Open enterprises collaborative innovation, authority and decision models

BACKGROUNDMARK SOKACIC – HOST

SERIAL ENTREPRENEUR

MARK@AIROVATE.COM.AU

• CURRENTLY OPERATING AIROVATE – CREATING SOCIAL COMMERCE AND LOGISTICS PLATFORMS

• 18 YEARS EXPERIENCE IN 9 STARTUPS

• MAINLY IN WEB AND OUTDOOR EVENT TECHNOLOGY

BACKGROUND WHY THIS TOPIC?

THE INTERNET: A REVOLUTION IN COMMUNICATION, SOCIAL & BUSINESS

RELATIONSHIPS

•ARE THERE BETTER WAYS OF ORGANISING A BUSINESS?

•HOW DO YOU STAY AHEAD OF THE COMPETITION?

•IS CONTINUOUS INNOVATION THE ONLY WAY TO STAY AHEAD OF THE

COMPETITION?

TRENDS – INDUSTRY & SOCIETAL

•VALUE IS SHIFTING FROM TRANSACTIONS TO RELATIONSHIPS

•NEW INDUSTRIES TAKING SHAPE

•MASSIVE MARKET FRAGMENTATION & FRACTALISATION

•SHIFTING CONSUMPTION PATTERNS

PROPHETIC WORDS12 PRINCIPLES OF THE NETWORK ECONOMY – 1997 (WIRED MAGAZINE)KEVIN KELLY – FOUNDER OF WIRED MAGAZINE

FOUR OF THE NEW RULES

1. WEALTH WILL FLOW DIRECTLY FROM INNOVATION, NOT OPTIMISATION. WEALTH CREATED BY SEIZING

THE IMPERFECT UNKNOWN

2. IDEAL ENVIRONMENT FOR CULTIVATING THE UNKNOWN IS TO NURTURE THE AGILITY AND NIMBLENESS

OF NETWORKS

3. CULTIVATION OF THE UNKNOWN MEANS ABANDONING THE HIGHLY SUCCESSFUL KNOWN

4. AS THE NETWORK ECONOMY GROWS THE CYCLE OF “FIND, NURTURE, DESTROY” HAPPENS FASTER AND

MORE INTENSELY

THE INNOVATORS DILEMMA

• ESTABLISHED COMPANIES DO ALL THE IMPORTANT THINGS RIGHT

• DOING ALL THE RIGHT THINGS MAKES THESE COMPANIES FAIL

THINK KODAK, FORD, NOKIA, HARVEY NORMAN, BLACKBERRY

• DISRUPTIVE INNOVATIONS USUALLY START BY SELLING TO NEW OR UNPROFITABLE

CUSTOMERS

• COMPANIES INVEST IN IMPROVING MAINSTAY PRODUCTS OR SYSTEMS, OFTEN TO THE

POINT WHERE QUALITY OUTSTRIPS WHAT THE MARKET NEEDS

Clayton Christensen - 1997

STRUCTURE

•COLLABORATIVE INNOVATION – WHY DO IT?

•OPEN ENTERPRISES – WHAT ARE THEY?

•AUTHORITY & CONTROL – HOW TO CO-ORDINATE?

•DECISION MODELS – WHO DECIDES?

COLLABORATIVE INNOVATION– WHY DO IT?

• DECREASE COSTS AND INCREASE VALUE TO THE CUSTOMER

• INCREASED AGILITY AND SPEED TO MARKET

• COMPETITIVE ADVANTAGE TO THOSE WHO LEARN HOW TO EMBRACE DE-CENTRALISED

POINTS OF CONTROL

• RELATIONSHIP TECHNOLOGIES ENHANCE, AMPLIFY, EXTEND, AUGMENT, AND DEVELOP

SOFT RELATIONSHIPS

COLLABORATIVE INNOVATION– WHY DO IT?

•RICH, UP TO DATE, DYNAMIC PRODUCTS & SERVICES

• LOWEST COST OF PRODUCTION

•GREATEST DEGREE OF INNOVATION & DIVERSITY

•GREATEST EXPOSURE AND AWARENESS OF ACTUAL MARKET STATE

•HARNESS COLLECTIVE INTELLIGENCE

• E.G GOOGLE ANDROID, OPEN STREET MAP, GOLDCORPT

WHAT IS AN OPEN ENTERPRISE?MAXIMAL USE OF COST LEVERS

• USING OPEN SOURCE PRODUCTS

• OPEN DATA

• OPEN CONTENT

• OPEN COMMUNITIES

• OPEN THINKING

INNOVATION IN OPERATION

• NEW METHODS OF VALUE CREATION

• NEW METHODS OF VALUE

TRANSFORMATION

• NEW METHODS OF CONTROL

• NEW METHODS OF DECISION MAKING

• NEW METHODS OF OWNERSHIP

THE OPEN ENTERPRISE MODEL

CASE STUDY BETTERMEANS.ORG

• A DEMOCRATIC AND MERITOCRATIC BASED BUSINESS MODEL

• VALUES CENTRED FORMATION

• DEMOCRATIC PARTICIPATION & DECISION MAKING

• VARIOUS OWNERSHIP MODELS POSSIBLE – MEMBERSHIP, EQUITY, CREDIT

• SPEEDY DECENTRALISED AND AGILE DECISION PROCESS

AUTHORITY & CONTROL- HOW TO CO-ORDINATE?

HIERARCHY OF TRUSTED MEMBERSHIP

• BOARD – OF TRUSTED ADVISORS

• CORE TEAM

• MEMBERS

• CONTRIBUTORS

• ACTIVE USERS – VOLUNTEERS

• COMMUNITY OF USERS

AUTHORITY & CONTROLH

OW

TO

CO

-OR

DIN

AT

E?

WORK STRUCTURE

DECISION MODELS– WHO DECIDES?

THE PROCESS – ALL INPUT WELCOME AT EACH DECISION POINT FROM ALL MEMBERS

PROPOSE, DISCUSS, VOTE DECIDE

DECISION MODELS – BASED ON SCOPE OF DECISION AND STATUS WITHIN THE ORGANISATION

(TRUST LEVEL) I.E. BINDING & NON BINDING VOTES

• LAZY CONSENSUS

• LAZY MAJORITY

• UNANIMOUS CONSENSUS

• CREDIT MAJORITY

AGILE DECISION MODEL

IDEAS FOR NEXT EVENT?SOMETHING THAT ENTREPRENEURS HAVE BEEN WAITING FOR A

LONG TIME

A NEW WAY TO SPLIT EQUITY IN A PRE-REVENUE STARTUP

DYNAMIC EQUITY SPLITTING USING THE GRUNT FUND CONCEPT

BY MIKE MOYER, AUTHOR OF SLICING PIE

REFERENCESCATEGORY: OPEN ENTERPRISESCASE STUDY: BETTERMEANS.COM

• OPEN ENTERPRISE MANIFESTO @ BETTERMEANS.ORG

• OPEN ENTERPRISE GOVERNANCE MODEL @ BETTERMEANS.ORG

• HTTP://OPENNEWS.COM.AU/

• HTTP://WWW.ZDNET.COM/BLOG/HINCHCLIFFE/THE-EMERGING-CASE-

FOR-OPEN-BUSINESS-METHODS/218

CATEGORY: INNOVATION, FRACTAL MARKETS• MOORE, G. A. (2005). DEALING WITH DARWIN: HOW GREAT COMPANIES

INNOVATE AT EVERY PHASE OF THEIR EVOLUTION.

• CHRISTENSEN, C. (1997). THE INNOVATOR'S DILEMMA: WHEN NEW

TECHNOLOGIES CAUSE GREAT FIRMS TO FAIL

CATEGORY: TRENDS, SOCIAL ECONOMY• BEINHOCKER, E., DAVIS, I., & MENDONCA, L. (2009). THE 10 TRENDS YOU

HAVE TO WATCH. HARVARD BUSINESS REVIEW, 87(7-8), 55-60.

• HTTP://WWW.ZDNET.COM/BLOG/HINCHCLIFFE/TWENTY-TWO-POWER-

LAWS-OF-THE-EMERGING-SOCIAL-ECONOMY/961

• KELLY, K. (1997). 3.14 NEW RULES FOR THE NEW ECONOMY: TWELVE

DEPENDABLE PRINCIPLES FOR THRIVING IN A TURBULENT WORLD8.

• KELLY, K. (1998) NEW RULES FOR THE NEW ECONOMY: 10 RADICAL

STRATEGIES FOR A CONNECTED WORLD.

CATEGORY: BUSINESS MODELS AND DESIGN• MINTZBERG, H. (1993). STRUCTURE IN FIVES: DESIGNING EFFECTIVE

ORGANIZATIONS. PRENTICE-HALL, INC.

• HAMEL, G., & BREEN, B. (2007). THE FUTURE OF MANAGEMENT. HARVARD

BUSINESS PRESS.

• HTTP://JOAQUINROCA.COM/2013/03/ORGANIZATION-DESIGN-FOR-

STARTUPS/