Chapter 5: Openness, 8 areas of Openness (areas 1-4)

Hello people,

There was an intermission while I made some serious progress on writing the book over Christmas, and then I had a trip to the USA.

But now I will be regularly publishing 3 or so extracts a week and would love your continued feedback and sharing.

General progress is quite exciting as the cover design has now been commissioned, and when I get some early designs I’ll be sharing them here.

Today, we’re breaking Openness down into 8 chunks – here’s the first 4.

Let me know what you think,

Will

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To understand how contemporary organisations are more open, we need to look at eight distinct areas of openness.

The eight areas of Openness

1.    Culture & behaviour
2.    Environment
3.    Systems
4.    Innovation
5.    Environment
6.    Marketing and communications
7.    Finance
8.    Privacy

1. Culture & behaviour

To discuss openness meaningfully, we need to start with your (or any) organisation’s culture and behaviour. There’s a reason why this book is called Culture Shock, and that is because so many of the adaptations that need to happen and the opportunities that are available are cultural. The following six domains on this list all interact with culture – they create it and they are created by it, the are all interlinked. But culture is like the glue binding them all together, which is why it is first.

So what does an open culture look like? Here’s a checklist; as you read through it, think about your own organisation and where you are.

In an open culture:

•    Almost all information is available to almost all members of the organisation – there are few secrets and it is easy to get the information you need.
•    People across the whole organisation are open about their emotions – there is little disguising or hiding of true feelings
•    Collaboration is a natural state, both within distinct organisational structures (like teams and divisions) and across them – there is little evidence of silos and no problem with people hoarding knowledge and protecting turf
•    The organisation collaborates as well as competes with its competitors – there is a nuanced view that competitors are also valuable collaborators who help build the market and ongoing joint projects

2. Environment

Interestingly the trend towards openness is also affecting our organisations internal environments, and has been – along with other trends over the past decades like those of global competition and the associated pressures for some companies to drive down costs in order to compete  – is beginning to transform how our workspaces look and operate.

Some of the emerging elements of these changing working environments include:

A shift from closed offices and cubicles to more shared spaces. Increasingly organisations are re-designing their spaces to have more ‘third spaces’ as Starbucks described themselves – that is, casual, comfortable, collaborative spaces like coffee shops, sofa areas and open plan spaces suited to informal meetings and conversations.

A shift from fixed desk spaces for all towards more hot-desking and even co-working. For several decades this has been happening, and many people have experienced both the pluses and the minuses of hot-desking. The next iteration of this trend is co-working: collaborative, shared workspaces for freelancers, independents and distributed employees who would otherwise work from home or alone in solo office spaces. What is particularly interesting about co-working spaces is how they physically design-in the opportunities for cross-over, serendipity and formal collaboration that we look at in the area of Innovation just a little bit further on in this list. In a co-working space, an architect sits next to a web developer, who sits across from a medical instruments sales rep, who shares a desk space with their illustrator partner. Co-working is the physical manifestation of a blended, connected, loosely connected workforce.

A shift from ‘the company provides the best technology’ to an emerging ‘Bring Your Own’ approach. Not long ago, the technology at work was pretty good and often better than that which most of us had access to at home. Over the past decade, that balance has inverted – many employees in developed and developing countries have better technology in their pockets and their home-offices than they are made to use at work! We are just starting to see intelligent organisations moving to harness this trend, with an emerging movement towards ‘here’s your tech budget, here’s an approved list of technology that will play nice with company systems – go choose the tools that are best for you and your job’.

A shift from company firewalls preventing access to large chunks of the web to an opening up of permission and a corresponding move towards IT as enablers rather than policers. When I worked in a traditional business in my first and (so far) only ‘proper’ job, it quickly became obvious that IT were gatekeepers. Theoretically there to serve the organisation, the IT manager wielded an unusual amount of power and seemed to revel in making things difficult. As an aside, he meant well, and did actually wear Disney ties – some stereotypes are true! Fortunately, times have changed in some organisations and there are those in IT who see themselves not only as gatekeepers and managers of security, but also as enablers of business results. As a result, in some organisations there is an enlightened recognition that employees need access to almost all of the web in order to carry out their lives and often to do their jobs too. The ‘Bring Your Own’ tech approach above is also a pretty enlightened trend. Long may the shift from IT as police to enablers continue! We look at this in more detail in Chapter Six on Technology.

3. Systems

Do you remember when Google Maps first came into your world? Suddenly, Google Maps was everywhere. It was the backdrop for news items on TV as the presenter introduced a piece about Iraq or Iowa – there was this big fat sattelite-y map and in the corner the Google Maps logo. It was soon popping up on other organisations’ websites – there, in the middle of an otherwise branded web page, was a Google Map of their office location. And then entirely new services popped up plotting all sorts of interesting property or crime or weather data onto a map that just happened to be a Google Map.

What Google had done so brilliantly was to build openness into the heart of their Google Map product. This was a map that came with a plug and a set of rules that said ‘hey, as long as you follow these rules, you can come along and plug into me and have a Google Map as part of your service and for free’.

You see, somewhat fascinatingly for non-technical geeks like me who are attracted to shiny cool technologies that do really useful things, openness, if allowed to, reaches into the very guts of a progressive organisation. It goes beyond the culture and the office layout into the very fundamentals of a business, into its systems and its inner core.

This is a huge and unstoppable trend, so let’s look at some of the core opportunities

APIs. Although Application Programming Interface isn’t the most user-friendly name it does do what it says on the tin from a technology perspective. I think of an API as a plug available in Company A (like with the Google Maps example or Facebook) that allows Companies B, C, and D to come along and plug into Company A and access some of the core functionality it provides. Simply put, this allows Companies B, C and D to get a lot more done with massively less resources – ‘hey, we don’t need to create a whole map thing now – we just plug into Google Maps for that part of our new property search engine’. And it allows Company A to substantially increase the distribution of their offering and their brand, and to build competitive advantage through having an ecosystem of related services that build on top of their own, but at little additional cost to themselves (Company A, that is).

This is how – in simple terms – independent companies are producing apps and games used daily by million inside Facebook. Facebook provides the platform, the plug, the rules, and independent companies are then able to develop their apps and games that take advantage of Facebook’s gigantic user base, its user information, its login functionality – the whole damn thing! In theory, everyone wins. Zynga, producers of Farmville, Mafia Wars and Words With Friends, did $600m revenues in 2010, a huge percent from game playing happening inside Facebook.

APIs tend to favour companies that have distinct, systematised products and services, and those which are powered by databases and technology – at least at first glance. So organisations providing very tailored products and services may struggle to identify opportunity here. But Facebook and Google Maps may be poor examples to use, because they allow the rest of us in non-digital native companies to get off the hook. That may be a little too easy. This is a seismic shift in how – from a systems point of view – business gets done in the networked 21st century. It will come knocking at your organisation and market sooner or later.

To find an opportunity, the way to think about the value that an API strategy can create is to think ‘What is the very core of our organisation? What are the crown jewels, and how could we accomplish our goals better by allowing other organisations (or individuals) to plug into a carefully considered part of those jewels in a way that creates value for us and for them?’

Open data

Let’s look at an overlapping opportunity but from a consumer’s point of view.

What would it be like if your bank could give you not only your balance and your recent transaction information, but could also provide a dashboard that gave you a sense of the trends in your personal finances and some meaningful insights into patterns and quirks that allowed you to better understand and manage your money?

What would it be like if you car could help you understand what your driving is like, and particularly when your driving style is more economical (financially and environmentally) and less, and when that tends to be in your journeys and why, and what you can do about it?

And, avoiding the old cliché of the Internet Fridge, would it be helpful if you could Google for your keys when you misplaced them at home (seriously, how cool will that be?), and if you could look up your cat flap data to tell whether the cat was in or out? Increasingly, objects are becoming connected to the Internet. The next generation of the web – the Semantic Web – is often popularly characterised as The Internet of Things. Soon it won’t just be people and data connected to one another through the web: almost everything will be connected.

In this digitized world, we are all leaving trails of breadcrumbs behind us that are being collected by the companies and organisations providing services to us. Recognising this, there is a whole raft of innovation happening around this idea of unlocking existing data stores to give value back to the creators – that is, the consumers and users – of that data. Some people are calling these ‘data handbacks’, and you can see this trend also located in the rise of visualizations of data, in infographics being used in the media to convey complex information through images as well as many other newly spawned opportunities.

Many banks and financial services institutions are beginning to hand back useful intelligence to their customers through a raft of ‘Personal Finance Managers’ – a good example for further research is Mint.com. The car example I gave just a moment ago is actually the Fiat 500 Eco-Drive which does exactly that – provides useful web-based information, nicely visualized, to the owners of their cars to help them understand and improve their driving.

Here’s a business-to-business example: Zappos, who we looked at earlier, has a vendor extranet where the c. 1,000 suppliers that it buys its many lines of shoes from can login and monitor the various stock levels for the lines that they supply. Nothing too revolutionary there, though I’d bet many companies wouldn’t allow their suppliers to do the same based on attitudes rather than technology limitations. But what about this? Zappos then permits those thousand or so vendors to raise Purchase Orders from Zappos to them to order new stock where they feel is necessary. Let me play that back to you: the supplier raises order from its customer to buy more stuff from itself, when it wants to. Zappos sees this as ‘a thousand extra people helping us to manage our business’. Pow!

So the question for you is ‘What information do you hold that could be enormously valuable to your customers, employees and stakeholders?’. And think about it good: there’s gold in them thar hills.

Open vs Closed systems

An interesting related consequence of the rise of Open is the tension between Open and Closed Systems. It is not something we are able to look at in detail here, but keep your eye on the positive conflict between open systems and closed systems. An example would be the open Google Android operating system for mobile devices in contrast with the closed ‘vertically integrated’ Apple system of iOS and iTunes, or the open Linux operating system for computers in contrast with the closed Windows operating system.

Both approaches have advantages: as an Apple user, I enjoy the (relatively) seamless integration between my iPhone, my iPad, the Macbook Pro that I have written this book on and my iTunes account. It generally ‘just works’, the quality is high, things work the same across different touchpoints. Yet here I am espousing the benefits of open systems.

4. Innovation

Perhaps the most radical influence of Openness has been in how businesses innovate in the late 20th and now early 21st century.

Crowdsourcing innovation

In 2010 a Russian by the name of Yury Bodrov solved twelve well-paid tricky ‘challenges’ for businesses around the world that he may never need to physically meet. That problem-solving feat made Yury the top solver of the year on innovation marketplace Innocentive. Yury is prolific – the next solver on the year’s leaderboard solved four challenges. And the challenges were not posted by just any old businesses: challenges have been set on Innocentive by P&G, NASA, Lilly and Roche.

You can think of Innocentive as a dating website where companies with business problems that they need solving can advertise their unfulfilled wishes to talented specialists that love solving problems. Solvers might be passionate soloist ‘amateurs’ working from their garden shed or a local lab, or highly paid professional scientists moonlighting. As Alph Bingham of Innocentive said at a recent event: “95% time the solver wouldn’t have been hired by sponsor”. This is problem-solving from the edges, or some kind of formalised serendipity – a way of gathering intelligence from the unexplored, unaccessed corners of possibility. And it is a valuable exchange for those involved.

At Threadless, community members submit new t-shirt designs, community members vote for their favourite designs which then go into production and community members send in photos of themselves and their friends wearing the t-shirts, which Threadless then adds to the product pages. So which bits of the typical t-shirt business does Threadless actually do? Well it prints the t-shirts, it takes some nice photos of them when they are first ready to be purchased, it takes the money and it sends them out – the logistics. But it’s just a hobby business though, right? Although the company doesn’t disclose financials often, it is in the public domain that Threadless is turned over $30m in 2009.

These kind of collaborative, online problem-solving endeavours have been called Crowdsourcing – the idea of harvesting or sourcing effort and intelligence from an online crowd or community.

This great opening up has been a radical shift in how innovation gets done in some organisations.

Previously, innovation was a matter for the Research & Development department. In-house talent would cook up the new product developments, and great innovation factories like 3M (sticky notes!) and Proctor & Gamble (the Swiffer!) would churn them out. This was both a practical reality and a source of company pride.

In this networked age, however, the opportunities to solve problems are far greater. As we have already touched on, businesses are no longer limited by their own available equipment, time, talent and resources. By opening up their fortress walls, these organisations are able to draw on talent dotted around the globe, on ideas and problem solving approaches that have not (and perhaps would not) emerged inside their own four walls and so can get better quality solutions to problems, and quicker too.

It’s like businesses have begun to get over the idea of themselves as the be-all-and-end-all and found a new found humility. That, or the economics of crowdsourcing as deeply compelling to profit-driven businesses in a hyper-competitive marketplace!

Getting stuff done in Government

As governments and local authorities wrangle with their delivery challenges in the recent austere, harsh economic environment, they too are exploring how opening up both their resources (like data stores) and their workloads to distributed groups can help. This is not crowdsourced innovation in the mode of Innocentive, but more like crowdsourcing-as-innovation.

Launched in 2009 by Hilary Clinton, the ‘Virtual Student Foreign Service’ is a U.S. Department of State programme harnessing ‘technology and a commitment to global service among young people to facilitate new forms of diplomatic engagement’.

The VSFS pairs ‘e-interns’ it has recruited – all of whom are American students –  with State department offices and US diplomatic posts worldwide, whom they then help with a variety of tasks from their own college and university campuses around the world.

As the VSFS says on its website: “Past projects asked students to:
•    Develop and implement a public relations campaign using social media sites like Facebook, Twitter, MySpace, YouTube, etc. to communicate and reach out to youth
•    Conduct research on the economic situation, prepare graphic representations of economic data, and prepare informational material for the U.S. Embassy website
•    Create a system to gather and analyze media coverage on a set of topics including environment, health, and trade
•    Research IT-based interventions that have been successful in higher education, particularly in teacher training
•    Write and contribute biweekly articles to the U.S. Embassy’s Facebook page on topics such as internet, computer science/technology, history, and literature
•    Develop a series of professional instructional video clips to be published by the U.S. Embassy
•    Survey social media efforts of U.S. diplomatic posts, NGOs, and private companies around the world to help establish best practices in a U.S. Embassy’s social media outreach business plan.”

A global workforce of unpaid, willing volunteers? Seems to work for the U.S. State Department in these lean times.

Smaller steps in crowdsourcing

However, the big, developed end of crowdsourcing that we have looked at above is increasingly well understood. There are whole books and events and – as we’ve seen – innovation marketplaces enabling this wonderful connectivity between those with something they need and those with something to give.

What else is there to enable Innovation in progressive businesses around crowdsourcing? There are a couple of fairly simple trends worthy of our attention, both building on these ideas of the organisation having porous edges so that ideas can flow in and out.

Firstly, hackdays. Hackdays are a wonderfully simple and useful phenomenon to emerge from the developer community. Like any community, software developers have always been drawn to one another and have a rich history of meetups and big community events where they can get together, geek out and make stuff. At hackdays, developers, designers and creatives get together – usually at a weekend – to ‘hack’ something together: that is, to make something, and usually something they personally believe in – something that scratches an itch they have. Barcamps – a global network of open, user-generated conferences – really helped distribute the methods and benefits of hackdays to a global audience.

We are now seeing the rise of nichely focused hackdays, either around a cause, a specific niche area or around a technology. Organisations are also increasingly using hackdays to either foster internal innovation or even externally, like the recent Honda Hackday in London.

Social Innovation Camp is a brilliant example. Founded by a few good-spirited, frustrated people in London who that felt there was a huge opportunity to innovate more to provide better practical solutions to social issues in society that just were not being taken up by the usual solution provides of Government, charities and NGOS. The Social Innovation Camp guys felt passionately that some of the making and getting-stuff-done-ness of the hackday formula could be brought usefully to bear on the job of innovating around social causes. The first Social Innovation Camp was run in London in April 2008.

In the UK alone Social Innovation Camps have generated more than 450 ideas of which over 30 have been protoyped into social ventures, and a few have continued to grow including MyPolice, ‘an online feedback system for the police service, allowing direct, open conversations between the public and the police’, and the awesomely practical SimpleCRB which provides ‘A cheaper, quicker and more effective CRB checking service for organisations in the voluntary and public sector’. Real outcomes. And Social Innovation Camp has now spread far beyond London alone: camps have happened in Nigeria, South Korea, Australia, Slovakia, Georgia, Czech Republic, Azerbaijan, Armenia, Kyrgyzstan, Bosnia. These lightweight, open movements are so much more viral than their centralised predeccesors – they spread.

Secondly and perhaps most simply of all, one of the most practical trends around this growing porosity in the edges of organisations is the rise of formats that bring guest speakers and potential collaborators into the organisation. Driven by the rise of the great talks available from inspiring events like the TED and TEDx series and the wonderful DO Lectures in Wales, there seems to be a growing consciousness that the world is full of interesting and alarmingly talented people that if we’re not careful, we may never hear from.

At NixonMcInnes we operate a First Friday programme where we simply ask interesting people we know to come and talk to us about their work on the first friday of every month. I think we ‘borrowed’ the idea from Google which has a whole external speaker programme in place bringing some of the world’s most interesting speakers to talk to their employees. Why wouldn’t we all do that?

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How was that? Please provide feedback: via comments on this post, via email to wmcinnes@gmail.com, tweets @willmcinnes #cltrshck.

Next extract: Finishing off the 8 areas of Openness by looking at areas 5 – 8.

Thank you for your support.

Will