Wikinomics

[|Wikinomics] by Don Tapscott and Anthony D. Williams looks at how companies are beginning to use mass collaboration of knowledge to gain success.

Citing many examples of successful and surprising projects, the authors explain how big businesses could harness external expertise by engaging directly with and rewarding participation from their customers, users and a wide pool of informed contributors - a method of epitomised by the online encyclopaedia 'Wikipedia', where entries are written and edited by users. 'Crowdsourcing' rather than 'outsourcing' as they put it.

Far from being sceptical about the power of mass collaboration - see Andrew Keen's [|The Cult of the Amateur,] another Newsnight Book Club entry - Tapscott and Williams claim Wikinomics could provide the basis for huge economic and intellectual growth.

In line with their own thesis, the last chapter of the book will be written by readers and is already open for contributions here.

Here is Paul Mason's report on Wikinomics and an interview with Don Tapscott.

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Throughout history corporations have organized themselves according to strict hierarchical lines of authority. Everyone was a subordinate to someone else—employees versus managers, marketers versus customers, producers versus supply chain subcontractors, companies versus the community. There was always someone or some company in charge, controlling things, at the “top” of the food chain. While hierarchies are not vanishing, profound changes in the nature of technology, demographics, and the global economy are giving rise to powerful new models of production based on community, collaboration, and self-organization rather than on hierarchy and control.
 * From the introduction**

Millions of media buffs now use blogs, wikis, chat rooms, and personal broadcasting to add their voices to a vociferous stream of dialogue and debate called the “blogosphere.” Employees drive performance by collaborating with peers across organizational boundaries, creating what we call a“wiki workplace.” Customers become “prosumers” by cocreating goods and services rather than simply consuming the end product. So-called supply chains work more effectively when the risk, reward, and capability to complete major projects—including massively complex products like cars, motorcycles, and airplanes—are distributed across planetary networks of partners who work as peers.

Smart companies are encouraging, rather than fighting, the heaving growth of massive online communities—many of which emerged from the fringes of the Web to attract tens of millions of participants overnight. Even ardent competitors are collaborating on path-breaking scientific initiatives that accelerate discovery in their industries. Indeed, as a growing number of firms see the benefits of mass collaboration, this new way of organizing will eventually displace the traditional corporate structures as the economy’s primary engine of wealth creation.

Already this new economic model extends beyond software, music, publishing, pharmaceuticals, and other bellwethers to virtually every part of the global economy. But as this process unravels, many managers have concluded that the new mass collaboration is far from benign. Some critics look at successful “open source” projects such as Linux and Wikipedia, for example, and assume they are an attack on the legitimate right and need of companies to make a profit. Others see this new cornucopia of participation in the economy as a threat to their very existence (has anyone bought a music CD lately?).

We paint a very different picture with the evidence we have accumulated in this book. Yes, there are examples of pain and suffering in industries and firms that have so far failed to grasp the new economic logic. But the forthcoming pages are filled with many tales of how ordinary people and firms are linking up in imaginative new ways to drive innovation and success. A number of these stories revolve around the explosive growth of phenomena such as MySpace, InnoCentive, flickr, Second Life, YouTube, and the Human Genome Project. These organizations are harnessing mass collaboration to create real value for participants and have enjoyed phenomenal successes as a result.

Billions of connected individuals can now actively participate in innovation, wealth creation, and social development in ways we once only dreamed of.Many mature firms are benefiting from this new business paradigm, and we share their stories too. Companies such as Boeing, BMW, and Procter & Gamble have been around for the better part of a century. And yet these organizations and their leaders have seized on collaboration and self-organization as powerful new levers to cut costs, innovate faster, co-create with customers and partners, and generally do whatever it takes to usher their organizations into the twenty-first-century business environment.

This book, too, is the product of several long-running collaborations. In the last few years the New Paradigm team has conducted several large multi-client investigations to understand how the new Web (sometimes called the Web 2.0) changes the corporation and how companies innovate, build relationships, market, and compete.

A $3 million study in 2000–2001 examined the rise of an increasingly mobile and pervasive Web and its impact on business models.1 In 2003 we raised $2 million to study Web-enabled transparency as a new force to foster powerful networked businesses and trust.2 In 2004–2005 a $4 million program explored how new technology and collaborative models change business designs and competitive dynamics.

The conclusion from all of this work is striking and enormously positive. Billions of connected individuals can now actively participate in innovation, wealth creation, and social development in ways we once only dreamed of. And when these masses of people collaborate they collectively can advance the arts, culture, science, education, government, and the economy in surprising but ultimately profitable ways. Companies that engage with these exploding Web-enabled communities are already discovering the true dividends of collective capability and genius.

To succeed, it will not be sufficient to simply intensify existing management strategies. Leaders must think differently about how to compete and be profitable, and embrace a new art and science of collaboration we call wikinomics. This is more than open source, social networking, socalled crowdsourcing, smart mobs, crowd wisdom, or other ideas that touch upon the subject. Rather, we are talking about deep changes in the structure and modus operandi of the corporation and our economy, based on new competitive principles such as openness, peering, sharing, and acting globally.

The results of this foundational research are proprietary to the members that funded it, including more than one hundred in-depth reports and countless executive briefings, seminars, and workshops. However, our work with these companies inspired us to devote weekends and evenings to write a book that would take this work to the next level and inspire a broad audience to apply its ideas, frameworks, and guidelines. We conducted more than one hundred interviews and discussions with key players in this revolution. Unless otherwise footnoted, all quotes in this book come from these conversations.

In the process, we, as authors, learned something about collaboration too. We authored these pages on separate continents, with Don working primarily from Toronto, Canada, and Anthony based in London, England. When we were both working on the manuscript at the same time we hooked up with a Skype connection, talking, exchanging material, or being silent as appropriate. At times it felt like we were in the same room.

We have also collaborated intensely with more than one hundred leading thinkers and practitioners. Their roles in bringing this book to life are graciously acknowledged at the end of the book. In one interesting twist we decided that the best way to come up with a great subtitle was to hold an open discussion on the Web. Within twenty-four hours we had dozens of great subtitle suggestions—the best of which are listed on the Subtitles page.

Most notably, with Wikinomics we’re making a modest attempt to reinvent the concept of a book. You’ll note that the final chapter, The Wikinomics Playbook, has only fifteen words: “Join us in peer producing the definitive guide to twenty-first-century strategy on [|www.wikinomics.com].” It is our hope that this book will transcend its physical form to become a living, real-time, collaborative document, cocreated by leading thinkers. As such, we view the book as a call to arms to create a wikinomics community. And we hope that the book and community will be uniquely helpful to corporate practitioners and anyone who wants to participate in the economy in new ways.

This extract from the book is reproduced from the [|BBC Two Newsnight] website.

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