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Wikinomics - Don Tapscott and Anthony D. Williams

  • Newsnight
  • 5 Sep 07, 04:37 PM

WikinomicsWikinomics 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.

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

Read the book's introduction below, and leave your thoughts and comments at the end.

From the introduction
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.

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” 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.

© Don Tapscott and Anthony D. Williams

This is an extract from WIKINOMICS: How Mass Collaboration Changes Everything by Don Tapscott and Anthony D. Williams, published by Atlantic Books 6 September.

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As the Oyster yields a pearl - man invents.
Neither realises their fecundity is rooted in irritation: of one - the body; of the other - the mind.
Man kills the Oyster for its pearl.
And his own World for that eureka moment of invention.

Another small step for Mammon but nothing for mankind.

This is an interesting concept, but hardly new. In particular, the revelation that co-operation is a driver of organizational activities loses some of its shock value when you consider that this has been the basis of civilization for something more than six millennia; and it was even enshrined in Adam Smith’s famous example of the pin factory.

Competition, derived from the predations of the robber barons of old and so beloved of right-wingers, has been grafted onto the basic drive relatively recently. Despite the obsessive focus on it since the neo-classical economists of the 19th century, modern society could survive without competition but it couldn’t exist without collaboration.

The new dimension may be the use of the Internet to allow individuals, and not just organizations, to co-operate with each other; and in the process to gain the maximum fulfillment possible to them. It is this aspect, perhaps, we should be investigating; since this level of personal involvement has been missing since the industrial revolution.

  • 3.
  • At 09:36 PM on 10 Sep 2007,
  • Adam Hibbert wrote:

David, the book won't disappoint on your stated concerns - the authors are well aware of the long historical roots here.

What's new and significant is that (a) the costs associated with setting up high quality collaborative relationships have plummeted to near zero and (b) the kinds of complex self-organising productive groupings that emerge just don't mesh with the existing "plan and push" method of business, without some significant, conscious effort. (And that's having only reached chapter two!).

  • 4.
  • At 10:49 PM on 11 Sep 2007,
  • Lionel Tiger wrote:

What is this ? Communism ? People aren't going to contribute accurate and valuable information without some financial reward. Whose idealistic vision of utopian socialist perfection pertains to ensure justice in such an atheistic commune of knowledge ? Property is theft, and Theft if intellectual property is just as significant. Wikinomics don't add up, you simply cannot get something from nothing.

The difference with Wikinomics is the emergence of a collaborative entrepreneurial approach that, at times, is hard to distinguish from popular causes or protest movements. The key differences between Wikinomics and previous examples are the scale and speed allowed by the internet and social networks in particular.

I believe there is a different philosophy that underpins the wiki approach that is inherently focused on sharing and, as Don Tapscott points out, that does apply to wealth creation. Those of us who have grown up with the self-driven model of capitalism need to rethink rapidly whether it is sustainable in the 'perfect storm' Tapscott and Williams anticipate in their excellent book.

Excuse the long post but this is a familiar (and good) discussion, that as the (co)author of Wikinomics I've had many times.

It's sort of understandable that you might view these heaving communities and new business models as socialist -- reducing the proportion of our economy that is available for profitable activity. Linux hurt Microsoft. MP3 hurt the record labels. Wikipedia hurt Britannica.

But leading firms are proving otherwise. Networked models of innovation and value creation can bring the prepared manager rich new possibilities to unlock innovative potential in a wide range of resources that thrive inside and outside the firm.

Consumer goods giant Procter & Gamble is a perfect example. Until recently, P&G was notoriously secretive, and about as closed as a company can get. It didn’t look outside its walls for anything and it was failing, punctuated by a stock collapse in 2000. New CEO A. G. Lafley led the company on an ambitious campaign to restore P&G’s greatness by sourcing 50% of its new innovations from outside the company. Today P&G searches for innovations in Web-enabled marketplaces such as InnoCentive, NineSigma, and These e-Bays for Innovation produced hundreds of new products on the market, some of which turned out to be hits. In the process Lafley and his managers transformed a lumbering consumer products company into a limber innovation machine. Five years after the stock implosion, P&G has doubled its share price and now boasts a portfolio of 22 one-billion-dollar brands.

Around the same time gold mining company Goldcorp was in a similar pickle, as its geologists could not determine whether its ailing mines held any more gold. The company was on the brink of folding. CEO Rob McEwan did something unheard of in his industry. He published all his previously secret geological data on the Web and held a contest to so see if anyone could help find gold on the property. 77 submissions came from around the world, some using techniques and technologies he had never heard of. For $500,000 in prizes he found over $3 billion of gold and the company’s market value multiplied several times over. By opening the kimono and his corporate walls and viewing the world as his HR department his shareholders prospered.

The smartest companies see a phenomenon like Linux and they embrace it, as IBM has done. They discover Second Life and jump in like Wells Fargo did. They discover tools like wikis, that enable their own staff to work across organizational silos and like Best Buy, they transform the way they collaborate. They understand that sharing some Intellectual Protperty (as did the biotech companies with the human genome) raises the tide and with it all boats.

If you look at most of the Examples in Wikinomics, they are about people making money. This is capitalism at its best.

I worked as a hardware and software technical consultant in the biggest IT company in the world.
- knowledge / collaboration were key, as far as I am concerned, in being able to offer complicated technical solutions as well as in enjoying overall success.

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