CollaborativEye

It is exciting to see concrete examples of radical collaboration in business ventures, particularly new ones that have a chance to make a big splash. GoLife Mobile , a startup venture headquartered in Portland, OR, yesterday announced their collaborative framework for developers of mobile applications (or widgets). Rather than taking on the impossible task of producing all of the applications themselves, they are enlisting a potentially vast pool of developers who are interested in mobile platforms, and who don't mind making a buck or two for their efforts. Developers are encouraged to share widgets, and build upon the work of others. The nifty thing is that whenever your widget gets used (either as the primary application, or a component in an application), the author of the widget gets a piece of the advertising revenue that the GoLife Mobile platform will produce.

Not only will this collaborative development eco-system reduce the time to produce applications, it promises to spur innovation as well. Developers are incentivized to create compelling, reusable widgets in the hopes that other developers will incorporate them into their own applications. I particularly like the way that GoLife Mobile is combining collaboration with good old fashioned capitalism. James Whitley, the CEO of GoLife Mobile, shared with me at their developer briefing that he's a died-in-the-wool, Central Oregon capitalist, while his president of technology Mounir Shita is from "socialist Norway" -- obviously a great mixture that promises to produce some interesting results!

 

Conventional wisdom says that strong intellectual property (IP) protection encourages investment and innovation. The thinking is that financial returns are "secured"  because of the exclusive nature of the IP and the fact that access to the IP comes at a price.  The thinking goes further that without IP protection, incentives for innovation and investment are stifled because others can simply "steal" the IP and flood the market.  If the story were this simple, this blog post would be over.

But the story isn't that simple. Yochai Benkler has written a heavy tome called The Wealth of Networks  in which he explores the implications of what he calls the "networked information economy". Benkler argues convincingly that strong IP protection is a bad idea, and that it actually stifles overall creativity and innovation. Almost all empirical evidence contradicts the conventional wisdom: Benkler refers to a study by Josh Lerner that shows that patent activity (a proxy for overall investment in innovation) actually decreases when patent law is strengthened. WHY???

The key is to understand that true innovators are also true collaborators. Innovators not only produce innovation, they consume existing innovation (intellectual property), play with it, mix it, build on it, and produce new innovation (new intellectual property).  Restricting the flow of IP makes it harder for innovators to freely collaborate : instead of easily building on the innovations of others, they may have to enter into costly contracts to license the IP, forgo the use of the IP, or settle for something inferior. The cost is not only monetary, but consists of time and energy as well. Time and energy and money that could be better spent developing new innovations. Therefore, restricting the free flow of IP, rather than encouraging and increasing innovation, actually curtails it.

Organizations which continue to hold to the industrial age protectionism of strong intellectual property rights should reconsider their strategies and potentially change the locus of their value-add. In the now famous case of IBM and open source Linux, IBM produces an estimated $2B in annual revenues from Linux related services. Their value-add is in helping companies make use of the innovation that is Linux, building on it, and in the process improving Linux and the open-source eco-system as well.  The free flow of innovation makes for truly collaborative industries which will see more innovation and more value-add than restrictive, property-rights based systems.

Collaborate, and bring on the innovation! 

I had the pleasure of hearing Scott Berkun, author of The Myths of Innovation, speak last night at the Open Source conference here in Portland, Oregon. What resonated with me was that innovation/exploration is not a linear thing. There are lots of false starts, wasted time, and tail-chasing. It is only with hindsight that we look at an innovation and pick out the magic “path” that was followed, ignoring all the noise that actually contributed to the innovation. This is particularly apparent when you look at a timeline of milestones, such as the “history of communications”, or the “history of navigation” — only the successes are highlighted! (For more on Scott Berkun, see UIE's interview with him.)

Magellan's navigation through what is now called the Strait of Magellan serves as a poignant example of the non-linear nature of innovation and exploration. Notwithstanding its name, the  Strait is not straight at all -- rather it is a complex maze of channels, tidal estuaries, treacherous shoals, and bays that could be easily mistaken for continuations of the Strait.  Magellan sent out small scouting parties in long boats to determine where the entire armada should proceed. These scouting parties were able to quickly follow trails and determine if they were indeed continuations of the Strait, or dead-ends. Utilizing multiple scouting parties, most of which "failed" to find the correct path, the armada was able to systematically proceed through uncharted pathways. Magellan's novel, collaborative approach to navigation through the Strait is widely acknowledged as the greatest feat in maritime history. (For more on this compelling story, see Laurence Bergreen's Over the Edge of the World.)

The take-away? Leaders should not succumb to the pressure of simply meeting milestones and expect to find innovation through safe, linear paths. Innovation requires emergence, randomness, experimentation, failure, as well as inspiration, good ideas, and a great deal of perseverance.

We've seen the lists of the "Most Admired Companies", and can name companies generally thought of as "Visionary". But are these companies truly innovative in their core, or are they admired because of their visionary leadership? Is their spark from within, or is it the result of charismatic leadership, and a strong corporate culture? These are questions raised in an interesting paper titled "Managing Innovation: When Less is More", written in 1997 by Charlan Jeanne Nemeth, Professor of Psychology at UC Berkeley. (Incidentally, I like written material that is at least 10 years old. If it still resonates after a decade, there must be some solid truth in it!)

According to Nemeth, most of these admired companies have very strong cultures, with loyalty, passion, and well understood norms, almost in a cult-like atmosphere. "Through this path, they may achieve productivity and high morale, but at the same time can thwart creativity, innovation, and an ability 'to respond readily to change.'"  Certainly strong values and a strong sense of corporate identity and purpose are good things??? Yes, but there are dangers as well.

Nemeth points to evidence that "the atmosphere most likely to induce creativity is one diametrically opposed to the 'cult-like' corporate culture.'" In such atmospheres, there is strong incentive to reinforce the corporation's values and vision. This "power of the majority", however, can easily cause groups to not see original solutions to problems and create individuals who are afraid to voice dissent. Why? Simply, people are afraid of rejection. This fear of rejection is particularly powerful within strong corporate cultures.

An additional danger is for companies to rely on creativity and innovation from the top. Examples include Enron, Mirage, Honda. These companies had good ideas and strong vision, but these were driven from the top. Why is this bad? It is not sustainable because it relies on the performance of one or two individuals - a risky proposition no matter how talented and inspired the leader may be.

So what should be done? "For companies that attempt to foster innovation from within the ranks, a number recognize the importance of dissent or of being a maverick. They often try to limit the fear of failure and promote risk taking."  Management must not only tolerate, but welcome dissent, and also explicitly try to limit the control of upper management. This can be achieved through the organic formation of cross-functional teams, allowing a level of randomness and "emergence" to occur. Such collaboration between individuals will be most fruitful when controls are limited to high-level strategic objectives, leaving idea generation and problem solving to occur within collaborative networks of employees, suppliers, and customers.

I believe there is more thinking that needs to occur here. How can companies balance a strong sense of mission and identity, but still leave room from considerable movement and freedom? Can corporate cultures have the best of both worlds?