TheThreePercent

 This is the thirteenth in the series on managing collaborative innovation. Click here for the Beginning of the Series

Leaking 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.

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[Click here for Entry #14.]