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

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Collaborative content generation is all the rage on the web. Now the open principles of Wikipedia are being applied to commercial consultancy. Robert Gray reports on a potential HR revolution.

Collaborative content creation has become big news online. Now the worldof 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 sometimescontroversial free online encyclopaedia that anyone can register toedit. Now there is 'wikinomics'. Like Wikipedia it's all about masscollaboration. The difference is that, while Wikipedia is about sharingknowledge for free, wikinomics taps into the web's interconnectivity forbusiness purposes.

The implications are startling. In theory, it means companies do notneed to physically hire anyone at all. If they have a problem thatrequires a specific piece of knowledge to solve, they can simply post itonline and wait for a response. Anyone with the requisite knowledge orsolution can respond to receive a bounty. There's no need to hiresomeone, no induction, no desk, no duty of care, no ties. It's likehiring a consultant, but easier and cheaper.

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

It is an example featured in Wikinomics - How Mass Collaboration ChangesEverything, by Don Tapscott and Anthony Williams. The 2007 bookcrystallises ideas related to a $9 million research project ledby Tapscott and outlines how organisations can harness externalcollective capability to spur innovation, improve efficiency and solveproblems. Tapscott, founder and CEO of business innovation think tankNew Paradigm, argues that wikinomics has the potential to revolutionisethe corporate world and in so doing is triggering issues for HR teams toaddress. "Wikinomics is changing three fundamental aspects of HR," hesays. "First the 'human resource' is not just inside the boundaries ofyour company. The world is your resource. This is more than outsourcing.Companies can now tap into vast pools of labour." Tapscott argues thatbusinesses are seeing the rise of the 'prosumer' - savvy consumersworking with companies to help create and innovate -using 'ideagoras' -online forums where ideas and solutions change hands (see box, page14).

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 theworkforce," says Turner. "They are beginning to challenge everything weknow about talent and management."

At the core of wikinomics is the idea that the old knowledge managementapproach has failed. Knowledge should no longer be viewed as a finiteand "containerised" resource, as Tapscott puts it, inside the boundariesof organisations. Rather it should be seen as an infinite resource, mostof which is held outside organisational boundaries, with progressachieved via collaboration.

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

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

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

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

Jonathan Trevor, lecturer in human resources and organisations at JudgeBusiness School, University of Cambridge, says companies such as Googleand 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 thecore of sustained creativity. You lose continuity as you are only asgood as your last project. The fear is that your business might becometoo open, too boundary-less, almost too informal."

Nevertheless, the potential upside is encouraging some companies toinvestigate the possibilities. Depo Consulting, a business that advisesclients on collaboration and communication on the web, has helped acluster of companies set up in a digital business park in virtual worldSecond Life.

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

Identifying the skills and experience of the virtual network might, forexample, lead to HR engaging these individuals in a formalised sharingmechanism through training programmes. "If wikinomics is proactivelymanaged it can benefit all involved," claims Dunkley.

If these models become more commonplace, there is the potential for asignificant change in the nature of employment. The ability to engageflexible, virtual teams on projects or outcomes means managingrelationships with, and the remuneration of, individuals who may beanywhere in the world. Logically, therefore, systems will be required tomanage a social context, reflecting the informality of these new workingrelationships, as well as a vastly increased regulatory context, as youcould potentially have workers in many different countries.

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

A significant potential issue here for HR professionals is to ensurethat the credit for innovation is given to those responsible. It is notunknown for middle management in large organisations to take credit forthe ideas of suppliers - and wikinomics is predicated upon openness andfairness.

You have to build trust and be non-exploitative. Dunkley concedes it iseasier for smaller companies to work in these ways, as large companiesmay find it extremely difficult to overcome suspicions that they arebeing exploitative.

StepStone Solutions group managing director Matthew Parker makes thepoint that, in order to work really well, wikinomics systems will needto be developed that are "less an IT system and more a library orinformation resource". Additionally, if companies are using wikis aspart of their knowledge transfer processes, then security and accesswill be crucial.

"These systems are powerful because they enable geographically dispersedemployees to create a central repository of what is essentially thecompany's intellectual property," says Parker. "So a careful balanceneeds to be struck between restricting access and having a wide enoughpool of contributors to ensure the wider relevance and validity of theinformation being gathered."

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

The business models and objectives of some companies lend themselves toembracing wikinomics more than others. Technology companies springreadily to mind. IBM now has more than 15,000 'customer engagements'involving the Linux open source operating software platform. But wherehigh-tech leads, others tend to follow. Wiki technology has made masscollaboration viable for all, with important HR implications for a widerange of organisations - including yours.

THE GOLDCORP CHALLENGE

Prospecting for gold through the internet is ostensibly an absurdnotion.

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

Impressed, McEwen began to wonder whether the same principle of masscollaboration could be applied to the problems Goldcorp faced with its50-year-old mine in Red Lake, Ontario. Without evidence of substantialnew gold deposits, the mine looked set for closure, putting the futureof the company at risk.

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

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

Between them, they recommended 110 targets, half of which Goldcorphadn'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 inputsuddenly didn't seem such a daft idea. Through this collaboration thecompany 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% ofnew innovations from outside the company and has said that for everygood scientist on its payroll there are 200 outside whose skills shouldbe harnessed.

2. Name: Dell

Sector: Computer manufacturing

Number of full-time staff: 90,000

Wikinomics credentials: Has a TechCenter Wiki page for users of itstechnology to share ideas and more radically the dellideastorm websitefor 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'shugely 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 todesign their own lego kits based around the Mindstorms robot. Thesedesigns then feed into the product development cycle for people who wantto buy lego robots without designing their own.

IDEAGORAS

Founded in 2001, InnoCentive (www.innocentive.com) is an open innovationmarketplace. It connects companies, academic institutions, andnon-profit organisations, which it terms 'Seekers', with a network of125,000 'Solvers' spread across 175 countries. Each so-called'challenge' has a cash award for the Solver who submits the solutionthat best meets the Seeker's requirements. Many major corporations haveregistered with InnoCentive, among them Colgate-Palmolive, which wasseeking 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 ReserveUniversity. The company's core mission is to work on behalf of clientsto source innovative ideas, technologies, products and services fromoutside their organisation quickly and effectively by connecting themwith the best innovators from around the world. Clients have includedProcter & Gamble, DuPont, General Mills, GlaxoSmithKline, Kraft,Kimberly-Clark, Philip Morris and Unilever.

Relative newcomer Fellowforce (www.fellowforce.com) started up in July2007. 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 'moreof an innovation platform than a solution platform'. Ruben and businesspartner Jack Allerts chose to walk the collaborative walk by offering a1% stake in their web 2.0 business to the person who proposes the besttagline for their venture on the Fellowforce site (a challenge that isnow closed).