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 / Autumn 2009 / Issue 56(originally published by Booz & Company)


The Promise (and Perils) of Open Collaboration

Two Movements in Time

Both quality management and open source were developed outside the corporate mainstream by pioneers who couched their missions in ethical and economic terms — as vehicles for simultaneous improvement of the integrity of the company and its bottom line. W. Edwards Deming, the leading exponent of the quality movement, was a self-employed statistician and a consultant. Deming inspired reverence among workers and engineers, but he often evoked impatience — even rage — among executives by publicly criticizing corporate practices. Nonetheless, his precepts were adopted by key members of the establishment, because they produced results. Deming’s followers included former Ford CEO Donald Petersen, who based the automaker’s turnaround during the early 1980s on Deming’s teachings.

Similarly, the earliest open source projects, such as Linux, were launched outside the corporate realm by thousands of self-organized engineers and computer science academics with a passion for collaboration and free software. Some of them, explicitly styling themselves as software iconoclasts and hackers, rebelled against the idea of proprietary intellectual property and the corporate profit motive. Then, in the mid-1990s, open source was embraced by such companies as IBM, which recognized it as a means of achieving unprecedented product quality and productivity increases. Thus began IBM’s transformation from a symbol of buttoned-up inwardness to champion of outward collaboration.

The open collaboration movement still draws directly on the open source values of knowledge sharing. Procter & Gamble, for example, relies on sophisticated social networking systems designed to make connections between in-house and outside sources of expertise. The collaborative model has enabled P&G to dramatically expand the number of its partnerships, licensing agreements, and technology purchases, which has in turn helped it unleash a steady stream of profitable innovations — with success rates up to three times as high as in the past.

Today, practitioners of open collaboration are picking up, in some ways, where the quality movement left off. They are working to tap the knowledge and creativity of a broad range of constituents, including employees and suppliers. In the process they are also rethinking their organizational structures and systems. Most important, at the core of both the quality and open collaboration movements (and sometimes it’s unclear where one leaves off and the other begins) are the values of trial-and-error learning, open communication, and systems thinking. Both movements recognized that employees — given the right tools, training, and management environment — are in the best position to do the analysis needed for meaningful improvement and innovation.

Open collaboration is already facing the same formidable barriers that held back the quality movement, especially in traditional companies. The persistence of hierarchical thinking, particularly a reliance on experts rather than the expertise of knowledgeable employees at all levels, can undermine any open collaboration effort. Also, although much of the publicity around the movement has focused on finding outside ideas through joint ventures and partnerships, it can be far more difficult, and more important, to cultivate and tap in-house creativity. Executives in many Western companies have never been comfortable soliciting the opinions of employees — especially rank-and-file workers — in any systematic way. And few companies have been willing to make the long-term commitment that quality management entails, including the training of both employees and suppliers in such areas as statistical methods and problem solving. The same is likely to be true for open collaboration.

Perhaps if we can learn from history, we won’t be condemned to repeat it. Here are seven key strategies that the pioneers of open collaboration have used to succeed in facing these obstacles, along with relevant perspectives from the quality movement.

1. Craft a leadership message. At a time when responsibility for quality improvement was ghettoized in manufacturing, W. Edwards Deming insisted that quality was the job of the CEO, and he typically refused to work for a company unless the CEO met with him regularly and developed a company-wide quality strategy. In addition to Ford’s Petersen (CEO from 1985 to 1990), Deming maintained a close relationship with Toyota senior management from the 1950s until his death in 1993.

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