Change to New Blog

This blog has moved to http://incollaboration.ning.com.

The Real Answer to the Tragedy of the Commons

This the actual real answer to the tragedy of the commons. Is it the answer to the economic problem introduced in the Reingold talk? Is it the real model for an innovation commons?

Howard Reingold on Collaboration

Stages of Collaboration

I've had an interesting exchange on this topic on LinkedIn. It can be found here:

http://www.linkedin.com/answers/management/organizational-development/MGM_ODV/164431-353379

The Federal Idea

Different cultures give a different prominence to the idea of the individual, but one can sense a growing feeling of impotence, everywhere, in the face of institutions and government, local and global. Democracy used to mean that the people had the power, but now that translates into the people have the vote, which is not the same thing.

The vote is an expression of last resort, a useful reminder to our rulers of the source of their bread and butter, but hardly a way for individuals to influence what is going on around them. Moreover, in the institutions of everyday life, particularly those of business, the only people with the vote are those outside, the financiers or the governors. Those who work in them are effectively disenfranchised. Democracy has its limits.

If we want to reconcile our humanity with our economics, we have to find a way to give more influence to what is personal and local, so that we can each feel that we have a chance to make a difference, that we matter. We have no hope of charting a way through those paradoxes unless we feel able to take some personal responsibility for events. A formal democracy will not be enough. We have to find another way, by changing the structure of our institutions to give more power to the small and to the local. We have to do that, with all the untidiness which it entails, while looking for efficiency, and the benefits of coordination and control. But more is needed than good intentions to empower the individual to do what we want him or her to do. The structures and the systems have to change to reflect a new balance of power. That means federalism.

Federalism is an old idea, but its time may have come again because it matches paradox with paradox. Federalism seeks to be both big in some things and small in others, to be centralized in some respects and decentralized in others. It aims to be local in its appeal and in many of its decisions, but national or even global in its scope. It endeavors to maximize independence, provided that there is a necessary interdependence; to encourage difference, but within limits; it needs to maintain a strong center, but one devoted to the service of the parts; it can, and should, be led from that center but has to be managed by the parts. There is room in federalism for the small to influence the mighty, and for individuals to flex their muscles.

We think of federalism as applying to countries-the United States, Germany, Switzerland, Australia, Canada. Her politicians might not admit it, but the United Kingdom is really a federation of its separate regions, as is Spain, and, increasingly, even France, as its regions gain more autonomy. The concept, however, goes beyond countries. Every organization of any size can be thought of in federal terms. Hospitals, schools, local government, and most charities are, if we look at them with federal spectacles, made for federalism, local and separate activities bonded in one whole, served by a common center. All businesses of any size have federal propensities, and a need to be all the things which federalism offers.

Why has such a good idea not been so obviously popular? Few businesses are consciously federal, nor does history provide many, if any, examples of a monarch or a central power voluntarily moving to a federalist structure. The hard truth is that we are always reluctant to give up power unless we have to, and federalism is an exercise in the balancing of power. The federal idea is an example of the second curve, but one which too few institutions or societies develop until they are forced to. It is a very different, and very uncomfortable, way of thinking about organizations. It is messy, untidy, and always a little out of control. Its only justification is that there is no real alternative in a complicated world. No one person, or group, or executive, is so all-wise and so all-sensitive to be able to balance the paradoxes on their own, or run the place from the center, even if people were prepared to allow them to. We have to allow space for the small and the local.

Federalism relies on a set of Chinese contracts between its various parts and operates through doughnuts of varying size and shape, which leave, of necessity and of right, considerable space for local decisions. The goals of the parts have to adjust to the requirements of the whole, and vice versa. No one in a federal organization can have everything exactly as they want it. Therefore, it is an excellent example of putting the preaching of this book into practice, with all its difficulties as well as opportunities.
Let us be clear, federalism is not the easiest of concepts to make work, or to understand. Yugoslavia is hardly an advertisement for the concept, nor is Canada. California is creaking under an excess of federalism from within and without. IBM proclaims its conversion to the idea, but may not be its most successful exponent in the years ahead. A federal Europe frightens many, and not just in Britain. Nevertheless, we have to persevere because it is the best way to return some sense of meaning to our larger institutions, a way of connecting their purposes with their people.

Much of the confusion and difficulty arises from a misunderstanding of what federalism is. A confederation, for example, is not the same thing as a federation. A confederation is an alliance of interested parties who agree to do some things together. It is a mechanism for mutual advantage. There is no reason for sacrifice or trade-offs or compromise unless it is very obviously in one's own interest. A confederation is not an organization that is going anywhere, because there is no mechanism or will to decide what that anywhere might be. The Confederation of Independent States, which replaced the Soviet Union, will never be an effective body. The British Commonwealth, another confederation, is a thing of sentiment and language, not a real organization. These are not the stuff of federalism
.
Confederations adapt when they have to, usually too late. They do not lead, nor do they build. They are organizations of expediency, not of common purpose. The British would like Europe to remain an economic confederation, a common market. Many in the rest of Europe want a more federal state, one with a greater common purpose, within which sacrifices and compromises are acceptable, one in which the rich are readier to help the poorer, one with common standards and common aspirations.

What is true of Europe is also true of organizations.

Alliances, joint ventures, and networks are the tools of confederations, arrangements of mutual convenience, inevitably fragile as the conveniences change. Organizations with a clear purpose will want to be federal, not confederal. The distinction is important.

The key concepts in federalism are twin citizenship and subsidiarity. They are old ideas, re-invented for today's world.

From: The Age of Paradox, Charles Handy, Harvard Business School Press, 1995

Technology Fountainheads

Technology Fountainheads: The Management Challenge of R&D Consortia

This book is a study of six R&D consortia in the US – Sematech, Semiconductor Research Corporation (SRC), Microelectronics and Computer technology Corporation (MCC), the Electric Power Research Institute (EPRI), the Gas Research Institute (GRI) and Bell Communications Research (Bellcore).

“The six consortia…were borne out of sense of industry crisis and/or deeply sensed need to advance the cause of industry R&D. In each instance, industry and/or government leaders articulated the need, advocated collective endeavor, and called for action.”

Why was Sematech successful?:

1. A viable, sustainable nationally important mission
2. Worked at precompetitive level
3. Outstanding leadership
4. Secured government funding
5. Industry led with 80% participation

Classification of R&D consortia;

1. Open membership
2. Exclusive membership
3. closed membership

Functions of R&D consortia:

• Development & dissemination of new industrial process technologies
• Technical education & training
• Environmental research (safety 7 health)
• Supply-industry infrastructure development
• Academic research & graduate education support
• End-product development & commercialization
• Industry standard-setting
• Industry disaster & crisis response

Strategy: “Vision is the basis for a call to action. The validity of a vision may depend upon the stature of those sounding the call, and on the premise that certain objectives can be met more effectively in a collective endeavor rather than the undertaking of a single firm.

If the vision is the basis of collective action, mission is an articulation of purpose. To be sustainable, a mission must promise the fulfillment of some broadly perceived need at the industry or sector level. It should attract the support of relevant constituencies – those whose backing can contribute to the consortium’s success, or whose lack of support could jeopardize its success from the onset.”

“A viable mission has several characteristics. First, it must not deal in domains of corporate core competencies or threaten consortium members’ competitive advantage. Second, it must offer firm-specific economic value. To the extent that a consortium reflects public purpose and the national interest, it will have validity and legitimacy. As a primary mission, however, collective or public purpose may attract support only in the short run. In the long run, return on R&D investments, becomes more the compelling objective – and at least for the United States, that measure tends to give priority to short-term results.”


Basic elements of consortium strategy:

1. its membership constituency, as well as other founders (that is, the markets it will serve
2. It’s R&D sourcing modes (basically the choice between an internal staff and external contracting)
3. Its product line, or range of services it will provide
4. Its pricing modes (that is, the forms in which its revenues are derived – e.g., one time shareholder fees, annual membership dues, cost per project charges)
5. Its R&D delivery systems (the channels used in the diffusion of new technology to member companies, their suppliers and their markets)

Theory of Consortia

“”The relevant theory, developed largely by Olson and Hardin, may be summarized as follows. A collective good is likely to be provided if the economic gain is great enough for one party or group that it alone would be willing to pay the full cost. Others may join the group if the net benefits to them contributing to the collective effort are positive, or if some attractive by-products are available through membership. Non economic benefits – for example the psychic rewards of belonging – may be relevant in small groups, but may decrease in importance for larger groups.”

“Current theory also holds that large groups will be less effective than small ones, on the grounds that:

‘The larger the group, the smaller the share of the total benefit going to any individual and the less likelihood that any small subset of the group, mush less any single individual, will gain enough from getting collective good to bear the burden of providing even a small amount of it.’”

I’m not sure that I agree with this. It seems like the premise is based upon additive rather than synergistic value. It would seem to be true if there was a decreased value for adding members. But, I don’t believe it’s true in general.

Benefits of Collaboration

“In theory, the economic rationale for the formation of a collaborative group is the anticipation of gain by some member or core group – a greater gain than if the member or core group were to undertake the same mission independently.”

• Cost sharing opportunities
• Sharing complementary knowledge
• Transitioning opportunities for firms moving into new fields of technology or diversifying into new businesses
• Risk reduction opportunities
• Monitor technological advances
• Risk of not collaborating
• Non economic motivations (especially for the core group)
• Potential for economic gain
• Improving the health of the industry
• Networking opportunities
• Sense of mutual dependence (smaller firms)
• Potential for selective and proprietary product offerings


Technology Fountainheads: The Management Challenge of R&D Consortia, E. Raymond Corey, Harvard Business School Press, 1997

Sematech: Saving the US Semiconductor Industry

Why Sematech consortium worked:

1. Members were willing to change
2. Members reduced interfirm secrecy
3. Solved problems with facts and information
4. Continuously reapplied the cooperative model
5. Accomplished specific, agreed-upon goals
6. Members avoiding “sandbagging”
7. Leverage continuous learning
8. Microchip industry profited by helping itself
9. The amount of investment was too big to dismiss
10. The organization was the optimal size
11. Leaders were willing to contribute without assurance of direct payback
12. Founding members brought with them the confidence of previous success

“The most important and timely success factor mentioned by everyone involved in Sematech is unprecedented cooperation among competitors requires an absolute belief in the necessity for collective action – a commonly held conviction that without hanging together, each will surely hand separately. In Sematech’s case that conviction was a widely held view that the industry’s survival was gravely endangered, and with it, the nation’s economic and military independence.”

“If it’s not competitive, it has to change.”

“The first empowerment was the decision to try. The second empowerment was the planning workshops, which said, ‘Try to do what?’”

“The biggest secret is that there is no secret.”

“One of the things we learned at Sematech early on was that all the secrets we were keeping from each other were basically the same secrets.”

“The prohibited areas of competitive collaboration were related to proprietary product and marketing issues. Legally allowed precompetitive collaboration involved core competencies or generic manufacturing process issues. The approximate proportions of the two types of information were eventually discovered to be a surprising 85 percent generic to 15 percent proprietary.”


Principles:

1. Being open to ongoing self-assessment and willingness to change
2. The recognition of long-term interdependence for survival
3. The importance of hearing every voice
4. The necessity of continually learning from learning
5. The moral conviction of the win/win rewards of systematically expanding mutual support


Sematech: Saving the US Semiconductor Industry, Larry Browning & Judy Shetler, Texas A&M University Press, 2000

Crowd Gaming

MSNBC.com has come up with a new way to entertain yourself before the movie begins. They have developed motion sensors that are placed throughout the theater that can tell which way the crowd is moving. What’s the fun in that? The crowd controls a ball and paddle like the ancient video game “Breakout.” The goal is to break the wall of news on the screen provided by MSNBC.com.

http://www.trendhunter.com/trends/crowd-gaming-what-to-do-before-the-movie-starts/

I've been looking for a demonstration of crowd gaming for awhile. This is a visual demonstration of collaboration.

First Democracy

"Democracy is government by and for the people. That is hardly a definition, but it will do for a start. As a next step, I shall propose that a government is a democracy insofar as it tries to express the seven ideas of this book: freedom from tyranny, harmony, the rule of law, natural equality, citizen wisdom, reasoning without knowledge, and general education.”

Paul Woodruff
First Democracy

All good principles for an innovation commons.

Read the book summary at http://illuminatedinnovant.blogspot.com/2007_06_10_archive.html