This is not a traditional book review page. I will scour the writing of our world's greatest minds and review only the work that provide new and interesting insight. I will avoid wasting your time with widely documented and accepted principles. The page will be devoted to providing you with a competitive edge to a normal education. This I will perform in a concise manner to deliver the highest quality assessments possible. Reviews are written from an entrepreneurial perspective and can benefit anyone, from Fortune 500 executives to curious teenagers.
Wikinomics
The book starts out with the story of an executive named Rob McEwen. The year was 1995 and Rob found himself as the majority shareholder in an ailing mining operation called Goldcorp. With strikes, high debt, and a 20 year low in gold value the company seemed to be destined for destitution. After a two day meeting, the company set aside ten million for further underground exploration. A few weeks later, test drilling suggested new gold deposits in the Red Lake, Ontario mine. Despite this development, years passed as the scientists unsuccessfully struggled to find the exact location of the hidden wealth.
With the company's stability still in question, rob found himself at an MIT conference for young presidents. The conference turned it's attention to the story of how Linus Torvalds and a group of volunteer programmers created the Linux operating system over the internet. The secret of it's success being that the source code of the operating system was visible, allowing thousands of anonymous programmers to contribute as they wished.
It was this bit of discourse that in march 2000, inspired Rob to release all of the mine's geographical data dating back to 1948. This he championed the "Goldcorp Challenge". $575,000 in prizes where to be awarded to participants with the best methods and estimates on the potential of the 55,000 acre property.
Weeks later, submissions were accepted from geologists, graduate students, consultants, mathematicians, and military officers. Contestants identified 110 targets on the property, 50 percent more than had already been identified. Out of these new targets, 80 percent yielded significant quantities of gold. It has been estimated that the contest shaved two to three years off of the exploration at a minimal cost.
Today Goldcorp is reaping the fruits of its open source approach to exploration. Not only did the contest yield copious quantities of gold, it catapulted his underperforming $100 million company into a $9 billion juggernaut while transforming a backward mining site in Northern Ontario into one of the most innovative and profitable properties in the industry. Needless to say McEwen is one happy camper. As are his stockholders. One hundred dollars invested in the company in 1993 is worth over $3,000 today.
Wikinomics outlines seven forms of change caused by collaborative trends.
1)Peer pioneers - Large, loosely associated groups of people can create quality products quicker and better than formal organizations.
IBM, The company that championed vertical hierarchy from 1889, is now a proponent of the open source movement. During the late 1990's IBM came to a crossroads, the century old company was losing money and needed to do something fast. Big Blue was losing ground in the server market. It had been developing a proprietary operating system called Jikes to run the units that was inferior to a free Linux OS called Apache. They had been sinking hundreds of millions of dollars a year into the project and were falling short. Finally, IBM decided to alter its business plan the way no company of its size had before. It would release all of it's secret research and develop for the Apache operating system. It would then use that system on it's own servers. IBM then plugged it's own developers into the apache system. The company estimates that it receives about $500 million dollars worth of development per year at a cost of only $100 million. IBM estimates that they save about $900 million dollars a year by participating in this development community.
2)Ideagoras - Online marketplaces for Ideas, Innovation, and Uniquely Qualified Minds are providing customized solutions that are superior to traditional research.
The chapter opens with the story of Werner Mueller. Werner Mueller was a brilliant chemist who worked at Hoechst Celanese.His passion was for chemistry and he did great work. The irony being that every time he did a good piece of work he got promoted, and as a result he got to do less and less science. When he retired he built facilities to do his two favorite things, chemistry and woodworking. One day he came across a Web site called InnoCentive that listed scientific challenges that needed answers. Attached to these questions were handsome prizes. "Great" He thought, "Now I have a set of challenges to work on". One day in late 2001, a pharmaceutical company required early stage raw material for a product it was bringing to market. The material was highly expensive to produce and it was causing the product to have a high final cost. The internal R&D team was struggling to find a solution and the product was already over budget. So the team posted the problem on InnoCentive where Mueller soon spotted it. Mueller recognized the problem from his decades of experience as a chemist. He got to work in his lab and soon after submitted a valuable solution. The company was delighted, it had not considered that solution-and Mueller was $25,000 better off. He reinvested his money into his facility and turned his hobby into a full-fledged consulting business.
No one is as smart as everyone. The knowledge that the most uniquely qualified minds probably lie outside of your organization is affecting the way innovators think. An increasing number of breakthrough products are the product of outside firms. Procter & Gamble for instance, uses a program called Connect and Develop that licenses and acquires products (the Swiffer, Olay Regenerist, and the Spinbrush) from other companies and markets them as P&G brands.
3)Prosumers - Consumers want to hack and customize their products
The massively multiplayer online game Second Life has over 325,000 participants. More remarkable than this is that 3,100 residents operate online businesses that earn them an average of $20,000 a year.
In his 1996 book, The Digital Economy Don introduced the term "pro-sumption" to describe how the gap between producers and consumers is blurring.
4)New Alexandrians
5)Platforms for Participation
6)Global Plant Floor - The production process is no longer limited by physical proximity or complexity
Innovation in the Aerospace and Defense industries are about as expensive and complex as it gets. When submitting plans to contractors for the 777, Boeing would release a document that was twenty five hundred pages long. Everything was outlined in excruciating detail, not a lot was left to the imagination. Now the equivalent document for the 787 is twenty pages. 70 to 80 percent of the 787 Dreamliner is wholly designed and manufactured by firms from around the world. The final product is snapped together in three days on site. The catalyst for this process is a collaborative system created by Boeing and Dassault systemes called the Global Collaborative Environment.
7)Wiki Workplace - When anyone can contribute, the best solution can be found
No one is as smart as everyone. Goldcorp vindicated a progressive method of growth, Open Collaboration. The knowledge that the most uniquely qualified minds probably lie outside of your organization is affecting the way innovators think. An increasing number of breakthrough products are the product of outside firms. Procter & Gamble for instance, uses a program called Connect and Develop that licenses and acquires products from other companies (the Swiffer, Olay Regenerist, and the Spinbrush) and markets them as P&G brands.
Customers are clamoring to give input, and many companies are cultivating this input to their benefit. Amazon.com has made millions capitalizing on user-created content. Amazon customers recommend literature, write book reviews, and endorse music, all at no charge to the domain itself. The list goes on, Wikipedia, Youtube, Flicker, Facebook, Myspace, Ebay, all these relatively new companies utilize an interactive interface. How long until this innovative force takes hold in the most conservative industries?
Coming Soon...
Made to Stick
By Chip and Dan Heath