All his life, he hated brushing his teeth. Getting toothpaste onto a toothbrush can be messy if your fine motor skills are still developing. And, of course, even though you know you’re supposed to replace a toothbrush every three months, who really keeps track of that? So, Houston Diaz decided to invent a solution. And several prototypes later, he designed a toothbrush that has the toothpaste dispenser integrated into the brush itself, allowing himself and others to have a more convenient solution. And when the toothpaste runs out? It’s a natural reminder that it’s time to buy a new brush.

Even though he’s only five years old, that product will one day be on the shelves of your local Bed Bath and Beyond, or Target. And, no, as precocious as this kid is, he is not an entrepreneur, and doesn’t need to raise VC money or write a business plan.

This five-year old is able to be the inventor without also creating a company because of a product innovation company called Quirky. What Quirky does is make invention accessible to anybody — and quite possibly everybody. In the Industrial Era, becoming an “inventor” meant you also had to create an organization that could produce, market, and sell your invention. Thus, it’s been a hard gig to crack. You not only had to be able to come up with great winning ideas, you also had to deal with the complexities of financing, engineering, distribution, recruiting staff, and legal liability — to name just a few. The intensity of the organizational demands narrowed the chances that new solutions would ever actually come to market. And, of course, this slowed innovation and restrained market outcomes.

Quirky has created an innovation engine more suited for the Social Era — in which work and jobs are no longer the same thing, and collaboration happens outside of organizations as much as within it — in three ways:

1. It disaggregates the process of innovation from the innovator’s work itself.
2. It aligns interests and economics so that all parties have a shared interest.
3. It engages community to improve ideas and ultimately co-create the value.

To date, Quirky has allowed 590 inventors to bring their products to market. Anyone can submit an idea, or you can help another idea be improved, or you can collaborate in further design refinement. Over 407,000 community members (growing at a rate of about 1,000 members a day) help create the solution in a variety of ways (from voting on best ideas to iterating or actually prototyping the concept). Organizationally, this means that with 140 people on payroll, less than 1% of the people involved are “inside” the organization in the traditional sense. This is scale in the social era: scale happens not by having more people report to you, but by having people engaged with you. Interests are 100% aligned. Both the inventor and the larger community get compensated for their work.

By working with an extended community, Quirky can bring at least three new consumer products to market each week. And by “market” we mean 188 retail partners. Ben Kaufman, the founder and CEO, says there is no limit to what they can create. “Even cars?” I asked him, curious about how far his vision holds. “Yeah, sure,” he replied. Ben himself is 26 and has been on the Tonight Show to tell the Quirky story. Thus far, Quirky has brought nearly 500 products to market, since 2009 and the level of sophistication and quality continues to grow.

Back to Houston Diaz’s toothbrush. He started this project with help from his dad. When he was done, he uploaded video and watched as votes started to roll in for his “no mess toothbrush. He agitated for more support himself, even calling his dentist and asked his vote. “No one was exempt from his pitch,” says Houston’s mom, Nancy Lublin. (As CEO of Dosomething.org, she’s clearly raising someone who believes in action.) Then Quirky put it “under consideration” — a live debate takes place for vetting ideas, which entrepreneurs are encouraged to attend. Houston and his dad wore matching jackets and ties, and Houston made sure his mohawk was extra spiky. He listened as people debated his idea, and answered questions as they came up. And very shortly (in the next 3-4 weeks), they will put the product into production.

Now you may not want to be an inventor. And maybe your kid doesn’t want to either. But the Quirky business model embodies a set of ideas that every business ought to be considering, in light of the Social Era. Quirky builds on a fundamental truth of the social era: Ideas can come from anywhere, from anyone without first being vetted to see if that person is “allowed” to have that idea. And as we find our way into the Social Era, we’re going to grapple with what it means to be a leader like Ben Kauffman — more like a community organizer than a traditional head honcho. Show me a leader, goes the saying, and I’ll show you a bunch of followers. The challenges of our era don’t require more followers; they require the kind of leadership that encourages the community to build what’s needed so that anyone and quite possibly everyone can exercise initiative.

Today, a few smart people see this as “the future.” Even smarter ones see it as “the present.” Which one are you?

And, more importantly, what are you doing about it?

***

This post originally appeared at HBR, here: http://blogs.hbr.org/cs/2013/05/why_you_should_let_a_5-year_ol.html. As is my traditional request, please post comments there so I can manage 1 conversation, which helps the personal sanity by a factor of 10.

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The measure will shape the e-commerce space, certainly affecting Ebay, Amazon, Etsy and others.  The bill still needs to pass the GOP-controlled House of Representatives and receive the signature of President Obama, a supporter, to become law. The legislation would require Web-based retailers with sales of at least $1M to collect sales taxes for the states where they ship goods and merchandise.

E-commerce accounted for $225B in revenues in 2012, according to the US Department of Commerce. To put this in practical terms using my state… California would experience between 15-20% of that volume, at 9.25% tax rate, so … well, it’s easy to do that math and know why this is a big deal. Amazon, which until recently was dead-set against a national online sales tax, now embraces it as it looks to expand its physical operations across the USA. eBay, Amazon’s rival, argues the tax would hinder its sellers who do more than $1 million in out-of-state sales annually. In a recent letter to eBay sellers, Chief Executive John Donahoe pushed the suggestion that the law should exempt any firms that have fewer than 50 employees or make less than $10 million annually on out-of-state sales. With no national way to establish the tax base, calculating taxes could become it’s own nightmare of a business problem (and I could imagine both Amazon and Intuit offerings to address the need).  As you might imagine, national and regional chains are tired of being showrooms for shoppers (hello Best Buy!) so they’ll be lobbying hard to pass this legislation and thus change the market dynamic. They are sick of having customers shop in their stores and then search on their smartphones for lower prices to buy it online. (That said, I think the regional chains are mostly deluding themselves to think this is the core issue of their problems.) According to a recent University of Tennessee study, states missed out on over $11 billion in uncollected taxes in 2012 from online purchases.

There are many times when being small, and Gazelle-like is an edge in the Social Era. But this legislative issue is one that benefits the Gorillas’ of the world. It means that small independent players *need* the efficiency and capabilities of a big platform like Amazon or Ebay to be able to do their business, ideally handling this tax payment issue on their behalf. That makes me think that this tax issue changes the relationship from an interdependence to a reliance. Power will jump to the platform players like Amazon.

And that sound you are hearing is the tide changing. Ecommerce used to be the cheapest way to buy, but no longer will be.  One to watch.

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Language encodes our thinking. To write a new future, we need to use a new language. Let’s stop focusing on the overly narrow term “social media”. Let’s simply be social.

Instead of capturing value, let’s find new ways of creating value, together.

Think of collaborators as those you work with. Let’s have co-creators design what to build. Let’s ask communities to create scale. And, when we embed this new social language — words such as collaboration and purpose and community — into our discussions, value creation will flow. Relationships are to the social era, what efficiency was to the industrial era. And we all remember what relationships are built on, don’t we? Trust. After decades of building business on capital, oil, land and silicon, trust will be our foundation for what we create next.

Get the full article by going here: http://www.wired.co.uk/magazine/archive/2013/03/ideas-bank/we-need-a-new-language-for-the-collaborative-age

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The HP board has this kind of legacy:

After ousting Mark Hurd as chief executive in 2010 amid messy accusations of sexual harassment, the board hired Léo Apotheker to replace him, even though Mr. Apotheker had been fired as chief of the European software giant SAP after just seven rocky months. Most of the board didn’t bother to meet Mr. Apotheker, let alone ask him any probing questions about his tenure at SAP, before rubber-stamping the choice of the board’s four-member search committee.

In 2011, H.P.’s directors unanimously approved the acquisition of the British software maker Autonomy for $11.1 billion, a deal that was considered wildly overpriced even at the time. Less than a year later, H.P. wrote off $8.8 billion of that and then claimed it had been defrauded. (Autonomy officials have denied the allegations, which are being investigated by authorities in both the United States and Britain.) Some consider Autonomy to be the worst corporate acquisition in business history. In the 2012 fiscal year, H.P. wrote off a total of $18 billion related to failed acquisitions and other missteps.

With Mr. Apotheker at the helm and the board backing his strategic initiatives, H.P. announced that it was considering abandoning its giant personal computer business, then changed its mind. After Mr. Apotheker had been on the job a disastrous 11 months, the board demanded his resignation, and then paid him more than $13 million in termination benefits.

Yet all 11 H.P. directors were re-elected on March 20. Some by the hair of their chiny-chin-chin but still reelected. The entire piece can be found here, or in long form: http://www.nytimes.com/2013/03/30/business/why-bad-directors-arent-thrown-out.html

Governance is not easy. No one is saying it is. But what we’re seeing is the combination of hubris, and a lack of accountability.

(By the way, for those of you that didn’t see it the first time, a post I did on how innovation isn’t tied to Size but operating rules, as demonstrated by HP and IBM. Original piece here: http://blogs.hbr.org/cs/2012/10/innovation_isnt_tied_to_size_b.html)

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I remember when as an analyst at Apple doing pricing and market research work, my job was to read the ($500K/year subscription) Gartner and IDC reports and get the nuggets out and then create a document of insights to circulate.. but only to the executive management team because that’s who would use the information.

Today, of course, all that is moot.

Anyone, quite possibly everyone, can get a pretty good idea of what is going on in a few minutes of web research. No exec team needs to hoard the information. No middle management team needs to parse out what it means. And what any individual can do — with seemingly disparate other people — is as powerful as anything we’ve ever seen. As powerful as governments, as powerful than big Goliath global organizations.

And that changes what we can create in business, the models to measure value creation, the leadership needed and even the very ethos that we effectively function by. It’s the Social Era, and it means change for all of us.

If you’re a regular reader of Yes & Know, you know I’ve been talking about this idea well before last year. But right around March 2012, I started doing my first talks on the topic, and have since published a book with Harvard on the topic and so on. Well, somewhere along the way, I got invited to give a talk at a venue that Google (the company) hosts whereby they invite speakers who are in the area to come talk to their employees and they film it and release it at no charge. Al Gore spoke the day after I did. (!)

I hadn’t honestly thought what it would feel like to be speaking these ideas — in front of effectively one of the most powerful organizations of this change. A little weird actually. But, still. Worth doing and worth sharing.

Filmed in February 2013, and just released today:

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Amanda Palmer has been a disruption in the music industry for some time. (By sheer coincidence, I was sitting at the conference next to some senior executives in the music industry and got to observe them as they gasped at each truth she said. I only checked out their badges after hearing the gasp-after-gasp to confirm my suspicion.)

The message of the talk is that it’s not only important for musicians or artists to be OK and asking for help, but audiences – especially given what’s happening on the Internet –  be OK with being asked. Actually, what I think she was talking about to creators of products is this: trust that things will be okay. And what I think she was saying to all consumers of those creative acts is: Don’t abuse the creators of things you value because that’s what makes the world go round. This is a new set of economics. An undervalued set of economics. One that lets people give and take, and to honor one another.

(Please don’t take this as pollyanna. This is a hugely complex issue. But the issue is not going to go away and we need to move on from the question of “is this happening?” to “how do we make it work”… look to how Andrew Sullivan and Brainpicker as two creative creators who have built viable systems.)

This new set of economics is going to require new measures. This one isn’t adequately measured by GDP. And it is also isn’t measured by the number of people on the payroll. As work is freed from jobs, we’ll need to find a new way to measure the economics of the day. It is the economics of generosity.

Related articles

• Amanda Palmer Wins TED
• TED: Amanda Palmer: The art of asking – Amanda Palmer (2013)

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While a speaker’s job is to passionately share their ideas, workshops are about applying ideas in a specific context and towards solving a specific situation. For example, if a General Manager wanted to do more open innovation but was struggling to have the organization be more “open”, then together we would discuss what that looks like now, what the team imagines it would look like and work through the specific cultural and strategic shifts. Or, if a CMO wanted their organization to be more purposeful in their work, we might first start with what role purpose plays in the Social Era and then brainstorm together what the shared purpose could be and how to test that hypothesis. Workshops are a private and safe way for a set of leaders or colleagues to talk through things they wouldn’t necessarily want in a more public forum.

For someone like me, for whom real business problems are like a bone to a dog, this is a great way to work with teams. Workshops let me bring my 20 plus years of operating experience to bear – solving real and present problems (without going back to being a consultant). And compared to many other speakers who are academics, etc this is a perfect use of my time.

One of my speakers bureau has been expanding their offering to include workshops and of course, we’ve done a few so far. For each one, we’ve been customizing the situation. I thought I could share what is (generically) done so far and ask for what you think is missing or needs to be tuned. This will “standardize” the offer at least in terms of structure — for others. The whole point of doing a workshop is to customize it for the situation at hand. In the interest of creating along side others, I thought given that so many of you face and have real-life situations, you could critically assess how a workshop should best be structured to maximize impact (measured by value delivered and shift achieved over least painful and shortest period of time).

Current Structure

Before hand:

1. Background that organization shares to provide context is devoured.
2. Consult (up to an hour) of their current business. I dig around and ask questions, to figure out which thing needs to be addressed first, because quite often just framing the question well is key to creating the shift.
3. Of course, content is created and customized to frame that topic for that business/ group / situation. I can use content I’ve created for New How, or Social Era but also anything else that makes sense. It’s my latest thinking, even untested stuff but focused on this particular area …

At the workshop itself.

1. Frame the ideas.
2. Hold a discussion (which I can facilitate given that I’m a certified facilitator or just participate actively in) to get team problem solving around what we decide in area #1. It has to be narrow enough to be actionable but broad enough to be meaty. We agree on the topline but then let the conversation go where it needs to go.
3. Make sure things become actionable by end.
4. The thing that is in the moment lets me ask the questions the group needs to answer but I’m working from within their context.
5. Typically, in a 4-6 hour timeframe, the agenda would be something like:15 min intros all around.
   30 minute keynote to frame
   15 minute Q&A to make sure we have a shared understanding.
   <break>
   Coming back to focus on the key question –
   2-4 hour discussion.  (obviously break in between if longer…)
   <break>
   1-hour developing next steps group wants to take.

   The breaks are designed for people to breathe and process so that when they talk, they are more committed to what they are jointly developing. We might all go walk around outside for a few minutes and capture some sunshine before we come back together….

Post-Meeting Followup. Typically, I will follow up with the leader after the workshop with my own thoughts and guidance on what I observed and maybe some resources that came to mind and so on.

Okay. What’s missing for this to be most valuable?

The only thing that is important… I’m not going back into full-on consulting –

this workshop has to be a contained process that can be 1 or 2 days long so the organization doesn’t feel they have to keep hiring a consultant but can use this kind of event to kickstart the right conversations within their organization. We want to create enough heat and energy from the workshop that it fuel the organization forward.

The last time I asked you for this kind of raw feedback was when we first named this blog, Yes * Know, with your direction. So a big, BIG thanks — in advance — for your advice!

One reason I so fervently believe in openness is because I see how much value there is in being open with others and co-creating value as we go along.

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Click here to listen to or download the Nilofer Merchant podcast on 11 Rules for Creating Value in the #SocialEra.

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***

You know that social interactions with the marketplace are becoming a source for innovation, strategy, product development, organizational alignment, and pretty much every important thing your organization does. In the Social Era, value will be (maybe even already is) no longer created primarily by people who work for you or your organization.

You might know all of that, but are you fully embracing it?

Lately, whenever I give a talk about social collaboration, the first question I hear from the audience goes something like this: Are you craaazzeeee? Well, to be fair, people usually find a way to phrase it slightly better. The real question, the specific one, is always the same: how is this going to affect the amount of power I have? People deep within organizations are wondering if they will finally get a chance to participate. Middle managers are worrying if they are still needed. And senior leaders are asking, “Won’t I have to give up power?”

This last question is a great and common one. It’s also complex, so let me take it apart to answer it:

1. Isn’t power about being the boss? Traditionally, being powerful within an organization has been a function of three aspects of bossness: (a) your title and rank within the hierarchy, (b) your span of control, or how many people you direct, and (c) your budget and/or profit and loss responsibilities. These allow you to direct activities and allocate resources — and by doing so, control other people. Power was also tied to eliteness — having the right degrees from the right schools would mean you would be picked over others. The Social Era has disrupted all this. (I wrote about this in a recent post, Just How Powerful Are You?) Now, power can also come from social collaboration. If Kickstarter, TEDx, and Wikipedia and other related platforms have taught us nothing else, it’s that people can become powerful without first being picked or vetted, through what we create together. Being powerful is less about being the boss, and more about sharing or championing ideas. (It is less Batman, and more Alfred  using an American superhero archetype and you might remember I wrote about what Batman Can Teach us.) Leadership position no longer matters as much as leadership itself (a distinction Peter Senge wrote about in The Fifth Discipline). It’s still true that as a function of our positions, some of us will have an easier time getting our ideas to be seen, heard, and shared. But if we redefine power as the capacity of a human to shape the future — as I believe we must — we all benefit. Bossness may or may not be involved, and it only matters in so much as it helps you frame and shape the future.

2. Aren’t I paid to know the answer? Well, yes and no. Largely because of the Internet’s great search tools and ease of sharing content, an average person today can be more informed today than the richest billionaire was 20 years ago. This prevalence of information is the main reason why everyone is able to contribute and why being the keeper of all answers isn’t really that valuable anymore. Add to that the millenniums’ desire to make a meaningful contribution and you have a talent pool that doesn’t need or want you to have the answer; they expect to play a role in coming up with the answer. As knowledge, capacity, and expectations grow, people have to change how they work together. In my first book on collaborative work, I nicknamed a character “The Chief of Answers”. This person felt he had to know everything, and one day I asked him, what does that do to the rest of your people if you are “the one” who knows everything? And he realized that by making himself the “chief of answers,” he turned everyone else into the “tribe of doing things.” That limited his informed, educated, and motivated colleagues and their ability to contribute. Collaboration is strongly correlated to innovation (according to research commissioned by Google), and you can use it to solve complex problems. But it doesn’t work if you aren’t willing to let go of knowing everything already. Many people have built their careers and their identities on being experts, and for them this can be terrifying. But being the chief of answers is exhausting, and it leads to diminishing returns. When an organization crowns a few people as chiefs of answers, it forces ideas to move slowly up and down the hierarchy, which makes the organization resistant to change and less competitive. The Social Era raises the pressure on leaders to move from knowing everything to knowing what needs to be addressed and then engaging many people in solving that, together. They should frame the challenge and point out the horizon, helping those involved know what matters and why. That means more ideas arise and can be acted on, and the people closest to problems can solve them. If you define leadership as we did above, that means by giving up some direct control, leaders actually expand their power.

3. Doesn’t this just mean I get the blame if an idea fails and no praise if it succeeds? In a collaborative / crowd-sourcing / co-creative world, there are lot of hands in every pie. Not just the leader, but everyone involved could worry that it’s not clear who is doing what and that they won’t be recognized for the value they create. But in practice, all this activity leads to more ownership, not less, and it’s clearer who is adding value and who is not. Look at any collaborative interaction in the coming week and you’ll realize that, just as you are assessing who is really showing up to create value, others are as well. Leaders worry about whether their division will get credit so that when it comes to budget times they can get more resources. But as we’ve already discussed, the social resources we all now have access to mean that in many circumstances budgetary resources matter less.

Power: it does not define you. You get to define it

This is a big shift.

If you currently equate your power with your bossness, your ability to have all the answers, and getting credit for everything you do, then you are set up to thrive in the past. Thriving in the Social Era requires different skills: collaborating rather than commanding, framing and guiding rather than telling, and sharing power rather than hoarding it. Can you make the change? Yes. Will you? Well, only you can decide that.

***

As is always true with the work I do with Harvard Business Review, I ask you to make comments directly at the main site so it can help us have a shared dialogue. Go here: http://blogs.hbr.org/cs/2012/12/are_you_giving_up_power.html

(Thanks as always and I look forward to our ongoing dialogue on power and leadership … )

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Today, the Innovation Matrix is on Rev 4. And my colleague, Tim, shares his most recent framing. Go check it out in his latest post. It is an idea that when developed could help any organization figure out where they are, and the moves to take based on where they want to be. Tim is going to lend academic depth and rigor because of his many gifts. And I’m hoping to find myself useful in some way.   More than likely, peeking into the future a bit to shape the conversation on not only what has worked in the past, but what will be central in the Social Era.

Beyond sharing the story that this new work is going on, it seemed to me that this is yet another example of how value is created in the Social Era.

- It is geography independent. Anyone from anywhere can collaborate.

- It is cross-disciplinary. (An academic and an operating type walk into a coffee shop … )

- While we certainly hope there will be some way to feed our families while / as we pursue this idea, we start it not knowing what the business model looks like. Passion, purpose, and interest precede the profit model.

- There is no sanctioning needed. We don’t need an institutional blessing (aka Harvard or MIT) to start …though our institutional connections and colleagues at major publications will surely help us shape, vet, and share the idea.

- We’ll be sharing as we go. Which means anyone — quite possibly you — will have ideas on what to include or cover or you will start to challenge our thinking and in doing so, shape ours. You will ultimately be the sharers of those ideas, if you deem them worthy.

I look forward to hearing what you think is needed and what you hope we’ll develop — feel free to comment here or on Tim’s blog.

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