Technology Guide: Wikinomics - The world is now your talent pool

Collaborative content creation has become big news online. Now the world of the wiki - server software that allows users to edit web page content - could form the hiring solution of the future.

Most web users will know the wiki model from Wikipedia - the sometimes controversial free online encyclopaedia that anyone can register to edit. Now there is 'wikinomics'. Like Wikipedia it's all about mass collaboration. The difference is that, while Wikipedia is about sharing knowledge for free, wikinomics taps into the web's interconnectivity for business purposes.

The implications are startling. In theory, it means companies do not need to physically hire anyone at all. If they have a problem that requires a specific piece of knowledge to solve, they can simply post it online and wait for a response. Anyone with the requisite knowledge or solution can respond to receive a bounty. There's no need to hire someone, no induction, no desk, no duty of care, no ties. It's like hiring a consultant, but easier and cheaper.

Wikinomics is not just a theory, it is happening now. One of the best-known instances of this approach was ailing Canadian-based mineral company Goldcorp, which believed it had run out of gold sources and was destined to shut down for good. Instead it launched the Goldcorp Challenge online. This asked geologists if they could suggest any untapped veins in the land it owned and was so successful it revived the company's fortunes (see box, left).

It is an example featured in Wikinomics - How Mass Collaboration Changes Everything, by Don Tapscott and Anthony Williams. The 2007 book crystallises ideas related to a $9 million research project led by Tapscott and outlines how organisations can harness external collective capability to spur innovation, improve efficiency and solve problems. Tapscott, founder and CEO of business innovation think tank New Paradigm, argues that wikinomics has the potential to revolutionise the corporate world and in so doing is triggering issues for HR teams to address. "Wikinomics is changing three fundamental aspects of HR," he says. "First the 'human resource' is not just inside the boundaries of your company. The world is your resource. This is more than outsourcing. Companies can now tap into vast pools of labour." Tapscott argues that businesses are seeing the rise of the 'prosumer' - savvy consumers working with companies to help create and innovate -using 'ideagoras' - online forums where ideas and solutions change hands (see box, page 14).

Another fundmental change is the recent emergence of social networks, wikis and blogs that transform the nature of collaboration within firms. Finally, "a new generation of digital young people is entering the workforce," says Turner. "They are beginning to challenge everything we know about talent and management."

At the core of wikinomics is the idea that the old knowledge management approach has failed. Knowledge should no longer be viewed as a finite and "containerised" resource, as Tapscott puts it, inside the boundaries of organisations. Rather it should be seen as an infinite resource, most of which is held outside organisational boundaries, with progress achieved via collaboration.

This is a radical departure from the way most companies do business, where information and insight are stubbornly protected to maintain competitive advantage. As yet, only a minority of companies are embracing such change, and many are doing so tentatively as it raises a wide range of issues spanning HR, intellectual property and broader business strategy that have an impact on corporate structure and IT systems.

"The old fashioned, hierarchical ways of managing a business are dead and, while we don't call it wikinomics, we are seeing many trends that are heading in that direction," says Alex Bartfeld, director EMEA at HR technology supplier Softscape. "Organisations have become much more fluid and we've had to adapt our tools. The HR function needs to look at how, in a wikinomics environment, you appraise people, how to reward them accordingly and how you attract them in the first place."

It is Bartfeld's contention that most HR teams have yet to crack the wiki way of working. Once they have done so, the next big challenge is to make the transition from a voluntary wikinomic environment into a commercial one. Ultimately, he asks, how can people be incentivised to collaborate?

One HR practitioner sounding a warning note is Daniel Kasmir, HR director at BDO Stoy Hayward. "Expectations of results also need to be kept in perspective," he says. "While the wiki business model might work well for areas such as research, there are many other fields where it may be a case of trying to herd cats. But this is the start of the revolution in which it will be beautiful to collaborate."

Jonathan Trevor, lecturer in human resources and organisations at Judge Business School, University of Cambridge, says companies such as Google and Oracle have grown successfully by utilising open source innovation. But he thinks some negative issues are beginning to emerge.

"There is the danger of a talent drain," he says. "You are diluting the core of sustained creativity. You lose continuity as you are only as good as your last project. The fear is that your business might become too open, too boundary-less, almost too informal."

Nevertheless, the potential upside is encouraging some companies to investigate the possibilities. Depo Consulting, a business that advises clients on collaboration and communication on the web, has helped a cluster of companies set up in a digital business park in virtual world Second Life.

Depo director Peter Dunkley sees enormous potential in the wiki way. "Working with the most talented people has to benefit everyone in the organisation," he says. "HR has a real role to play, listening to the experiences of both the traditional workforce and the new virtual network and making interventions that build value for both."

Identifying the skills and experience of the virtual network might, for example, lead to HR engaging these individuals in a formalised sharing mechanism through training programmes. "If wikinomics is proactively managed it can benefit all involved," claims Dunkley.

If these models become more commonplace, there is the potential for a significant change in the nature of employment. The ability to engage flexible, virtual teams on projects or outcomes means managing relationships with, and the remuneration of, individuals who may be anywhere in the world. Logically, therefore, systems will be required to manage a social context, reflecting the informality of these new working relationships, as well as a vastly increased regulatory context, as you could potentially have workers in many different countries.

There should, argues Dunkley, be standards in terms of how people engage with an extended, virtual team. Virtual teams, in particular, require an understanding of cultural norms to avoid misunderstandings. It is also vital to manage any areas of controversy.

A significant potential issue here for HR professionals is to ensure that the credit for innovation is given to those responsible. It is not unknown for middle management in large organisations to take credit for the ideas of suppliers - and wikinomics is predicated upon openness and fairness.

You have to build trust and be non-exploitative. Dunkley concedes it is easier for smaller companies to work in these ways, as large companies may find it extremely difficult to overcome suspicions that they are being exploitative.

StepStone Solutions group managing director Matthew Parker makes the point that, in order to work really well, wikinomics systems will need to be developed that are "less an IT system and more a library or information resource". Additionally, if companies are using wikis as part of their knowledge transfer processes, then security and access will be crucial.

"These systems are powerful because they enable geographically dispersed employees to create a central repository of what is essentially the company's intellectual property," says Parker. "So a careful balance needs to be struck between restricting access and having a wide enough pool of contributors to ensure the wider relevance and validity of the information being gathered."

A critical factor in mass collaboration is intellectual property rights. Great care should be taken to ensure that wikinomics is not conducted in a way that leaves ownership of a solution open to question. "What you don't want to do is swallow an IP poison pill so that when you come to implement a solution you find that someone says it's going to cost you in a way you didn't expect," says David Naylor, partner at law firm Field Fisher Waterhouse.

The business models and objectives of some companies lend themselves to embracing wikinomics more than others. Technology companies spring readily to mind. IBM now has more than 15,000 'customer engagements' involving the Linux open source operating software platform. But where high-tech leads, others tend to follow. Wiki technology has made mass collaboration viable for all, with important HR implications for a wide range of organisations - including yours.

THE GOLDCORP CHALLENGE

Prospecting for gold through the internet is ostensibly an absurd notion.

It took Rob McEwen, CEO of Canadian mining company Goldcorp, to see things rather differently. Attending a conference at MIT in 1999, McEwen heard all about how software visionary Linus Torvalds used the internet to harness input from disparate experts scattered across the globe in order to develop the open source Linux computer operating system.

Impressed, McEwen began to wonder whether the same principle of mass collaboration could be applied to the problems Goldcorp faced with its 50-year-old mine in Red Lake, Ontario. Without evidence of substantial new gold deposits, the mine looked set for closure, putting the future of the company at risk.

To the surprise of the geologists at Goldcorp, McEwen suggested that the company go against received wisdom and make all the previously confidential geological data it had on the mine public so as to elicit outside input. In March 2000 The Goldcorp Challenge was launched, offering $575,000 in prize money to participants with the best estimates and methods for extracting more gold from the 55,000-acre property. A massive 400MB of information was loaded on to the site.

News of the contest spread quickly around the internet. More than 1,000 virtual prospectors from 50 countries got busy crunching the data. As well as the inevitable geologists, participants included graduate students, mathematicians and military officers.

Between them, they recommended 110 targets, half of which Goldcorp hadn't previously identified or had thought were dead. Astonishingly, four-fifths of these turned out to contain gold.

Prospecting for precious metal using the internet to stimulate input suddenly didn't seem such a daft idea. Through this collaboration the company quite literally struck gold. Its corporate value leapt from $100 million to $9 billion.

WIKI WONDERS

1. Name: Procter & Gamble

Sector: Fast-moving consumer goods

Number of full-time staff: 138,000

Wikinomics credentials: Understood to be near its aim of sourcing 50% of new innovations from outside the company and has said that for every good scientist on its payroll there are 200 outside whose skills should be harnessed.

2. Name: Dell

Sector: Computer manufacturing

Number of full-time staff: 90,000

Wikinomics credentials: Has a TechCenter Wiki page for users of its technology to share ideas and more radically the dellideastorm website for encouraging innovation.

3. Name: Linden Lab

Sector: Online communities

Number of full-time staff: 200+

Wikinomics credentials: Less than 1% of the content of the company's hugely popular virtual society Second Life is produced by Linden.

4. Name: LEGO Group

Sector: Toy manufacturing

Number of full time-staff: 5,000

Wikinomics credentials: The Lego Mindstorms site encourages customers to design their own lego kits based around the Mindstorms robot. These designs then feed into the product development cycle for people who want to buy lego robots without designing their own.

IDEAGORAS

Founded in 2001, InnoCentive (www.innocentive.com) is an open innovation marketplace. It connects companies, academic institutions, and non-profit organisations, which it terms 'Seekers', with a network of 125,000 'Solvers' spread across 175 countries. Each so-called 'challenge' has a cash award for the Solver who submits the solution that best meets the Seeker's requirements. Many major corporations have registered with InnoCentive, among them Colgate-Palmolive, which was seeking a more efficent means of getting toothpaste into tubes.

NineSigma (www.ninesigma.com) was founded in 2000 by Mehran Mehregany, Goodrich professor of engineering innovation at Case Western Reserve University. The company's core mission is to work on behalf of clients to source innovative ideas, technologies, products and services from outside their organisation quickly and effectively by connecting them with the best innovators from around the world. Clients have included Procter & Gamble, DuPont, General Mills, GlaxoSmithKline, Kraft, Kimberly-Clark, Philip Morris and Unilever.

Relative newcomer Fellowforce (www.fellowforce.com) started up in July 2007. By November 2007, it averaged 10 cases a month, with 1,750 'fellows' from 25 different countries pitching and posting ideas. Co-founder and head of marketing Robert Ruben says the business is 'more of an innovation platform than a solution platform'. Ruben and business partner Jack Allerts chose to walk the collaborative walk by offering a 1% stake in their web 2.0 business to the person who proposes the best tagline for their venture on the Fellowforce site (a challenge that is now closed).