Our goal is to do the same with our Nascar Operation by involving the public. The ideas and directions that could come from this should be helpful and possibly groundbreaking. We think cars and racing can be effected by this model
We would like to credit USATODAY and Kevin Maney for the following article, originally published December 27, 2006.
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The "company," as we've known it for almost a century, is about to go the way of vinyl albums, floppy disks and perked coffee.
It is about to get wikified. Or starfished. Or cracked open like a beehive hit with a baseball bat. Depending on whom you ask.
Three new books say so, and a lot of big thinkers agree. One, due out Jan. 3, is the much-anticipated Wikinomics: How Mass Collaboration Changes Everything by Don Tapscott and Anthony Williams.
Internet companies such as eBay or YouTube,
where the site's denizens create the content, are only the beginning.
The Wikipedia online encyclopedia — written by thousands of individuals
working without a boss — also shows the way. But these days, the trend
is turning companies inside-out in industries from gold mining to
motorcycles to diapers.
The basic premise starts with economist Ronald
Coase, who in 1937 figured out that companies exist because of
transaction costs. Doing business by assembling all the right people
and resources inside an establishment has long been more efficient than
trying to find and coordinate those things in the world at large. For
this, Coase won the Nobel Memorial Prize in Economic Science.
But something momentous is happening to change that.
A combination of the Internet, cheap computing,
Web-based software, open-source projects such as Linux and new ways of
thinking about management are mixing together to dramatically drop the
transaction costs of doing business outside a company's walls.
Doing business is becoming no more efficient
inside a company vs. doing the same stuff outside a company — or
without a company at all. In fact, in many ways, collaborating outside
a company's structure can even be better.
So if a core reason companies exist is to lower
transaction costs, what happens if that reason goes away? Companies
could run into an identity crisis that will hit them like the talkies
hit Charlie Chaplain.
"This new form of innovation and production can
be harnessed for spectacular growth and profitability," Tapscott tells
me. "But companies are going to have to change their business models to
embrace it."
Which is a nice way of saying: This will be about as much fun as going through adolescence.
The best way to see what's happening is through examples.
Wikinomics opens with the story of
Goldcorp, a Canadian gold-mining company — a business about as unlike a
Silicon Valley start-up as opera is unlike Green Day. Desperate for
ways to find new places to drill, Goldcorp did the unthinkable for a
mining company: It posted all its proprietary data on the Internet and
let anyone interpret it for possible drilling targets. Prize money was
promised.
Within weeks, submissions poured in. People
around the world found drilling targets Goldcorp never thought of. The
process shaved years off exploration and shot Goldcorp from $100
million in revenue to $9 billion.
The Internet made it possible to rake in
expertise from all over. The cost was cheap, the payoff huge. It's a
lesson in how every company will have to open processes that have long
been closed — or get clobbered by competitors who do it first.
Tapscott applies the term "wiki" to this
phenomenon. A wiki is a document or process on the Web that anybody can
add to or alter. Another book, The Starfish and the Spider by
Ori Brafman and Rod Beckstrom, says that winning companies will be more
like starfish, which, as I learned from the book, apparently have no
head or brain and are more like a group of cells that agree to
cooperate. Which is how I sometimes feel on New Year's Day.
A more academic book, Open Business Models: How to Thrive in the New Innovation Landscape,
is just out from Henry Chesbrough, business school professor at the
University of California at Berkeley. And on the fringe, an academic
organization called We Are Smarter Than Me is attempting to get
thousands of people to contribute to a Web-based wiki-type book about
these new wiki-type business models.
This is laudable in a practice-what-you-preach way, but there may be another cliché that applies here: Too many cooks …
Anyway, all these books are chock-full of
examples. Tapscott writes about some of the most surprising ones, such
as the Chinese motorcycle industry. Apparently, China opted to create
an open-source motorcycle. The country defined a basic structure and
standards — copied, as Tapscott notes, from Japanese motorcycles — but
then leaves it to individuals and small companies to design parts or
assemble whole motorcycles.
The Chinese are building motorcycles the way
programmers built Linux, and the results have been fantastic with no
single company driving the industry. "It's the extreme example,"
Tapscott says. "But it's now the largest motorcycle industry in the
world."
Companies are testing these waters in lots of
ways. When Procter & Gamble is looking for a molecule that takes
red wine off a shirt or absorbs smells in a diaper, it no longer just
relies on internal R&D. It puts those requests out on a site called
InnoCentive. Scientists around the world can see the challenge, work on
a solution and sell it to P&G. Again, the costs of working outside
the company are minimal.
Geek Squad, the computer fix-it company now
owned by Best Buy, has an open management model. It pretty much lets
employees run the company and design products by collaborating over the
Net, sometimes while playing an online game called Battlefield 2. It's a major reason the company has grown so quickly.
All the authors argue that every company is
going to have to do these things. But it will require the greatest
change in management thinking since the likes of General Motors
invented the corporation in the early 20th century.
Should be a wild ride.
E-mail kmaney@usatoday.com
| Posted 12/26/2006 8:48 PM ET Thanks for your time and input, Doug |
