TedGlobal Talk: Banking on Openness

As you might have noticed, I took the summer off.

Well, not quite off.  More like away.  I went to Scotland, and gave a talk at TEDGlobal on the topic of openness. I also finished a new book (my 2nd title) on the #SocialEra that Harvard Press releases next week. Yet, I also managed to sneak in a few weeks of fun with the family. Hope you managed to enjoy the season. Today, as I write this, there is thunder and rain here in Northern California. Clearly a sign, it’s time to get back to work.

Before I catch you up on new stuff, let me share with you the talk from the TED experience. (I’ll have to tell you what it’s like to do a TEDtalk at some point… but I’ll save that for another post… )

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There are two ways of holding an idea. One is with a closed fist, and one is with an open palm.

When you hold an idea like this — in a closed fist —  you control it. It is yours. And no one else can access it. Ideas held tightly– as if in a fist – can’t be seen. Sure, if you try really hard, you might be able to see the little bits between the cracks. But they’re hard to see, or share, or steal.

But an idea held in an open hand can evolve. It’s given space to grow bigger. Ideas are actually organic, living things. If they have room to expand, they can quite possibly spread, and be picked up by others and grow into something much, much bigger than what you imagined.

Openness – this – changes power. Openness is a stance – to share with, to collaborate, to distribute power to many.

Some would argue – myself amongst them – that openness is the ethos of the era we live in today – the Social Era. Instead of a competing through overpowering strength and scale by yourself, you create value in communities and by sharing power with one another.

It can be seen today on a societal, organizational, and personal level.

• On the world stage, we saw the Arab Spring. Many voices advocated for freedom, effecting the change of oppressive regimes, and thus advanced the condition of their country.
• We see it in organizations when we see global brands like TED decide to open up with TEDx. What was once limited to a few thousand people and two events has grown to be over 3000 events of people caring about ideas that matter – to them, in places as far away as Kibera (a slum in Nairobi Kenya), and as close as London.
• And at the individual level, we see it when people work together to collectively solve problems that are relevant to all of them individually.  For example, online forums allow anyone, everyone to contribute to solving problems. One such game, Fold It, which helps scientists advance their field by knowing how a protein should fold … a woman, an admin who has no bio science background ends up being the best protein folder in the world. This is something that wouldn’t have happened if she had to first be picked, or vetted or in any other way been  “allowed” to participate.

But many – perhaps even you – suggest that open is just a phase and philosophy of the young, naïve, and unaware… It something that people will grow out of when they accumulate power or want to be rich. Sort of like Harry Potter was dismissed when he was young.

And perhaps this is human nature.

Anytime we give birth to anything – kids, companies, ideas – the natural instinct is to hold that thing close, to protect it from the big, scary world and the bad things in it. This is understandable, especially with kids. But beyond the emotional desire to protect, should we apply this notion to companies and ideas?

In the Industrial Era, both money and power came from being bigger than the other guy, defending one’s turf, and controlling one’s own destiny. The person who owned the machine was the person who created capital wealth. The person who set the rules had an inside track to stay in power. And, protecting IP in a closed system has allowed many a company to keep its edge. It used to be possible to erect barriers to entry from competitors and to establish entirely new markets that could be all yours.

And that’s the key; it used to work when the rules of the Industrial Era were in place.

Not so much for the Social Era. In the Social Era, seemingly disparate individuals gathered together can form a powerful tribe that can do things that once only centralized organizations could do. To be sure, openness is a letting go. But there is also evidence that this is more than a fad, that it provides a new way to make money and create power – albeit differently.

Let’s look at the global mobile market as a source for how innovation happens differently today.

Perhaps the best example of this shift is Apple unlocking the SDK for the iPhone. From their earliest days, Apple always kept a tight rein on the experience–no third-party developers, no licensing of its OS. But does anyone think the iPhone would have been as successful–with over a billion apps downloaded–if it hadn’t moved to an open model its IP with the world? Anyone who doesn’t like the walled garden approach of Apple feels drawn to the open platform that is Google. And one could argue that the Android / Google entirely open strategy has lent success to that platform, now contributing to 50% of all the units in the world in a short 4 years. One can easily say that the openness of Android forced Apple to innovate faster and thus the whole market improved.

Openness fueled growth.

Yet – — and this is key: it’s not that everything is open — but that what needs to be, is. Each had to get clear what parts of their platform they would hold tightly, and what they would open up. The same could apply to democratic governments; it’s not that all things are open, participation has some rules to enable order, not chaos. The implications on personal privacy hold a similar form.

This also distributes wealth. Revenues used to flow to a few control points in the mobile world, the operators. With open, revenues flow to a wider base of developers.

So we’ve proven the point that openness can lead to market power and profits. But you can’t measure the impact of openness in that dimension alone. The implications must be understood systemically. Just like riding a bicycle builds muscles to help you to do more than ride a bicycle, openness creates strength beyond the direct impact.

While the Apple app store only contributes 6% of the profits of the firm, it also empowers a developer ecosystem that helps drive adoption. And the more those developers are rewarded and enjoy sufficient benefits of this ecosystem; they are not advancing another approach. They form a first wall of defense for the one that is being “open”.  This of course also shifts the competitive power. If people are part of your ecosystem, they are not part of someone elses’.

Also, openness allows people to move from wanting someone else to come fix their problem, to being able to solve their own. For this, we’ll move to a non-mobile story. A website called Patients Like Me was co-founded about 10 years ago by 3 MIT engineers. Their brother and friend had been diagnosed with ALS (Lou Gehrig’s disease) at the age of 29. As they began searching the world over for ideas that would extend and improve Stephen’s life, they built a health data-sharing platform which allowed patients to manage their own conditions, change the way industry conducts research and improved care. Unlike most healthcare policies that worry about privacy, Patients Like Me focuses on openness. You see, they believe that sharing experiences and outcomes is good. Why? Because when patients share real-world data, collaboration on a global scale becomes possible. New treatments become possible. Most importantly, change becomes possible. And ultimately this leads to the greater purpose: speeding up the pace of research and fixing a broken healthcare system.

In this way, Patients Like me shows us another less about Openness. When you share, you can make something better for everyone. This is hallmark of openness: it strengthens not just the direct act, but the indirect acts – of community, of speed to create new solutions, and certainly new solutions to old problems. And, the real key is that an open approach can get to new and better ideas–and a lot more of them–faster, as a system opens up. Openness is about allowing for anyone, anywhere to contribute. Not the people you think can, or even the people that you think “should”, but from the abundance and diversity of many peoples experiences. As each person stands in a place only they see, they can bring their onlyness to solve whatever problem they see closest to them.  Those add up to the reasons why Openness is important.

Now I wasn’t always a believer in openness myself. I once ran right over other people, because I wanted to be “right” more than I wanted to build an idea that became real in the marketplace. And I personally liked being in charge and controlling and telling other people what to do. I came up through business with the old mentality. In my 20s, I ran a $200M unit at a Fortune 500 company. I remember one particular time when I was locked in a death match with a colleague over whose idea would win. I kept my idea in a closed fist, and fought tooth and nail to both prove it was best and I was the best. I won. The board adopted my plan. And  yet ultimately I lost. I was fired a month later because the team didn’t trust me. I also lost my best friend with whom I had once run a marathon. It was a spectacular failure that helped me move past the industrial era thinking I was trained in…. I started to understand, for any idea to win, I had to let them go, I had to let other people in… I’ve come to this understanding that the future is not created; the future is co-created…whenever we want something bigger and better and faster, we need to be able to let go of a tight grip and open up. Because openness is powerful, even catalytic.

Openness.

• On a personal level, it not only allows us to share, but to co-create with speed .
• On an organizational level, it allows for more than collaboration, it enables communities.
• At a societal level, it is more than distributing power, and allowing for the shift from what is to what will be. It also allow for shared responsibility. Making anyone able, and perhaps even everyone responsible for finding new solutions to old problems, and inventing the future.

Openness is a way to enable many people to connect and create in the Social Era. Sure, it feels like we are protecting things when we hold ideas tightly as if in a closed first [hand in a closed fist] – maybe we’re even hoping that if we do it tightly enough, we’ll create a diamond. But we must realize that this comes at a cost. If we embrace openness [ hand in an open gesture], we are banking on something else – the indomitable spirit of people’s ability to create. And in that move we unlock potential.