Thursday, March 10, 2011

What is an Open Enterprise and why should we adopt it?

Two days ago we had our second group meeting (at this moment we are four individuals in the group). The initial goal was to agree on some very general principles for a value sharing mechanism for our enterprise. We had one week to write them down individually and the idea was to get together to reach a consensus. Everyone in the group was aware of the Discovery Network model and its Value Exchange Mechanism. Not everyone agrees with this model and at least one member finds it too radical or even non-realistic. So I thought that we needed to harmonize our opinions and explore alternatives to the DN Value Exchange Mechanism that would bind us together.

Right after we started I took the opportunity to frame the subject of the meeting as such:

Taking into consideration the vast outreach that the Internet provides us, and the collaboration tools we have at our disposal, we need to think of creating an enterprise capable of growing fast, encompassing a maximum amount of resources from around the planet, capable of managing very complex relationships, while remaining creative, productive, and very efficient.

In other words, I wanted to attract attention over the fact that the world today is not the same as the pre-Internet world. We now have the possibility to forge strong collaborative relations with individuals or small organizations from anywhere in the world. We also have the possibility to find potential partners, wherever they may be, very rapidly. On the distribution side, we can spread our technology a lot more effectively than before. Therefore, it would be a mistake to build our organization based on a classic model.

Very soon into the meeting I realized that our visions diverged at an even deeper level than I thought. I was the only one to communicate my list of basic principles before the meeting, and I realized that it was hard for my partners to do the same, probably because they didn't have a clear idea of their own of an organization that would be better suited for this new world. Perhaps some of them weren't even convinced that we need to change anything to the classic organizational model, which has been proven to be economically viable and still appears to be unmatched.  

Our discussion deviated from value exchange mechanism to what is an open enterprise, and why do we necessarily need to adopt it. I guess it's not so easy to sell the "open" idea...

At some point into the conversation we were talking about how to structure relations with our partners. Needless to say that the language used was heavily grounded within what I call the old economical paradigm (the one operating within the pre-Internet world), with clear-cut distinctions such as us/them, concepts like internal knowledge or trade secrets, references to legally binding transactions, etc. My position was to keep the barrier for collaboration very low, to open our knowledge base, and to operate on transparent processes. During this meeting, as many other times before, my position was qualified as idealistic and altruistic. In other words, one member thought that I was such a good guy, perhaps even a little bit naive, that I was ready to share our knowledge publicly and invite anyone out there to join our venture, hoping that something magic will come out of it, somehow, that karma will come back to us in one form or another.

I find this extremely evocative. But let me first say that these remarks had absolutely no emotional or egoistical effect on me, because I know my partners and because I understand the source of the problem. To answer to these remarks I first introduced the concept of enlightened self-interest, through the example of Richard Stallmen, a guy who gave big and who lives well as a result of that. Making the distinction between altruism and enlightened self-interest was the first step, after which I tried to explain how large scale effects can be reached by being open, transparent, and by lowering the barrier to entry. The essence of this idea is that the Internet provides us with widespread outreach and with the possibility to build vast collaborative networks, with no geographical constraints. Being open allows our technology to spread faster. Potential partners can find us, instead of us spending energy finding them. Making the group more fluid, by lowering barriers allows knowledge, know how, and resources to flow through the organization. Eliminating defensive mechanisms also helps to create a better collaborative environment. After reaching its critical mass the organization can enter a fast growth phase, network effects kick in, it becomes an attractor, the technology becomes ubiquitous, many applications are developed. 

I also want to thank Sebastien for attending our meeting and for giving us his views on open collaboration.

From Michel Bauwens on Quora

An open enterprise is:
- based on a commons of knowledge, software and design, to whom everybody can participate given certain rules pertaining to quality etc .. 
- is managed collective and transparently by all those who contribute, augmented with a role for those who are affected by its activities; it is based on open book accounting 
- does not restrict access to the commons on which it is based, but it sells any scarce goods and services it may produce at a fair price; the revenue is used both for its contributors and the maintainance of the wider commons on which it depends 
- as regarding its material infrastructure of production, it based on the shared ownership of its owners, eventually augmented and combined with other stakeholders 
- the enterprise is mission-oriented around its commons, and uses profit only in accordance with its mission 
- it takes account of all positive exernalities through revenue or benefit sharing, and of negative externalities 
- it acts in solidarity with the wider world, not just for its own members

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