Innovation in the Age of Mass Collaboration

BusinessWeek: Innovation in the Age of Mass Collaboration

Chief Executive Officer Rob McEwen needed a miracle. Frustrated that his in-house geologists couldn't reliably estimate the value and location of the gold on his property, McEwen did something unheard of in his industry: He published his geological data on the Web for all to see and challenged the world to do the prospecting. The "Goldcorp Challenge" made a total of $575,000 in prize money available to participants who submitted the best methods and estimates.

Every scrap of information (some 400 megabytes worth) about the 55,000 acre property was revealed on Goldcorp's Web site. News of the contest spread quickly around the Internet and more than 1,000 virtual prospectors from 50 countries got busy crunching the data.

Goldcorp was hardly the first company to go open-source. Ever since a loose network of dedicated software programmers built Linux—one of the most widely used operating systems in the world—a growing number of companies have adopted their own open-source strategies. We've all heard about how Amazon opened up its e-commerce infrastructure to build an active developer community of some 150,000 third-party programmers. Companies such as Google (GOOG), eBay (EBAY), and Red Hat (RHAT) have also built businesses on a foundation of mass collaboration.

But Goldcorp isn't a dot-com kind of company. Mining is one of the world's oldest industries, and it's governed by some pretty conventional thinking. Take Industry Rule No. 1: Don't share your proprietary data. The fact that McEwen went open-source was a stunning gamble. And even McEwen was surprised by how handsomely the gamble paid off.

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The lesson for business leaders is that the old monolithic multinational that creates value in a closed hierarchical fashion is dead. Winning companies today have open and porous boundaries and compete by reaching outside their walls to harness external knowledge, resources, and capabilities. Rather than do everything internally, these companies set a context for innovation and then invite their customers, partners, and other third parties to co-create their products and services.

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A new breed of 21st-century enterprise is emerging—one that opens its doors to the world; co-innovates with everyone, especially customers; shares resources that were previously closely guarded; harnesses the power of mass collaboration; and behaves not as a multi-national, but as something new: a truly global business. These new modus operandi revolve around four powerful new ideas: openness, "peering," sharing, and acting globally.

In this series, we build on the lessons from our book, Wikinomics: How Mass Collaboration Changes Everything, to show how leaders are harnessing these new principles to drive important changes in their industries and even rewrite the rules of competition.