Disintegration and Open Innovation

In an obvious homage to Michael Lewis’ 1999 book, The New New Thing, Chris Anderson, Charles Mann, Kevin Kelly and Steven Levy collaborate to write Wired’s June 2009 feature story, “The New New Economy.”

I know, I know – we’ve heard this all before.  The corporate dinosaurs are going to sink into the tar pit of history, and nimble, warm-blooded little companies are going to crawl out of their hiding holes and into the sun of a new age.

What struck me about the story was not whether 2008′s economic meltdown was the proverbial asteroid triggering this long-awaited transition, but whether more corporate disintegration would lead to an age of more open innovation.

On the surface, things look rosy:  Imagine a world where many small, independent companies form organically around specific objectives to create ‘virtual flash firms’ that can just as quickly and easily reorganize in response to new opportunities.  Sounds terrific, though the dinosaur analogy doesn’t seem quite right.  There are, and have been, plenty of huge, lumbering mammals, many of which are also now extinct.  No, these writers seem to be talking about a world not of elephants but of insects…or rather, a world of insects collaborating to pose as elephants.

No doubt, as Chris Anderson points out by quoting micro-investor, Paul Graham, “The rule, ‘large and disciplined organizations win,’ needs to have a qualification appended: ‘at games that change slowly.’” This speaks to the truth of how poorly large hierarchies of humans respond to rapid change.

But looking closer, there are obvious problems with the notion that swarms of legally separate entities are better at quickly identifying new opportunities and cooperatively responding to them.  Chief among these problems is that legally separate entities, especially very, very small ones, are skittish and not typically prone to trusting each other. While it might be difficult for a team in a large company to be open about its know-how and intentions (the two things that absolutely need to be shared in order to initiate open, collaborative innovation), vulnerable startups find it almost impossible to be so open.  Startup entrepreneurs frequently refer to themselves as being in “stealth mode.”  The only thing that will freak out a typical startup entrepreneur more than the sound of a big company stomping through the forest is the sight of another startup suddenly close to its nest.

People in big companies tend to have a hard time sharing.  And people in small companies tend to have a hard time sharing.  You see, whether we organize in hierarchies or swarms, the problem with collaborative innovation is not that we are insects or elephants, but that we are human.

Advertisement