems…” Pg. 236 (Marsha)
Another interesting point relates to
something I can connect more personally to in my line of business. The
authors convey that when businesses provide their teams with the tools
that empower them and offer independence, it gives employees a sense of
trust. This behavioral shift into business confidence is crucial to
creating a framework of innovation. Trust breeds a safety net wherein
employees are more willing to take healthy risk, growing the company.
Employees take on more ownership and pride in responsibility. This
breeds the latitude to innovate. Ultimately this can result in a
greater openness in business processes and cross-functional and
cross-global productivity. “Global collaborators like BMW and Boeing
understand that sharing information through inter-enterprise systems
builds trust and helps enable networks of partners and suppliers to act
as a single entity.” Pg. 237
9.Wiki Workplace
Wiki Workplace -- the working
environment where employees freely collaborate using any number of
media (not exclusively wikis), creating a new source of value, support,
or strategies. The chapter spends a fair bit of time talking about Geek
Squad, which uses computer games along with other social-connectivity
tools to allow the employees to share amongst themselves--not just
socially, but also support and product issues. The trick is that the
employees found their own on-line social connections without the firm
providing the tools or resources. This is an example of the "open"
shift that is being made at firms. No longer is it company-sponsored
training programs or memos passed around based on a "routing sheet",
but an increasingly peer-organized, self-sufficient workforce and
support model.
The trends that have become obvious are:
-- distributed workplaces, using more telecommuting, off-hours peer
socialization, less reliance on firm-provided resources (other than PC
and network connections)
-- more independence of the workforce...careers are something that
employees have and develop on their own, not that firms provide
-- monolithic firms are challenged with these changes and must learn to be nimble and flexible...wiki-ish.
-- peer-to-peer reputation-rating services are being used (e.g. Amazon
book review) to help identify quality products and services
But the chapter doesn't do the topic justice. Excessive jargon,
examples from the "great leaders" rather than stories from the members
of the peer-socializing masses, and lack of solid suggestions and
advise (just mostly vague warnings). Yes, the workforce is
changing--they are more pressed for time, more likely to jump than
change, but they are also embracing the technologies of today, allowing
firms to benefit from their adaptation. As the author writes, "The
baby-boom generation grew up using typewriters, telephones, and cars to
commute to work, and will have a difficult time changing its lifestyle.
Technology may open the doors, but it can't force people to walk
through them" (pg 266). In other words, what chapter 9 is saying is,
those (firms and people) firmly entrenched in the 20th century must
adapt or perish
!
10.Collaborative Minds
Collaborating, knowledge
building within a network or community, sharing ideas and reaching
beyond our workplace, classroom, small corner of the world: These sound
like ideas that we have been tossing around all semester. Tapscott
summarizes the ideas of wikinomics in this chapter, by bringing us back
to Rob McEwen, the CEO of Goldcorp-that stepped outside of the box..and
struck it rich! The idea is that we can share knowledge, share ideas,
share trade secrets and our businesses will be better because of it.
You DO share your proprietary data!
The power of thinking differently! Companies are finding that there are
several new models within the collaboration economy that can allow for
greater competitiveness and growth. Each model gives companies a new
way to compete that is different from anything they have done before.
Using the models to drive change, companies can rewrite the rules of
competition.
- Peer Producers
- Ideagoras
- Prosumer community
- The New Alexnadrians
- Platforms for participation
- Global plant floors
- Wiki workplaces
To think differently, you must be open, embrace peering and sharing,
and act globally. You must also deal with the challenges that come from
doing these things. Not everybody is able to think differently and let
go of control as we notice from the example of Linden Labs sharing all
property rights to Sony's digression of not sharing anything.
Companies, or CEO's feel threatened by mass collaboration, when they
should really feel empowered by it.
Wikinomics Design Principles: Some suggestions for applying wikinomics in your business.
- Taking cues from your lead users
- Building critical mass
- Supplying an infrastructure for collaboration
- Take your time to get structures and governance right
- Make sure all participants can harvest some value
- Abide by community norms
- Let the process evolve
- Hone your collaborative mind
Mass collaboration is key to any successful company today. Throw away
your detailed plans, let go of the control and allow the walls to come
down. Allowing for collaboration, openness, and peering will only make
your company stronger. Use wikinomics as your playbook and start
thinking differently!
11.Wikinomics Playbook
This chapter was not
written, intentionally. It directs readers to begin applying the
theories of peer collaboration in a dynamic format by logging on to
www.wikinomics.com. Here is the link to the blog announcing the Wikinomics Playbook:
http://www.wikinomics.com/blog/index.php/2008/02/15/announcing-the-wikinomics-playbook/. Embedded in the blog is a link to the playbook, also a link is provided below under Discussions.
(Thanks to Don, Marsha, Jenith, Chad & Richard, my classmates, for helping assemble this review.)