Shared Secrets – Entry #14: The Virtuous Rumor Mill
This is the fourteenth in the series on managing collaborative innovation. Click here for the Beginning of the Series
Another important aspect of the Silicon Valley rumor mill is that it lays down a set of unspoken rules that serve to maintain credibility in spite of changing intentions. Emerging intentions are subject to a high degree of change. All the business innovation examples in this article involved change from what the champions originally thought their intentions were to what they became in the end. An intention circulating through the rumor mill tags it to the original champions – for later use when claiming credit – while implicitly embracing the likelihood that either nothing will come of it or that the champions will go in a completely different direction without notice. In a market play, the public does not take kindly to companies that introduce offerings only to withdraw them shortly afterwards or that frequently go off in tangents.
What this shows is that a community of trust, using powerful but largely unwritten cues and standards of conduct, can at least partially overcome the three ‘unsolvable’ problems of collaborative business innovation. In the Adobe case, the community brought Jobs, Warnock and Geshke together, because there was a shared sense that they could help each other. This overcame the typical problem many firms have of needing signed non-disclosure agreements up-front but not knowing enough about each other in advance to warrant the effort. Most of the secrets were already out in the open, and yet only as unofficial ‘whispers.’ The community also helped ensure that those with the ideas – Warnock and Geschke in this case – got credit for them by keeping track of sources through the rumor mill. This is slightly more formalized in open source software communities, but the principal is the same. And whether they consciously realized it or not, Warnock and Geschke were protected by the community of trust, which helped reduce the chance that Jobs’ benevolent intentions would reverse after being exposed to the details of Adobe’s internal information.
This works in the Bay Area and other communities, which have traditionally been defined geographically. It also highlights one perspective on why we sometimes run into trouble when sharing between communities of trust, such as a Bay Area firm that wishes to explore partnerships in China. The curbing power of social consequences is similar to gravity. It drops off dramatically with distance. If the arbiters of social (and economic) consequence are not shared, the parties must fall back on the inefficiencies of legal methods. The good news long term is that, of course, the world is getting smaller, and global communities of trust are springing up. Use of online communities backed by global players can socialize ideas while ensuring that everyone knows where those ideas came from.
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[...] This is the thirteenth in the series on managing collaborative innovation. Click here for the Beginning of the SeriesLeaking intentions privately to individual advisors or small cadres like one’s consultants or Board can sometimes be more dangerous than sharing them openly. Executive Board members are notoriously loose-lipped within their personal networks. It is partly what one looks for in a Board member. On one hand, we want them to keep our secrets. On the other, we want them to tell people they trust about what we want to do. But the problem with this is three-fold. First, this limits the set of intentions only to those where senior executives are champions or advocates, and Harvard’s Clayton Christensen has well argued that this set of intentions is inevitably watered down from sources toward the middle and bottom of the org chart. Second, if the Board member errs and confides privately in someone who then uses the information to move against you, you may never know until it is too late. Third, if only a small cadre know that the intention is yours, then if someone else appropriates the information and makes a move in the market first, the public will generally believe that it was their idea, not yours.A lot of people knowing your intentions can be a better move. I made the point earlier that if Steve Jobs had intended, he could have taken the general idea of PostScript from Adobe and made his own independent solution without them. But he didn’t. Did Adobe’s Warnock and Geschke just get lucky? Not exactly. By the time Steve Jobs met with Adobe there was a large community in the Bay Area who mutually knew and supported both Steve and the Adobe team. As the record of email between Bay Area computer enthusiasts at the time has shown, many people in the community knew generally what Adobe’s intentions were. Making off with their ideas would have had negative consequences in the community of support that Jobs now relied upon. Even if he had decided after seeing Adobe’s technology that the right strategy for Apple was to appropriate it or re-invent it on his own, he would have had to find a way to make good for Warnock and Geschke.The community of trust, not Adobe’s intellectual property, helped ensure fair play. In the end, Jobs not only collaborated with Adobe, he bought 5% of the company as part of a partnership deal that gave the budding firm a strategic leg-up and improved its appearance for future financing rounds. Perhaps Silicon Valley should be seen not simply as a venture capital led knowledge-brokering network as some have suggested, but rather as a community that uses social consequences to impose constraints on what people do with information that is openly shared. In this view, venture capitalists are not just knowledge-brokers. They are more importantly a key arbiter of fair use. If your company is funded (or seeks funding) by any member of the tight-knit VC community and you use others’ knowledge in a way that the greater community feels is inappropriate, you are likely angering people whose VCs know your VCs. For this to work, though, the greater community must know what your intentions are – or at least the rumor mill must be circulating them. No wonder so many hybrid business models from eBay to Google come out of Silicon Valley and choose to suffer the incredible cost of maintaining headquarters there.Click here for the Previous Entry.[Click here for Entry #14.] [...]
I am seaching for some idea to write in my blog… somehow come to your blog. best of luck. Eugene