Business is being revolutionized by a new form of mass collaboration facilitated by social networking tools - logo montage by Ludwig Gatze

UBC Reports | Vol. 54 | No. 1 | Jan. 3, 2008

NBT: Doing Business 2.0

By Paul Cubbon
Instructor, Marketing Division, Sauder School of Business,

Facebook, Secondlife, Linkedin, Flickr -- these websites are more than just digital entertainment, but rather the experimental frontline of a new way of communicating and doing business.

But because of the rapid pace of change along with new and sometimes confusing jargon and names, there is a danger that people are missing the bigger business story at play. Collaborative, web-based tools represent a fundamental change in the way that business is, and increasingly will be, conducted.

Although many exciting new web-based ventures are being created and championed in the media, as with the first generation of web activity, the lower profile but more profound changes are happening in the traditional business world. In his 2006 book, Wikinomics: How Mass Collaboration changes everything, Don Tapscott notes two prime examples of “old economy” companies benefiting from web-enabled mass collaboration.

Goldcorp, a Canadian mining company in a traditionally secretive industry, famously made all of its geological information public online, and ran a competition to help it identify where to look for gold. Thousands of submissions came from unconventional sources; many of these were productive, leading to 8 million ounces of new gold production.

Meanwhile, Procter and Gamble now has thousands of non-employee scientists signed up to its open collaboration network, focused on innovation and problem-solving. The aim is to generate at least half of future new business ideas and technology from outside of the company.

This trend represents a serious threat to the survival of those companies that ignore it, and a massive opportunity for creativity, productivity and competitiveness in those companies that embrace this change.

The premise is that the second stage (Web2.0) of the web revolution is just beginning. The future is predicated on collaboration and what we currently see as primarily entertainment sites for the young are the experimental ground for future business collaboration and operation.

So, “wikinomics” and “web 2.0” are not just jargon terms, or for “Internet geeks.” Mass collaboration, enabled by the Internet provides the opportunity for all types of organizations to transform the way they operate.

Some, for example, are facilitating “expert, evangelical” customers to help other customers in online expert forums and knowledge bases, improving satisfaction, increasing the sense of brand community and loyalty, and reducing customer service and call centre costs. Many companies (think computer hardware and software companies like Apple, Dell, Microsoft) are pro-actively engaging a select group of customers to help other customers problem-solve.

There is no set play-book (although Tapscott’s blog on www.wikinomics.com is currently facilitating a collaborative effort to write a “playbook” on this topic.)

It is a time of exciting experimentation where the bold innovators are already crafting a competitive advantage by learning from their successes and from their mistakes. The takeaway: find a way to increase your collaborative network -- then empower experimentation.