New Principles of a Swarm Business

Attendees of last year's BIF-2 summit might remember Peter Gloor, a research scientist at MIT and founder of iquest analytics. Gloor shared his insights about Collaborative Innovation Networks (COINs) and swarm creativity. For more than a decade, he's studied the social networking phenomena and defines a COIN as a cyberteam of self-motivated people with a collective vision, enabled by technology to collaborate in achieving an innovation by sharing ideas, information, and work. The power that keeps the COIN engine running is swarm creativity.

One important lesson he learned from analyzing social networks was “Don’t be a star, be a galaxy.” The real measure of value is “betweenness”; the person who is a galaxy is more powerful than the individual star. Peter's written an article for the MIT Sloan Management Review called

 New Principles of a Swarm Business. It's really a primer for developing an open innovation strategy with 3 key principles: 'gain power by giving it away,' 'share with the swarm,' and 'concentrate on the swarm, not on making money.'

"In a swarm business, companies may not make money where they think they will. Instead, revenues may likely come from unexpected places in surprising was. Thus, when first building a swarm business, firms should not concern themselves with how they'll profit from the venture. They should keep in check any preconceived ideas about their business models. ...the simple truth is that companies need to build value for the swarm first. Only after they accomplish this will they uncover the business model that will lead to profits."

The article has a great example of swarm creativity in action through Swiss retailer Migros:

"[Migros] has deployed the principles of a swarm business for decades to transform itself into one of the largest enterprises in Switzerland. Migros is primarily a self-organized netity, consisting of 10 large local cooperatives that have wide autonomy. The company is governed by a board as well as an assembly of delegates of the member cooperative (that is, the Swiss customers) who are democratically elected. Although there is a CEO, he has far less power than in the typical corporation."

Gloor contends that swarm creativity has clear advantages in accomplishing complex tasks: it affords flexibility, robustness, and self-repair. Errors and lack of centralized control are not only acceptable, but even welcome. In the end, while we must certainly recognize the contribution of individuals, its clear that networks are essential for reaping the rewards of innovation. As he told me last year: "While every innovation can be traced back to individuals, it is collaboration among creators that brings disruptive innovations over the tipping point."

RELATED LINKS:

• The father of swarm creativity, Eric Bonabeau, will be in the house on October 10th and 11th. Don't miss him - details about the BIF-3 Summit can be found here.