Melodies in Marketing

After hearing so much about Innovation these days, it’s nice to be able to gain some fresh perspective on how it’s influenced in this day and age with the Internet and open-collaboration models we’ve come to know and see grow over the last 10 years. Besides the obvious reference to Wikipedia and our knowledge of social media, it feels now that innovation-ability has increased because greater opportunities for collaboration have never existed like today, and companies/orgs have realized that being more open can have significant advantages in product & process innovation.

In the authors’ own words, p.18:

The new promise of collaboration is that with peer production we will harness human skill, ingenuity, and intelligence more efficiently and effectively than anything we have witnessed previously…the collective knowledge, capability, and resources embodied within broad horizontal networks can be mobilized to accomplish much more than one firm acting alone. Whether designing an airplane, assembling a motorcycle, or analyzing the human genome, the ability to integrate the talents of dispersed individuals and organizations is becoming the defining competency for managers and firms.

The authors describe the principles of Wikinomics as: Being Open, Peering, Sharing, and Acting Globally.

While these principles speak for themselves in our imagination and real-life examples, the authors share with us seven new models of mass collaboration:

Peer Production - Think of all the individuals contributing to open source software, Wikipedia, the Age of Conversation, and volunteers in grass roots orgs who collectively show that together they can create and execute quality projects faster than large and well-financed enterprises can.

“Ideagoras” - These are eBay-like marketplaces for innovation. Organizations can solicit proposals for unique solutions they’re seeking OR offer their intellectual property for license/sale. Bright individuals can review proposals and submit their ideas if they believe the reward (monetary, recognition) worth it. Examples include: InnoCentive, Yet2.com, NineSigma, InnovationXchange Network, Eureka Medical, YourEncore, Innovation Relay Centers, TopCoder, and Fellowforce. Additional examples with a nonprofit social-design aspect include Design21, and Open Architecture Network.

“Prosumers” - Product customization has existed for a long time, whether pursued by individuals’ own creative efforts, or offered as an option by manufacturers/providers. But lead users are a force to be reckoned with. They can take matters into their own hands by hacking iPods and PSPs; or creating mashups of creative works, dispersed data, and web applications. Alternatively, organizations can allow such open-innovation by offering up software APIs, design kits, and other tools; in doing so they can vastly extend their user base and grow their brand goodwill. Examples include: Lego Mindstorms, Facebook applications, Creative Commons, and embeddable media.

Science 2.0 - Dubbed “The New Alexandrians” by the authors because it represents distributed and shared R&D among scientists for specific fields and purposes across geographic boundaries and organizational types. The best example was that of the SNP Consortium which in 1999 began tracking gene sequences for addition to the Human Genome Project. The nice twist was that this movement originally began with Merck in 1995 as a counterstrategy to entrepreneurial biotech companies looking to find and patent gene information; Merck created immediate commons of all its findings in its ‘Gene Index’. Examples of this in action include: arXiv, Earth System Grid, OpenWetWare, and various digital library projects whether by governments, universities, or the private sector.

Participation Platforms - Here we’re talking about taking your product/service platform, and opening it up for others to play/mix/re-purpose aspects of it, for their own personal and creative use. The benefits for both originator and participants can be vast. The primary environment is software and digital data/media. Mashups from open web APIs, XML, RSS and embeddable media, are great examples. Specific applications from a variety of uses include: PeopleFinder, for displaced families of hurricane Katrina; HousingMaps (Google Maps and Craigslist housing info), BBC’s Creative Archive License Group, Amazon Web Services (Commerce, Search [Alexa], computing, storage, work outsourcing), Scorecard (environmental data on US communities), Neighborhood Knowledge California (Los Angeles community data tool for identifying areas of urban decay & in need of improvement), and Force.com (open application platform for use within the Salesforce.com environment).

Globally Distributed Product Development & Manufacturing - Yes, this is a common trend many of us know and understand. But this isn’t just about outsourcing, it’s about collaboration. The Boeing’s 787 was built faster and more efficiently by opening up technical/architectural info to its many suppliers. Chonqing in western China is home to a vibrant collaborative community of motorcycles parts and unit manufacturers, of which Lifan is the largest brand (all vehicle types). It’s approximated that around 60-70% of ALL vehicle parts are manufactured by third parties; Magna International is one example. BMW now spends R&D only on designing engines, interiors, and software (btw, their DesignWorksUSA division outsources industrial design). From these examples, the authors give us 7 lessons for manufacturers to learn from:

1. Identify and focus your efforts on critical value drivers. The authors give a new golden rule: “Always strive to be the best at what your customers value most and partner for everything else.”
   
2. Use orchestration to add value. Think excellent execution through project management and open collaboration.
3. Foster collaborative design processes that are rapid and iterative.
4. Employ modular architectures. The authors describe this as “Rather than mandating how to produce products, firms can work to create standards and modular architectures that specify product interfaces and leave it up to suppliers to the the job done.”
5. Build a supply chain ecosystem that’s transparent and egalitarian.
6. “Share the Costs and Risks” of product development among all parties. This includes shared decision making, where the implications of certain programs/efforts will affect the operations of various partners.
7. Observe market and industry developments and use predictive scenario planning techniques to identify strategic arenas of opportunity.

The “Wiki Workplace” - Spontaneous and collaborative workspaces resembling networks, increase innovation and boost employee participation & morale. The visibility of the traditional hierarchy and its function, begins to fade. The authors point out 5 typical workplace functions that will be affected: teams, time allocation, decision making, resource allocation, and communication.

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So those are the 7 models of mass collaboration. Before I bore you (and burn myself out) any more on this subject, I would like to close with the authors’ final design principles that are common to all these models:

• Follow, listen, and take cues for action from Lead Users.
• Build a critical mass of participants that’ll attract more people to the ecosystem.
• Provide an infrastructure for collaboration.
• “Take your time to get the structures and governance right”.
• Ensure benefits can be gained from the participation of all parties.
• “Abide by community norms” regarding issues like communication, appropriation, and contribution processes.
• Allow for the entire ecosystem to grow and evolve without strict adherence to a personally intended “best-case-for-us” blueprint.
• Develop and utilize a mind toward collaboration.

For more information on Wikinomics, check out the book itself and a special section of BusinessWeek devoted to the subject.

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