Business needs to open up to openness

While born-digital firms ‘get’ openness all companies need to move to this model, says author

Mon, Feb 24, 2014, 01:03

Coverage of the London Paralympic Games in 2012 under the banner of ‘superhumans’ won many plaudits for the broadcaster Channel 4. The unprecedented 150 hours of live coverage of the games demonstrated boldness and a sense of purpose in an station that many felt had lost its edge.

When CEO David Abraham took over there in 2010 he found an organisation suffering from doom and gloom and a cap in hand attitude towards the people who owned and funded it – the taxpayers. Abraham aligned people around the notion of “mission with mischief” with a purpose clearly expressed through the organisation.

The result was a re-energised organisation. “As well as generating a raft of award winning content and advertising, it also delivered unforeseen audience figures and a sense of significant momentum for the organisation. Purpose helped it win,” notes author David Cushman, who says that a sense of purpose combined with openness are key attributes for modern businesses.

Openness is not just a nice to have corporate social responsibility virtue but is a vital element in 21st century organisations. While born-digital ventures, for example, instructively know this, all organisations need to move to this model quickly if they are to survive in the networked age, he maintains.

Cushman is a former journalist who first plied his trade as a junior reporter on the Biggleswade Chronicle in Bedfordshire in 1987. These days you’ll more likely find his byline in the Financial Times or Wall Street Journal .

He is a permanent member of the Financial Times Judgment Call panel, and a trustee of Citizens Online – a UK Charity which aims to ensure no-one gets left behind by the internet revolution. His fascination with the world of media remains and features strongly in his book ( The 10 Principles of Open Business ).

Other open principles he outlines include open capital, open networking, connectedness, open innovation, open data, shareability and transparency. Many of the greatest success stories of the 21st century including Google, Apple and Amazon are built on multiple open business principles while many of its biggest failures aren’t and won’t be, he argues.

“You would struggle to find an organisation that is an exemplar of all 10 [open business principles] but it’s good to recognise what they are and to score yourself against them and identify which are the most urgent priorities. It becomes a way in which they can act rather than just talking about this stuff,” he notes.

He cites an IBM CEO survey from 2012 that indicates that companies that outperform their sector are 30 per cent more likely to identify “openness” as a key factor in their success, with particular benefits for collaboration and innovation. Companies are 50 per cent more likely to outperform their rivals and grow sustainable profits following this approach, according to global consultancy firm McKinsey & Company, he adds.

Open capital
The most significant disruption changing the way organisations function and businesses operate will be the way in which capital is organised, he says.

While in the past, capital was organised along the principles of mass and centralised control with big blocks of cash held by small groups, the networked world requires something new.

This is, as he puts it, “something which delivers faster decisions together with wider distribution of both risk and reward; something which moves the role of the customer from the end user to participant and partner.”

Open capital such as crowd-funding platforms are the future, he says, as they democratise innovation, something that is valuable to old as well as new organisations.

Cushman is keen to not only provide a diagnosis but also offers prescriptions for traditional organisations around each of the principles. On open capital for example, he suggests running an internal idea generation event at which users have play currency to back their favourite ideas.

The winning idea is then tested on a platform and the organisation commits to providing half the funding if the crowd will match that by pre-ordering the output.

“Large organisations need to learn how the disruptives think and they need to reshape themselves to fit the way the world actually is now. Disruptives won’t go to the VC community for support, they will crowd fund, not only to get money but to discover whether they have a market or not.”

Cushman stresses the importance of four “Cs” – community, culture, content and connectivity.

The notion of “communities of purpose” embodies this and is a great way of lowering the cost of action. Witness what happens on Twitter, he says, where people often organise around something they care about and get things done.

The clean-up of the streets of London after the 2012 riots, organised around a citizen-inspired hashtag, is a case in point. “If the Government had organised a designated big ‘Let’s clean up the streets day’, I doubt much would have happened. People can self-organise very quickly around a worthwhile goal and then move on. That general principle is one organisations need to think about. If you want to be more fluid, teams have to be smaller and tasks need to be broken down,” he observes.