John Seely Brown argues companies should flip how innovation works: instead of isolated R&D feeding the core, let the innovative edge pull the core toward it. He uses SAP's NetWeaver platform as an example, where opening it to global developers grew the community from 109,000 to millions, forcing the company to modernize.
Chapters
How might we actually change the way innovation works in the corporation, in the corporate world? I come from, as you know, Xerox. Xerox PARC was designed to be the edge of Xerox and we did really, really, really cool things. How many of them actually got into the core of Xerox? Our story isn't quite so good there. Don't say anything. A lot more got to Silicon Valley and did a good shaping job at Silicon Valley. But the fundamental idea of us and almost every other major corporation was to create these skunk works on the edge, do radical things, and then somehow have the core pull the edge into the core, to slowly transform the core and to leverage the capabilities of the core. Actually, I argue for that idea. In the 20th century, it may have actually been a pretty good idea. But in a world that is changing this rapidly, I'm not sure that actually works. We want to propose that there's another approach to this problem, and that is how do you actually build an edge and have that edge be able to attract the core to the edge rather than have the core attract the edge to it? Could we completely reverse this game? I want to show you kind of one interesting example. We go through how this all happened. In the book. Example is a moderately conservative software firm called SAP. I think most of you may know about it. It is, I think, the biggest software firm in the world. It is moderately conservative. That's being polite. And Sy Agassi, when he joined and when they acquired one of his companies and his company that did this, he said, maybe we could build on the edge something that actually builds a complete new way to think about web services that are open as a new kind of a platform that could actually transform SAP. So it's not going to be a case of pulling the edge into the core. The question is, could he pull the core to the edge? Now, if the game is to pull the core to the edge, don't expect the core to be all that excited about giving you all kinds of money to do that. He recognized that too, and he said, okay, what I'm going to do is I'm going to create a social development network and I'm going to go out and I'm going to find not only developers inside SAP, but start to find developers around the world, give them total access to netweaver as an open platform and say, guys, let's get together and reconstruct kind of what the next generation of SAP products should actually look like on a much more open web service oriented architecture. Service oriented architecture. He started this. The first year he tracked 109,000 people, last I checked, is 1.8 million in 2008. 1.4 million people around the world have come together to build and extend and create momentum behind this edge. This edge is now becoming a dominant edge and in fact, beginning to change SAP in interesting ways.
