Internal And External Cooperation Leads To More Value

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In 2005, I read Friedman’s The World is Flat. In his book he outlines how 10 forces coupled with what he calls the “Triple Convergence” would turbo charge the “flattening” of the world’s economies. He points to the Internet being the primary vehicle for this change. Fast forward to 2011, and the BRIC countries are contemplating a bailout for Europe, while the U.S. economy is still seeking a jump-start. It seems that Friedman’s predictions have started to take hold in just six years after publishing his book.

The rate of change is nothing short of revolutionary, and it seems that the revolution is in full swing.  In 1970, American poet Gill Scott Heron said “The revolution will not be televised” and, in a strange twist of fate, Scott Heron’s poem was published around the same time that American scientists were building for the first time ARPANET, a networked system that would eventually evolve to be the vehicle of change.

As of summer 2011, 2 billion people have access to the Internet. The speed at which information can be consumed, synthesized and remixed has no comparison to any other time in history.

Historically, the liberation of information leads to significant changes in the way we behave, conduct business and view the world. Those who ignore the significance of that shift do so at their peril.

In 2001, we were introduced to Wikipedia, now the world’s largest encyclopedia, in 2003 Linkedin, now the world’s largest collection of resumes, then Skype, which uses the Internet to send free voice calls, which now include video and conferencing. In 2004, Facebook, which now stands at 750 million users, revolutionized social networks, and in 2006, Twitter changed the way we were informed. In 2011, Google launched Google Plus, which is growing at a faster rate than Facebook did a few years earlier. The ability of 2 billion people to find each other, network with each other and share ideas is only getting faster. Viewing innovation challenges from a number of networked and diverse perspectives will produce a plethora of solutions globally.

In the past, large companies just had to hire the top students in their particular field to stay ahead. They could focus on tracking their industry and direct competition to maintain market share and industry leadership. Many technology driver companies would also measure innovation by the amount of capital invested in R&D (RIM and Nortel were No.1 and 2 in R&D spend in Canada last year). The tools on the Internet are changing that reality at an alarming rate leaving many companies either in denial or in absolute confusion. However, it seems that many other smart companies see that leveraging Web 2.0 is critical to their continued success and survival.

In a survey done by McKinsey of nearly 1,700 top executives from around the world, they asked about the value of Web 2.0 deployment. 69 per cent reported that their company gained measurable business benefits including more innovative products and services, better access to knowledge, lowered cost of doing business and higher revenues. The key to success was more cooperation via a better networked organization.

Open innovation allows a company to weave the components of social media and effective collaboration together. Smart entities will leverage open innovation to create business ecosystems that look at not just their core business, but at all the players that can add value and extract value from being a part of that ecosystem. They will encourage responsible sharing of information and co-development with members of the ecosystem and will think very seriously about leveraging the tools of the Internet to do so. Innovation is no longer the domain of your smartest hire, or your company, or your country or the “Developed” world.  Innovation is becoming truly global in scope. Inclusion and cooperation with actors within and without an entity will prove critical in the next decade.

Educational expert Alfie Kohn says  “Non-cooperative approaches . . . almost always involve duplication of effort, since someone working independently must spend time and skills on problems that already have been encountered and overcome by someone else. A technical hitch, for example, is more likely to be solved quickly and imaginatively if scientists (including scientists from different countries) pool their talents rather than compete against one another.”

Whether companies like it or not, the reality of value being created via cooperation will be powered by a future that is already here. It turns out that the zero sum game idea has flaws and gaps. Perhaps it may be more beneficial for entities to start thinking of raising the sea so that all boats can rise, while ensuring that their boat is fit for the high seas and winds ahead.

By Dwayne Matthews

Dwayne Matthews is the managing director of Clean 15, Canadian leader in open innovation.

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