MAKING CONNECTIONS
Lessons From Open Source
on the Power of Networked Communities
SoftSummit
San Francisco
October 2005
THE BOSTON CONSULTING GROUP
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).
BCG-OSBC-Connections-15Mar04.ppt
-1-
IBM AND “VIRAL MARKETING”:
UNTIL RECENTLY, AN OXYMORON
BCG-OSBC-Connections-15Mar04.ppt
-2-
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
18,000
WW announcement out to vendor
community, Slashdot, and other lists;
discussion about outreach to users
16,000
AB
14,000
MP
12,000
MW
10,000
AT
8,000
DD
6,000
rsync
Work on “honey pot” started by AB and
MW
4,000
RR
2,000
G2L
0
Tues, 2 Dec 2003
11 PM GMT
3 Dec
4 AM
BCG-OSBC-Connections-15Mar04.ppt
8 AM
noon
4 PM
8 PM
midnight
4 Dec
4 AM
8 AM
noon
Time
-3-
MORE THAN 85,000 MESSAGES A MONTH
COORDINATE THE LINUX ENTERPRISE
User
Development
Corporate
mailing lists
redhatlist
suselinux-e
suse-linux
suse-security
debian-devel-changes
Community
mailing lists
linux-newbie
Extensions
debiandevel
linux “beer hiking club”
linux-raid
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.
networking
alt.os.linux
comp.os.
linux.
hardware
comp.os.
linux.misc
Community
bulletin boards
1,000
Posts/month
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
BCG-OSBC-Connections-15Mar04.ppt
-4-
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
8
7
6
5
Who are
these guys?
4
3
2
1
Volunteer significant time
IT professionals
52
49
46
43
40
37
34
31
28
25
22
19
16
13
0
Generation Xers
What about the
community?
Strong identification
BCG-OSBC-Connections-15Mar04.ppt
Global effort
Peer leadership
preferred
-5-
OSS MAKES A “CREATIVE CONNECTION” FOR PARTICIPANTS
“Like composing
48.4% poetry or music”
61.7%
72.6%
“This project is as (or most)
creative as anything I have done”
“When I program,
I lose track of time”
60.0%
“With one more hour in the day,
I would spend it programming”
Note: “...like composing poetry...” answer chosen as one of top three attitudes by participants; other answers based on degree of
participant agreement with statement
BCG-OSBC-Connections-15Mar04.ppt
-6-
IT’S ABOUT LEARNING, AND GETTING STUFF DONE
More So Than A Religious War
Intellectually stimulating
44.9
Improves skill
41.3
Work functionality
33.8
Code should be open
33.1
Non-work functionality
29.7
Obligation from use
28.5
Work with team
20.3
17.5
Professional status
16.3
Other
Open Source reputation
11.0
Beat proprietary software
11.1
License forces me to
0.2
0
10
20
30
40
50
Percent of respondents
Note: Question asked for top three motivators of F/OSS participation, n=684
BCG-OSBC-Connections-15Mar04.ppt
-7-
MOTIVATIONS AND CONTRIBUTION STATUS
SEGMENT HACKERS
“Community
Believers” (19%)
“Hobbyists” (27%)
Motivations
Do it because they feel
obligation and believe
source code should be open
“Professionals” (25%)
Do it for
work need
BCG-OSBC-Connections-15Mar04.ppt
?
Do it for non-work
“Learning &
Stimulation” (29%)
Do it for
skill improvement and fun
-8-
IS YOUR ORGANIZATION THIS CANDID?
From: Linus Torvalds (torvalds@transmeta.com)
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 (rusty@rustcorp.com.au)
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
BCG-OSBC-Connections-15Mar04.ppt
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FIRE AT THE KARIYA #1 PLANT OF AISIN SEIKI
4:18 AM February 1, 1997
Source: SMR
BCG-OSBC-Connections-15Mar04.ppt
- 10 -
Fire at Kariya #1 Plant – Toyota’s sole
source of P-valves (for brakes)
Nippon
Denso
Denso
Entire TPS faces shutdown within 72 hours
Aisin, Toyota and other Tier One Suppliers
collaborate on an emergency production plan
Toyota
Tier 2 suppliers team up, under leadership of their
Tier 1’s
Aisin distributes blueprints, raw material,
undamaged drills, and assigns staff
Aisin
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
Koritsu
Sangyo
aily Production of Vehicles
18,000
16,000
Units
14,000
12,000
10,000
First 1000 ‘P’ valves shipped to Toyota
8,000
6,000
4,000
Daily output of 13,000 vehicles; 62 firms
manufacturing “P” valves
2,000
0
Fri
SatSat
Sun
Mon Tues
Wed
Wed
02/01/97
04/02/97 02/02/97
02/05/97
01/31/97
02/01/97 02/02/97 02/03/97
Source: SMR, WSJ
BCG-OSBC-Connections-15Mar04.ppt
Mon
02/10/97
- 11 -
TOYOTA BUILDS ITS SUPPLY CHAIN TO ENHANCE
NETWORK LEARNING
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)
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
BCG-OSBC-Connections-15Mar04.ppt
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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
In negotiation
August
2003
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
BCG-OSBC-Connections-15Mar04.ppt
Recent changes
- 13 -
WHAT’S HAPPENING WITHIN THE TPS? (I)
Organizational
Learning
Transaction
Costs
BCG-OSBC-Connections-15Mar04.ppt
- 14 -
WHAT’S HAPPENING WITHIN THE TPS? (II)
Organizational
Learning
Individual
Learning
Information
Symmetry/
Transparency
Trust
Shared
Mental
Models
“Swarming”
Transaction
Costs
BCG-OSBC-Connections-15Mar04.ppt
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WHAT’S HAPPENING WITHIN THE TPS? (III)
Individual Learning
Principles
System oriented
principles
Organizational
Learning
“It’s the work, stupid”
All work is an experiment
Individual
Learning
Standardized
documentation
Leaders as mentors in the
work
Information
Symmetry/
Transparency
Trust
Systemic “voltage”
generation (pull, JIT,
balance)
“Swarming”
Accumulate personal
knowledge of work and
norms
Transaction
Costs
BCG-OSBC-Connections-15Mar04.ppt
Standardized
interactions
Long term
relationships
Shared
Mental
Models
Open knowledge
sharing
Discretionary “voltage”
directed by leadership
Stability and
consistency of
application of
mechanisms
- 16 -
THE NETWORK LENS:
MAKING THE INVISIBLE VISIBLE
Traditional views
Network analysis view
Operations
Org. chart
TC
CD
HC
Strategy
Energy
Consumer
IG
FS
Matrix
BCG-OSBC-Connections-15Mar04.ppt
Org
IT
- 17 -
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
Insight, Impact
Network shows key “catchers” and
“pitchers” of referrals
Hospital currently reviewing referral
process
Attending physician (~250 referrals received)
Referring physician (~250 referrals made)
Possible marketing vehicle for pharma
Source: BCG analysis
BCG-OSBC-Connections-15Mar04.ppt
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KEY OPINION LEADERS IN MEDICAL MARKET
Thomas Q
Situation
Steinberg J
Cink R
Declining return on marketing spend in
complex medical market
Martinez D
Boldin A
Johnson B
Beem N
Berg D
Owens J Cline J
Hamilton E
Chen R
Jones G George E
Ogden R
Brown J
Gupta R
Gunter S
McSpadden C
Ling T
Hunter D
Branch K
Taylor C
Blake O
Victor J
Blackburn D
Uncertainty about how to decide on who to
influence and how
Mitchell F
Rice R
Peete V
Schaub M
Finneran B
Lewis J
Mason D
Cruz L
Green T
Holmes P
Goldberg W
Porter W
Brady M
Glenn T
Upson T
Morgan Q
Weir B
Marshall P
Lundy M
Hutchinson T
Reed J
Garner C
Key players
Stewart K
Moss S
White B
Linked to key players
Not linked to key players
Link “within” groups of nodes
Links from key players to
nodes outside of key players
Non-reciprocated links to key players
BCG-OSBC-Connections-15Mar04.ppt
Moore R
Campbell F
Gore B
Smith J
Lopez G
Jackson R
Danner J
Noble J
Ma D
Hannah M
Montgomery F
Insight, Impact
Patterns of influence across KOLs
identified and optimal influence team
identified
Current client position assessed and
marketing spend focused and optimized
- 19 -
TELECOM REVIEWING SALES FORCE EFFECTIVENESS
FOR EFFICIENCY IMPROVEMENTS
Example of sales reps
(linked by who hired them)
Situation
High variation in attrition rates among sales
force reps
Network analysis conducted on hiring
patterns of managers
A
B
Insight, Impact
C
Evidence suggests that certain sales reps.
gaming the hiring system to achieve bonus
quotas
Manager:
Cancelled reps:
Active reps:
A
41%
59%
B
C
78% 95%
22% 5%
Company modified incentive compensation
system to account for “gaming” factors
Source: BCG analysis
BCG-OSBC-Connections-15Mar04.ppt
- 20 -
AN APPROACH TO NETWORK ANALYSIS
Five Step Process
Methodology
Objective
25
25
-25
-25
1998
2000
2002
1992
1994
1996
1998
2000
2002
2002
2000
1998
1996
1994
BCG-OSBC-Connections-15Mar04.ppt
1996
45
35
25
15
5
-5
-15
-25
25
-25
1992
5. Launch the network
transformation
1994
• Synthesize analysis to assess overall
network performance and develop action
plan to pursue opportunities
1992
4. Create the diagnostic
2002
• Map networks and analyze quantitative
network performance metrics
2000
3. Build the fact base
1998
• Determine methods to observe and
measure interactions that define “good”
collaboration
1996
2. Define the
measurement plan
?
1994
• Define network aspirations (i.e. “good”
collaboration) and characteristics which
promote it
1992
1. Develop lay of the
land
• Design and implement new business
processes to foster the network
characteristics recommended
- 21 -
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
BCG-OSBC-Connections-15Mar04.ppt
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“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 work
Release early/release often
Openness
Work space:
Activity must exist where individuals work
“Call to arms”:
Why this effort, why us, why now
Get started. Learn by doing.
BCG-OSBC-Connections-15Mar04.ppt
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