Some thoughts about Tapscott and Williams' Wikinomics

Don Tapscott and Anthony D. Williams
Wikinomics: How Mass Collaboration Changes Everything

I thought I’d write a few comments about this book, while it’s fresh in my mind. I was pretty skeptical when I started reading it. While this book does focus on collaboration and Web 2.0, it’s clearly in the line of popular books designed to help business execs adapt to changing times. There are definitely elements of hype, and there is definitely not enough critical reflection on the potential or real negative consequences of changes in the workplace. The authors say, for instance, that “The days of lifelong employment and pensions are already long gone” (265). I bet they have nice pensions, however. Tapscott, by the way, runs the New Paradigm think tank and consulting company and is the author of 10 books, including the bestsellers Paradigm Shift, The Digital Economy, Growing up Digital, The Naked Corporation, and Digital Capital. He teaches in the School of Management at the University of Toronto. Williams is research director at New Paradigm.

But back to the book. Despite its limitations, this book documents some pretty profound changes in the workplace. In so doing, it supports the point that Knobel and Lankshear make in their work—that new literacies involve both new technology stuff and new “ethos stuff.” Tapscott and Williams don’t use this language, but they are definitely talking about new ethos stuff in the world of work when they talk about wikinomics.

They do talk in interesting ways about their collaboration, which happened mainly via Skype (with Don in Canada and Anthony in England). They posted sections of the book on the web at Wikinomics.com and solicited reader feedback. They include, for instance, the subtitles that readers suggested for the book. And they conclude the book with a final chapter called “The Wikinomics Playbook” that has this single sentence: “Join us in peer producing the definitive guide to twenty-first-century strategy at www.wikinomics.com” (291), where they have a blog.

The following are some examples and notes from my reading of the book:
They begin with the Goldcorp Inc story, which has appeared in every study of Web 2 and convergence culture that I’ve read this year. Rob McEwen, the CEO of Goldcorp, a mining company, did the opposite of what most CEO’s of mining companies do. Rather than protecting the company’s proprietary information, he made it all available on the Web and offered $575,000 in prize money for folks who analyzed the data and suggested places to mine that proved successful. Ultimately, 1000 virtual prospectors from 50 countries participated. Over 80% of the targets they identified yielded substantial quantities of gold. “McEwen estimates the collaborative process shaved two to three years off their exploration time” (9).

They have a lengthy discussion in multiple places in the book of how Procter & Gamble has moved from doing just about all its R&D internally to using web-based programs like InnoCentive. InnoCentive matches “scientists to R&D challenges presented by companies in search of innovation” (13). According to the authors, 90,000 scientists have registered with InnoCentive to provide solutions to companies such as Boeing, Dow, DuPont, P&G, etc. (98). Innocentive works somewhat like EBay. “Companies—or `seekers’—anonymously post R&D problems on the InnoCentive Web site, while `solvers’ submit their solutions in a bid to capture cash prizes ranging from $5000 to $100,000 (98-99). The idea is to allow companies to easily find the persons who are best suited to solving a particular problem, which vastly expands their R&D possibilities (and also saving them permanent labor costs). There’s a similar company called Encore, which recruits retired scientists.

They say there are four principles of wikinomics: openness, peering, sharing, and acting globally and argue that these are “very different from the hierarchical, closed, secretive, and insular multinational [model] that dominated the previous century” (30).

They discuss Cory Toctorow, one of the hosts of Boing Boing (one of the most popular and high trafficked blogs), who is also a writer of science fiction. He gives his books away for free (as downloads) on his Web site—so he can sell more books on Amazon.com. “Readers in developing companies can even resell them [his books] at a profit” and that’s fine with Doctorow, who says his “problem isn’t piracy, it’s obscurity” (35).

There’s a lot of discussion of blogging and of citizen journalism. In general, this is much less nuanced and helpful than Clay Shirkey’s discussion in Here Comes Everybody.

A fascinating example of peering on the Web is a site called TakingITGlobal. It’s both a social networking and a political action site run by a small staff of 15 people who manage core functions and work with volunteers from around the world. Currently, folks on this site are working together to develop “a set of tools and curricular activities that will get students collaborating with other students in other countries to complete projects, and learning through active projects that make a difference in their communities” (51).

Of course there’s lots of discussion of Wikipedia and of Linux. Something that I learned about Linix is that though it started as all volunteer “a growing number of people are paid to participate in Linux by the companies they work for” because Linix is now so huge as a software program (70).

There is a lengthy discussion of how IBM, which was failing as a company, joined early on with Linux and reversed its decline as a business. This required an almost complete change of business culture for IBM, which the authors say “has become a champion of peer production and a leader of the open world” (78). The authors say: “Giving up so much control is unconventional to say the least, but the rewards for doing so have been handsome. IBM spends about $100 million per year on general Linux development. If the Linux community puts in $1 billion of effort, and even half of that is useful to IBM customers, the company gets $500 million of software development for an investment of $100 million. `Linux gives us a viable platform uniquely tailored to our needs for twenty percent of the cost of a proprietary OS’” says someone in the company (81).

Another interesting project: The California Department of Education has developed a project called The California Open Source Textbook Project. Currently, teachers are volunteering their time to “create a world history text for tenth-grade history classes” (69). The authors say that this project is slated to save California taxpayers $400 million per year (281).

There are all kinds of examples of companies that use Linux to provide free Web-based services. One example is Pentaho, which provides open sources business intelligence that “competes with commercial applications provided by Cognos and Hyperion” (85). They give their baseline software away for free: “Like other open source vendors, it generates revenues from support, training, and consulting to customize the software for a company’s specific requirements” (85). No one is obligated to ask for this help, however, and they can fully use the software for free.

Another example is a company called Spike Source that tests and integrates new open source applications and updates. They crunch over 30,000 tests nightly and provide an integrated solution or “stack” every day. “Downloading the stack is free. Spike Source makes its money providing customer service and support” (88). Evidently the free service they provide is incredibly important to the open source community.

Companies are beginning to deal with patents differently. P&G used to strictly protect its patents. Then it did an audit and discovered that “it was spending $1.5 billion on R&D, generating lots of patents, but using less than 10% of them in its own products” (103). So they’ve opened up their patents and made “every patent in its portfolio available for licensure to any outsider” (with a very few restrictions) (103). As a result, they’ve seen a huge increase in the profit they make from licensing their patents.

“Virtually all companies with sizable patent holdings are now busy mining their portfolios” (104). This is a huge reversal of previous practices, which was to protect patents at all costs.

There’s a whole chapter on “prosumers,” consumers that blur the gap between producers and consumers. Second Life is a paradigmatic example, but they give many others. When BMW wanted to redesign their cars, the “company released a digital design kit on its Web site to encourage interested consumers to design them” rather than designing internally (129).

There’s a chapter on what the authors call science 2.0. As an example they cite OpenWetWare, “an MIT project designed to share expertise, information, and ideas in biology. . . .Twenty labs at different institutions already use the wiki-based site to swap data, standardize research protocols, and even share materials and equipment” (161). The Human Genome Project is another example.

There’s a really interesting chapter on open platforms, such as exist on Google, Amazon, and EBay. Open platforms mean that developers not only can but are encouraged to go in and build new applications with these site’s code. Paul Bausch write a book that is part of the O’Reilly Hacks series on using Amazon’s open platform, creating mash ups, etc. The authors argue that this has hugely increased these site’s business and reputation. They say that Amazon alone has “975,000 active seller accounts, 140,000-plus developers, and third-party sales generating 28% of Amazon’s revenues in the second quarter of 2005” (194). Amazon pays no money for this (other than the $ spent developing the basic open platform) and earns a lot from it. Amazon gives “developers carte blanche to build any application they see fit. No one has to ask for permission or await approval” (195).

They also discuss open platforms created by non-profits that perform valuable civic roles. Scorecard gathers and provides access to information about pollution. You just have to type your zip code into a box on their site, and you get lots of info about pollution in your particular area. Another example is Neighborhood Knowledge California, which was developed at UCLA’s Center for Neighborhood Knowledge as a participatory research project. Citizens and community organizations use its online databases “to look for properties with tax problems, code violations, or other difficulties. . . .that could be precursors to abandonment and deterioration in their neighborhood” (204). They use this information to undertake activist projects.

There was a fascinating discussion of a computer called Geek Squad that “helps consumers navigate the increasing complexity of electronic gadgetry” (238). The CEO had a pretty wikinomic-centered philosophy from the start, but he learned something when he set up a wiki to encourage communication and collaboration. It didn’t take off, and when he asked a manager about it the manager admitted that workers throughout the US kept in touch by playing Battlefield 2 online during work hours. In the midst of playing, they exchange all kinds of helpful tips and info. The CEO learned a lot, he said, from this. He is happy to have workers/agents play on company time, and he says he now sees himself as “serving his agents’ agenda” rather than imposing his own (243). I won’t go into details but there are some wonderful, and at times funny, examples of how “Geek Squad agents have even come up with some of the company’s most successful PR stunts” (244).

In their conclusion, they talk about the kind of threat to the Internet and Web that recent telecom giant proposals represent. They are trying “to create a tiered Internet with different levels of service akin to first class, business, and coach” (273). The authors say that this works against the golden rules of the Internet as established in its basic design: “Nobody owns it, everybody uses it, and anybody can add services to it” (273). I just got a copy of Jonathan Zittrain’s The Future of the Internet And How to Stop It (Yale UP, 2008), and the entire book focuses on these kinds of threats to the basic architecture of the internet. There’s a quote from Lawrence Lessig on the back cover. He says this book will “define the debate about the future of the Internet.”

They are also careful to say that while open source communities value openness, freedom, flexibility, spontaneity etc. “All successful open source communities today deploy highly structured and hierarchically directed processes for managing the tedious, tiresome work of joining together all of the fragmented pieces and contributions” (280). They say this balance between self-organization and hierarchical direction is essential for success.

I thought I’d close with the final wikinomics design principles that the authors articulate.

--Take cues from your lead users
--Build a critical mass
--Supply an infrastructure for collaboration
--Take your time to get the structures and governance right
--Make sure all participants can harvest some value
--Abide by community norms
--Let the process evolve
--Hone your collaborative mind (286-289)

As I said earlier, at times I was a fairly resistant reader of this book. There is some hype and not enough critical reflection for what this means for the least empowered workers. But finally I found the sheer accumulation of examples pretty darn compelling. When companies as big and established (and notoriously set in their ways) as Xerox and Procter and Gamble make such significant changes in their business practices, that seems noteworthy.