As McAfee puts it: "Companies that rely heavily on innovation have always spent a great deal of time, money and effort on ways to help knowledge workers interact better with their close colleagues. These companies obsess about office and lab layouts, trying to ensure that people flow past each other often and feel drawn to common work areas. They assemble cross-functional teams and try to make sure that these groups have enough of the right kinds of diversity (whatever that is). They hold brainstorming sessions and off-sites where co-workers can interact with the same set of colleagues, but differently."
The problem, however, is that managers tend to call on people they know and like to help solve problems. Most managers like the familiar sound of the echo chamber, and have more affection for Loveable Fools than Competitive Jerks. Wikis open up the process beyond the usual cronies, favorites and in-the-loopers who regularly get invited to closed-door meetings. Wikis network horizontally, blowing through corporate silos, to find those who can bring real expertise to a problem—even if he's a Competent Jerk. Wikis reject closed echo chambers and promote the brainpower of collective smarts.
Wikis are increasingly being deployed both internally and externally to improve productivity and build social capital. IBM launched its "WikiCentral" in 2005 as a vehicle for internal expertise. A year later the Big Blue organized a brainstorming platform called InnovationJam which was soon attracting more than 150,000 participants inside and outside the company to help identify emerging business opportunities.
SAP is promoting SAP Wiki to become part of the SAP Corporate Portal and has introduced the enterprise social network pilot Harmony as a platform for connecting people across the organization.
General Motors uses its internal blog, FastLane, as a corporate "focus group" that attracts some 5000 visits daily, including from consumers. The television channel Discovery launched a wiki called "Wetpaint" to bring its customers—viewers—into the conversation. Through Wetpaint, Discovery not only got feedback from viewers, but also user-generated video content.
Peer production can offer tremendous competitive advantages to fi rms in sectors where innovation produces winners and losers. Corporate executives are becoming increasingly aware that innovation should not be conceived as restricted to walled-off R & D departments, but promoted as a dynamic social process—or open innovation. 35 Procter & Gamble famously outsourced its R & D through sites like InnoCentive, which crowdsources product development and problem - solving for its clients. InnoCentive, an R & D braintrust spinoff from drug maker Eli Lilly, demonstrates that, more often than not, the best brains are somewhere outside the corporation. A.G. Lafl ey, P & G's chief executive, has said he wants 50% of the company's product development crowdsourced outside the company.
As a McKinsey Quarterly report published in June 2008 noted: "Executives in a number of companies are now considering the next step in this trend towards more open innovation. For one thing, they are looking at ways to delegate more of the management of innovation to networks of suppliers and independent specialists that interact with each other to cocreate products and services. They also hope to get their customers in to the act." McKinsey cited the well-known example of Lego, which invited its customers to come up with new product models and paid for the best ideas.
Perhaps the best-known example of a Fortune 500 company converted to open innovation is IBM. After the Big Blue chip business had lost $ 1 billion in 2002, the company was desperate for a new strategy. Crisis forced IBM to take drastic measures. The solution was a new "open ecosystem" that opened up its chip R & D to outside partners. And it worked. IBM's chip division quickly turned the corner and began booming. As Samuel Palmisano, the company's CEO, told Business Week : "We are the most innovative when we collaborate". IBM today is on the leading edge of major corporations that have embraced social media. Other global corporations that have integrated social networking into their organizational strategies include FedEx, Shell Oil, Motorola, General Electric, Kodak, British Telecom, Kraft Foods, McDonald's and Lockheed Martin.
That's an impressive list. So why has Enterprise not yet reached a tipping point? One reason is that, as noted, in most companies Web 2.0 tools are still being used mainly for communications, marketing and HR purposes. These functions, while useful, don't drive radical organizational transformation. When a CEO is blogging and an HR vice-president is using Facebook as a recruitment tool, the optics are cool but, in truth, nobody's power base is threatened. That kind of change is evolution , not revolution.
Revolution, as Gary Hamel noted, comes only when crisis hits and a radical rethink of corporate strategy is imperative. Hamel nonetheless believes that corporate management will change radically over the next few decades due to the combined impacts of technology, competitive pressures to innovate and what he calls a "revolution in expectations" by younger generations.
"Take a look at our kids—the fi rst generation that has grown up on the Web," notes Hamel. "Their basic assumption is that your contribution should be judged simply on the merits of what you do rather than on the basis of your title or your credentials or providence or anything else. This is the lesson they've drawn from the experience with what I call the 'thoughtocracy'of cyberspace."
Tom Davenport agrees that demographics may be the key driver to the Web 2.0 revolution. Having expressed doubts about the utopian evangelism about Enterprise 2.0, Davenport nonetheless believes that young people may see things differently. "It's going to be very interesting to see what happens when the young bucks and buckettes of today's wired world hit the adult work force," he says. "Will they freely submit to such structured information environments as those provided by SAP and Oracle, content and knowledge management systems and communication by email? Or will they overthrow the computational and communicational status quo with MySpace, MyBlog and MyWiki?"
So we're back to our 40th-level half-elf in World of Warcraft who, one day, might be CEO of your company. While we are waiting for that demographic tipping point, we can say that Enterprise 2.0 has succeeded in gaining legitimacy on one key front: openness. Empowered by open-source software, open collaboration and open innovation, Enterprise 2.0 may soon be open for business.
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