James Osborn

Many smart companies are now coming round to the point of view that the internet and open source isn’t a threat to their business model but, if utilised correctly a huge asset. The internet opens up vast new markets and opportunities to interact with some of the smartest knowledge workers in the world on a level playing field. The traditional hierarchical structure of organisations is being broken down and “profound changes in the nature of technology, demographics and the global economy are giving rise to powerful new models of production based on community, collaboration and self-organisation rather than hierarchy and control” .

The best, (and most famous thanks to the excellent ‘Wikinomics’ book) example of ‘crowd sourcing’ and of utilising the vast resources of the web is the case of GoldCorp Inc. In 1999 the stock price hovered at around $2.8 per share. As of 14th March 2010 the stock closed at $39.30. This is a remarkable turnaround for a company which was overrun with debt and who’s only asset was a 50 year old apparently exhausted mine. In March 2000 the company CEO ‘McEwen’ announced the so called ‘GoldCorp Challenge’. The company put up $575,000 in prize money and, in a highly controversial move; published every page on information on the exhausted mine that the company had collected over its 50 year history to the internet. News spread fast and over 1,200 people from 50 countries set about virtually prospecting for new sources of gold.The results were astounding. 8 million new ounces of gold were found and the company valuation shot from $100m to $9 billion.

The incentive for volunteers of the above programme is clear, however there are hundreds of examples where people have contributed with little or no obvious desire for any reward. Wikipedia serves as the best example of a self-regulating system where millions of people contribute simply because they believe in the project or because they want to demonstrate their knowledge on a particular subject. According to the ‘Sloan management review’ “In ‘reputation cultures’ such as academia and the open-source world, reputation serves as a coin of the realm in its own right”. Although doubts are often expressed about the accuracy of the information in the online encyclopaedia a study in 2005 produced by the British journal ‘Nature’ found that the online resource “is about as accurate on science as the Encyclopaedia Britannica”. Indeed, when experts were asked to review the information provided by both sources “reviewers… found many factual errors, omissions or misleading statements: 162 and 123 in Wikipedia and Britannica, respectively” .

It is time that traditional companies got a hold of the open source movement and utilised the general public. ‘Social Media’ is currently the hottest space for businesses who believe that twitter and the like helps them sell, but rather than looking at the web as a great platform to market wares why not align social media strategies with a grander aim to harness the power of the masses and increase brand engagement by getting individuals involved. In short, don’t work for the web make the web work for you.

[1] Tapscott, Don and Anthony D Williams. Wikinomics – How mass collaboration changes everything. London: Atlantic Books, 2008.

[2] Lynne, Markus M, Brook Manville and Carole E Agres. “What makes a virtual organisation work.” Sloan Management Review (2000): 18.

[3] BBC. Wikipedia survives research test. 15 Dec 2005. 14 Mar 2010 .

Categorized as Business, Commentary