A recent article in the New Yorker discussed how the web site and its governance model have evolved over the past few years. The site has had to deal with numerous challenges as a result of its growth, including bitter disputes over articles on scientology and politics and, more recently, a prank organized by television personality Steven Colbert. In particular, three features of the site’s struggle with growth stand out:
- Slowing growth & declining quality: what was a small community is now a very large network. The sense of pride and glory from writing great articles and being well known has been harder to create in new contributors. The productivity of volunteers and the quality of their output has suffered accordingly.
- Rising bureaucracy: research done by the IBM team cited in the New Yorker article showed that Wikipedia’s bureaucratic content – process and controls – was the fastest growing part of the site, taking up almost 30% of all articles. This is encyclopedic equivalent of SG&A – administrative overhead to manage an increasingly complex environment.
- Rise of “metric optimizers”: as metrics have replaced networks of personal trust, some contributors have started correcting grammatical errors and misspellings to drive up their edit count – the measure of how many articles to which they have contributed. Such selfish behavior devalues that acclaim that should be going to genuine contributors.
If all this seems familiar, there’s a reason for that- I believe that Wikipedia is a microcosm of the large and fast growing enterprise. As enterprises grow, it becomes harder to keep a sense of community and personal network. The result: quality suffers, bureaucracy grows, and sales people fight over who owns territories and accounts instead of closing new deals. It doesn’t matter that they’re unpaid, the volunteers at Wikipedia care about glory as much as any executive cares about his underwater stock options.
My bet, however, is that Wikipedia will save itself, because even though the problems look similar, the approach that the organization is taking to solve them is radically different. Instead of changing bosses and decreeing new policies, Wikipedia is engaged an intense and completely open debate about transformation. New policies are going into effect, such as a new revision control and editing process for articles, and they are likely to be successful because they have been subjected to intense scrutiny before being put into practice.
Large enterprises, by contrast, tend to take very different approaches to organizational and process change. Small teams of strategists often operate in environments of high secrecy, planning business changes and presenting transformation strategies to executives for approval long before the vast majority of employees are aware change is being planned. More often than not these radical plans fail to produce lasting change.
Environments of extreme transparency, like Wikipedia, have significant strategic advantages over more opaque business models and may be much better positioned to navigate the challenges of genuine transformation. While it’s true that secrecy provides some companies with a valuable element of surprise, it also gives cover for self-dealing, political infighting, and “metric optimization” instead of real innovation. The benefits of transparency are compelling:
- Trust: If every employee and shareholder can view every single transaction in the general ledger, it makes it hard to conceal back-dated stock options. If everyone could read the CEO’s expense reports, it would be hard to buy a $25,000 shower curtain. This effect doesn’t just apply to expenses; it applies to products as well. In the open-source world, the fact that every line of code in Linux can be examined has made it more trusted than Microsoft’s opaque approach, not less so.
- Excellence. In a completely open environment, where everyone can see everyone else’s work product, it’s hard to steal credit or conceal poor work. Like successful sellers on eBay, people who consistently produce great work will rise to the top over thousands of work products and many years.
- Innovation. Innovation is a team sport and organizations that share knowledge are organizations that innovate. The beauty of the Wikipedia concept was that anyone could write or edit an article. In the transparent and open company, why shouldn’t field service engineers be able to read and edit the draft specifications for the next generation product? It’s quite possible nobody else in the company has a better idea of what customers need.
The opponents of transparency cite a litany of seemingly reasonable ideas as to why secrecy is important. First and foremost, executives say we must protect our trade secrets. You only have to look at the open source model embraced by Linux to see the error in that logic. Every line of code in Linux is open to the public and any Microsoft employee could go in a review it (and don’t think they haven’t taken a look).
Despite such access to the competition, Microsoft has been unable to fix its perennial security problems and has been losing market share to a product and an organization made up of unpaid volunteers and without any secrets. The strength of the collaborative and transparent process embraced by Linux and Wikipedia is far more valuable than the risk that any one secret will get out, or probably even all of them, for that matter.
Another common argument against too much openness is that decisions by committee give low quality results and complete openness is like inviting everyone into the committee. Transparency, however, doesn’t mean that everyone is involved in every decision. What it does mean is that everyone who is passionate about something can find out about it and participate. Passion and energy are what will drive productivity and excellence. Recent academic research also suggests that committees, far from being ineffective, are in fact better decision-makers than individuals in many cases.
Lastly, it is argued that transparency is the incompatible with legal requirements for privacy and confidentiality. Reasonable people can agree that some information should be kept confidential and that people are due some standard of privacy. The benefit of complete transparency is a rigorous debate can be conducted about such needs for privacy and confidentiality and, when an agreement is reached; compliance is likely to be exceptionally high.
Many elements of what we see in the Wikipedia business model have been tried in other settings. Open source software has many similarities with Wikipedia and enterprises have elements of collaboration and discussion forums. What is new in the Wikipedia environment is the exceptional ease of use and unrestricted access that is the default setting for all information sharing. In most enterprises, data is considered a secret until people are added to access control lists, in Wikipedia, it is just the reverse: data is locked up only after a clear demonstration that complete openness has not been effective.
I cannot think of any companies that have embraced a high level of transparency internally. If the success of Wikipedia is any guide, however, then it shows har far most enterprises have to go. From expense reports to strategy discussions to sales contracts, I believe that enterprises should make their default complete openness inside our firewall.
I believe taking such radical action will do wonders to rebuilding the trust between employees and executives and unleash a much wider level of creativity and innovation inside these large enterprises.
No comments:
Post a Comment