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MAKING CONNECTIONS Lessons From Open Source on the Power of Networked Communities SoftSummit San Francisco October 2005. T HE B OSTON C ONSULTING G ROUP. OPEN SOURCE IS ABOUT. Breakthrough creativity ...solving complex challenges ...by participants

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MAKING CONNECTIONSLessons From Open Sourceon the Power of Networked CommunitiesSoftSummitSan FranciscoOctober 2005

THE BOSTON CONSULTING GROUP


Open source is about l.jpg

OPEN SOURCE IS ABOUT...

  • Breakthrough creativity

  • ...solving complex challenges

  • ...by participants

    • who are geographically and organizationally dispersed

    • who don’t do it for direct monetary reward

    • who display unusual passion for the endeavour

  • ...in ways that compete aggressively with solutions from the most fearsome commercial vendors

The basic principles are not new. The full set of organizational lessons are very new (and still emerging).


Ibm and viral marketing until recently an oxymoron l.jpg

IBM AND “VIRAL MARKETING”:UNTIL RECENTLY, AN OXYMORON


Slide4 l.jpg

Security breach reported by sysadmin AB to MP and others. In parallel, security specialist MW emails MP about same issue. MP does 4 hours of homework

Slashdot

G2L

Recognized as threat to entire Linux community, any breach must be kept confidential within a trusted team

AT

MP studies available data, consults with security expert DD, and engages with AB by phone

rsync

Team

AB

On three hours of sleep, AB digs into 8 hour forensic investigation, hands to MP

RR

MP

MW

MP pulls in rsync team including AT, RR, plus Gentoo Linux and other security specialists. MP, AT and RR write patch and have it vetted by others

DD

In parallel, AT writes technical announcement to WW Linux community

Participants

WW announcement out to vendor community, Slashdot, and other lists; discussion about outreach to users

AB

MP

MW

AT

DD

rsync

Work on “honey pot” started by AB and MW

RR

G2L

Tues, 2 Dec 2003

11 PM GMT

3 Dec

4 AM

8 AM

noon

4 PM

8 PM

midnight

4 Dec

4 AM

8 AM

noon

Time


More than 85 000 messages a month coordinate the linux enterprise l.jpg

MORE THAN 85,000 MESSAGES A MONTHCOORDINATE THE LINUX ENTERPRISE

User

Development

Extensions

Corporate mailing lists

redhat-

list

suse-

linux-e

suse-linux

suse-security

Community mailing lists

debian-devel-changes

debian-

devel

linux “beer hiking club”

linux-raid

linux-newbie

linux-kernel

debian-user

alsa-devel

linux.redhat.misc

linux.

redhat.

install

Corporate bulletin boards

alt.os.linux.

mandrake

comp.os.linux.

advocacy

comp.os.

linux.

hardware

comp.os.

linux.

networking

comp.os.

linux.misc

Community bulletin boards

Posts/month

1,000

alt.os.linux

Note:Number of messages posted in June 2000 on 147 relevant bulletin boards and mailing lists (duplicate postings removed)

Source:deja.com; geocrawlers.com; BCG analysis


Overview of key findings on hacker motivations l.jpg

OVERVIEW OF KEY FINDINGS ON HACKER MOTIVATIONS

Why should

we care?

High creativity

?

What motivates hackers?

Fun, skill,

freedom and need

Increasing knowledge

biggest benefit

Losing sleep

biggest cost

Who are

these guys?

Volunteer significant time

IT professionals

Generation Xers

What about the community?

Strong identification

Global effort

Peer leadership preferred


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OSS MAKES A “CREATIVE CONNECTION” FOR PARTICIPANTS

  • “Like composing

  • poetry or music”

48.4%

61.7%

  • “This project is as (or most)creative as anything I have done”

72.6%

  • “When I program,

  • I lose track of time”

  • “With one more hour in the day,

  • I would spend it programming”

60.0%

Note:“...like composing poetry...” answer chosen as one of top three attitudes by participants; other answers based on degree of

participant agreement with statement


It s about learning and getting stuff done more so than a religious war l.jpg

IT’S ABOUT LEARNING, AND GETTING STUFF DONEMore So Than A Religious War

Intellectually stimulating

Improves skill

Work functionality

Code should be open

Non-work functionality

Obligation from use

Work with team

Professional status

Other

Open Source reputation

Beat proprietary software

License forces me to

Percent of respondents

Note: Question asked for top three motivators of F/OSS participation, n=684


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MOTIVATIONS AND CONTRIBUTION STATUSSEGMENT HACKERS

“Community Believers” (19%)

“Hobbyists” (27%)

Motivations

?

Do it because they feel obligation and believe source code should be open

Do it for non-work

“Professionals” (25%)

“Learning & Stimulation” (29%)

Do it for

skill improvement and fun

Do it for

work need


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IS YOUR ORGANIZATION THIS CANDID?

  • From: Linus Torvalds ([email protected])Date: Tue Jun 18 2002 - 19:12:45 EST Re: latest linus-2.5 BK broken

  • ...This is not rocket science, and I find it ridiculous that you claim to worry about scaling up to thousands of CPU's, and then you try to send me absolute crap like the above which clearly is unacceptable for lots of CPU's.

  • No, C doesn't have built-in support for bitmap operations except on a small scale level (ie single words), and yes, clearly that's why Linux tends to prefer only small bitmaps, but NO, that does not make bitmaps evil.

  • Linus

  • From: Rusty Russell ([email protected])Date: Wed Jun 19 2002 - 10:23:53 EST

  • ...Spinning 1000 times doesn't phase me until someone complains. Breaking userspace code does. One can be fixed if it proves to be a bottleneck. Understand?

  • Rusty


Fire at the kariya 1 plant of aisin seiki 4 18 am february 1 1997 l.jpg

FIRE AT THE KARIYA #1 PLANT OF AISIN SEIKI4:18 AM February 1, 1997

Source:SMR


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Nippon

Denso

Toyota

Toyota

KoritsuSangyo

Aisin

Aisin

Fire at Kariya #1 Plant – Toyota’s sole source of P-valves (for brakes)

Entire TPS faces shutdown within 72 hours

Denso

Aisin, Toyota and other Tier One Suppliers collaborate on an emergency production plan

Tier 2 suppliers team up, under leadership of their Tier 1’s

Aisin distributes blueprints, raw material, undamaged drills, and assigns staff

  • 22 of 30 plants closed; TPS self organizes to save system, e.g.

  • Nippon Denso volunteers as the logistics manager

  • Toyota turned to its R&D prototype department

  • Koritsu Sangyo, a tiny Tier 2 supplier to Aisin, was first to deliver P-valves

Daily Production of Vehicles

First 1000 ‘P’ valves shipped to Toyota

Units

Daily output of 13,000 vehicles; 62 firms manufacturing “P” valves

Sat

02/01/97

Tues

04/02/97

Wed

02/02/97

Wed

02/05/97

Mon

02/10/97

Fri

01/31/97

Sat

02/01/97

Sun

02/02/97

Mon

02/03/97

Source:SMR, WSJ


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Phase 1: Supplier associations

for Tier 1 suppliers (kyohokai, BAMA)

Phase 2: Toyota consults for free

to Tier 1 suppliers (OMCD, TSSC)

Phase 3: Nested networks

and learning groups spanning

Tier 1 and 2 suppliers (jishyuken,

PDA); interfirm employee transfers

(shukko)

TOYOTA BUILDS ITS SUPPLY CHAIN TO ENHANCENETWORK LEARNING

  • Across the chain, Toyota builds

    • Affiliation, loyalty, shared goals, mutual dependence

    • Open knowledge-sharing based on a common ‘semantic’

    • Teaming norms

    • Trust that all will be treated fairly

    • Dense collaboration networks

Common principles used in Japan and North America

Source:Dyer and Nobeoka “Creating and managing high-performance knowledge-sharing network: the Toyota case” SMJ, 2000


Tps suppliers self organize on major initiatives supplier network restructures over time l.jpg

In negotiation August 2003

TPS SUPPLIERS SELF-ORGANIZE ON MAJOR INITIATIVES Supplier Network Restructures Over Time

Toyota Encouraging Supplier Consolidation, Collaboration

Toyota’s Tier One Supplier Network Increasingly Interconnected

  • Recent projects

    • Interior parts and seats (in discussion, August 2003)

    • Brake products: ADVICS (July 2001)

    • Plastic fuel tanks: FTS (Feb 2002)

    • Electronic power steering (Nov 2002)

    • Map databases: Toyota Mapmaster (1998)

  • Development/production collaboration

    • Safety systems (airbags, seatbelts)

    • Engine parts (throttle bodies, injectors)

    • Pistons

  • Production, business transfer and consolidation

    • A/C compressors

    • Anti-vibration rubber

Note: This network map is partial representation of existing TPS collaborations

Source:Morgan Stanley, August 21, 2003

Recent changes


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Organizational

Learning

Transaction

Costs

WHAT’S HAPPENING WITHIN THE TPS? (I)


What s happening within the tps ii l.jpg

Organizational

Learning

Individual

Learning

Shared

Mental

Models

Information

Symmetry/

Transparency

Trust

“Swarming”

Transaction

Costs

WHAT’S HAPPENING WITHIN THE TPS? (II)


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WHAT’S HAPPENING WITHIN THE TPS? (III)

“It’s the work, stupid”

All work is an experiment

Standardized documentation

Leaders as mentors in the work

Systemic “voltage” generation (pull, JIT, balance)

Accumulate personal knowledge of work and norms

  • Individual Learning Principles

  • System oriented principles

Standardized interactions

Long term relationships

Open knowledge sharing

Discretionary “voltage” directed by leadership

Stability and consistency of application of mechanisms


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THE NETWORK LENS:MAKING THE INVISIBLE VISIBLE

Traditional views

Network analysis view

Operations

Org. chart

TC

CD

HC

Strategy

Energy

Consumer

IG

FS

Org

Matrix

IT


Key players become apparent in physician referral network l.jpg

Insight, Impact

Network shows key “catchers” and “pitchers” of referrals

Hospital currently reviewing referral process

Possible marketing vehicle for pharma

KEY PLAYERS BECOME APPARENT IN PHYSICIAN REFERRAL NETWORK

Example of attending and referring physicians

Situation

High variation in number of referrals made by physicians

Uncertainty about high leverage marketing targets

Attending physician (~250 referrals received)

Referring physician (~250 referrals made)

Source: BCG analysis


Key opinion leaders in medical market l.jpg

Situation

Declining return on marketing spend in complex medical market

Uncertainty about how to decide on who to influence and how

Insight, Impact

Patterns of influence across KOLs identified and optimal influence team identified

Current client position assessed and marketing spend focused and optimized

KEY OPINION LEADERS IN MEDICAL MARKET


Telecom reviewing sales force effectiveness for efficiency improvements l.jpg

Example of sales reps

(linked by who hired them)

B

A

Insight, Impact

C

Evidence suggests that certain sales reps. gaming the hiring system to achieve bonus quotas

Company modified incentive compensation system to account for “gaming” factors

Manager: A B C

Cancelled reps:41%78%95%

Active reps:59%22%5%

TELECOM REVIEWING SALES FORCE EFFECTIVENESSFOR EFFICIENCY IMPROVEMENTS

Situation

High variation in attrition rates among sales force reps

Network analysis conducted on hiring patterns of managers

Source: BCG analysis


An approach to network analysis five step process l.jpg

?

AN APPROACH TO NETWORK ANALYSIS Five Step Process

Methodology

Objective

  • Develop lay of the land

  • Define the measurement plan

  • Build the fact base

  • Create the diagnostic

  • Launch the network transformation

  • Define network aspirations (i.e. “good” collaboration) and characteristics which promote it

  • Determine methods to observe and measure interactions that define “good” collaboration

  • Map networks and analyze quantitative network performance metrics

  • Synthesize analysis to assess overall network performance and develop action plan to pursue opportunities

  • Design and implement new business processes to foster the network characteristics recommended


Where to start candidates for networked community action l.jpg

WHERE TO START?Candidates For Networked Community Action

  • Look for target problems or projects:

    • That have a clear, valuable objective

    • Where individual action can make a difference

    • That will benefit from “lots of eyes”

    • Cross organization boundaries

  • A few ideas to consider:

    • Your product support knowledge base

    • IT or technology standards

    • Your IT application portfolio


Open source pilot check list l.jpg

“OPEN SOURCE” PILOT CHECK LIST

Global goal :A compelling, collective vision

Individual goals: “It’s the work, stupid”

Peer leadership: Fact-based, passionate, open, accountable

Modularity:“Chunks” where individuals can make a difference

Connectivity:Connections across silos

Work norms:Disciplined, fact-based interaction around the workRelease early/release oftenOpenness

Work space: Activity must exist where individuals work

“Call to arms”:Why this effort, why us, why now

Get started. Learn by doing.


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