`Men work together,' I told him from the heart,
`Whether they work together or apart.'
This week I met with a friend, Roland Harwood of NESTA, who works on Open Innovation. Don't panic! He asked to be un-anonymised and is curious to see your comments on our joint work - see his response below. He was only stopping for the day, in a tour that embraced Belgium, Scotland, the North of England, the West and would eventually take him back to London. We talked about LinkedIn and Facebook, and whether they really allow a change in the way that people can work together.
My experience with e-mail is bad. It brings out my worst side. Swift anger in a moment of tiredness that leaves a mark on relationships that only time and more positive experiences can wipe away. Paranoid concerns about someone's motivation - which will naturally be forwarded to them to resolve! The problem with e-mail is that we think we are having a private conversation, and we are not. Even when we copy, or worse, blind-copy others, in our mind we have the podium. As the villain in "The Incredibles" wryly comments "You got me monologuing, you sly dog!". By contrast, this blog is kinder to me. The text you are reading now is very different from the first version. It started with the end in mind, an invitation to discussion where I open the text to others to comment.
Our Network has some amazing global businesses that use technologies like this to collaborate with partners. In my own doctoral studies I witnessed how ARM works with partners like Texas Instruments and Nokia. This way of working was enabled by a couple of important changes. The first was a legal change that occured a long time ago, when the US Navy required all suppliers of aircraft and radio sets in the First World War to pool their patents to enable fast innovation, and then paid them according to the usage of those patents in the products that were finally used. The consequence of that legal change is that companies that licence technologies to electronics manufacturers can simply verify the volumes of the product that are being produced and sold from an industry log, and get payment on a percentage basis. The second change was Electronic Design Automation. This, combined with a set of sophisticated spreadsheets, allows ARM engineers to model the performance of a microchip quite accurately without having to build it, and share those models with collaborators on the other side of the world. In contrast to a spell-checker for e-mail that gives "feed-back" these models allow "feed-through". This allows much better communication to the other electronics engineer, for whom the ARM architecture is only one component of the entire design they are trying to realise.
A chance meeting on a train gave me access to Jamie Urquhart, a founder of ARM (again, Jamie e-mailed kindly with comments, see below). I was very keen to go and learn how they ran their global network of collaborators. I blithely asserted that ubiquitous mobile telephony with access to e-mail had finally caused the death of distance. This thesis proved to be an exaggeration (to steal a phrase from Mark Twain). Jamie, who was to become a great mentor, kindly introduced me to a number of other founders and key folks, but thought that ARM was still "an airmiles business". ARM was born global because its senior management team flew out to Japan and persuaded key semiconductor manufacturers to back an unknown team with only one successful application, the Apple Newton. Their new collaborators had recently been let down by an Intel decision to take production back inhouse and were ready to become part of a new, open architecture, which worked out just fine for all concerned. My interviews with senior ARM personnel taught me a great deal, much of it already discovered by researchers elsewhere. I re-discovered patterns of innovation depending on architectural uncertainty observed in the 1950s in television manufacturers which had somehow been forgotten in the interim. Thank goodness that charitable examiners found something novel in my thesis (perhaps my spellings or my split infinitives?). But it was pretty clear that real innovation mostly requires face to face meetings.
I offered my experience to Roland. I warned him: "If I look at when I am effective, it is not through these shared models. People need to sit down together to have any serious conversation. And I spend most of my time simply trying to sit down with people - my worst work is done on e-mail." We gazed out of the window of the University Centre Grads Cafe. It had been a very long conversation, and one that had taken us through a whole series of related experiences and common collaborators.
Suddenly he turned to me. "You know", he said, "I must get 100 e-mails a week from Networks. Mostly they want money. And I am okay with that". But I could tell he was not okay with that (as you will see below, he didn't even remember saying those words, so maybe I misheard him). Actually, nobody is okay with people just wanting money from them and not caring whether their needs have been served. Perhaps the reason why he had come to me was precisely because I had NOT contacted him asking him for money. And so we had a quick conversation about the rationale for putting money into networks, and what kinds of legitimate outcomes could be expected. Fortunately, I could refer him to an excellent summary that had been written by people he trusted from past work. And I could give him a lead to a forthcoming report by a leading local consultancy that will give him an edge. And so we moved past that dangerous moment, the moment when they are expecting you to ask for money.
And I guess that is my answer to his question, "Have electronic networks now realized in LinkedIn and Facebook changed the nature of open innovation?" Now we can follow one another on Twitter, we can create communities on LinkedIn, we can organize parties on Facebook. All share the merit of this blog - we can edit and fix stuff so we appear as we wish to appear. But none of them replace the moment of truth in the meeting. We can talk on the telephone, warm things up, but until we actually make time to meet we will not accomodate one another. The profound conversations that actually change our direction, change our minds, take us out of our isolation and calm our rage, only happen face to face. Just showing up really helps.
Roland read my blog and responded::
"I'm glad we helped to inspire a post. Just had a read. I agree with much of what you say about the pros and cons of different media verses face to face.
On the networks point I feel I must clarify my view. I am not ok with numerous requests to prop up/fund networks and I don't think I implied I was. I do believe firmly in the mantra 'conversations, then relationships, then transactions' in that order and yes it does annoy me when people try to sell/pitch straight away without understanding what I might be buying.
What frustrates me most though is that, on the one hand I believe strongly that cross cutting networks are vital to an innovation economy, but on the other hand public subsidies are at often unhelpful or worse, counter productive.
Part of what we are seeking to understand through this piece of research is how we can shift focus from investments into people or individual companies into activities (that almost certainly need some investment) that encourages networks to grow, strengthen and flourish.
And yes, I did single you out as a 'good guy' with relevant experience with whom we could discuss these matters.
Thanks again for your time. It gave us much food for thought also and we'll share that with you once we've conducted a few more conversations with other network 'hubs'."
Jamie also e-mailed with some thoughts about what lessons ARM's licensing model should teach others:
"A thought about your piece on the factors that lead to successful licensing businesses. There has to be a maturity in the market such that the item being licensed whether it be a CPU or a USB interface is not the differentiating factor for competitiveness. So had ARM been around earlier it would have not been as successful because most companies interested in CPUs would have designed their own and retained that knowledge as in-house IP. The other factor that is important to creating a high-value IP business is that the business must own the roadmap for the IP. In that way a premium can be maintained for the IP. For instance many companies build standard IP blocks such as USB i/f but are not able to achieve premium pricing since there is not monopoly on building to the USB i/f standard. Whereas ARM, providing the lawyers and engineers work together can maintain its lawful monopoly over the IP.
This latter point affects many start-ups who seek funding but do not appreciate the dynamics of licensing. Furthermore a licensing business will find it difficult to achieve an exit other than an IPO. Since its technology will have been widely licensed and so little competitive advantage accrues to an acquirer. To go public requires a significant market position. Look at the struggles that companies such as ARC and Cyan have - I wonder if their investors mis-interpreted the value proposition by misunderstanding the market dynamics of IP licensing. Classically markets tend to support 3 players at most in the long-term. The CPU licensing business has ARM, MIPS, Tensilica, ARC, Cyan etc - time for a shake-out?"
'
Matt,
Interesting blog entry.
It's hard to disagree with the point that the face-to-face meeting achieves more than the social networking, at least for the present, but I think the case might be just a little too bi-laterally stated.
There are a couple of examples of 'in-between' transactions that are worth considering. My first would be the way that Internet standards come about - the RFC (http://en.wikipedia.org/wiki/Request_for_Comments) process used by the IETF. What is going on here is a semi-formal network, with peer review and opt-in membership. It would be very hard to imagine these working as well if they relied only on face-to-face meetings. My second exhibit is more anecdotal, and is the way that an engineer might work when they are asked to transfer knowledge to another group or individual. Typically, it's semi-structured and might involve a deal of file transfer and sharing before they meet face-to-face. This is where other media such as screencasts come in - considered here http://www.cognidox.com/company/blog/Making-screencasts-for-training-videos.html by me.
I think the dynamics are this - the LinkedIn and Facebook interaction is good for serpendipity. If I just saw that my contact made contact with another person who is doing something that I am interested in, and I use my contact to get an introduction - that's lucky. Whereas the face-to-face meeting is much better for dealing with spontaneous information quickly (such as you get in a sales dialogue).
But, like most bipolar scales, it isn't hard to find some interval points in-between.
-- Paul
Posted by: Paul Walsh | May 19, 2009 at 12:26 PM