John Seely Brown on the challenge and opportunity for technologies of cooperation

By Marc Dangeard, published at 10 May 2007 - 8:12pm, last updated 11 years 13 weeks ago.

IT Conversations - Supernova 2005


http://cdn.itconversations.com/ITC.SN2005-JohnSeelyBrown-2005.06.22.mp3

In this podcast John Seely Brown give us an analysis of Innovation Ecologies in Asia and Offshoring. And the interesting finding is that some of the successes behind these models are the result of swarm innovation and a very "peer-to-peer" approach to doing business.
From this discussion, it results that the interesting challenge and huge potential for the technologies of cooperation is that they should be included in the business processes in such a way that machines can handle better exceptions.

On a more personal note, the other interesting point I took from this talk is that in a distributed network of suppliers, it is important to let suppliers work for others so that they can keep learning outside of the ecosystem and from competitors for example. I think that such a rule should also apply to employees. A company would benefit a lot more from employees that would not be allowed to work full time, and would therefore see (and learn from) other things outside the company ecosystem. To a lesser extent it seems that this is actually one of the reason Silicon Valley strive, through employees switching companies more often than anywhere else: From RedHerring - Some of the most economically relevant ties in the region are those forged by technophiles who worked together at the same company.
The learning from this process is accelerated. There may be a way to do even better in this area...

Summary of the presentation:

John Seely Brown has been taking a look at examples of innovation networks and disruptive processes in Asia. In this presentation he is considering 4 examples:

  • 1. Toyota: the company has very interesting ways to tap the productivity of their employees and suppliers. The work is driven by an upside down pyramid, where the workers on the production line have a lot of the decision power, and where it is an honor for the designer to be sent to the production line to collaborate with the workers rather than the other way around. On the outside, Toyota is seleecting suppliers not based on their prices, but based on their cost. The difference is that it allows them to work with people who have better control over their production process.
  • 2. Motorcycle industry in China: in 1997 the system changed from a government owned entreprise with heavy top-down management to a model of swarm innovation resulting from netiations between suppliers. This created ability to build motorcycles better and cheaper, with the result of devastating Honda. In this case, innovation happens in a manner very close to the Open Source model.
  • 3. ODMs in Taiwan: in this case, cameras are specified at a high level (functionality required by the market) by the large manufacturers, and ODMs are then doing the actual design work through a distributed network of suppliers. Similarly, the highest-end flat panel screen from Sony are coming from this group too. This is Innovation-on-the-fly.
  • 4. Leong Fong (spelling?): This garment manufacturer enjoys a 50% ROE most of the time. 5B revenue. This is coming from its ability to tap into many ecosystems as a learning architecture to be able to design the best way to produce the final product. This also includes the ability to benchmark suppliers within the whole supply chain, to keep learning who does best what and where. The result is unique garment at a price point that is unbeatable.

Findings:

  • 1. From these examples, John Seely Brown takes that the real success of Offshoring has less to do with the cheap cost of labor, and more to do with accessing distinctive skills wherever they are in the world.
  • 2. The other point developped in the discussion is around the importance of the learning process within the organization:
    • 2.1. One interesting comment from John on the last example is that suppliers are never used at more than 60% of their capacity, so that they also have to work for other companies and competitors, and so that the ecosystem can keep learning from this outside interaction.
    • 2.2. He also gives the example of Telecare in the Philipines as one of the best call center in the world. They moved up the chain all the way to do complex financial marketing for their customers within 18 month, which is much faster than what companies do usually in this field.
      One explanation is that in the US the phone specialist to manager ratio is 50 to 1 while it is 5 to 1 in this call center, because they believe the manager role is to accelerate learning.
  • 3. Distributed network of suppliers is a confluence of architecture and tools that accelerate the formation of such networks.
    SOA architecture is an enabler, virtualization architecture allows the systems to scale out, interaction tools (wiki, AIM, etc...) should be wrapped around SOA architectures to improve the process one step further:
    People's time goes to handling exceptions but our SOA architecture is not built to do this. So there is a need for an underlying fabric that would help accelerate the work, including, new forms of dynamic specialisation.
    The only sustainable edge is how to accelerate learning inside the firm and also within the ecosystem through the right partnerships where the goal is to accelerate the ability to learn and innovate through friction.