As organisations become more transparent, more open, more prepared to share we are seeing more and more intellectual capital being given away "free". There is the over-quoted example of Goldmine giving away its geological data, Sun Microsystems and IBM giving away software, and pharmaceutical companies collaborating openly on the human genome project.
These organisations haven't suddenly found a corporate conscience, they are still aggressive, quarterly driven, often American companies with shareholders to answer to. This is part of a deliberate strategy to compete in the modern world. The idea is that if you give away something that your competitors see as core business, you destabilise the market, and make what you charge for more valuable.
Sun giving away Solaris, and IBM supporting Linux, destabilises Microsoft as it devalues and commoditises Microsoft's core offering, whilst moving the differentiation toward hardware and services.
Open sourcing geological data moves the mining industry away from hoarding data to focusing on how you execute against that data, an area in which Goldmine believes it has a competitive advantage.
Pharmaceuticals can stop spending money on the leg-work of research, and compete instead on the execution of delivering quality products to market at affordable prices as quickly as possible.
This trend, should it continue, is going to effect a profound change in the nature of the workplace and the type of people companies will look to employ.
Organisations will differentiate and compete on adding intellectual capital above and beyond what is publicly available, rather than try to milk a trade secret or cash-cow such as the Coca-Cola recipe. This will require more and more "knowledge workers" - people who don't follow an administrative business process to do their jobs but rely on their experiences, professionalism and networks to add value to their organisations - or, as recently described by Thomas A Stewart, "someone who gets to decide what he does each morning.." (thanks to Jessica Twentyman for finding me the source).
Organisations need to trust these professionals, they will not be in the office from 9-5 every day. These are exactly the sorts of people who thrive on their personal networks, they are the people who you go to when you need to know what's going on. Social software brings the same level of productivity increases for these people as type-writers and then word processors did for a previous generation of workers. It takes their natural propensity to connect, to share, to add value and extends it in the same way the internet extends our access to information.
It won't be enough to hire knowledge workers to survive and thrive in this recession. Organisations will have to change their business practices to take advantage of their abilities, and provide them with the tools to be effective. Word, Outlook and even Sharepoint won't cut it. They will need custom built social platforms, or products such as Confluence, Jive, Socialtext and Lotus Connections.
This is not a technology driven change. These tools are a response to a new way of organising and operating companies, breaking free from 1950s management theory and production lines to treating people as individuals who get things done by independently and autonomously adding value through their networks. Organisations need to embrace the business change first, and look at the software second. Otherwise the competition will gain a significant competitive edge, whilst you're worrying about the ROI of the investment in the latest "it's like Facebook, but..." product.
The old economic models of business has not only shifted by done so at speeds that are disrupting everything at the click of a mouse.
When simultaneous disruption happens across multiple industries the fabric of past economic models collapse. Old economic models have been based on beliefs formed by past market experiences and conditions that were predictable. Today markets are changing rapidly and the emergence of mass communications is fueling new ideals, ideas and a new economy. The only thing that is predictable is that things will change faster than you’ve ever previously experienced.
Time to Shift Our Thinking?
Umair Haque writes in Harvard Business: Saul Hansell asks: are telcos next to go bankrupt?
They’re definitely on the list. As I’ve pointed out for some time, the problem isn’t within industries: it’s across them.
It’s time to connect the dots. It is no coincidence that so many industries are in trouble simultaneously and so fast. The growth of the Zombieconomy is a Jupiter-sized wake-up call to today’s leaders.
Here’s the real problem.
Capitalism 1.0 is built on an obsolete set of ideals. What the 21st century needs are better ideals, to build a better kind of business on. Fundamentally, we need organizations that can behave very differently.
That’s a tough set of lessons to internalize. Recently, I gave a talk on Constructive Capitalism to a bunch of senior guys at a major international organization. They debated with me for close to an hour whether a better kind of capitalism was really necessary.
Frankly, I thought it was a bit funny that the debate was necessary at all. Hey, look — it’s the simultaneous collapse of significant portions of the manufacturing and service sectors. Convinced yet?
Thinking Like a Zombie?
Sometimes discussing the emergence and value of all this “social stuff” with business leaders is like talking to Zombies. A zombie is a mythical creature that appears in folklore and popular culture typically as a reanimated corpse or a mindless human being. The word mindelss means marked by a lack of mind or consciousnes (1): marked by or displaying no use of the powers of the intellect (2): requiring little attention or thought. Sound like a harsh assessment of business leaders? How long to the leaders of industries collapsing take to recognize the entire market has changed? Lets see, the automobile industries has been losing billions for years thus “we the people” had to bail them out.
Don’t be a zombie. Wake up to the market changes and subsequent opportunities before you. However, in order to wake up you have to recognize that simply resting on your old ideals, old models and past success may mean that you’ll be dreaming about yesterday while today displaces you. Get it?