Point: A collectively-motivated group of peers can develop innovations in a distributed online environment.

Story: When Hernando Barragán created a nontechie-friendly microcontroller board for artists, designers, and architects in 2004, his thesis adviser, Massimo Banzi, liked the idea.  But Banzi wanted something simpler and cheaper for use in design class projects at the Interaction Design Institute Ivrea in Italy.  In particular, Banzi wanted a low cost, an integrated software environment, programmability via an everyday USB port, and a project supported by a community.

So Massimo Banzi, David Cuartielles, Dave Mellis, Gianluca Martino and Nicholas Zambetti created Arduino, an easy-make, easy-to-use circuit board about the size of a business card.  Anyone can use the device to create all manner of computer-controlled devices such as prototypes of products, pieces of art, or just fun hobbyist contraptions.  The team’s device was about 1/3 the price of the predecessor device and 1/3 the price of commercial products.  Best if all, the group released Arduino under Creative Commons Attribution-ShareAlike licensing, which means anyone can copy the Arduino and make the circuit board without payment or permission from the Arduino group.

The Arduino project uses open source methods to develop its hardware and software. Open source is a type of connected innovation based on the collective contribution of peer innovators to a project or product.  Open source allows free access to the internal design specification of the product such that anyone in the world can modify the design to correct a problem, improve performance, or add a new feature.  With this openness comes a cultural norm that if someone does improve the design, then they should share that improvement with the community for inclusion in the public version of the design.  Through this open process, Arduino now has 12 different models and 5 supplementary function boards.

Arduino, like other open source projects, relies heavily on connective technologies to coordinate its loose global team of project participants.  Email lists, online wikis, discussion forums, and content management systems help the project participants maintain the core product as well as developing new ideas that later become incorporated in the main products.  Arduino uses Google Code to host the project to provide a central connection point for anyone who wants the software.  People can report defects or suggest enhancements. Google’s tools help the project participants track the status, priority, and milestones of the idea.  Other tools aid collaborative problem solving.  The main Arduino discussion forum has nearly 70 thousand members and over 700 thousand posts on some 90 thousand topics.

Action:

• Determine if there’s some technology that you (and others) need more access or control over than is permitted by commercial suppliers with proprietary products
• Start an open source project to create and share the technology
• Use connection technologies to link to distant contributors and coordinate activities
• Pool innovation from across the technical and user community

Point: Unlike the diminishing returns of the Experience Curve, Collaboration Curves offer continuous, exponential improvement and innovation through knowledge sharing and interactions among a group of participants.

Story: Most of us have heard about the Experience Curve, which traces how a company’s rising experience in making a product leads to declining cost of that making a product.  On average, the cost declines 20-30 percent each time that a company’s experience in making that product doubles. The Experience Curve, which has been systematically studied since the 1960s, holds true across a wide range of industries.  The sad flip-side of the Experience Curve, however, is that the rate of improvement declines over time because it takes longer and longer for experience to double.  It has diminishing returns.  Can anything be done to sustain the rate of improvement? Is there another way to keep on advancing? There is: Collaboration Curves.

Collaboration — in the form of knowledge sharing and interactions among a group of participants — improves the performance of all.  Before the internet, collaboration took place primarily face to face, along with some letter-writing between participants.  For example, in the 1870s, the art movement that came to be called Impressionism arose.  A group of young painters — Claude Monet, Pierre Renoir, Camille Pissaro and others — started meeting in cafes, talking and visiting each other’s art studios. They became a collaborative group; that is, they’d share their work in progress, talk about painting techniques, experiment with colors, and help each other learn and improve.

For example, the group broke with the tradition of black shadows.  They experimented with shadows painted in purple, deep blue or a mix of other colors.  Sometimes the shadows weren’t even that dark. This was a radical idea — no one had painted shadows in a different color before, but once one of the group came upon it, others adopted it as well.  They also expanded the notions of what could be painted. The subject matter needn’t be a religious icon, mythological scene, portrait of a nobleman or an allegorical landscape — it could be something as simple as a haystack or water lilies, painted over and over at different times or day or different seasons, showing how the light and color changes with the times and seasons.  Combining their experiences accelerated the Impressionists’ innovations in color, composition, brushwork, and subject matter.

Today, these collaborative groups can extend online, enabling people to talk and share with others anywhere, any time, thereby greatly — indeed exponentially — improving the group’s capacity to produce.  In the old model, the experience of any one person (or company) grew linearly with time, which created an Experience Curve with diminishing returns.  But a collaborating group can multiply experiences by combining lessons from the successes and failures of all to create a Collaboration Curve that sustains performance improvement.  The internet, social media, and collaboration platforms greatly enhance the Collaboration Curve by increasing the number of people who can collaborate, increasing the geographic span of people who can collaborate, and increasing the access to the accumulated experience of the collaborative group.

Collaboration Curves were first identified by John Hagel, who heads consulting firm Deloitte’s Center for the Edge in Silicon Valley.  “We’re seeing the emergence of a new kind of learning curve as we scale connectivity and learning, rather than scaling efficiency,” says Hagel in his Harvard Business Review blog (coauthored with John Seely Brown and Lang Davison).  “Collaboration curves hold the potential to mobilize larger and more diverse groups of participants to innovate and create new value.”

So far, examples of internet-enabled Collaboration Curves are more anecdotal rather than rigorous because of their nascency.  But Hagel has found that collaborative environments like the popular online game World of Warcraft offer participants a way to continue improving beyond what individuals could accomplish alone.  In the business world, similar collaboration curves take place on SAP’s software developer sites, and large open source projects such as the Eclipse Foundation.  What’s exciting is that “Collaboration curves may reverse the diminishing returns dynamics of the experience curve and deliver increasing returns to performance instead,” Hagel says.  The opportunity for interactions among the many participants lets performance continue improving through the continuing contributions of ideas by other participants.

Action: Hagel found that there are three prerequisites for these online collaboration groups to work and generate the Collaboration Curve effect.

• Attract Participants: First, you need people. That’s pretty obvious, that you need people to make this work. But what’s exciting is that the people don’t all have to be talking or active all the time – it’s perfectly ok to begin by just being an observer who lurks and learns from others. Indeed, in SAP’s software developer network (SAP SDN), most participants do just that — learning by reading the discussion forums before they contribute anything themselves.
• Interact: to get better results, you start interacting with others, in discussions — in person or online — sharing experiences, making suggestions, giving feedback. The more interactions, the faster the performance improvement.
• A supportive, multi-layered environment: Supportive means friendly and online.  It also means that the technology supports the interaction through discussion boards, archives, live chats, video.  Interaction must be easy not only among peers but among all cross-cutting groups. Digital infrastructure lowers interaction costs, enabling large, diverse groups of people to share information and learn from each other, driving performance improvements for all.

Point: Innovation tournaments can be run either competitively or collaboratively, with each approach yielding better results for different purposes.

Story: In his second book, Best Practices are Stupid: 40 Ways to Out-Innovate the Competition, (named the 2011 best book on innovation by CEORead) innovation speaker Stephen Shapiro offers 40 tips on how to innovate efficiently.  His tip #11, for example, tackles the topic of innovation competitions and tournaments. The tip focuses on what role, if any, collaboration should play in these bounty-driven events.

Innovation tournaments can be run either competitively or collaboratively, Shapiro says.  In a competitive tournament, such as ones run by Cisco and LG Electronics, no participant can see rivals’ submissions.  In a collaborative tournament, such as GE’s Eco-Imagination challenges, anyone can see a submission and comment on or vote on the entry. The Netflix Prize and X Prize use a hybrid version, running the tournaments as competitions for prizes but allowing for collaboration within each submission.

Which approach generates the best solutions? Collaborative tournaments work best in areas where problems require “cumulative knowledge” or “building on best practices,” Shapiro says, citing research by Kevin Boudreau and Karim Kakhani in the Sloan Management Review. The collaborative approach lets players build on to each other ideas and create more refined ideas based on feedback from other participants.

Competition, in contrast, is most effective when the problem requires broad experimentation with an emphasis on truly new ideas rather than refined ideas  The competitive aspect means that many different ideas are pursued simultaneously. Whereas collaboration enjoys the benefits of players influencing each other, competition enjoys the benefits of players being independent of each other, thereby avoiding problems like groupthink, which might artificially narrow the ideas along the basis of the first idea suggested.  In some cases, a hybrid approach will use competition in phase one of the tournament to gather a lot of ideas and then use collaboration during a second phase to flesh out and refine the most promising ideas.

Action

• Hold an innovation tournament to access the innovative energies of suppliers, customers, and smart people from around the world.
• Use a collaborative tournament if you need ideas that are cumulatively built and more carefully refined by the players.
• Use a competitive tournament if you want a wider range of “left-field” ideas and plan to do your own refinement or hold a two-stage contest in which the second stage refines the ideas of the first.