GreenXchange

Social change advocates have long dreamed of a day when corporate rivals might be able to collaborate, legally, to share some of their smartest ideas to fight social problems.

Sound pie-in-the-sky? Maybe so. But if GreenXchange gets off the ground, it would be a first big step in that direction. Launched last week at the World Economic Forum in Davos, GreenXchange (GX) is being spearheaded by 10 companies and social enterprises, including Nike, Best Buy, and Creative Commons, the San Francisco nonprofit that works to expand the range of creative works available for others to build upon legally and to share. GreenXchange's seven other backers include Yahoo!, IDEO, Mountain Equipment Co-op, salesforce.com, 2degrees, the Outdoor Industry Association, and nGenera, a corporate strategy think tank.

GreenXchange is groundbreaking in that it would enable companies working to protect the environment to share their research -- legally -- for social good and mutual profit, and at a time when businesses everywhere are allocating larger shares of their investment dollars to social innovation.

Skeptical? To be sure, while rival companies in the same market may not want to share the research and patents they have, companies in different fields may benefit from that very same research without posing a competitive threat to each other.

Let's say, for example, that Nike has done extensive research on how to maximize the efficiency of air pressure in sneaker design. Why shouldn't a company that makes truck tires apply that patent in a way that creates a more eco-friendly product and doesn't harm Nike's sales? Nike would be able to draw up a contract letting the tire company take a peek at its patents in this area, but decide to exclude other sneaker makers.

Or, consider other examples. How about letting several companies that make sneakers team up to create a more eco-friendly shoebox that will benefit the entire sneaker industry? [Participants on any one project will be bound by contracts spelling out access and profit issues, among others.]

This type of collaboration is what GreenXchange has in mind, and backers hope to catalyze the concept of "innovation communities" within and across industries. The benefit: to know what knowledge is missing and where breakthroughs are already occurring. As more patents are added to the pool, backers say, the exchange could be used more widely for social innovation across multiple sectors.

For starters, GreenXchange backers are focused on the environment. "GreenXchange is all about using social networks and collaborative platforms ... as part of new thinking about open innovation and competitive strategies," says Don Tapscott, the chairman of the think tank nGenera Insight, an Adjunct Professor of the Rotman School of Management, and one of the catalysts behind GreenXchange.

To get things started, Nike has committed to placing more than 400 of its patents into the commons for research. Mark Parker, Nike president and CEO, acknowledged that at first, Nike's lawyers opposed the Xchange, "but they've come around, seeing that this could bring competitive advantage." Indeed, any improvements made to its patents will be available to Nike, Parker says. John Wilbanks, VP for Science at Creative Commons, says his interest in the concept is being fueled by a desire to end widespread duplication of effort and "wasted resources" by companies working on sustainability. "We need to make it easier for individuals, companies, academia, and researchers to collaborate and share best practices," he told the Davos gathering.

What do you think? Is it possible -- and/or desireable -- for companies to team up in this way for the common good? What could be the pitfalls?

Let us hear from you.


-- Marcia Stepanek

(This post first appeared on Justmeans.com and appears here with permission)
(Illustration by KYC Studio-Montevideo for istock.com)

Social Production

There's a debate among business leaders about the impact of social networks on social enterprises and innovation. At the World Economic Forum in Davos last week, Don Tapscott, a strategy consultant and an author of books on the so-called Net Generation and corporate transparency in the Digital Age, predicted sweeping changes in the way companies operate. What follows are excerpts of his remarks during a hot-ticket workshop co-led by the top executives of Twitter, Facebook, LinkedIn, MySpace, and Ning, among others.

How do you think social networks will impact businesses and social innovation?

I think we're at an inflection point where social networking is changing and becoming a new mode of production. It's becoming what I call "social production." And social networks within the enterprise are becoming the new operating system of a business. Best Buy, for example, has a social network (Blue Shirt Nation) that involves tens of thousands of people, and this changes the way Best Buy operates its business. It has a link to its social network, as part of broader collaborative platform, to an electronic water cooler of 70,000 people that come up with all kinds of fantastic new ideas. It uses prediction markets to better understand what's really happening within the company. This is changing the way you run a business. It's no longer about hooking up online or creating a garden community for your products.

The more important opportunity for business is using these new collaborative platforms that are built around social networks to change the deep structure and architecture of the company; to orchestrate their capability to innovate and create value. I used Ning to run a contest for a book I'd written recently [Grown Up Digital], where I asked kids around the world to give me a two-minute video that says what's wrong with the education system and how they'd fix it. I had a person working on this for two weeks. I got hundreds of videos from dozens of countries and it changed the way that I, as a company, relate to the rest of the world.

What other examples can you share?

InnoCentive is basically built on a social network. I'm Procter & Gamble and I'm trying to find a molecule that will take red wine out of a shirt. I've got 9,000 people inside the company but there are 200,000 outside on the InnoCentive network, and sure enough, there's a retired chemist in Taipei or a grad student in London that comes up with a molecule. I pay them $200,000 for the fix and I have a product that ends up being a billion-dollar product.

Or take Goldcorp Inc., a gold mining company. The CEO there was very frustrated that his geologists couldn't tell him where to go into production -- where the gold was. So he ran a contest on a social network and collaborative platform. He offered $500,000 in prizes for anyone who could tell him whether he had any gold in his company, and if so, where it was. He got 77 submissions from all over the world. They used techniques that he'd never heard of. And for his $500,000 of prize money, he found $3.4 billion worth of gold. The market value of his company went from $90 million to $10 billion. He's my neighbor, and I can tell you he's a happy camper. Social networks are changing the way we innovate and the way we get capability.

What are the risks?

One big problem has to do with moving to this new paradigm. There's a crisis of leadership in companies and enterprises typified by this popular habit that some companies have of banning social networks like Facebook within the enterprise. I was talking to the CIO of a state where the governor had banned Facebook and I asked, 'Why do you do that?' And he said the governor felt the people were wasting their time on the job -- to which I replied, 'Well, if young people are wasting time, is that a technology problem? Do you fix that by banning the technology? Maybe it has something to do with work flow, or job design, or performance evaluations.' I asked what the effect was of banning Facebook, and he said that everybody went to MySpace. Another youngster, 27 years old, had a different answer. He said it was the single most demoralizing thing management has ever done. It said to him that management doesn't get collaboration, doesn't get his generation's tools, doesn't understand his generation, and doesn't trust him. So there is a crisis of leadership emerging.

...The whole theme of Davos this year is that the world is bust and we need to rethink, redesign, and rebuild our institutions. The current model of nation-states coming together to fix things isn't working very well. The model we are exploring now at Davos is to create new multi-stakeholder networks to solve problems, so that while world leaders get stalled at Copenhagen coming up with a climate change deal, for example, there are something like 10 million people organizing on the Web around this issue. This is the first time in human history where we're all pretty much on the same side as citizens on an issue like this. To me, this presents a new opportunity to change the way we collaborate in the world and in the way we solve problems.

Nike has just launched something called the GreenXchange, where companies are going to contribute their intellectual property and put it in the commons and use social networking to do this. Nike is giving away 440 environmental patents and placing them in the commons. It's not just on the idea that a rising tide lifts all boats but we have big environmental problems in the world and need to move toward more open innovation and competitive strategies. Social networks give us a platform that radically drops innovation costs. This is a big change.

...Transparency is a new force that's causing companies to be more open, truthful and honest. Now, it's true. You don't always see it. But that's the general trend. Companies that are honest can use transparency as a friend.

—Marcia Stepanek

(Illustration by Saul Herrera for istock.com)