Value Creation through Networks


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My presentation at Google's Inspiration Day in March 2013 in Stockholm

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  • Of original Forbes 100 in 191761 companies ceased to exist by 198718 of remaining 39 underperformed market by 20%Only 2 beat market index (GE & Eastman Kodak)Only 1 (1%) today!Of companies in original S&P 500 in 1957426 companies ceased to exist by 1997Only 12 (2.4%) outperformed S&P 500 index in 1997 Of top 100 companies in Korea in 1955Only 7 still on list in 20041997 crisis destroyed half of 30 largest conglomerates
  • Kenneth Lay delegated responsibility to those in his old boys network – failed to listen to someone outside the club – Sherron Watkins.
  • (1) Enabling people to do things we already know how to do and (2)creating collaborative environments that allow people to develop new ideasand concepts to address unanticipated opportunities or challenges.Productive learning focuses mostly on the individual and on helpingthat individual to adopt a pattern of behavior that improves productivity.Generative learning, by contrast, is a collaborative endeavor. Shared meaningand insights are developed at the group level, and these insights driveenterprise transformation to ensure growth and sustainability. Today, thelearning function is focused primarily on productive learning. As a result,it appears that trainers are more likely to want to maintain the status quo,rather than challenge it.Learning is a far more complicated phenomenon than can ever be limitedto the classroom context. If we convey knowledge about tasks we alreadyknow how to do, we call it productive learning . If we share knowledge abouttasks that are new and different, we call it generative learning . Productivelearning serves largely to maintain the status quo within an enterprise byconveying what is already known, while generative learning involves notonly absorbing existing information but also creating new solutions to unanticipatedproblems. Information age learning requires that individuals andorganizations change the way they think about and act on what is knownand what needs to be known in order to innovate, change, and win.
  • In September 2011, GE and partners launched a $100 million open innovation challenge which sought to identify and accelerate ideas that advance breast cancer early detection and diagnostics. Explore the 500 submissions through this interactive data visualization and see the five seed winners that were awarded $100,000 each from GE to develop their ideas.
  • Kay, J. (1993) Foundations of Corporate Success, Oxford, Oxford University Press.
  • 120,000 tshirts sold each monthThreadless:What came first – the community or the company?RT: presents Threadless,,530,000 followers on TwitterThe whole business model for Threadless is based on an implicit understanding of how the social web works and gives a great demonstration of how communities can be built and harnessed across an organisation. Identifying online enthusiasts and passion groups and then using social platforms to bring them into the core of a business would appear to be a more powerful way of utilising social opportunities than just running ads on Facebook - but it requires a good deal more commitment. The media aspect of social offers some exciting opportunities for brands, but the potential of the social web can be significantly greater if the power of community is fully realised. In summary, there has to be purpose behind why you use social media. Largest challenge is about changing the mindset though – where create value? Use of social media considerably larger in smaller companies: Inc 100 vs Fortune 100. In these smaller companies, social media being used as a leadership tool as well.
  • Liam Dippenaar couldn't catch a ball with both hands. Holding two objects at once was a feat and, though right-handed, the 5-year-old used his left. Born with Ambiotic Band Syndrome, Liam lacks the instrument critical for most tasks: fingers. Thanks to two strangers halfway around the world and the magic of 3D printing, Liam is now able to color and write to his heart's content. Ivan Owen and Richard Van As created Robohand, an open-sourced device built with customized prosthetic fingers. Owen, of Washington state, and Van As, of South Africa, collaborated via the Internet to create the prosthetic. The duo decided to make the design in the public domain to help others who can benefit from the technology.Their journey started in 2011, when Van As came across a video of Owen's costume piece, a robotic hand built for amusement. Van As lost most of the fingers on his right hand in a woodworking accident and cast a net out for those willing to help build a prosthetic. Owen was the only one who agreed. "I had started with the first prototype prior to meeting Ivan. But yes, there were so many obstacles and one of the main ones was contacting people and them just saying, 'No, it can’t be done,'" Van As tells Mashable. Long nights on Skype and a 10-hour time difference took some getting used to, but the two kept the project going through email and file sharing. Owen and Van As initially used a milling machine and spent hours engineering parts until MakerBot donated two Replicator2 Desktop 3D Printers. The donation exponentially cut production time for prototypes. What used to take up to three days to complete can now be done in only 20 minutes. Using OpenSCAD, a free software application, Owen and Van As can exchange files and make changes in minutes. Jenifer Howard, MakerBot's PR director, says the cross-continent collaboration fits perfectly with the company's mission. "We love to see our printers being used for amazing life-changing and life-validating projects like this," Howard says. The two men document their progress on a blog called "Coming up Short Handed." Liam's mother, Yolandi, saw the site and reached out to Van As for help. Liam, who has no fingers on his right hand, received his own Robohand at no cost after several trials and prototypes. "At first it was quite amazing to see the smile on his face when they made the first prototype and he put it on his hand," Yolandi says. "His expression was, 'Oh wow, it’s copying me.'
  • I can’t find the source for this, it would be great if someone could point this out to me.
  • Value Creation through Networks

    1. 1. March 2013
    2. 2. "...when the rate of change outside an organization is greater than the rate of change inside, the end is near...." Jack Welch…
    3. 3. Increasing pace of change  Of original Forbes 100 in 1917 - 61 companies ceased to exist by 1987 - 18 of remaining 39 underperformed market by 20% - Only 2 beat market index (GE & Eastman Kodak) - Only 1 (1%) today!  Average S&P 500 company lifespan − 1920s – 67 years − 2010s – 15 years  Dr. Richard Foster, Yale, Sept 2012 − Today's rate of change is at faster pace than ever − By 2020 prediction is > 75% of S&P 500 will be companies we do not know about today
    4. 4. A Big Bang in the Information Universe 2.7Bln daily comments and ”likes” on Facebook 500Mln daily posts on Twitter and Weibo combined 200k videos uploaded to YouTube daily, Tomas Larsson, 2012
    5. 5. Big Data is now big money the-sexiest-job-of-the-21st-century/ar/1
    6. 6. ”No one knows everything, everyone knows something, all knowledge resides in humanity.”networks Adapted from Lévy 1997 Six degrees of separation - Milgram, 1967
    7. 7. Yet we are stuck in our old ways at work…
    8. 8. If only we knew what we know…..
    9. 9. Challenges •Overly connected people •Invisible network silos •Poor awareness of expertise •Network outliersU.S. Brazil Angola Saudi Arabia Canada U.K. Nigeria U.S.Gulf of Mexico Brazil Angola UK Canada Saudi Arabia Nigeria U.S. Brazil Angola Saudi Arabia Canada U.K. Nigeria U.S.Gulf of Mexico Brazil Angola UK Canada Saudi Arabia Nigeria U.S. Brazil Angola Saudi Arabia Canada U.K. Nigeria U.S. Brazil Angola Saudi Arabia Canada U.K. Nigeria U.S.Gulf of Mexico Brazil Angola UK Canada Saudi Arabia Nigeria Networked collaboration brings results Gulf of Mexico Brazil Angola UK Canada Saudi Arabia Nigeria Gulf of Mexico Brazil Angola UK Canada Saudi Arabia Nigeria Business results •Poor quality cost down 66% •Operational productivity up 10% •New product revenue up 22% •Customer satisfaction up 24% Cross 2010 Before After
    10. 10. Closed networks lead to failure Ken Lay CEO of Enron
    11. 11. Exploitation Improving existing value creation activities Exploration Developing new value creation activities Adapted from March 1991
    12. 12. DEMO! From problems solvers to solution finders Open innovation in health care $100mln open innovation challenge 500 submissions
    13. 13. Where have the traditional sources of sustainable competitive advantage been? #1 Innovation Networks of relationships Brand & Reputation FIRM Kaye 1993
    14. 14. #1 Innovation Networks of relationships Brand & Reputation FIRM T Where are tomorrow’s sources of sustainable competitive advantage? Teigland 2010
    15. 15. Est. $30 mln sales 30% profit margin in commodity business 20 employees but a 24x7 global “workforce” of 2.4 million No internal R&D or sales & marketing Threadless A platform for global community collaboration
    16. 16. Shifting market logic Adapted from Ericsson & Augur 2011 Economies of scope and reach
    17. 17. What’s around the corner? 24x7 Global Internet Collaboration + Open Source + 3D Printing $60,000 $150 Available for free download on
    18. 18. The Firm The Collectivevs E.g., Microsoft ~ Built by employees within organizational boundaries E.g., Linux ~ Built by users and distributed freely regardless of affiliation Models of Value Creation Teigland, Di Gangi, & Yetis 2012
    19. 19. Some things do not change Innovation Exchange Exchange Trust Trust Relationships Relationships Interaction
    20. 20. What should you think about? How to let go of control? How to enhance networked collaboration inside your organization? How to engage the “crowd” outside your organization?
    21. 21. Karinda Rhode aka Robin Teigland RobinTeigland Photo: Lindholm, Metro Photo: Nordenskiöld Photo: Lindqvist If you love knowledge, set it free…