Our video called the Red Hat Way starts:
“Your mother was right. It’s better to share.”
There’s more proof that your mom was right in the business world every day. Today in Orlando, experts from around the world are gathering for the inaugural Open Innovation Summit, highlighting companies like Proctor & Gamble, Mozilla, Xerox, and Johnson & Johnson who have seen success with collaborative innovation. My company, Red Hat, has also done pretty well with this approach.
Now, in a new working paper released yesterday entitled Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation, Eric von Hippel and Carliss Baldwin examine the body of research to draw some conclusions about why more people are moving away from simple producer/consumer models to open collaborative innovation models.
You may have heard of Eric von Hippel, one of the world’s leading experts on open innovation. I like that he’s written about open source many times before, including in his 2005 book Democratizing Innovation and in his 2002 HBR paper Customers as Innovators.
In this paper, von Hippel and Baldwin argue that the number of places where traditional 20th century “producer” innovation (companies making products for users without collaborating with them) makes sense is rapidly shrinking. Why? From the paper:
Over the past month or so, I’ve been having a conversation with Iain Gray, Red Hat Vice President of Customer Engagement, about the ways companies engage with communities. I’ve also written a lot lately about common mistakes folks make in developing corporate community strategies (see my two posts about Tom Sawyer community-building here and here and Chris Brogan’s writeup here).
One idea we bounced around for a while was a mashup of community thinking and Maslow’s hierarchy of needs. For those of you who slept in with a bad hangover the day you were supposed to learn about Maslow in your intro psych class (damn you, Jagermeister!), here is the Wikipedia summary:
“[Maslow’s hierarchy of needs] is often depicted as a pyramid consisting of five levels: the lowest level is associated with physiological needs, while the uppermost level is associated with self-actualization needs, particularly those related to identity and purpose. The higher needs in this hierarchy only come into focus when the lower needs in the pyramid are met. Once an individual has moved upwards to the next level, needs in the lower level will no longer be prioritized. If a lower set of needs is no longer being met, the individual will temporarily re-prioritize those needs by focusing attention on the unfulfilled needs, but will not permanently regress to the lower level.”
Now granted, the needs of a company are very different than the needs of a human being. At its very basic level, a company has a “physiological” need to make money. If that need is not being met, little else will matter. But in an ironic twist, this basic need to make money can actually hinder the company’s ability to make money if it is not wrapped in a more self-actualized strategy.
To explain what I mean, think about the last annoying salesperson who called or emailed you. Why were you annoyed? Probably because it was very clear to you that the salesperson was badly hiding his basic motivation to make money. He wasn’t talking to you because he valued you– he was talking to your wallet.
Now think about the best recent sales experience you’ve had. Mostly likely, this salesperson was being motivated by a higher purpose, perhaps something as simple as a desire to make you happy. Sometimes the most effective salespeople aren’t even in sales at all– like a friend who tells you about a new album you should buy, for example. Or sites like Trip Advisor, where you can learn about where to go on vacation from other folks like you.
When it comes to community strategy, most companies have trouble finding motivation beyond the simple need to make money– and the communities they interact with can tell.
Yet if you look at the greatest companies out there, you’ll find that they usually have a strong sense of identity and purpose– just like Maslow’s self-actualized people. Read anything by Jim Collins and you’ll see what I mean.
For a recent presentation, Iain developed a chart that looks a lot like the one below. And to embarrass Iain, let’s call it the Gray hierarchy of community needs.