Napsterize Your Knowledge

Here is a short interview I had for Ben and Jackie. It has to do with the "Napsterize Your Knowledge" chapter of their book.

1. One chapter in your book is called "Napsterize Your Knowledge: Give to Receive." The basic idea being that companies shouldn't hoard what they know, but share it. Did it surprise you when you came to that conclusion?

We weren't too surprised. We came from technology backgrounds where much of the selling process is education. Sharing knowledge about the subject matter, products, processes, etc. was — and is — very important. What surprised us was how often lawyers get in the way. Granted, they're paid to worry about potential problems, but resistance from legal teams against sharing knowledge — even though everyone inside a company believe it's in the best interest of customers and the company to do so — was palpable. These days, we see evidence that legal department-resistance is waning.

2. In business school, we are taught the opposite. Knowledge is a source of competitive advantage and having proprietary information is a great way to dominate the market. Was that true in the past or should IBM have been napsterizing its knowledge 50 years ago? If it was true in the past but isn't now, what factors caused such a huge change?

It's important to delineate the types of information we are talking about. It does not include proprietary information that could jeopardize business. We aren't suggesting that Krispy Kreme publish the secret recipe to its doughnuts or that Coke create open source cola.

That said, our research finds that the more companies share knowledge, ideas, tips, tools, trading knowledge — anything that customers would find valuable or useful — the more valuable that knowledge tends to become. Why? Because people tend to share valuable information with other people. IBM *really* knows this now: By giving away open source development tools, training and the knowledge it has about Linux, it is very efficiently expanding the number of businesses that will need services related to Linux applications. It so happens that IBM Global Services can help with that. It's the old axiom: Give to receive.

Just think: If IBM had Napsterized Smalltalk or, even better, OS/2, as open source, just think how different the world of client-server or operating systems might be today!

Because of the Internet, people pass knowledge on to friends, colleagues and customers more efficiently than in the history of the world. The businesses we've studied find ways to make knowledge distribution fast and easy. So the lesson here is: If your customers are asking you to publish better APIs to your software, publish them! If your vendors are asking you for more detailed sales data, make it available. If customers want to see how your doughnuts are made, show them! Transparency is good. Transparency helps inspire innovation. Innovation drives revenue. Revenue is good.

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3. Let's take two companies that are identical in every way except one. Company A napsterizes and Company B doesn't. Can you characterize the differences in the way customers would perceive the two companies?
Company A would likely perceived to be:

* A forward-thinking company
* A company without much to hide
* A company that is positioning itself for industry leadership
* A company that appeals to early adopters who are influential among their networks

Company B wouldn't not necessarily be the opposite of Company A, but company A creates more opportunities for its customers to spread its knowledge. When customers spread your knowledge, they're acting as your volunteer sales force and creating a natural selection process for you to find new customers.

4. When you napsterize your knowledge, why don't other companies capitalize on that? Look at Southwest. Everyone knows their business model: save money on training and parts by using only one kinds of plane, offer no frills service and only fly direct routes. They are consistently one of the most profitable airlines, yet the major carriers don't copy that model.

Southwest's success is hard to duplicate primarily for one reason: It hires extremely well.

It has an employee (and customer!) committee that helps ensure the company's culture of fun, spirit and individuality remain impervious to finance-drive calls for increased shareholder value. Chairman Herb Kelleher implores employees to worry about customer service, not profitability. In his model, customer service drives profitability. That seems to work — it's made the company profitable 30 years in a row.

Southwest was the first airline to Napsterize its knowledge on the web by making all of its fares easily viewable, something some of the major airlines still don't do. Southwest is now Napsterizing its operations and customer service through the TV series "Airline," a show for which it has no editorial control. Through the program, we see that running an airline is extremely difficult.

5. Let's say a midlevel executive reads your book and decides her company should begin napsterizing knowledge. Top management will probably be reluctant to listen to the idea. What major points should she make to help convince them to go for it?

First, find out what customers say. It's hard for executives to argue with what customers want. What types of knowledge, data, processes, intellectual capital are your customers or business partners asking for? What do they say would make their jobs or lives easier, more profitable, or more prone to innovation?

Second, think about how customers might spread your knowledge or data and how that could benefit the company. How could it open doors into new markets? How might customers help you improve your processes, products or, dare we say, marketing! Customers probably have some pretty good ideas about this, too.

Third, include a copy of our book with a Post-It to the chapter about Napsterizing knowledge! Outside validation can never hurt.