-
Steven L. Johnson wrote a new post on the site MIS2901 Spring 2015 9 years, 7 months ago
Here is a link to Quiz #9. It is due by start of class on Tuesday, March 24.
https://docs.google.com/forms/d/1BKMfxVmd0aBgKUIM6oxEnzEEQWeiQBa4PhrmN5uZRPM/viewform
The quiz is open-book, open-notes. The quiz […]
-
Steven L. Johnson wrote a new post on the site MIS2901 Spring 2015 9 years, 7 months ago
According to a recent article in the Washington Post:
The stereotype of a “gamer” — mostly young, mostly nerdy and most definitely male — has never been further from the truth. In the United States, twice as […]-
I have never been big into computer games or video games in general. With that said, however, there have been a few games here and there that I’ve played and enjoyed throughout my life. Perhaps this is because I was surrounded by friends who were hooked on video gaming when I was younger. I do not have a favorite kind of computer game because I barely ever play them – but I would imagine that sport games would be my favorite, or arcade-style games like Space Invaders. When I was younger, I would have been more likely to play a game on a console. Today, a phone or computer is what I would probably use to play a game. I have not the slightest clue as to how computer gaming will change for the future. If the demographic of video gamers is shifting to women, we may see more games designed to be attractive to women. This is about the most complex observation I could make.
-
When I was younger, I played a lot more, but these days I have lost the time and interest to invest in them. While I still enjoy playing a game like FIFA a lot and the occasional game on my phone to kill time, I generally try to be more productive with what I do. However, I do believe with current trends in technology, games will start to mimic real life more and more, both in terms of how they play and how they are interacted with. Virtual reality is starting to become a buzzword, with things like holographic tools and eyetracking software. When those are incorporated within games, I think they will get even more widespread appeal.
-
-
Steven L. Johnson wrote a new post on the site MIS2901 Spring 2015 9 years, 7 months ago
Here is a link to Quiz #8. It is due by start of class on Thursday, March 19.
https://docs.google.com/forms/d/1dWtXTlQ3OOxClVMLu1Zg35Eal9nCuMhrt9Dc1HHC9B0/viewform
The quiz is open-book, open-notes. The quiz […]
-
Steven L. Johnson wrote a new post on the site MIS2901 Spring 2015 9 years, 7 months ago
Thinking about a recent customer service experience, what ways did Information Technology either help or hinder the quality of the interaction?
-
A recent customer experience interaction I had was with Harvard Business Publishing. I was required to create an account and purchase cases for my class. I bought the cases in the first week of the semester but when the time came when I had to actually go in and use them, I was blocked from accessing the cases. I could still log into my account, however. Before I could even become frustrated I noticed that there was an option on the side of the page to ‘chat’ with a customer service/tech support person. I clicked, and began chatting right away. The person quickly and effectively restored access back to the way I had it. Perhaps IT helped create and solve this problem. Had everything been working fine, I would not have been prevented from accessing the cases in the first place. However, HBP had an excellent system in place to respond to these issues. The tech support person was able to fix the problem in record time. So in the end, I never lost valuable time to work on the case and have nothing bad to say about Harvard Business Publishing.
-
The most recent customer interaction that involved IT that I can think of is when I purchased my last ukulele. I have bad luck with instruments and everytime I get one, there’s some kind of defect that needs to be addressed. The last time around, one of the frets was damaged, but when I called the Guitar Center that I bought it from, they quickly looked up a directory for warehouses and other Guitar Centers close by, identified one that had the same model of my ukulele in stock, and ordered it to be shipped to their store, which was the closest to me. It was available for pickup within a day or two. Without IT, they would not have been able to quickly identify an acceptable replacement without ever making another phone call, and it was a quick and painless process.
-
-
Steven L. Johnson commented on the post, More Information on the Case Analyses Assignments, on the site 9 years, 7 months ago
Kevin — Thanks for your question.
Case Analysis #2 is considered the final exam — the case document and case questions will be made available immediately upon the conclusion of our final class WebEx meeting. Much like any “final exam” if you want to start preparing sooner my recommendation is to re-visit each of the assigned readings…[Read more]
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting A-G 9 years, 7 months ago
From the perspective of the recording industry (record labels), what advantages do digital media have over physical media? Then why were the labels so resistant to digital media?
How did Radiohead decide to […]-
The advent of digital media has been a significant for cost-reduction within the record and video industries. The decreased need to produce CDs or DVDs or other mechanisms of distribution has decreased the cost massively. The negative of digital media is the ease with which things can be copied and distributed. So although the record labels have significantly decreased cost of producing the albums and distributing them there is a much higher level of copyright infringement and out right theft and free distribution. Because of this Radiohead offered their album for a donation under the hopes that people will donate money rather than steal the music. This is a significant potential problem for other artists due to the fact that they may not be as popular or as rich already and therefore may not necessarily make significant income off of their albums.
-
I agree with you on the cost-reduction factor. Digital media is more physically and financially convenient for both the record labels and the consumers than the conventional physical means. Nowadays, there’s no need for a whole building in order to run a record company, a space as moderate as one bedroom apartment is big enough for any nature of digital music production. A major negative about digital media, like you stated, is piracy, considering the high level of illegal and even legitimate music downloads these days. There are public libraries that offer free music and book downloads to their registered members.
-
Hi, in the other hand for the artists that are rich and well known with ample means for a completely innovative way of managing their own work this seems to me a good strategy to give back to the artists what they deserve: control on their artistic abilities.
-
-
I think both artists and record companies took a while to warm up to embracing digital media, after all it was a big change, and as the evidence show, companies and artists took a hit. This was disruptive. Radiohead’s release of “in Rainbows” was a big hit. I think they were inventive in finding a new way to approach something that hadn’t evolved very much, and as a result was able to change the music business and show that money could be made outside of the traditional system. Radiohead self-released the album as a pay-what-you-want download that was followed by a retail CD release. They had chosen not to renew their contract with EMI, and this was their first release after their contract ended. Wikipedia shares that the album made headlines across the world and entered the UK Albums Chart and US Billboard 200 at number one. After doing some research I learned that while many felt this was in fact revolutionary, there were those who felt Radiohead’s release of their album this way hurt young artists starting out who didn’t have their reputation. I found it interesting that one article I read stated that one downside to this self-release was that the method of release became more pf the focus than the music itself.
-
please excuse my typo!! pf should read of
thanks -
I had never thought of it hurting new artists in that way but I guess that could be true. I remember about 6 years ago going to a restaurant and hearing a band I really liked. I asked if I could buy their CD and they said just go to their site and download it. I tried to insist to pay something and they just said they wanted people to like their music, listen to it, and share it with friends so they could get a foot in the market. Sadly, they’r no longer around but I can see how larger bands could be squashing even the little guys with stunts like this. Nice comment Diane!
-
Hi Amanda,
The comment was included here http://pitchfork.com/news/33749-radioheads-in-rainbows-successes-revealed/ and the other reference was http://en.wikipedia.org/wiki/In_Rainbows. Looks like most of us found the same info online. I found it interesting that they never distributed another album the same way, even with the album’s success what it was. This album’s release made me think about how Beyoncé released her self-titled fifth album in December of 2013. She did release it through an established channel, but the way she did it shook things up for sure. Some retailers refused to release the physical copy of the album. In fact in September 2014, Harvard University’s Business School published a case study on the release strategy of the album which examines its difficult planning and execution, as well as its short-term and long-term impact http://en.wikipedia.org/wiki/Beyonc%C3%A9_%28album%29.-
Diane
I read about the Beyonce HBR case a while ago. I definitely don’t think that many artists can pull off what she did just because of the big following that she already had and utilizing the social media outlets that she did to announce the album. Radiohead was a big name back in the day and if they had the social media outlets that Beyonce did, I think that they would be able to pull it off. I think that they took it a step further though by launching it solely on their website while Beyonce utilized iTunes, which has a substantial user base.
-
-
-
Diane, I agree the ‘pay what you want’ business model was disruptive. This strategy is also used for charitable purposes or at non-profits, such as museums and parks. Here’s an interesting article about the dynamics of ‘pay what you want’ pricing in its foundation’s charitable ‘Panera Cares’ cafes. Essentially, Panera allowed customers to pay what they could afford – to draw attention to ‘food insecurity.’
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/14/down-with-price-tags-heres-how-to-profit-when-people-pay-what-they-want/
-
-
The advantages are cheaper production costs. It is cheaper to publish and offer a digital MP3 than it is to produce physical media, a case, and shipping costs. Record companies can also fill all demand whereas in the past inventory shortages may have cost them millions of potential sales. There are also inventory costs such as warehouse costs that can be eliminated with digital media. It is more convenient for the consumer to buy digital media as opposed to someone who has to get in a car and travel to a store to buy the music. I think labels are resistant for a couple of reasons. The control factor is a big one, especially in regards to production. I also think the labels want to have more control whereas an artist can go out and publish their own digital media. In that regard, job security is a big one. A lot of jobs would be eliminated if the industry went all digital. The margins are also much lower for a digital asset as opposed to a physical asset where the label can inflate shipping, production, and inventory costs. Record companies also feel that the media are more susceptible to theft through sharing and torrent networks. Radiohead asked for donations from fans who wanted to obtain the album. I think it boxes other artists into a corner who are perceived as greedy as opposed to Radiohead who come off more fan-friendly. The launch was very successful according to Pitchfork.com (http://pitchfork.com/news/33749-radioheads-in-rainbows-successes-revealed/ )with three million purchases of In Rainbows.
-
From the perceptive of record labels, the main advantage of digital media over physical media is cost-saving. Physical record label is becoming less lucrative for record companies because certain fixed and variable costs associated with music production (rent, manufacturing and packaging costs, employee salary, etc.,) are in evitable regardless of sales performance. According to the Radiohead article, overhead cost plus other production costs such as packaging & manufacturing, distribution, marketing & promotion, totaled about 45% ($6.41) of the retail price per unit ($14.25), whereas most of these costs are avoidable in the digital media industry.
Another reason for the resistant may be due to piracy issues. Digital music is generally easier to reproduce and transfer than physical CDs. Somebody with a legitimate access to a song in America could have a friend in Europe access their Amazon account and download the same song for free.
An online Billboard article states that CDs sales, though incrementally declining, still surpass digital downloads. However, “only when track equivalent album (TEA) sales, whereby 10 songs equal one album, are factored in do digital album sales surpass CDs.”
http://www.billboard.com/biz/articles/news/digital-and-mobile/5901188/cd-album-sales-fall-behind-album-downloads-is-2014-theIn lieu of charging a flat rate, Radiohead demanded donations for their all-digital album, In Rainbows. In addition, the album could only be bought as a whole; no selected or individual tracks may be purchased. According to pitchfork.com, the album as at October 2008, had sold over 3 million digital downloads from the band’s website, and 1.75 million and 100,000 in CDs and discboxes respectively.
What problems do you think this might create for other artists? I think Radiohead’s tactic for selling their In Rainbow’s album was a personal risk that could have either favored or failed the band. I don’t think it tends to create any problems for other artists because such strategy is still unpopular and I am yet to hear any outcry from other artistes as to that effect.
-
Radio Heads 2007 release of In Rainbow was exclusively through RadioHead’s website. RadioHead had already chosen to not enter into contract with a record company and went forward riding their past success and large fan base. By not contracting marketing and distribution RadioHead would not have to share revenue. Surprisingly, RadioHead offered the album to fans for any price the customer wanted to pay; a $0.90 download charge applied. Customers could purchase a box set of two CDs, vinyl LP and artwork book for about 80$. Though it may seem that fans would offer a relatively low price the reality is that under a traditional contract, RadiHead was only receiving $1.40 to $2.25 of the sale a digital album or physical CD respectively. RadioHead made more money on their In Rainbows strategy than any past album. The first year realized $3M in sales. Past albums sales revenue for RadioHead had been int eh hundreds of thousands. Piracy is an issue. Almost immediately after their downloads began, file sharing torrents were generated. The impact of file sharing did eventually result in more files being exchanged than sold and RadioHead halted their website download and shifted to offering physical CD, but the money already made far exceeded expectation. RadioHead’s overall strategy proved highly successful.
-
-
I apologize for the link above, it was meant for my own post.
-
-
-
Almost forgot source:
http://pitchfork.com/news/33749-radioheads-in-rainbows-successes-revealed/
-
First I would like to start by mentioning that the quality of music played by digital and physical media is different. Where the best sound comes out from LPs, provided that the proper equipment is used. Tables A and B of the assigned reading indicates the profit’s breakdown of physical and digital media. It appears that the recording industry has a much larger profit when publishing digital media. It is, also, evident that the physical media lower profit is related to higher costs of production, marketing, packaging, and shipping of the actual CD. It is my opinion that recording industries were resistant to digital media for two orders of reason. First and foremost because of their fear to lose control over third party distributors, and bands on the sale and production of music. Also, because of the potential loss of revenue generated by the illegal website that allowed free music downloading.
Radiohead in 2007 was a very successful rock band that did not have any contractual agreement with recording companies. The band owe a website and decided to sale their newest production directly to the users for a price of their wish starting from $0. According to this website: http://pitchfork.com/news/33749-radioheads-in-rainbows-successes-revealed/
their experiment was very successful for an album that people could have had for free!
I personally think that Radiohead approach rather than creating problems for other artist opened up a new window of opportunities especially for those who are established in their field and wish to regain control on their work. By going back to tables A and B of the reading it appears that the artists, independently from physical or digital media, were getting the smallest cut of the pie!-
I think with respect to the specific advantage of older forms of music such as LPs providing high quality audio, you are referring to more of the holistic experience of listening to music. I’m not sure that to the average consumer today that this qualifies as an advantage of the older format over current media technology. With respect to the recording industry (record labels), this discussion is merely a tool for justification of their existence while their true value is slowly evolving to become an extinct resource. My only further thought with respect to Radiohead’s approach opening up a new venue is that their opportunity existed in the manner it did in 2007 solely due to the fact that they were of outrageous popularity. The average new artist publishing in this manner is unlikely to garner the respect of the general public. If the average purchaser spent between $1-2 for Radiohead’s music and they sold 1.2 million albums, how many people will buy Sofi De La Torre’s “Vermillion” through this route and how much will they be willing to pay without knowing who she even is or having seen her ever perform?
-
No, I am not referring to the holistic experience nor I thought you can have such an experience when you listen to music coming out of an LP. I am referring to the fact that music coming out of LPs “…when proper equipment is used…” sounds much better.
-
-
-
Digital media provides the recording industry with both lucrative and detrimental business avenues. Modern digital media has increased record labels’ speed to their market by providing instantaneous internet-based access to music purchasing. It reduces costs of manufacturing and procuring physical albums. It has multiplied libraries of available recordings through almost unending digital storage capacity. Additionally, digital media has increased music-distribution reach. No longer must customers visit a record store to find the latest release of an album. Modern technology enables music customers to find everything they desire, from classics to currents, in a few simple clicks of a computer keyboard.
But, digital media also limits record labels’ influence over distribution and access. The protective walls of copyrights begin to crumble under mass digital media distribution capabilities. Artists, with digital media technology, now have the ability to distribute their recordings much easier without record label assistance. Furthermore, record labels’ profit splits are reduced by giving up control over their musicians’ music distribution outlets. Lastly, with music gone digital, it has become extremely more difficult to limit illegal sharing and/or proliferation.
How did Radiohead decide to sell their album “In Rainbows”? How successful was it? What problems do you think this might create for other artists?
Radiohead chose to disrupt the record industry further by selling their “In Rainbows” album for any amount chosen by their customer plus a small service fee. They made this deal available during a set period of time and it was extremely successful. This pitchfork article (http://pitchfork.com/news/33749-radioheads-in-rainbows-successes-revealed/) explains that Radiohead made more money off of their digital release of “In Rainbows” before making it available in record form than they did on their entire prior album “Hail to the Thief”. While Radiohead found this creative and prosperous music distribution channel, other (likely less successful) artists might feel inclined to reduce their asking price for self-produced albums or, similar to Radiohead, allow their customers to decide their music’s value. I could see how the popularity of such a disruptive innovation could hurt starving artists. In a hard-to-succeed business like music, these entrants need financial support, not pressure.
-
How did Radiohead decide to sell their album “In Rainbows”? How successful was it? What problems do you think this might create for other artists?
Radiohead made the album “In Rainbows” available for download on its website. Instead of setting a price, the British rock band simply asked its fans to donate what they thought was suitable. Interesting concept. Not wanting to put individual songs up for sale on iTunes, the company only sold In Rainbows by the album. Another very interesting concept.In my opinion, I believe this stunt was successful and by successful, I think it made a strong statement to musician producers and record companies that artists themselves hold the talent and can do things independently. When I saw how much the artists actually received when they sold a CD, it was a bit appalling. Grant it, the dollar amount declines with downloadable music but they receive the same percentage of the sale.
By providing this type of availability to fans, I can see where other artists might be intimidated as they may not want the responsibility to 1) produce their music independently to save costs and 2) to provide a safe and technological savvy (piracy and hackers avoidance) website to download the music. Perhaps other artists would prefer to have the traditional third parties provide its services as it had been in the past and not open something new like what Radiohead did.
I found an article posted last year from CBS news about the band’s revolutionary consumption offering. According to the site, “Radiohead singer Thom Yorke has said the band made more money from digital downloads of “In Rainbows” than for all of its other albums, the team wrote.” The band Nine Inch Nails tried to do something similar in 2008 by letting their fans download the album “The Slip” for free a few months before offering it other sales channels. Apparently it did not generate the same impact as Radiohead’s and wasn’t very successful (and by that, I mean it wasn’t a cash-cow).
Below is the link to the article:
http://www.cbsnews.com/news/what-happens-when-shoppers-pick-their-own-prices/-
March,
Thanks for the CBS link. It’s interesting to see what researchers found when evaluating Radiohead’s unusual way of promoting their music. I found it surprising that a good amount of fans felt that they needed to pay a fair amount and didn’t take advantage of the offer. I agree with your point regarding other artists and the intimidation factor as well. Radiohead really took an unusual, but innovative approach by dealing with the business aspects of their music. A lot of artists don’t want to get involved in this so I think it’s fair to say that many other musicians grew concerned when this proved to be a successful endeavor. Aside from wanting to stay clear of business responsibilities, I think artists are also became concerned with illegal downloading and loss of overall revenue by taking this approach. As you mentioned, another band attempted to do the same thing and didn’t see much success so I am sure other artists are hoping that this approach doesn’t sustain.
-
-
From the perspective of the music recording industry, it would be foolish not to embrace digital music. When thousands of songs are available instantly at the click of the mouse, few rational people would deliberately go out of their way to go buy a physical product. In fact, it is difficult to find methods to play music in a non-digital format. The resistance probably stems from the fact that digital music is so easy to pirate and transmit. One would think that record companies would lower prices (some of which could come from the significant reduction in overhead costs provided by digital format) and prevent so much piracy. Instead, most have chosen to involve themselves in ugly disputes over music rights and how underpaid musicians and music producers are.
Radiohead, although I like them as a band, pretentiously pulled this marketing stunt to make themselves seem like the ultimate antithesis to the money-hungry record labels. It might seem generous to give out an album at whatever price fans want to pay, but such decisions are really easy to make when you already have millions of dollars and no need to cultivate a new fan base. Other (less known) artists do not have the liberty of being under their own label, or spending years on a studio album only to give it away for free. However, this debate is less than cut and dry. It’s almost a damned if you do and damned if you don’t scenario. Recently, U2 caught a metric ton of flack for putting their latest album for free on Apple phones. While, at the same time, record labels get slammed on a regular basis for charging too much for digital content, or for not releasing the option to sell individual tracks from albums.
Ultimately, the way the music industry makes money might have to change altogether. It is difficult to enforce distribution of digital content and to ensure the rightful parties (even with proper contracts) get their money. I think the main way artists and production companies will make money will be through live shows. However, as any recent concert-goer might agree, this change will be reflected in the rapidly increasing ticket prices.
-
The advantages to digital vs. physical media are numerous and many already noted here including lower cost to produce, higher quality, etc. Even with many advantages there are several large disadvantages. The biggest problem with digital is that it is so easy to share and reproduce that the music industry, as well as other media industries like cinema, are loosing out because of pirated and unauthorized sharing. Napster was the first big push towards digital sharing and although it was shut down, the damage was already done since people had a taste of what was possible through sharing. More recently, the example of the Sony hack by North Korea highlights another risk with utilizing digital. If the films had been done with physical media the option to hack the content wouldn’t haven’ existed. With such high stakes for intellectual property rights it’s understandable why some industries would be cautious. Radiohead’s tactic of allowing the music to be downloaded for free was innovated at best, crazy at worst. They took a huge gamble but it paid off big time. I haven’t heard of other artists fallowing suit however with the launch of the iPhone 6, U2 offered their latest album for free, without an option for payment, so we may see more of this type of marketing in the future.
-
It is funny you brought up the U2 album. The strategy actually backfired. U2’s album was forced on iTunes users whether they opted to download it or not. Apple users actually got angry over being forced the download. http://abcnews.go.com/Entertainment/u2-apologizes-free-songs-innocence-album/story?id=26214810
-
Eric – very good example. I recall Apple releasing instructions on how iTunes users could ‘return’ the free album (i.e. delete from their music library). U2 figured that everyone, regardless of whether they were fans — would appreciate a free cd.
-
Good examples here. I agree that U2 over stretched with their assumption that everyone would want their album. And it does appear that Radiohead’s strategy is an anomaly in the music business. From the article below it looks like Nine Inch Nails attempted to give away their music, with much less fanfare. The link to Radiohead’s success was allowing choice for their fans, with the phrase, “It’s up to you”. Considering the success, I am somewhat surprises we have not seen more copycats out there.
http://www.cbsnews.com/news/what-happens-when-shoppers-pick-their-own-prices/
-
-
-
-
From the perspective of the record label industry, digital media has the clear advantage of sophisticated software based DRM over physical media which can be copied and distributed much more easily. This should theoretically help protect unwanted or unlawful distribution of their contractual advantage for which they have invested heavily. The industry was likely resistant to digital media simply because they didn’t invent or control the industry themselves and thus had to worry about profit sharing with a third party such as Apple. In fact, you can see that about 35% of their profit would be given to a company such as iTunes with the advent of digital media, since the industry was no longer the distributer of content. Ultimately, they would be forced to give in and accept DRM and profit sharing with the hopes of recouping losses to torrent networks.
Radiohead had garnered enough individual recognition that marketing and distribution of digital media through a record company was no longer required. As such, they decided to take the unique approach to distribution by creating a presale through their website with a minimal service fee where potential listeners could choose their own price for the record and pay in advance to the distribution. This allowed Radiohead to ultimately control the pricing in case they felt their strategy was not working before the day of distribution. For a premium service, they offered a physical CD and LP version of their product for $80 with early pre-access for those that were die hard fans with the hopes that they would stick by Radiohead more loyally and likely not illegally distribute their music. Their sale was quite successful, and while it doesn’t seem as though official final sales dollars exist because the information is protected, their was 1.2 million album sales, with approximately 30-40% of the downloads being lawfully acquired. They also sold about 100,000 of their limited edition product and some predictions say they made approximately $3 million on sales alone with additional profits coming from concert ticket sales. Most artists would be more than satisfied with this level of success. Unfortunately, the music industry labels lose out on a major label such as Radiohead and there is risk that other big name artists will follow suit. Potentially, this prevents the labels from being able to take gambles on smaller artists and forces those trying to make a name for themselves to also seek alternative avenues for distribution in the future, potentially limiting future creativity. This is all theory however, and artists will likely find alternative ways to distribute their content, making record labels obsolete.
-
One of the biggest advantages of digital media is its ability to be interactive. By that, I mean that digital media has the ability to change, upgrade, and transparent. However, I believe that many labels refused to convert to digital media because they would lose control. The consumer and the artist would have more control over the products; whereas, in the past, the labels had full control over the final products (to include sales etc). Also, by losing control, they would contribute to their own extinction. In October 2007, Radiohead chose to sell its new album, ‘In Rainbows’ on the band’s website. The price was reliant on how much the consumer wanted to pay per song. I believe that their method was successful for them; the album sold over 3 million copies, both digitally and traditionally. However, I believe that this created a new trend within the music industry which has led to the ultimate demise of the traditional record. In example, years later, highly valued and priced bands such as U2 offered their albums for free. People also began to question the set price of $0.99 per download. For bands and/or artists that relied heavily on the profit margin from their albums, the bottom lines was much less than expected and anticipated.
-
Hi Mori,
Your comment about U2 offering free albums to their fans is interesting and although extremely generous it makes me wonder how they are able to do this. Although I am sure they have enough money to never work again, they aren’t running a charity. Artists like U2 (who are amazing live) or even Taylor Swift I think make more money on their tours than on their albums and by providing their music free of charge to their fans gets those fans even more excited about their concerts. This is definitely not a method every artist can take as I am sure some artists would prefer to be in a studio than having to perform night after night.-
Kristen,
I felt that it was probably more profitable for them to get all of this free buzz and marketing (there’s no such thing as bad publicity right?) than they would get from the value of their album. Although U2 is still huge and highly successful, they won’t be selling records forever and they won’t sell platinum records anymore. Therefore, i dont think they would make THAT much from the album. Although, I have to say, something about free makes me feel like it’s also subpar in quality.
-
Mariya,
I can relate to what you are saying when you say for some reason you feel that free makes it feel like its subpar in quality. If something is offered to me free or extremely less than it should be, I almost think there has to be some sort of catch or its a scam.
-
-
Kristen,
I agree – most musicians/bands can make more money touring than they do on album sales. Therefore, it’s beneficial to ‘give away’ albums to fans for free, knowing they will gladly pay upwards of $50 for concert tickets. It’s a cost of doing business to promote lucrative performances. On the other hand, Wu-Tang opted for the ‘scarcity’ model and decided to sell only 1 copy of their ‘secret’ album. The album is being auctioned for $5mm and the purchaser cannot release to the public for 88 years. By then I wonder if ‘music’ as we know it will even exist, or be as relevant in daily lives.
http://www.forbes.com/wu-tang/
Wu-Tang Clan places 88-year copyright on $5 million secret album-
Corey, at the risk of stating the obvious, the music industry is about entertaining the masses of the world and selling millions of albums and songs in the process. Without checking my crystal ball, I predict that the $5 million album might be the equivalent of being stuck with an eight- track tape with an antiquated device that can play it 88 years from now. I think Wu-Tang’s ‘1 of 1’ may unfortunately lose its value quicker than the Russian ruble while Putin thinks he’s the king of the world. Besides who is to say how good the quality of the album might be… If a tree falls in the forest will there be someone there to hear it?!?
-
Corey,
I hadn’t heard about this strategy by Wu Tang. I’m fascinated! With so much piracy (the HBR case cites 20 illegal downloads per legit track purchase), it’s amazing that the basic forces of economics (supply and demand) prevail, garnering such a high price simply for the scarcity of the sole physical copy of the LP.What a bizarre industry!
-
-
-
Hi, Mori, I agree with you that loss control and loss margin both played role in the battle of digital media and record labels.In addition, once artists and bands are familiar with digital techniques, the record label will loss their contracted artists and bands, they then will definitely loss their market and profits.
-
-
In my opinion, digital media has multiple advantages over traditional, physical media. I have to agree with everyone with the concept of financial savings as record industries have seen a significant drop in costs that are related to record distributions and other marketing initiatives. However, I do think the overall advantages go well beyond just cost. It provides fans and viewers the chance to share and access content on a long lasting platform and it is also more efficient as it is flexible and can be easily accessed on a PC, Mac, or even a Smart Phone. This easy accessibility is highly appealing to the everyday consumer or music listener and can increase profits for the industry. I think the labels were resistant mainly due to the concerns surrounding piracy and illegal downloading. According to the Institute of Policy Innovation, it was estimated that the U.S. suffered a 12.5 billion dollars loss secondary to global piracy of recorded music. The industry is subject to take a huge hit from this so it is not surprising that growing resistance was seen. In addition to this fear, digital media takes away the label’s right and ability to distribute as they do not have full access over the music. This also contributed to the initial resistance.
As far as Radiohead, I like that they took a nontraditional approach to selling their music. The band truly broke away from the industry standard which normally sets fixed prices for music. Radiohead shocked the industry by making their music entirely available as a digital download on their website and initially allowed fans to determine how much they would pay for it. After reading some additional articles on the topic, it appears that this innovative tactic was successful as it set a new precedent for musicians. It expanded their fan base to a higher level and introduced a new way for artists to promote their music. Other artists may become concerned with this approach for various reasons. A lot of artists prefer to rely on their record labels to be responsible for the distribution and marketing of their music. After seeing that Radiohead’s approach was a success that increased their fan base and thus contributed to an increase in sales, artists may become concerned that this is the wave of the future for musicians. I think many artists prefer to focus on the art of making music rather than having to be responsible for the business responsibilities such as marketing and obtaining revenue.-
Liz, I agree with your last comment about artists prefer to focus on making music rather than the business responsibilities. I think this is very true and once you have a band that is responsible for business responsibilities I think it is really easy to point fingers at each other or building resentment rather all agreeing to hire someone to take care of this for them. Many of us hire lawyers, accountants, real estate agents, etc as we are not professionals in that field and we would prefer to let the professionals handle those types of things.
-
-
The advantages of digital media vs. physical media is the sound is much better not to mention that it is able to be accessed by more people. The problem with this is that there are possibilities that the music may get pirated and the artist / record company will lose out on a lot of potential income. The case also spoke about when a consumers have a choice on buying a single or an album they are more likely to buy a single song, which leaves a whole for lost revenue. Radiohead decided to sell their album “In Rainbows” on their own and implemented a pay-what-you-want scheme where fans were able to pay what they wanted to download their music. This was extremely successful, it won 2 Grammy’s http://en.wikipedia.org/wiki/In_Rainbows. Radiohead was extremely fortunate that they had the success they did, not all artists will have this success. Other artists without the same loyal fan base may not get people paying anything for their songs and rather choose not to pay anything.
-
Radiohead decided to sell their album “In Rainbows” digitally using a “name your own price” (NYOP) strategy. This method was used for the three to four months prior to the album’s release on physical media. According to the getelastic.com article below, the album “was downloaded 1.8 million times, generating $2.26 per album, (and) without costs of production, inventory, shipping, or cuts to the middleman, Radiohead claims it actually made more money off the ‘pay what you want’ release than any other album.” I believe that the disruptive nature of this business model could adversely affect other artists – emerging artists in particular. As the traditional business model of the music industry continues to erode, large voids will be left in the promotion strategy and startup capital sectors that were once filled by record companies. Aspiring artists may have difficulties navigating this new environment on their own. Of course, they can always try to get free exposure through mediums like The Voice and YouTube. After all, YouTube worked out well for “The Biebs” – sorry – bad joke. In the end, however, it will always be more challenging without the traditional record company support structure. Radiohead couldn’t have done too badly with the NYOP model as lead singer Thom Yorke released a solo single in the same manner this past December.
Digital media has several advantages over physical media as well as some disadvantages which is part of the reason that labels and artists were so resistant to embracing change to the distribution model. As long as you can access the Internet, you can download, stream, and view many different types of digital files. You can store all of your digital media on the cloud so it is all in one place, accessible from anywhere on any device, regardless of the size of the files. Because movies and music are digital, they can’t be damaged or stolen and have thereby enabled the world to become a smaller place. A huge pro for digital media is that it reduces all manner of costs – production, distribution, and holding costs to name a few. With respect to the downside of digital media and why labels did not readily latch onto it, the principle reason is piracy. The advent of the internet and cloud computing has made it not only easier to share information but to also steal and illegally distribute it at a rapid pace. Many people will choose to download the free, pirated copy even when they know it is wrong. This caused a loss of the total control over digital intellectual property rights and rightfully unnerved folks involved in the entertainment industry. As a result, significant revenue losses were absorbed across the business. That is why Radiohead’s NYOP was so incredibly brilliant. They realized that the traditional business model no longer worked, that they could promote and distribute their music themselves, and that any profit that they made was far better than losing it to digital media pirates.
http://www.getelastic.com/name-your-own-price/
http://www.theverge.com/2014/12/27/7454915/thom-yorke-you-wont-like-me-when-im-angry-single-free-download-
Bill,
I’m completely agree with your point about digital media technology streamlining the music and visual arts procurement process. As a millennial, I often laugh about recording radio songs to cassette tapes and playing them back in a “walkman”. Its amazing that we can now hear a song on the radio, download it to our phone and listen to it the download before its finished over the radio-waves.
You’re absolutely right that Radiohead’s progressive move to independently release “In Rainbows” at any price customers were willing pay was ingenious. While not entirely doable by most bands, it pinpointed major flaws in the traditional confines of record producing, recording and distributing. I look forward to future moves such as this. Maybe someday recorded music will be like wall art. Anyone can print a pretty photo and hang it on the wall but the value in that art is found in the exclusive rights to original works or prints. I would not be surprised if we see popular bands seek value-added revenue avenues through exclusive and controlled distribution tactics. This is the exact opposite route of Radiohead’s NYOP but lucrative nonetheless. Here’s to all types of new music and all types of new ways to access this music with hopes that these new avenues do not devalue the artists’ work.-
Hey Jordan, I agree- I posted a link to a Forbes article about Wu-Tang’s album release — they only created 1 copy and are selling exclusive rights (or possibly already sold) for $5mm.The buyer can’t release to the public for 88 years.. This is all in the name of ‘art’–
-
Jordan,
What’s a “walkman?” Just kidding. I completely agree that I hope the advent of digital media and all the ways in which to access it does not devalue any artist’s hard work and dedication to their craft. Radiohead’s revolutionary methods is not not doable by all artist but, in offering their product in such a manner, hopefully they began to forge a new path that really gave the artists their due for their creative work and talents without having to slice the pie into so many different pieces.Corey,
I think that you, Jordan, and I should pool our money together and submit a bid for the Wu-Tang album! Maybe we’ll mix in a little crowdfunding while we’re at it.Thanks for the comments.
Bill
-
-
-
-
According to Table B, record companies received 56% (or about $5.60) of digital album retail sales price, but according to Table A, record company profit was only 10% for a physical album (or $1.50). Based on this breakdown, record companies receive significantly more money for digital album sales, than physical albums. As others have mentioned, they also benefit from reduced overhead costs. So, why would they resist digital media? Primarily because this new business model facilitates independent album releases (i.e. cutting out the middleman) and threatens their future revenue stream. With the advent of iTunes and other digital/streaming media platforms, musicians are no longer reliant on record labels to distribute and promote their albums. They can work for themselves instead of being forced to accept costly recording contracts. Ultimately, even if record companies receive 56% vs. 10%, 56% of $0 is still $0. Meaning, they can only profit from digital album sales if musicians choose to work for them. To remain relevant, record companies need to rethink their value proposition, especially when album purchases are dwindling, when compared to purchases of individual songs only. Not sure if anyone posted this article yet- “2014 is the first year with zero platinum certified records” http://www.deathandtaxesmag.com/229695/2014-is-first-year-ever-with-zero-platinum-certified-records/
-
Digital media provided an increase in speed to market, broader distribution, and easier accessibility of music. Record labels did not have to solely rely on brick and mortar stores to increase revenue. Digital media files also provided a significant cost reduction in overhead. They did not have to pay packaging, manufacturing, distribution, marketing & advertising, and other overhead related costs. Record labels were so resistant to change because the industry was accustomed to LPs and CDs for the last fifty plus years. Making the transition over to digital music also provided the consumer with more buying power and control in having the option to purchase a single album as opposed to an entire album. Record labels would receive higher royalties from selling an album and the sale of single tracks would cut into their overall profits and loss in revenue.
-
Yeah, ‘Q’s’ music rankings are probably as subjective as ‘People’s’ sexiest man alive ones. I mean a land that produced Floyd, Zeppelin, the Clash, and the Beatles for goodness sake and Ok Computer trumps all of them?! I bet the editor had a particularly bad breakup at the moment and Thom Yorke soothed his/her broken heart ;).
-
Radiohead used an extremely unique and controversial approach to distribute “In Rainbows”. It was released online and the format was a “pay-what-you-want” download; the amount that could be paid could be any amount, including $0. The strategy proved to be successful and the album arrived on the UK Albums Chart and the US Billboard 200 at the number one position. By not associating a cost with the music, they essentially devalued the product which created pressure on other artists to take a similar approach. In my opinion, like any other tangible item, music owned should carry a cost, whether the cost is subscription based or based on the cost of the album.
-
I agree that Radiohead employed a very unique strategy to get their album “In Rainbows” out there and it appears to have worked well for them. However, I maintain that such marketing strategy isn’t popular enough to negatively affect other artistes. As a matter of fact, I am unaware of any other artistes who have used such strategy.
-
-
There are fewer costs associated with digital media than physical media. Both types of media costs include artist’s royalties/shares, record company’s profit/shares and retail profit/iTunes shares. Physical media costs include publishing royalties, packaging and manufacturing, distribution, marketing and promotion. One of the problems with digital media is the cost of illegally traded music files worldwide. Also, some artists made their music available for free on their own sites or on social networking sites.
Radiohead did not have a recording contract when the released “In Rainbows” so they were free to release their musing when and how they wanted to. In 2007 Radiohead announced that the new album “In Rainbows” would be released exclusively through their website for digital download. They made their digital download 160-kbps which was slightly better than the standard downloads from iTunes. Also “In Rainbows” was only available in its entirety rather than customers being able to buy singles songs as available on iTunes. Radiohead allowed consumers to pre-order the album for digital delivery and also set their own price, “It’s up to you” message, with only a service charge of about ninety cents. They sold a collectors version which included two CD’s containing extra tracks, a vinyl LP and a hardcover book of artwork.
This album was a huge success even though it was essentially available “for free”. According to an article from October 2008 on musically.com, Warner Chappell confirmed that “Radiohead had made more money before “In Rainbows’ was physically released then they made in total on the previous album ‘Hail To the Thief’.”
What Radiohead did with “In Rainbows” challenged the existing commercial assumptions. Other artists may have felt pressure to offer their music in a similar fashion to Radiohead. This ‘experiment’ worked for Radiohead but would it work for others? Artists with recording contracts do not have the same freedom to offer their music in this way. Would this drive down the price for other music?
-
Angela, if these kind of promotional things help drive the cost of music down, it may actually help reshape the industry since the recording labels are taking a large cut. That is why, I believe the artists are getting creative with their approach to promoting their products and kudos to them. It is time to turn the tide and renegotiate the terms of doing business to favor creativity and benefit those who are the authors rather than the industry’s deep pockets.
-
-
The advantage of digital media are including fast turnaround, larger pool of audience and artists, no boundary of country, no ship cost, no inventory cost, therefore, cost effective especially price bid, and time sensitive with unlimited access, and no need of long term contract with artists and so on. The labels resistant to digital media are mainly ascribed to illegal download from digital version as there were about 20 illegal download for every track sold, and artists and bands started to publish their music online for free. Digital media is a true challenge to record labels as it shares its markets, diverts its customer pool and artists, bands, and divides its profits; most importantly, challenges the existing commercial assumptions.
Radiohead self-produced and self-released or sold “In Rainbow” exclusively in digital version with customer self-prices and a gift box with privilege running in unlimited computers and devices. It was very successful. However, it changed the business model of record labels. It supports that artists and band no longer need recording contract or to contract with publisher, they no longer need store to sell their hard copies, they could do everything on their own with success.
-
1) I think that in the opinion of the record industry, that digital media would be most cost effective because they wouldn’t have to deal with the overhead of selling/distribution of the albums. What labels would be concerned about it that now consumers have the ability of buying individual songs instead of a whole album, see breakdown of revenue: http://appleinsider.com/articles/07/04/23/itunes_store_a_greater_cash_crop_than_apple_implies.
2) Radiohead was just getting out of their previous deal. Overall, the album was successful and generated a lot of buzz for the band, even though 60-70% of the people who “brought” the album legally actually paid $0.00 for it according to an NPR analysis of the band’s decision (http://www.npr.org/blogs/monitormix/2009/11/the_in_rainbows_experiment_did.html).
For other artists, that would normally spell some trouble, depending on how well-known the artist is with the public because they would really need to focus on marketing their album. But then I look at Prince, who in 2007 gave away his album through a newspaper (http://www.dailymail.co.uk/home/moslive/article-466634/New-Prince-album-FREE-inside-weekends-Mail-Sunday.html). He was heavily criticized at the time for doing so because he gave them away for free…but at the same time, he announced that he was going on tour and ended up selling out on 27 of his shows. I think that artists do have to be creative with promoting their album to stand out amongst other artists and to be able to reach their audience most effectively.
-
Jon, Enjoyed reading your post. I liked the part about artists being creative about promoting their music to reach their audience. I think for most artists it is more about sharing their music with their fans then making a profit off of selling a product. And the same goes for fans who would rather experience the music of their favorite band live. With digital media being able to pay for a single song makes it more challenging for artists to make songs their fan base connects with rather than push an album on them with only one good song. Record labels don’t like the creative promoting by the likes of Radiohead and Prince because they don’t make any money doing it. That’s what they are in the recording industry to do, but for the real musicians they are in the business to share their art with their fans.
-
Jon, really enjoyed your post – and made me think of additional questions I have about the record industry. How have they had to change business model with streaming radio services such as Pandora, RDIO and Spotify? When looking at Spotify users can now add songs to their profile and listen to them offline if they pay the monthly subscription piece. Also, you see artists like Beyonce who launched an entire album, WITHOUT TELLING ANYONE! It caused such an uproar certain stores (i.e., Target) refused to sell her album. I think its quite clear that because consumption behavior has changes with consumers artists need to change their business model. I’d be curious to see how record labels profit margins are compared to years past. The idea of buying a CD might be lost, but there are now new creative ways artists can sell their material (and have more ownership and say on where the revenue lands).
-
-
After spending my youth collecting albums and making tapes for my friends, I found CDs to have lost their charm pretty quickly as the industry started restricting duplication and private distribution. To me, music is not just about hearing it but also sharing it with those in our lives. Given the percentage distribution between the artist and recording labels, it is the latter who drives the prohibition as they have the most to lose. Therefore I don’t blame the artists for wanting and being creative by taking matter into their hands and be the drivers pushing for their own success. I feel that instead creating problems for those more complacent, it will actually push for reform within the industry. Personally, I rather pay $100 dollars and attend a live concert, feel the music and create memories than give itunes $0.99 let alone $9.99 for the album.
-
From the perspective of the recording industry (record labels), what advantages do digital media have over physical media? Then why were the labels so resistant to digital media? The advantages for the recording industry are reduced costs to produce, deliver and store music and better sound quality with digital media. The reason record labels were so resistant was because the advent of digital media disrupted their control over the recording industry. The Radiohead case study is an example of how record labels could be removed from the equation entirely if a singer or band wanted to self-record, much like the readings on self-publication where a writer is now empowered to publish their work without the help of a publishing house. Digital media is continuing to evolve. Music CD sales were first endangered by digital downloads and now on-demand music is cannibalizing digital downloads. Rather than be resistant to digital media, record labels need to retain their competitive advantage in this evolving digital music market. Embrace change and create a new strategy. Established musicians going it on their own is not a revolution in our new digital age, but rather the evolution of experienced musicians creating their own record label. Digital media has simply created more opportunities for new talent to be discovered and established talent to promote themselves. But record labels, as professionals in their field, are still highly qualified in finding and promoting talent. They just need to adapt.
-
With packaging/manufacturing, distribution, record company and retail overhead all a combined 40% of the price of a physical album, it’s not surprising to see disruptive innovation on the part of artists wanting to produce and distribute their own albums. While digital downloads were themselves a disruptive innovation, distributers like iTunes with big market share claimed a huge chunk of revenues – Apple takes 30%, and in the eyes of the artist (who is still giving up 56% to the record company in this arrangement) it makes them no better off, with a measly 14% left – perhaps worse than the physical album model.
On the other hand, retaining control of production and distribution, the artist can stand to make (or lose) quite a bit more. Well-known bands with a large fan base can take this risk – though only after their 6-7 album contracts with major labels expire. It may be harder for smaller bands, as noted in others’ posts. An old friend and bandmate of mine just released his group’s 3rd EP in much the same way as Radiohead – pay what you want, with a premium offering of a box set with extra goodies. In order to finance it, he used Kickstarter (another disruptive force: crowdsourcing) to get investors to whom the album is now owed upon release. This is not an uncommon approach now http://launchandrelease.com/category/100-music-kickstarters/The advantages of digital include lower overhead cost associated with creating and distributing a physical album. The pay-per-track model is an advantage for consumers, but with only 5% of sales now involving entire albums, it means lost revenue for record labels. Piracy is a disadvantage as well. The recording industry was understandably wary of digital formats, as it was a disruptive innovation that threatened their control over artists. As Radiohead frontman Thom Yorke said, “the time is at hand when you have to ask why anyone needs [a recording company].”
-
Generally, going digital is going to reduce costs. From the record companies perspective, they were generating only $1.50 in profit on the sale of a record ($14.25 total cost). The overhead, inclusive of distribution, packaging, retail costs etc; certainly drove down profitability and increased costs for the consumer. Digital music streamlined this process by reducing overheard and increasing profits for record companies. In fact, on a $9.99 sale, the record company would not generate $5.60 in profit. There is absolute appeal to this approach for the record labels. On the flip side, the resistance to this method derives from digital piracy and lack of control. The stats are staggering in the sense that illegally downloaded music accounted for a $12.5b loss in addition to 20 illegal downloads for 1 paid track. An additional risk to record companies is that digital music has allowed artists to experiment outside of the traditional structure. Radiohead is an excellent example specific to their In Rainbows release. This method would have been impossible a decade earlier, but now relies on web based marketing, social media and online digital downloads. This is a threat to the very future of how we consume and purchase music on all fronts.
-
I believe Radiohead’s “stunt” was successful as it made a strong statement that they build this music for their fans – and by not putting a price on their product does exactly that. Additionally, the artist has the ability to cut costs significantly and increase their net returning (rather than having to split the revenue and only see a fraction of 2%). However, there is a negative side to digital media which revolves around security – Radiohead’s music can easily be copied and distributed. At the same time, I think all artists are vulnerable to do this (whether they post their video on YouTube or iTunes). If people want to steal music they are going to do it through whatever outlet allows them to do so. I remember in college my friend gave me some code to change YouTube videos into digital files I could upload into my iTunes. The process was laborious, but it worked for a broke college student who had some time on their hands and didn’t want to listen to elevator music on a long flight.
-
From the perspective of the recording industry (record labels), what advantages do digital media have over physical media? Then why were the labels so resistant to digital media?
How did Radiohead decide to sell their album “In Rainbows”? How successful was it? What problems do you think this might create for other artists?
Since the inception of the iPod in late 2001, the music industry has been changing at speed of light. When just few decades ago the vinyl was primary mean of listening of music, which shifted toward cassette and then a CD. The demand of digitalized music took sharp turn as iPod took place of ‘Walkman.’ The biggest advantage of digitalized music is accessibility. For artists, the digital contents can be pushed globally without additional supply chain costs. This reduced cost of supply chain transfers benefit both to seller and buyer. When Radiohead decided to take leap forward with innovative approach to release its album first as digital media, it would allow consumers the freedom of saving money (paying selectively per song if whole album was not needed). The biggest disadvantage would be the record labels, which has potential to be cut out of the loop if the artist can self-publish their content. For artists, the digital publishing earns wider market outreach and saves costs to yield larger margins than sale of a physical music copy.
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting N-Z 9 years, 7 months ago
From the perspective of the recording industry (record labels), what advantages do digital media have over physical media? Then why were the labels so resistant to digital media?
How did Radiohead decide to […]-
Digital media has completely changed the landscape of the music industry. Recorded music sales have declined year after year. When is the last time anyone actually bought a CD? The advantages of digital media for record companies is the unprecendented access to customers by selling their product on websites and online services that are virtual stores where music can be purchased with the click of a button from a mobile device. The downside is whereas you would plunk down $14 for a CD in a store, digital media is typically purchased “a la carte” and customers buy just the tracks they like. Platinum and multi-platinum albums are a thing of the past (the only two platinum albums last year were Disney’s Frozen and Taylor Swift’s album). And although the music industry and Metallica ~~/ killed off the original Napster, music piracy and illegal downloads and sharing are alive and well. These days, big name artists who are able to draw big crowds to concerts and can sell merchandise make more money that way than they do by selling CD’s and downloads.
Radiohead made news by self-producing and distributing their album without any record label by simply giving it away on their website for whatever price the customer wanted to pay. The entire album had to be downloaded, though. They felt like they current business model was not in their favor, and their music was already being leaked and illegally shared digitally. So why not just “leak” it digitally themselves and try to make some money? They claim that they made more money on “In Rainbows” than they did on their previous album, although exact figures are not clear. Their strategy, however, has not exactly taken off to my knowledge. To some extent, their approach can be seen as “cheapening” the music and making it appear like its worthless, as many fans downloaded it for free. If fans value new music as worth next to nothing, how are new artists or lesser-known artists going to make any money selling their music? What was the point of fighting piracy if you are going to give the music away for free anyway?
-
Saqib – I disagree with your take on the In Rainbows release. Radiohead as a band is known for being unconventional and anti-establishment. They also have a history of trying different ways of distributing their music. From a musical standpoint, Radiohead creates albums that that build as compositions or concepts rather than a group of individual songs distributed together. I never viewed the In Rainbows release as an attempt to evade piracy or a “cheapening” of the music. Instead, I viewed it idealistically as a way to get a full composition to a lot of people without having rely on any “establishment”. With the digital release of In Rainbows, Radiohead maintained full control of their composition and avoided sharing initial profits with Apple, Sony or any other major music establishment.
Of course, now that I know more about the project and data mining, some of those idealistic view have faded a bit. But I do still see merit in the approach, even for newer artists. Think of it as a way to get people listening to your music while building a database of fan information to leverage for target marketing and direct advertising.
-
In a way, this type of release can be viewed as part of the “aura” of Radiohead. They’re unconventional and cutting edge. The release in itself is actually a pretty smart way to market the album without the use of a publisher or advertising beyond their own website. All the buzz about the release spreads like wildfire and everybody talks about. Radiohead was able to market themselves essentially by being themselves.
-
Joel,
Thank you for your comments to my post. I agree with some of your points, especially your last one about potentially building a database of fans. But they could have done the same thing by releasing the album for an actual fixed price. If established bands were all giving away their music for free, how are newer bands going to sell any music? Why would the average consumer pay money for an unknown when you can get a known for free? That’s why Napster was so popular and the music industry had to crush it. Fortunately for those newer and unknown bands, Radiohead’s method of ‘pay what you want’ has not caught on. Just my opinion.-
Good points Saqib – This is a bit of a debate on which came first, the chicken or the egg. Why would an average person go see a band they know nothing about? Newer/Unknown bands don’t make their money on song/album sales. They make some money on performances, but many are searching for the right break or the right person to discover them. The first challenge is actually getting people to listen to your music. That generates opportunities for performances, which can generate some revenue and hopefully more people listening to your music. That’s why many bands, not just newer bands often offer music for free. To me the In Rainbows was an acknowledgement of something that is increasingly true, many people don’t buy music, regardless of the artists stature in the industry (http://www.businessinsider.com/heres-how-pop-stars-make-money-now-that-people-dont-buy-music-2014-5).
-
-
-
-
Radiohead’s decision to leverage online distribution for the initial release and a ‘pay what you want’ strategy ultimately led the band to sell more copies of In Rainbows than both of their previous albums combined! This article, published by The Guardian, one year after the digital release of In Rainbows states that the band sold more than 3 million box sets, CDs, and digital versions of the album.
http://www.theguardian.com/music/2008/oct/16/radiohead-album-sales
Consider that Radiohead, at the time of the release of In Rainbows, was one of the biggest alternative rock bands in the world – so not any band (even popular bands) could have pulled this off. Radiohead cultivated an image that was outside of the norm, both through their reclusive nature and ‘different’ (yet critically acclaimed) sound. The band had a very large, very loyal following – one that helped their previous albums reach the top of the charts worldwide. Plus, the band was a multiple winner of Grammy awards for previous albums.
By 2007 online purchasing of music was the norm, not an exception. The mature nature of the online distribution market and the popular nature of the band allowed for Radiohead to make technology a key component of their strategy for a big pay day with In Rainbows. With the ability to self-produce, self-distribute – the band could afford to give away the record for the first few weeks. There were no records companies covering their costs before paying the band. By allowing pay what you want downloads the band could create even more buzz with the extra publicity for the distribution method.
Ultimately, it wasn’t about principle – the band did distribute the album on physical disc and through iTunes. This band knew it could do this and do very well, financially, in the process.
Record companies rely on having bands in their company that can bring big profits. They need the platinum and multiplatinum recording artists to fill their coffers. It gives them the ability to scout and develop new talent. Without the large profits associated with #1 albums from bands like Radiohead, the big record companies might have to change their business model for producing and distributing music. This could ultimately have an affect of the up and coming bands, leaving fewer opportunities to be ‘discovered’ by the record companies and money to further their careers.
-
Thanks for getting that back up information Kevin! I was wondering how I could find out how successful Radiohead was with In Rainbows. Wow, the article really illustrated how the record companies are all about the record companies and not so much about the artists.
-
Thank you for commenting Kristin. The music business is a business first. The major labels are also part of larger conglomerates (Sony, Warner, for example) and must survive by producing profits for their parent companies. Artists give up control of their content in order to have their music published and distributed. Artists, especially the major acts, often make much more performing live (tours) than they do from the sale of records. Labels usually have nothing to do with artists live performances (there is a concert promoter there for the artists to have to deal with).
-
-
-
Advantages of digital media over physical media for record labels include easier and faster distribution of music, effective new targeted marketing programs tailored for the rising digital customer segment, and the ability to increase market share based on penetration opportunities within digital channels. The labels were resistant due to overall music sales decreasing since the introduction of digital media with a large decrease in album sales with most consumers just purchasing individual songs. They also had concerns around piracy, illegal downloads and distribution of music.
Radiohead decided to sell their “In Rainbows” album on their web-site with an “It’s up to you” pricing strategy allowing the consumer to decide how much to pay for the album (you could not buy singles) but customers could purchase a deluxe box set as a collectors item with extra tracks. The album was critically acclaimed so it was very successful from that perspective. However, Warner Chappell stated that most people paid nothing for the download but that pre-release sales were more profitable than the total sales of Hail to the Thief, and that the box set had sold 100,000 copies. It’s revealing that they did not employ the pay what you want strategy on their next self-released album, The King of Limbs in 2011.
I think the strategy hurts the younger artists that aren’t as established and would put severe pricing pressure on the industry if others were to allow their music to be distributed for free. Although Radiohead was able to lure their fans into purchasing box sets, new and many established artists will not have that same opportunity for success.
Reading this case makes me nostalgic for my vinyl album collection (especially Pink Floyd “The Wall”) and of course my classic 8 track tapes that stopped to switch tracks in the middle of songs! I write this as I am listening to Queen on Pandora so at least I can listen to my “oldies” through the latest sources of media.
-
Paul I agree with you that labels were resistant to digital media due to reduced revenues for albums as consumers opted to buy just the singles. As a consumer, why pay $15 for the whole album when all you want is the one hit song. Labels rely on the profit from a while album to support the search and development of new talent.
Many artists dislike the digital distribution method of iTunes because it disrupts their form of art. Many artists, like Radiohead, view the ordering of tracks on an album as very important to the presentation. The sum of the whole is greater than any one part.
Recently, the Wu Tang Clan finished a new album. The group decided to release one copy of their work. Just one, an original The group claims to have destroyed the master recordings and all copies. The band cites wanting to distribute their music similar to how fine art is presented: a single work.
-
Kevin – Wow – that is taking it to a whole other level that I quite frankly think is nuts. I understand their desire to treat like fine art but even that is shared and displayed for others to enjoy. I think they are taking the artist thing a bit far and I don’t think this will be disruptive to the industry. In 88 years they will be dead and then the world can listen to the “artists formerly known as the Wu Tang Clan” represented by some sort of unprounouncable symbol. Sorry for being so cynical but I don’t think something automatically becomes a fine piece of art because they want it to be or because of scarcity. It’a amazing to me what people will buy into. Instead of pouring all that money into an “album” the investor should help fund medical research or another charitable cause. Just my two cents. Thanks.
-
Paul, Kevin : great postings from both of you. Art and beauty is definitely in the eye of the beholder. And to that end, people with a lot of money will be willing to pay premium even ridiculous amount to be able to own something. What a great job by Wu-Tang to stay relevant and even cause a stir with this marketing ploy! As a fan of theirs from my younger days, I think it’s absolutely great that these “old” guys can still make headlines.
-
-
-
-
To create scale digital media is the way to go for music artists. You have access to the world and thorough scale you can far surpass the profits once realized by vinyl records and the brick and mortar methods of selling albums. The great fear of the recording artists initially was the lack of laws protecting them from piracy and unsanctioned sales on the internet. Now that major industries have commoditized the digital business model and laws have caught up with IP issues the internet is being embraced by todays recording artists. The In Rainbows release strategy of allowing anyone to set their price for their album was a brilliant way to connect to the masses to bring awareness to their music. They didn’t totally give the farm away. They received 90 cents a download and were able to piggyback the sale of their deluxe box set of the album for $80 which included two compact disks, the final LP record and a hard cover book of art work along with a digital version of the album. This method of selling also brought awareness to every song on the album as the buyer could not cherry pick the songs they wanted. This method of bringing music to the market would work well for a new or established band that is in their productive years of music creation as more is to come. It probably would not work well for one hit wonders or a band in their twilight years as they may find that this is a great way to bring awareness to the masses but then you would have to capitalize on it in the future.
-
Alex,
Good point about new bands being able to replicate Radiohead’s idea of bringing their music to market through a personal/band website. It actually just made me think of how Youtube has helped establish so many artists. Justin Bieber being the biggest one today! He was able to make a career by being “discovered” through various early year home videos he made. Getting your music out there without incurring all the costs is a brilliant way new artists to attempt to make it the cut-throat music industry!
-
-
Digital media completely changed the music industry in the late 1990s to 2000s. On the one hand, it made the distribution of music faster, more cost-effective, and opened up new consumer-friendly ways for music distribution. On the other hand, digital media made it much easier for people to download and share music without paying for it. In response to this changing landscape, Radiohead decided in 2007 to try a novel approach to introducing its In Rainbows album. Instead of charging per song through iTunes or through a subscription service, Radiohead decided to release its complete album for download on its website directly to its fans before the physical versions were released to stores or digital versions were released through other channels. The most widely discussed feature of Radiohead’s plan was that the customer could pay what they want for the album. I ran some searches to see what happened and the results appear to be mixed. On the one hand, In Rainbows became Radiohead’s most successful album, but on the other hand it was widely downloaded from other sources and shared for free. Overall, I think the plan worked out well for Radiohead as they generated a huge buzz around the album, connected with their fans, and were able to generate significant revenue through the service charge and the collector’s item box sets. With respect to other artists, I think this kind of approach could work well for musicians looking to build a fan base or for a band looking to re-connect with fans.
-
Digital media lessens the need for a distribution network for CDs. They no longer have the overhead costs of mass producing CDs in order to supply the demand to their distributors i.e. manufacturing, shipping, etc. I believe the labels were so resistant because it was a complete market shift where they could no longer monopolize the sale of records. Digital media now allowed the end user to decide which songs they wanted from albums. The control of the industry was no longer in the hands of the record labels. Radiohead decided to bypass both avenues of distribution, record label & digital media, and mass distribute independently through their own website. They decided they would allow their customer/end user to decide what price they wanted to pay, however they only stipulation was they had to buy the entire album and they were subject to a service fee. I believe for a bad that already has an established “brand” and tremendous following this was a brilliant idea. They could capitalize monetarily by deleting the middle man in the mass distribution of their music. They were already seeing very small margins from both record labels and digital media distribution. I believe a logical choice for the band was to sell it independently and leverage their brand name and following to penetrate the market. Also, the digital marketing agenda they created also caused a buzz that drove more traffic to their site and enticed customers to buy it through their website.
-
Stephen,
I totally agree with your thoughts. Creating physical media increases overhead costs. What the band was trying to do was make it easier for consumers to purchase their music while creating a buzz. While they eliminated the middleman, the could notice an increase in their own profits which could potentially be about 70%(including the overhead). My initial reaction to the question was about “change”, but after reading your post I think you may be right and that the industry was losing control with digital music. Right now, the industry has changed completely. Physical media is now a rarity and Pandora and Spotify as well as XM radio are gaining popularity. Not only has the music industry become digitalized, so has the television/movie industry.
-
-
As highlighted by the case, the record label benefits from higher profit margins on digital media. The figures quoted in the case are dramatic $, 0.75 profit for physical media versus $5.60 profit for digital media. From a pure profit standpoint, it is hard to understand why record labels were so resistant to digital media. The reason record labels resisted digital media so intently was because digital media threatened their stranglehold on the music industry. Before digital media disrupted the music industry, bands and artists had to follow a very specific path to get their music to the masses. Sitting at the end of that path was a record contract with a major label. This path was necessary because up and coming bands could not shoulder the cost producing, promoting and distributing their music. In short, bands needed record labels. Digital distribution totally disrupted that system and made it possible for bands to distribute their music broadly without a major label.
-
Overall, the production and distribution of digital music is much less expensive than physical media. Record companies save on the physical production, shipping, and so forth. Then, while actually decreasing the cost of the album, the can actually make more based on the lower overhead costs. I think the resistance lied in two areas. One is that it was just plain different and not something record companies felt they had mastered yet. The other is fear that digital versions will expose their product to piracy and that fewer people will actually end up buying the albums.
Radiohead released In Rainbows digitally, via their website, and on a whole album basis. Individual tracks were not available for purchase, but the album price was entirely up to the consumer. As others have pointed out, they sold more albums than ever using this method.
Other bands should probably be more wary of using this technique. As Thom Yorke is quoted saying in the case, “we’ve earned the privilege to do things our way.” (2) I think he’s absolutely right about that. Radiohead had established a very strong reputation for good and popular music with legions of fans. They had also established a reputation of being unconventional to the point that I would say it’s part of who they are as a band. This type of release strategy fits them pretty darn well, if not perfectly. The buzz about the unconventional release will generate interest because it’s Radiohead and it’s their latest act (for lack of a better term). Their fans will appreciate the faith put in them regarding price, and while some might go very low with their price, others will likely reward them for their offer. Without such a loyal following and unique reputation, I don’t think other bands could generate such success. There’s something to said of making your music available, but I don’t think less established bands would have as much financial success using Radiohead’s method.-
Sam, great points. I agree that Radiohead was properly positioned at the right time to implement their novel pay what you want strategy. At the time, they already had a strong and loyal fan base so through this strategy, they were able to quickly connect their fans to all of the songs in their new album through digital media. The positive buzz the strategy generated only helped their reputation. A quick Google search showed that many articles were written about the strategy as it was being implemented. And even though the price could have been “free” for some fans, there was still the transaction fee, the box set that some fans chose to buy, and the goodwill that could be built up for selling albums in the future. So overall, I think this was a risk that really paid off for Radiohead but would not be something less established bands should expect to replicate.
-
-
From the record labels perspective, the main advantage of digital media versus physical media is the drastic reduction in the costs of manufacturing and distribution of CDs. The record labels could redistribute those capital expenditures toward a bigger budget for the promotion and marketing of the artists, their albums, and their tours. The last advantage is ability to reach everyone at the same time through the digital media in terms of iTunes, social network sites, and digital music subscription services. The record labels were resistant to digital media because of three reasons. The first reason record labels were resistant to digital media is that in 2006 only about 5% of all digital music transactions were in the form of album sales, where the record labels would make the most profit. The second reason is the concern over pirated digital music available for downloading. Although some companies instituted DRM to help combat piracy, the global piracy of recorded music cost the record labels billions of dollars every year. The last reason record labels were resistant to digital media is because the “control” that record labels had over artists with locked in contract over many years and/or albums was suddenly a thing of the past. As the case demonstrated with Radiohead’s decision to market, distribute, and sell their own albums through their own website, the record labels could clearly be cut out of the equation.
-
Hi Duke,
Great post, I agree with you that the record companies resisted digital media because they were losing the control they had over artists. Artists would not be very eager to renew or sign contracts with the record labels if they can get their music to their fun in a different way or directly as with the case of Radiohead and still be able to retain a larger percentage of the revenue. Digital media caused record labels to rethink their business models and probably renegotiate contracts with current signed artist.-
Hi Christine, I completely agree that digital media has given the artists a bit more leverage with contract signings or renewals. And yes, the record labels are rethinking their business models to adjust to the digital media. For example, I absolutely loved what Jay-Z’s label did in 2013 when he signed and exclusive $5 million deal with Samsung. It shows that the record labels are innovating and leveraging digital technologies with consumers like us having more choices with our music selections and formats.
-
-
-
For the record companies, I see a much larger downside than upside with regard to digital technology. The technology has enabled them to streamline manufacturing and distribution of music, but that same technology has also enabled those, other than huge record companies, to do the same thing. I was staggered by the percentage of sales the artists actually made, though I had heard many times before that bands make most their money touring. Another band who strayed from the standard big record company model is Cake. While their album is available to purchase at stores, they created it, manufactured it and had it distributed without the help of a record company.
The greed of the record companies has been off the charts. I am happy to see something challenge them. I hope that more bands follow Radiohead’s model.
-
Kristen, your right with your statement of the record companies and their greed. It’s amazing to read and learn just what an artist will make from record sales. Of course there are a few of the big ones like U2 Maroon 5, Coldplay who sell out places like Madison Square Gardens and at $40 for a tshirt you have to think that they are making money from those sales as well. I do know that up and coming artists struggle, after signing they think that they are set and will stand to make money. But they struggle with recording fees, management fees etc., before they get their share of the profit. I found this article which shows just how much they do/don’t get. It really is a shame that so many talented singers/songwriters may never really make it because of the greed of the record label.
http://minorityfortune.com/liabilities/how-much-musicians-really-make-in-the-industry-part-i/
-
-
Some of the advantages of digital media over physical media are the ability to access your purchases and collection from the cloud on multiple devices. It’s easier to purchase with just a search and click and the track can be listened to immediately and at times at a better quality. Cost is also a large factor as tracks can be purchased singularly instead of consumers having to buy a whole album. Physical media can often get damaged, scratched or broken. Labels are resistant to digital in part due to sites such as Spotify where you can have different types of accounts from free where you do have to listen to a commercial, to premium where you can listen ad- free and from not only your own devices, but anywhere you can log in and have internet. This allows consumers to download individual tracks to complete albums. It is cheaper to purchase one track on iTunes with tracks available at anything from 69c to $1.29 than the whole album. Apple has now introduced a service where you can buy the remainder of the album for the cost of the album minus the cost of the track you have already downloaded. Piracy is a huge issue for the music industry even with music websites such as Spotify. Digital media obviously makes it easier to access and copy songs and therefore has an effect on sales.
Radiohead, after fulfilling their contractual obligations decided to go another route for record sales. Their decision to remain independent had influence on other large music stars who followed suit, preferring to stay independent and turn down multi-million dollar contracts. Once completing the album ‘In Rainbows’, the band allowed fans to purchase the album at a price they wanted to pay. Individual tracks were not available. Music had been available digitally before, but was now picking up momentum with Apple iTunes becoming a powerhouse in the industry. By releasing their album digitally and encouraging people to pay only what the wanted, the band had created a perfect advertising storm. They no longer had to rely on airtime on radio stations and wait for fans to hear the song. It was available immediately and sales took off. The album was extremely successful. According to this article in the NY times: http://www.nytimes.com/2007/12/09/arts/music/09pare.html?pagewanted=all&_r=0 the risk of releasing their album “In Rainbows” paid off for the band, cutting out middlemen and gaining massive amounts of publicity. A year after its October 2007 release the album had sold more than 3 million copies in both digital and physical formats. New and upcoming artists would struggle with this kind of release; Radiohead was well known and had a strong following. Having had already successful tours and albums as well as being out of contract, Radiohead could afford to take the risk. Many singers and bands in contract have to sell and incredible amount of music, concert tickets, and merchandise to be able to earn any amount of money. Taylor Swift who is arguably (even if you don’t like her) very successful has removed her music from Spotify due to the tracks and whole albums being available for free. Her label claims that many stars will follow as they feel its disrespectful to a fan who bought and paid for an album to have friends tease them that they got it for free from Spotify. Or is it the music label deciding to take back the money that’s disappeared with digital media? -
From the perspective of recording industry, digital media offers cost saving when it comes to production such as cost of CD’s used to record the music, packaging the discs and cost of shipping to retailers or consumers. Digital media also increases the rate of distribution because people can simply download the music on their devices instead of waiting to visit a store. Digital media also offers sales alternatives such as consumers choosing to either pay for the whole album or just the songs that they like. Digital media in some way may also save the recording industry money by reducing overproduction cost of CDs that will not sell. Labels are resistant to digital media because it caused the sale of physical media such as CD to drop drastically and the availability of music in digital media allowed easy access for illegal downloads which also causes revenue loss for the industry.
Radiohead chose not to renew its existing contract with their record label or sign a new contract with any other music label to distribute their album. They decided to sell their album directly to their consumers through their website. Their strategy proved to be very successful because Radiohead was able to be in control of how they wanted their music distributed, they were able to retain all the rights to their music and eliminated expenses paid to middlemen or other production retailers.
Although this approach worked for Radiohead, I it would be detrimental to new artist who are not yet established and are trying to sell their music and cannot afford to allow people to download their music for free. Also, consumers would not want to pay for one artist’s music if they can get another artist’s music for free or at their chosen price.-
Hi Christine,
I think you make some great points. It could be a financial burden for new artists to supply their music for free. The primary benefit I see in this approach from both Radiohead’s perspective as well as a new artist is getting your music in the hands of more people than you possibly would have before. Radiohead was already well established and therefore, the media was interested and it created a buzz.-
Thanks for responding Tonia. The “set your own price” method is certainly a big marketing idea to get any artist music to most people that the option of fixed price. For the new artists, this might be a good idea if the intent is for exposure only and not counting on record profit. For Radiohead, this idea opened up their market to those who did not or were not sure about their music plus they were able to also offer deluxe box set version of the album which was marketed as a collector’s item for $80 dollars. With this second offer, they were able to make money, something that new artist would not be able to offer to the market.
-
-
-
According to Tables A & B in the case, going the digital media route leads to more money for the record companies themselves instead of the manufacturer. Also since there are digital files, the record company will always be able to meet customer demands. There were several concerns to be considered by record labels. Although digital media had its financial advantages, there were also financial disadvantages. Piracy was one issue. For example, record labels worried about the loss in revenue resulting from music fans easily (and illegally) downloading and trading “free” digital music files online.
Radiohead allowed its fans to preorder unrestricted digital copies of the album at a price the fans were willing to pay during a short window of time (a couple of weeks). Fans were able to download a digital version after paying what they wanted to pay for the album plus a $0.90 service charge. Radiohead also offered a deluxe box set, which included additional items of interest such as a vinyl version of the album and a hardcover book containing artwork for a low price. According to articles I found on businessinsider.com and pitchfork.com, the band’s strategy was a success. They were able to move more compact disks (1.75 million units as of 10/2008) and also sold 100,000 disc boxes. This was in addition to sales made from 3 million purchases of the In Rainbows digital file.
Naming one’s own price is not a strategy I would recommend for new artists. Having released six previous albums, much of Radiohead’s success was attributed to the large fan base it had already acquired (especially since consumers were not allowed to preview any of the tracks before pre-ordering them). This would not work as well for new, unknown artists or smaller record labels struggling to remain profitable.
http://pitchfork.com/news/33749-radioheads-in-rainbows-successes-revealed/
http://www.businessinsider.com/2008/10/radiohead-s-innovative-approach-paid-off-or-did-it--
LeRena, your point regarding Radioheads previous popularity is excellent. The have always marched to the beat of there own drum, so to speak and if you were to compare them to Weezer, another group of highly educated Alternative Rock musicians, they bring a deeper understanding of how to build their brand themselves instead of reliance on a label. Radiohead is not a one size fits all band and that helps their popularity.
-
-
Look at Table A. If the artist is also the writer of the song, they stand to make about $3.00 per physical CD sold according to the typical breakdown as indicated in the Table, for a retail priced CD of $14.25. Offered digitally directly by the artist/writer to the public, such as the “In Rainbows” album by Radiohead, even at an “it’s up to you” cost to the consumer, they are likely to average more than $3.00 per download. Even if they don’t, there is a likelihood that the freeloaders weren’t going to purchase the full price CD anyway, had they released it in the typical fashion, so that was money that wasn’t coming their way regardless. Together with the free publicity, wider exposure, and the continued/enhanced image of being unconventional and on the cutting edge, it probably generated greater ticket sales for their concerts too. And looking at Table B, the digital model of selling through Apple gives the artist merely $1.40 per digital CD album sold. So, Radiohead’s strategy applied even more so in that example. And, by controlling the other parallel sales of it’s pricey “deluxe box set” it stood to make even more. (I’m disregarding for this discussion the “artistic” considerations such as Radiohead wanting the album in its entirety to be delivered to the listener and not just individual tracks “cherry picked”)
I think the record labels were resistant because they would no longer be indispensable to recording artists. It used to take a lot of money to record and publicize and bring to market the actual physical CD’s. A lot of overhead was required and long established networks of retailers, promoters, and radio outlets were assets that formed barriers to entry for any new company to try to steal a percentage of their turf, so to speak. Likewise, unless an artist was big enough to try and form his/her/their own record label, i.e., The Beatles, artists were dependent on the recording industry. But along comes digital media and its a disrupter of the established way things were always done. Suddenly, what were considered major assets in a record label’s ability to promote, distribute and sell physical C.D’s. were no longer as valuable. And the barriers to entry for an upstart company or artist to “go on his own” without the necessity of a big record label behind him became easier to overcome. So, I believe that is why the labels were so resistant. (also, pirated music was cutting into sales as well)
But, once the dust settled and the major labels were able to position themselves as the major players again in the digital music arena, there are advantages of lower distribution costs and other overhead. A new kid on the block, Apple iTunes, didn’t use to be between the labels and the consumer. It is large enough that it largely sets the market for what amount is paid per CD sale to the artist’s label and a part of the new landscape the labels have had to adjust to. -
Any time an innovation is disruptive and not sustainable or evolutionary established dominant players in the market will always be uneasy. Established record companies did not have the bandwidth or understanding initially to explore the new business model of digital media. They held a dominant business position and as only 4-5 companies had the size to capture the top artists any change in the business model would only be a threat. As is often the case, the new digital revolution represented a threat to the traditional methods of business such as contracting an artist/songwriter, producing, promoting, and selling to retailers etc. The evolution of the innovation was typical. An outside startup such as Napster introduces the concept of digitally downloading music for anyone to hear. Of course not only was this disruptive but it clearly was a threat as music was basically pirated from the labels with no attempt at monetization for those who owned the music/IP. ITunes developed a legal business model as it had the know-how and resources to take advantage of digital technology to access the masses. Once established and digested by the legal as well as recording industry pricing mechanisms allowed for all stakeholders to do well through scale and scope. A million apples selling for 5 cents is much better that 100 apples selling for a quarter.
-
Digital music has not only had a profound impact on the music industry as a whole, but specifically in access to music on multiple levels. Records labels were afraid of the loss of control of distribution and of the artist themselves to some extent, but it has improved greatly the ability to get music to market sooner, get artists from whom they are able to make more profit into the mainstream sooner and partner with different outlets like Pandora. As they sooner realized, if you could shift the retail overhead and profit shown in Table A to other outlets at a lower cost, there would be an increase in profit opportunity, possibly for the label. Digital media has really allowed the label to focus on Artist Royalty packages and marketing as, as referenced in the case, the creative and production needs of the artists have shifted back to the artist themselves in some cases. But I have recently noticed a return to vinyl and this article references such. http://www.npr.org/2014/11/29/367420344/vinyl-once-thought-dead-makes-a-comeback-in-the-digital-age
Maybe the artists and labels have come to some balance and found there is a fit for both. -
Radiohead had a reputation for experimenting with unconventional album release tactics. They wanted to find ways other than conventional ways, to get their records into as many hands as possible. Over years, they were very well known and had a huge following, which was large enough to make their albums make it to top of the chart. The fan following would large enough that they would use radiohead fan sites to song discussions, blogs and bootleg recordings etc.
Digital media has its own way to sell and price the recorded music. It could sell the entire album or ala carte. The digital media also reduces overhead, many middle layers. It we look at the Apple’s ITunes breakdown of a digital album, there are only three main players with increase shares – artists(14%), record company(56%) and apple iTune store(30%). It’s a win win for all. But in the traditional way, the record company could control the sales and pricing, contracts etc . but not anymore.
Radiohead released its “In Rainbow” album in a way that was unprecedented in the industry. They made the album available digitally on their website allowing fans to download, not setting the fixed price but with a nominal surcharge( 0.40 pounds or $90 cents) plus any additional amount that the fans wish to pay out of gratitude and they could set their own price.
I did search the internet with a keyword “In Rainbows” and on Wikipedia, I read that they received widespread critical acclaim. It earned a rating of 88 out of 100 on Metacritic which indicated universal acclaim. I believe it had a huge success. The fans could also order a deluxe box set for $80 with few goodies. Also the downloaded audio quality was much better than what fans would have gotten out of iTunes, so fans were happy. This will create a enormous pressure on other artists as they have to either follow or find other ways to reach the fans and it will be challenging. The other artists might not be at a liberty to follow what Radiohead did to their band and monetize and be successful. -
Record labels could realize numerous advantages by leveraging digital media, including lower inventory and costs associated with producing physical CD’s. Additionally, digital media allows record companies and digital music retailers (iTunes, Amazon…etc) to benefit from Chris Anderson’s The Long Tail effect http://www.longtail.com/about.html. Essentially, they can offer more choice and variety as the costs of production and distribution continue to fall. Record companies no longer need to search for a one-size-fits all, or force consumers to buy entire albums when they only want one song. The theory of the Long Tail basically hypothesizes that the size of many small markets (those typically too small to hold inventory in brick and mortar stores) could be just as big as the demand for hit records/artists.
Radiohead’s unique release of “In Rainbows” was ultimately a success, though as others have suggested, the band’s massive following probably allowed it to be successful where other bands might have failed. This feels much like Panera Bread’s “Pay What You Want” experiment. Though their efforts were more of a social enterprise model, the results were similar to Radiohead’s amazing ability to profit despite offering the album for free. Panera posted suggested prices but allowed people to pay whatever they could afford. They found that 60% leave the suggested amount, 20% leave more, and 20% leave less. Where few Panera patrons seem to take unfair advantage of the the system, Radiohead fans likely also felt compelled to pay for the album despite not ‘needing’ to. http://www.csmonitor.com/World/Making-a-difference/Change-Agent/2011/0517/Panera-Bread-lets-diners-pay-what-you-can. Not paying would be almost like disrespecting the band.
The problem Radiohead’s success could create would be consumer expectations for new albums. As stated above, why would we pay for new bands when established ones are giving it away. While it could also be said that this might limit some of the opportunities new artists to be discovered, more and more artists are also now being discovered through other digital mediums (Youtube).
-
From the perspective of the recording industry, digital media has many advantages over physical media. The first being the reduction in overhead cost. The record company’s share is 56% with digital media, while it can get 10% of profit with physical media. The next advantage is the quickness and ease of distribution. After editing the media, the company can upload it to ITunes or a server where people can purchase and download. There is no hassle in manufacturing, packaging, and distributing the CD. The labels are so resistant to digital media because of change. Normally, people like following routines and resist change. So when change occurs, people become hesitant which is analogous to the recording industry. Artists/Bands followed a specific protocol to manufacture, distribute, and promote their music. Digital technology allowed these artists/bands to have more control over the production process by self-producing or enlisting their own producers. This reduced the importance of the recording industry.
-
Vinay,
I agree that digital media does have a lot of advantages over physical media. However, in the case of “In Rainbows” I read an interesting article that states that 62% of people downloaded the album for free which gave an average of $2.26 per download. I’m sure that this activity was predicted by Radiohead and the goal for “In Rainbows” was merely to reach as many listeners as possible even if it meant giving away the album for free. A new artist would not be able to survive this type of business model unless they were already financially secure. Lastly, some artists feared that allowing consumers to download “In Rainbows” for free, decreases the value of future albums by others and lowers the sales price. http://community.mis.temple.edu/mis5001s15dq3/2015/03/13/case-question-radiohead/-
Kerry, even at $2.26 average per download, its better than the $1.40 they would have received per download of digital CD’s through Apple. And, I’m guessing a good portion of those who downloaded it for free would not have been purchasers of the album if it had been offered for sale in the usual way. So I think the average per download needs further analysis to eliminate those who would not have purchased it if it was being sold in the traditional way. I agree with your point about some artists fearing that Radiohead’s free “In Rainbows” download might diminish the value of future albums by others and negatively affect the sales price.
-
This reminds me of a PBS TV channel which runs on donations made by viewers like you and me. This doesnt mean that ABC or others arent doing well, but they are. Its just allows for everyone to compete and also allows viewers to chose what they wish to. We already see the monopoly with the cable companies, in the town where I live, there is just either comcast or fios. So even if they charge you more, you have no choice. But where as in the music industry this is different lately, thanks to digital media. Me as a consumer I would like to have choices, even though i may not like to own the entire cd album spending $15, with iTunes or others you spend $15 and get your favorite songs which i think is lovely. But to the record companies this may not be that profitable as there is so much overhead. But for the artists this may hurt too. But if you can cut the middle man, or even cut the middle man’s share from the equation, then artists will thrive and consumers will win too.
-
-
-
-
Digital media has an advantage over physical media because in our tech savvy environment, media devices are being used to download and store music when it is downloaded. This allows music to be accessed while being mobile by using devices such as IPod, Apple devices, and Android devices. However, labels are resistant to digital media because of the problems with pirating music material. Furthermore, once the music is downloaded it can easily be shared or copied by other, thus lowering the overall sales of the music project. Radiohead decided to sell its album, “In Rainbows”, by allowing consumers to digitally download or purchase the album by choosing the price they were willing to pay for the album. “In Rainbows” was a very successful album selling over 3 million copies and considered one of the best albums ever. Problems that other artist may encounter with a pay-what-you-want download is that the artist is leaving their earnings in the hands of the consumer. Also, typically artists are unsuccessful in promoting and obtaining distribution deals to market their album themselves. Therefore, unlike Radiohead, having a recording agreement leaves the artist with significantly less earnings than the likes of Radiohead.
-
Radiohead decided to self-release “In Rainbows” exclusively through its website. The digital version was only available for purchase as an entire album and fans could opt to pay what they wished. It is my understanding that the digital sales turned out to be comparable to what would have been expected had they not used this approach. Regardless, I think the innovative release tactic was advantageous because it attracted much attention and highly publicized the group. In my opinion, it was wise that they chose to still release the physical album conventionally with a standard price. I think it could be more risky to use this approach for less establish artists as it is obviously less financially predictable, however, it could be appealing from a media coverage standpoint. Potentially, music could be more accessible to a broader number of people. Radiohead was in a good position to try this out as they already had a well-established loyal fan base.
Elberse, A. and Bergman, J. (2009). Radiohead: Music at Your Own Price (A), Harvard Business School, 9-508-110. -
Digital media has the advantage of being made available immediately once an album is released. The days of waiting at line at Tower Records for an album drop are long gone. Also, digital media has a price advantage as it is much more reasonable to release a product that isn’t tangible. CDs cost roughly $15 while a digital download costs about $10. Another advantage is you can have music on the move through your iPod or MP3 players, which definitely brings a better quality of music. I remember as a kid walking with my bulky CD player and with one wrong move, the song would skip. I would think having this mobile advantage of having music with you everywhere and at anytime is an advantage for the labels as people are constantly playing music, maybe for others to hear, like, and then buy. Record labels were resistant because many consumers would download music illegally, cutting into their profits and also exposing the album before it was actually released. Prior to digital media, you maybe were exposed to one hit song from the album and you made a decision whether or not to purchase. With online piracy so high in the late 90’s/early 2000’s, you could listen to what you wanted for free in some cases.
Radiohead was one of the most popular and artistically significant contemporary bands of our time. They are known for doing things eccentrically so it is no wonder that they decided to sell their album, “In Rainbows”, by digital download through their website in October 2007. The most significant thing is that they decided to sell the album at any price you would be willing to pay for it with only a small fee of .90 to download. Unlike through iTunes where you can cherry pick and download what songs you wanted specifically for usually, .99/song, the “In Rainbows” album had to be downloaded in its entirety. Being able to download their album directly from their site gave them better control over the customer experience by getting their whole album out there and listened to and also providing better quality of their songs. Likewise they offered a box set which was a collector’s item for a flat fee. This made the album advertising a huge successful and also all profits would go directly to them as opposed to shared with their record label, publishers, marketers, retailers, etc (they did pay to have their album played uninterrupted on Xfm). While the exact figure was not published, album purchases were said to be around 3 million and this album made more money than their previous album “Hail to the Thief”. It is also said that most people did in fact download the album for free so again great for advertising purposes and creating a buzz with their “it’s up to you” payment notion but could have possibly sold themselves much shorter profit wise. With music piracy so high, I think Radiohead recognized this and offered its fans the complete experience without having to go through the illegal channels. The problem it produces for other artists is that it creates expectations. If Radiohead is willing to forego huge profits by offering a pay what you want model others may be expected to follow suit.
For me I like the feel of a tangible good, similar to the way I read a book. No digital downloads for me! I may be the last remaining CD buyer. When I know an artist I like is releasing an album, I’ll head to Walmart or Target and pick it up. It’s funny because ten years ago I would pay around $20 for a new CD and today I am paying roughly $10. The only disadvantage is the space these CDs take up and my lack of mobility with not being able to have the music on the move.
http://www.rollingstone.com/music/news/radiohead-publishers-reveal-in-rainbows-numbers-20081015
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting H-M 9 years, 7 months ago
From the perspective of the recording industry (record labels), what advantages do digital media have over physical media? Then why were the labels so resistant to digital media?
How did Radiohead decide to […]-
If I were running a record label I would love how quickly digital media can get one of my artist’s songs and albums out to fans. It’s a great way to market and save money. It would seem natural that if popularity rises so do my profits. Unfortunately I begin to worry about issues surrounding piracy.
Let’s be honest for a moment, if we have the opportunity to get a song for free, and it’s easy, most people are going to go for it instead of going to a physical store to buy the entire CD, or to pay for a download. This thought would sit in the back of my mind as a CEO of a record label and drive me crazy. Initially I wouldn’t want anything to do with digital media because it becomes a slippery slope of exposing my artists’ music for free. But if there was a way for me to make money and to appease the fans I would reconsider.
If the thought of piracy drove me crazy, I would be furious when bands like Radiohead try to ride into town to save the day by releasing their album In Rainbows via their website for a price that can be determined by consumers. I would be even more upset if I were an artist. These guys make millions of dollars and then they decide to get all charitable and pump out music to the tune of free-99? No thanks. If they wanted to make a statement and show how noble they are they could have paid out the label to break the contract earlier in the career and done something different. And spare me with the idea that they are doing it for the love of the music. If they did it all for the love of the music then why don’t they tell us how much it cost for a concert ticket when they toured in 2006, which was when they were testing music for the next album. Great, I had to pay $40 for a concert ticket to be a guinea pig and the chance to download music from their website.
Was it all a success? For Radiohead it probably was because they felt like they got to stick it to the man, even though in reality they are the man who tried to stick to some up and coming artists. Thankfully ideas like this haven’t taken off.-
Will,
I enjoyed your passionate post. As you mentioned, it is almost impossible to avoid piracy issues and if I was a CEO it would drive me nuts as well. I appreciate your candor as I too would opt for the free version (I haven’t bought a CD in 10 years) over purchasing a CD. To your point though, I think that there is a way to make money and appease fans and maybe the recording companies resources would have been better spent strategically adjusting to the changes that technology created instead of costly lawsuits in an efforrt to preserve the “status quo.” I remember in the 2000’s record companies were suing their customers for downloading music. A large effort was spent on this which I guess the objective was to induce fear into the general public as if that was going to stop what was occurring. I think that this was a misjudgement on the Record Companies part. While they had an obligation to stop piracy or prevent it as much as they could, I think their action was reactive and not proactive and has led further to their demise because those resources could of been spent on innovation and leading the music revolution instead of trying to control and prevent it.
Great post Will.
-John
-
John – I remember wondering why record labels were going after individual users for downloading music … it seemed to me that sharing music (which everyone did even before digital media became popular) was similar to lending a friend a book, but you never heard of publishers going after people for that. On the other hand, it’s virtually impossible to lend a friend an electronic book unless you hand over your Kindle or Amazon account access, so maybe that’s why publishers never went after users like record labels. I also think that attempting to induce fear into customers is not necessarily the best way to endear them to your organization. Who wants to purchase music that will be used to support a company going after a teenage kid? I wonder if those actions encouraged more people to download illegal copies rather than prevent them.
-
John,
I like your point about the record companies needing to be proactive instead of reactive regarding piracy issues. Brandon has a really good post below about Napster being a disruptive innovation that may have led to the creation of iTunes. Perhaps some of the record labels missed out on an opportunity to capitalize on downloading music because they were so concerned about stopping it instead of figuring out how it can help their label and the artists.
-
-
Agreed Will, I think it was a very smart marketing ploy on the band’s part to pique interest in their music, selling more copies of their earlier records as music fans awaited this new option. I think it’s also worth mentioning that Radiohead songs are now individually downloadable on iTunes. I guess they got over wanting fans to buy their records as a whole…
-
Nicole,
This certainly was a great example of a marketing ploy. It’s a shame they didn’t realize how to do this a little differently and capitalize like Macklemore. I had no idea about that.
-
-
Will, what a great post! And I agree with your critical assessment of the effect their move would have had on a new band. How can they try to recoup their time, effort, and investment (usually borrowed money from parents and friends) by “selling” albums when the “big stars” are giving them away for free. Like you said, $40 for a seat at their concert? Why not be “charitable” and go on a world tour giving “free concerts?” I also agree with you 100% that they were “experimenting” on their fans at those 2006 concerts, although they are DEFINITELY NOT THE FIRST BAND TO DO THAT!
-
Alan,
I definitely think this would put new bands in tough spot if this kind of model stuck. I want to sound cheerful and optimistic, but the reality is people need to get paid for what they do. We can say you need to find a job you like but for some individuals they need to find a job that pays the bills, and some people need to get back the investment they put in themselves. At any rate, musicians, teachers, doctors, lawyers, and everyone else, in my opinion should seek the get paid what they are owed. Not only will it benefit them but it may help others down the road.
Also, Nicole has a great post below about an individual abandoning a record label and doing well.
-
-
Will — like others, I agree with your post, especially your point about Radiohead’s “giveaway” hurting other, smaller artists. It’s great that Radiohead can afford to give their music to fans for free, but like I mentioned in my post, that devalues their work and works created by others (at least in my opinion). If one newspaper gives free access to all of their articles, but another charges you to access anything, do you believe that the paid-access newspaper provides greater value? If you’re like me, I read news from free sites (or sites that I’ve gained free access to through school, work, or family accounts).
-
Rachel,
I completely agree about your devaluing point. I remember being in a meeting once and someone suggested providing hospitals with free assessments. The idea was immediately shot down because clients would begin to devalue that part of an engagement even though one can argue an assessment is the most critical piece of a consulting engagement.
-
-
Will, see my post below. One thing to keep in mind is the fact that bands will no longer make money on the sale of their music. Instead, their new revenue model should be based around concerts, paraphernalia, and other ancillary activities. This is an interesting article which discusses profitability in the new digital age:
http://www.digitalmusicnews.com/permalink/2014/09/08/fans-arent-going-pay-music-anymore-thats-ok
Radiohead was essentially one of the first bands to recognize this. Releasing their music essentially free was one method they used to “experiment” to gain knowledge and help determine how to remain popular and successful in the new music climate. Releasing music in this way might have allowed them to reach a wider audience and gain additional fans who would purchase concert tickets. I don’t see it as an act of nobility, but rather an attempt to cope with the changing media landscape.
-
-
I think the obvious main benefit of the digital media is the ability to eliminate the costs associated with the physical production and distribution of CDs/albums and focus time and effort on the marketing and promotion side of the business. Per the case study, packaging, distribution and overhead (retail and record company) represented more than half of the cost of producing a physical album or CD. Using digital channels to introduce new music not only eliminates this cost but also allows record labels to get the music to the industry much more quickly. In addition, digital distribution is instantly global. The release date in London or Japan is the same as in the United States. Using digital media for record distribution/promotion is such a new way of thinking for the recording industry. It basically blew up the existing business model for the music business. I think for that reason it took time for companies to recognize and understand the ways to profit from digital platforms so the transition was met with resistance. Resistance to change is a common theme in our readings so it should be no surprise record companies showed this resistance, especially with such a significant change to their model.
I think Radiohead’s release of In Rainbows for whatever price consumers chose to pay is a nice tribute to Radiohead fans but beyond that is a model that won’t be and shouldn’t be followed by other artists. The only reason they were able to move forward with a release strategy is because the band is well established and can afford to “challenge commercial assumptions.” It’s a shame that Radiohead promoted the release in this manner versus releasing it as a thank you to fans for all of they’ve done to help the band become so successful….and rich. How about instead Radiohead charges market price for the album and sends out a free box set to purchasers? That would be a challenge.
-
.
-
Rich, you bring up a good point that has been mentioned several times in this class. Many organisations and industries aren’t quick to adapt new concepts and business practices but instead think the old way of doing things is tested through time so it must work. I agree with you that digital distribution hit this industry rather quickly so they ended up being slow to adapt. I would also add to your post that I’m sure their was also a fear of heavy piracy if they released online because during the time digital distribution was just starting up, the big issue was the question of piracy. I think this industry failed to realized and to an extent still fail to realize that regardless of how you release a form of media, someone will still transfer it online for people to illegally download. As for the release of Radiohead’s album, I agree that the method of sales will not be sustainable for the media industry and this album was just an outlier. Like you said, the band was well established so people knew who they were and were more likely to pay a higher price for their album. This won’t be the case for many other artists.
-
You make good points about this being a shaky model for other performers to follow, and that it may be that the main (if not the only) reason this worked for Radiohead is that they were very well-established at the point they decided to do this. I know of some other artists that are taking a DIY-type approach to getting their product out there, and was able to find a nice article addressing some of these folks. The article also echoes your thought that such an approach may not necessarily be as effective for artists that do not already have a significant and loyal fan base. The article can be found here: http://www.fastcocreate.com/1680492/can-the-louis-ck-distribution-strategy-work-for-the-everyman-comic
-
-
I think from the recording industry perspective the advantages that digital media has is cost and exposure. The investment of time and money spent on marketing has decreased due to digital media’s global footprint which can reach anyone anywhere, and cost because the lack of a relying on manufacturing physical material. The music industry has changed dramatically in the last 15 years. I am sure almost everyone remembers Napster, Bearshare or Limewire. These companies essentially kicked off the fall of record labels as they provided a means for illegal downloads which hurt the record companies and artist. With that came lawsuits. Record companies were resistant to digital media initially because it not only hurt business but it was also unethical as it provided a means to steal intellectual property. After the wave of illegal download companies cooled down due to lawsuits, the road was paved for MP3 and Itunes. Fast forward to today and nearly every number in Nielsen’s 2014 annual review of the music industry is preceded by a negative sign, including chain store sales (-20%), total new album sales (-14%), and sales of new songs online (-10.3%). (Thomson 2015) Two things are up: streaming music and vinyl album sales. (Thompson 15). While I personally think that Vinyl album sales growth is temporary, I think that streaming is here to stay and will continue to grow. I think Radiohead’s approach was deemed successful because of who they are but it would not be a model to emulate. While their approach may be admirable to some fans, had they been just starting out, it probably would have been near impossible to make money or be successful. Digital media without a doubt has hurt big recording companies but I am not sure that it has hurt new and upcoming artist who are seeking to be heard and get that one chance. Websites such as hitrecord provide open collaboration and people can produce music themselves and easily distribute it to the masses. Not to mention Youtube and how artist have used that platform to market themselves. However, there is no doubt that digital media continues to provide a threat to intellectual property. Overall, I think that the recording company industry needed to evolve with the growth of technology much sooner. Evolving to me means that when Napster came out, the services that they provided should have been viewed as a worm hole into the future and recording companies should of changed their strategic approach then and invested in IT infrastructure to support mp3’s and streaming.
Thompson, Derek. “The Death of Music Sales.” The Atlantic. Atlantic Media Company, 25 Jan. 2015. Web. 16 Mar. 2015. .
-
Good point about the abundance of social media turning into a platform for exposure and early marketing efforts for up and comers. My daughter is a huge Shaun Mendes fan, and having looked into it, this young man represents a textbook case of riding the Vine and YouTube wave to get himself exposed to a national audience in a relatively short period of time, and without the need to be constantly touring or doing local gigs in the hopes of one day being discovered by someone at a record label. By the time Island Records had any idea who Mendes was, he already had an enormous following on YouTube, and in short order found himself with a record deal, and opening for the music industry’s current darling, Taylor Swift. More details on his rise to fame can be found here: http://www.billboard.com/articles/news/6106520/shawn-mendes-vine-island-records-label-deal-album
-
-
Q: From the perspective of the recording industry (record labels), what advantages do digital media have over physical media? Then why were the labels so resistant to digital media?
A; Digital media distribution provided several benefits to record labels. The primary benefit was a reduction in overhead, fixed costs, and variable costs. More specifically, digital distribution reduced overall production costs of records (less CDs to make, less spent in advertising and promotion). Secondly, digital distribution provided high quality records then previously available. By focusing on digital means of distribution, record labels could theoretically greatly expand their artists’ exposure to a wider and more robust audience.
The record labels were recalcitrant to digital distribution efforts because they realized that the new system, in effect, made record labels unnecessary. The new process removed many of the expenses and processes that previously were handled by record labels (e.g. promoting the album, production, distribution). Instead of seeing the tides of change and trying to pivot their business model to meet the changing demands of the industry, their clients, and their customers, however – the record labels attempted to deploy a brick-wall defense strategy – fight to keep the status quo.
-
I don’t believe that the digital distribution of music makes record labels unnecessary, but did make them less valuable. There are many things that are pretty important still such as matching song writers with vocalists, contracting with venues, recording the music. We know there have been success stories where people got big by posting their music online and getting viral attention, but those in essence are few and far between. In reality the promoting leads to the distribution (or downloading) and therefore the needs of the record label doesn’t go away. Now since they can focus on more important and critical things rather than distribution you might wonder if record labels are now pushing out to much music and leading to an oversaturation of the market where previously they had to be more selective of who they worked with.
-
-
Digital media has several advantages over physical media: quicker and more cost-effective distribution, smaller manufacturing and inventory costs, and generally, less returns due to purchasing policies. On the other hand, digital media, like self-publishing, provides the means for artists to create, record, and distribute their own albums without relying on record labels. If a new artist doesn’t have a lot of money, YouTube is a relatively inexpensive way to reach the masses, and more than one pop star started from YouTube. That kind of reach would not have been possible before digital media became common, and it’s probably very unnerving to record labels that their services are not the only method available to help artists be successful. Several people have already brought up piracy as a reason why record labels were/are resistant to digital media. While the digital nature may make it easier to copy music, piracy certainly isn’t a new concept. It was never very difficult to duplicate a record to a cassette tape, or to copy a tape or CD. I’m sure more than one of us kept a blank cassette tape in the stereo so when a favorite song came on the radio, you’d run to press the record button instead of going out and buying the single. I think the difference is that the same advantages the recording industry sees in digital media are also what makes piracy easier – low cost, easy distribution, etc.
-
Oops … I forgot to answer part 2 of the question in my response above.
.
Radiohead decided to let their fans determine the value of their album through online pre-orders at the band’s website instead of (a) going through a record label or (b) giving the album a set price. Another unusual aspect of their model was the lack of preview tracks – fans had to make the purchase without previewing anything, which was atypical of most music purchases (remember those headphones in music stores?). Additionally, Radiohead released the album in MP3 format, which meant there were no restrictions on the number of playable devices versus the traditional DRM format that can make it difficult to transfer music from a computer to a phone. According to a RollingStone article published about a year after the release, the digital release of In Rainbows made more money than was made from all of the previous album’s sales. However, their music publisher also admitted that more people downloaded the album for free rather than paying for it. While this experiment apparently succeeded for Radiohead, it probably would not have been as successful with a lesser-known artist. The problem is that by giving customers the option to pay nothing, Radiohead was, in a way, saying that their album had no definitive value. This issue of how much artist-created music is inherently worth is why some artists won’t allow their catalogs to be available on streaming services like Spotify, which pays a small amount of money each time their song is streamed. Obviously artists like Taylor Swift aren’t hurting for money, but does that mean they should be expected to practically give away their work, which in their case, is music? Or, does the popularity of streaming music mean artists just need to get used to receiving less in royalty payments as a tradeoff to losing money through piracy? -
Digital media is much cheaper to produce and easier to get to the masses, so for a record company, it should yield a financial windfall. However, that isn’t necessarily the case because of piracy issues, meaning people download music from the internet (or share with their friends) for free, leaving the record company and artist with nothing to show for their work. Metallica, along with many other artists and record labels filed suit about this exact issue with Napster back in 2010, forcing it into bankruptcy.
Radiohead sold their album “In Rainbows” via their own website and allowed their fans to name their own price. By all accounts, it was a successful experiment, although the actual profit made by the band was never fully disclosed. According to NME, “The album had been bought 3m times, including downloads, CDs and the £40 ‘Discboxes’ that were pre-orderable when the original download went live. 1.75m of those sales were CDs, and 100,000 Discboxes (a cool £4m in gross revenues from the latter alone).”
http://www.nme.com/blogs/nme-blogs/did-radioheads-in-rainbows-honesty-box-actually-damage-the-music-industryRadiohead was in a position to allow fans to name their own price though, given that they were already well established in the industry. Up and coming artists would never be able to make a living giving their music away for free. An artist who was successful with marketing himself on his own website, without the benefit of a record label, was Macklemore. He pounded the pavement, built a fan base, and released music on his terms, rather than divert a cut of the profit to a record label. I think artistic choices like this, coupled with the easy access afforded by digital media are what have record company’s quaking in their boots.
-
From the perspective of the record labels digital media allows them to distribute their artists’ music much faster than traditional methods. Historically, individuals had to make an effort to physically go to a store and purchase an album. With the introduction of digital media, people can now get music on the go or from the comfort of their own home. Additionally, the music is available to a much larger audience. As a record label I would love this benefit of digital media because the more albums I sell the more money I make. Digital media also cuts the overhead costs traditionally associated with albums. By distributing the content digitally there is no physical production cost for CDs or packaging, and now that physical music stores are virtually nonexistent, costs associated with brick and mortar stores are also eliminated. This in turn, allows margins to be higher and equates to more profit. With that said, digital media is not without flaws. The largest detractor to digital media is piracy. Once a person buys a digital version of an album they can then distribute that content online, making it accessible to many others for free. This can lead to massive revenue losses for the record label.
Radiohead decided to release their album In Rainbows on their site, and allowed the consumer to decide the price. I’m sure this method infuriated many other artists. Doing this puts pressure on subsequent artists to do the same although they might not be in the financial situation that Radiohead is in. Radiohead did this well into their career and following a record contract with EMI. I’m all for free expression and finding innovative ways to release music, however, I think it is unfair for Radiohead to attempt to start such a disruptive trend with no regard for their fellow artists. -
Radiohead decided to sell “In Rainbows” on their own terms. They were free from contractual obligation to the record companies and had established themselves with their 6 previous albums that collectively sold over 8 million. Their years of previous success gave them the financial freedom to execute the sale via a name your own price model on their own website. They did the recording and production on their own so they didn’t have to worry about the 55% of overhead and profit typically associated with the record company and retail and also didn’t have to worry about the 86% cut that typically would go to the record company or Apple via a sale of the album on ITunes. One major mistake that seems puzzling is that the download had no restrictions on the amount of devices that the digital file could be played so there was surely a heck of a lot more piracy with this album that you would normally expect. While I think that Radiohead views their delivery as a success, I would argue that from a financial point of view, it wasn’t a good experiment and certainly not one that I would expect to see other artists attempt to replicate. The main reason that Radiohead was able to do this was because they had already established themselves as giant in the music industry. For every Radiohead success, there are likely hundreds or thousands that just never make it and it is all of these bands that need the record labels more than the record labels need them.
-
Thanks for the post John. I agree that part of what made “In Rainbows” a financial success was that they were already an established artist in the music industry, but I don’t think that is the only way you can determine success for a band. Many bands come out and are just hoping to get noticed and digital music is a way for them to do so. Now, I don’t think you will see other established artists do this because they are already in the mainstream, but I think you have seen over the past few years, and will continue to see more and more, newer artists doing this very same format, asking for donations while giving there music away for free. Also, I disagree that this tactic by Radiohead led to more piracy, as there was no reason to pirate the music because you could download it for free straight from Radiohead. Now, did you see an increase in sales if people put the song on multiple devices? I don’t know the answer to that. My guess is no, and may of been a good reason for Radiohead to limit the number of downloads per person allowed, but I would say that based on the number of sales (3 million copies) that this tactic was a success overall.
-
Hi, John: I agree that Radiohead was able to do this because they had already established themselves in the music business. The record labels for a long time have been the main gatekeepers of which bands make it and which do not. The bands used to have zero leverage. They were totally dependent on the labels. Of course, there were exceptions to this. Green Day built up a massive grass roots following by themselves, which gave them considerable negotiating power when they eventually chose to sign. In fact, the community that had supported them for years revolted against them, calling them “sellouts.” In today’s world, it is encouraging that there are more options available to artists. iTunes, Spotify, and the internet have given rise to many bands who see themselves as entrepreneurs and have full confidence in their ability to get the word out. I do not think the record labels will carry much sway in the future.
-
-
The thing I found most surprising about the Radiohead release of “in Rainbows” was that a majority of their albums were still sold as a “physical music” CD, given that 1) this was only 8 years ago, and 2) you could have downloaded it for as little as $0.00, according to the band’s website. According to an article I read, they also managed to sell about 100,000 of the “deluxe box sets” of the albums at a much higher price (~$80 according to our case study). Certainly, these numbers suggest that Radiohead’s strategy was very successful…they set prices to appeal to consumers across the spectrum of their audience by providing three (four if you count iTunes downloads) methods for “purchasing” the music, and managed to “sell” over 3 million copies, a majority of that in physical formats.
Regarding the recording industry, digital media is much less expensive to produce and deliver, but the risk of piracy of material is quite high and essentially unavoidable, to some extent. Being able to “dissect out” songs from an album using iTunes must also result in some losses to record labels, since there was a time (not that long ago!) when some of us would buy an entire album (or CD) just to get the one or two “good songs” that it contained.
-
The most obvious advantage of digital media over physical media is cost reduction in materials and distribution. Even though compact discs and cassette tapes were relatively low cost to produce, multiplied by several billion copies, it can still be a significant cost to the industry. Since there is no longer a need to distribute physical copies, there is also no need for manufacturing lead times, creating faster turnaround times to market.
On the other hand, digital media is harder to monetize. Piracy was rampant, particularly in the early days of digital recording. The recording companies no longer owned the distribution channels, so the profits were extracted by companies like Apple instead of the Big Four. As records were commoditized, consumers were only willing to pay for hit singles, rather than full albums, further reducing gross profits of the industry giants. Instead of embracing the iindustry disruption (like, e.g. television has with offerings like Hulu and WatchESPN), the music industry fought to avoid proliferation of digital consumption, which ultimately ended up hurting the industry leaders rather than helping them. -
This brings up many memories of Napster and the wide availability of free music in pretty good quality. This is a little off topic, but I wonder if there would be an Itunes now if it wasn’t for a Napster then. Napster really ushered in this era of mp3 downloads being a disruptive innovation that the music industry was slow to adapt to because it didn’t fit there business model. Digital media has advantages, much of which has already been discussed, like being cheaper to produce versus a cd, so bringing higher margins. It also allows for marketing in a way as people can sample a band’s music before buying the whole thing, much like grocery stores do. If the music is strong enough, you will buy more. The other side of the coin is mp3’s are easy to pirate and get for free, which can hurt sales for an artist. Also, with piece mealing songs from an album, consumers could buy just the songs that they liked or that were good. This could hurt sales as you are not gaining the money from the sale of the whole album. Now, artists could just make there whole album worth buying and not have songs that are put on albums just to take up space, but that’s too much to ask. Mostly I think they were hesitant to incorporate this new technology because it didn’t fit into how it always was done. You had systems in place for an artist, starting with getting a producer, music agency, to recording, then marketing from the agency, and so on. This was how it had Radiohead approached this problem differently. One, they made there albums an album, meant to enjoy as a story of sorts that flows together. This encouraged people to listen and want the whole album. Then, they offered there album “in Rainbows” for free, asking people to pay what they think its worth. This was counter-revolutionary to how the music industry thought things were supposed to go. Who just gives things away for free? Well, it worked. They sold over 3 million copies, mainly from physical albums rather than digital. Now, other artists must rethink there strategy from this and from the whole mp3 movement as a whole. They must follow in Radiohead’s lead and make albums, well, albums, otherwise risk losing out on potential sales.
-
JiHae — thanks for posting the link to that article. It’s interesting that piracy of In Rainbows was up so much considering people could legally get the album for free. I sort of agree with you that smaller acts may need record labels to help them from discovery to sales, but I think that the ease of creating and distributing digital media means that record labels aren’t as necessary as they once were in terms of being the only way for bands to be successful from the get-go. Many smaller artists use platforms like YouTube or MySpace (when MySpace was a thing) to promote their work and reach fans. On the other hand, the NYTimes posted an article the other day about artists who pay to play at SXSW with the hopes of getting noticed and signed. In this sense, they’re also giving away their work, but with the end goal of eventually being able to sell their work instead.
-
When Napster and other sites started making their impact on the music industry I was working at a network engineer for a record label. One caveat to that is the label I was working for was focused mainly on oldies and therefore at the time had substantially less to lose as at the time the user base was substantially less tech savy and didn’t have access nor were they inclined to purchase devices that made listening digital media worthwhile. Digital media has many advantages from reduced cost, portability, technology backwards compatibility. Let’s start with reduced cost as this one benefits both the end user and the producer. By having media that is downloadable you remove the cost of distribution, storage, shipping and related labor. When I think about why they would be resistant to that change it was primarily fear of a simple way to share with each other and lose out on sales. It’s less likely that you would be willing to copy 100 CDs for a friend as opposed to simply letting them plug into your laptop and download your music library. The music industry made more money by selling a complete album for $10 by selling an album of 10 songs, 9 of which nobody would purchase if sold as a single by getting the listener to purchase it as a package. By offering it digitally the user had much more selection of what they were purchasing. Lastly, each time that a new technology was released 8-track, cassette, CD they managed to sell music all over again. With digital media technology is typically backwards compatible and purchasing more than once is typically no longer needed.
-
A primary advantage of digital media over physical for the record labels is reduced cost of distribution. The article notes in its Table A the cost breakdown for a physical album, in which the largest share, 20%, is record company overhead. Retail overhead is also noted at 20%. Other costs associated with physical media include packaging and manufacturing (5%) and distribution (5%). Physical media-associated costs make up in total 50% of the cost of the album. By reducing or eliminating these costs, profit margins are higher, and the record label has the option to lower pricing to attract more customers. Although singles have been available before iTunes, the 99 cent song is much more affordable tot eh record label in digital format, since many of the physical costs are unchanged by the number of songs on a cd.
Record labels were probably resistant to digital media because of exactly what happened with Radiohead. As soon as their contract was up with EMI, they decided to go it alone. The cost structures were more prohibitive of this in physical media. With the onset of digital distribution, reaching the public was easier and cheaper than ever before, and individuals had the ability to distribute their own product if they so chose.
Radiohead sold their album In Rainbows through their own website with purchasers setting their own price. They also had various other release avenues, including sale of a collector’s box set and release of the song to various radio stations in the U.S. and the U.K. The release was very successful – according to Rolling Stone (http://www.rollingstone.com/music/news/radiohead-publishers-reveal-in-rainbows-numbers-20081015), “Radiohead made more money before In Rainbows was physically released than they made in total on the previous album Hail to the Thief,” although many of the initial downloads where people name their own price were done for free. Therein lies the problem for other artists – Radiohead allowed its fans to have the music for free or some low cost initially but were well compensated in the end. A similar gamble may not pay off as well for someone else. Or conversely, another artist may look greedy or old-fashioned by not following suit. Realistically, however, I believe these potential problems are highly unlikely – the Radiohead strategy could be considered a disruptive one but is so extreme in its approach that I don’t believe it is likely to have a permanent effect, but is more of an interesting novelty.
-
Dan – You are right a 99 cent song is much more affordable to the record label in digital format, but it’s also much more affordable to me as a customer which I appreciate. I remember when pirating music wasn’t about saving a few dollars it was simply about having access to the music when and where I wanted it and that’s what the record labels failed to recognize. An individual is more willing to spend .99 on a whim just to listen to a song once as opposed to buying an entire album where they need to go to the store or order the CD online. Not to mention the advanced capabilities of being able to listen to snippets of every single song before you purchase to decide if you like it.
-
-
Digital technologies, such as cloud based music services, has disrupted the music scene resulting in digital media creating an entertainment abundance for consumers. This has led to many advantages over more physical media. Such as;
Revenue – Manly consumers listen with iPods, therefore providing the option has the potential to boost electronic sales.
Transportable – Digital media is transportable, and has become part of the consumers everyday lives whether it’s enjoying an entertaining video on their commute or during an exercise routine.
Convenience – Consumers like having all of their music in the same place. The latest introduction in digital distribution comes with cloud computing, which allows consumers to remotely store their music libraries and access it from virtually any device with an Internet connection. In addition, digital media has the ability to spread music around the world with no physical or economical barriers.
While music listeners enjoy greater selection and lower prices. The advent of digital media saw the value of record sales weakened. Therefore, many labels are resistant to digital media. With the excess of digital music outlets, questions are being raised on the impact of piracy on the willingness of consumers to pay for music in a digital format and subscribe to a streaming music service. Consumers now have the option to acquire songs from a variety of paid and non-paid legitimate source as well as through illegal channels. There are also concerns about intellectual property rights. In addition, record companies have partially lost a hold of the control that once allowed them to keep prices for music and their profits, high.
Rather than going to the potential consumers with a big marketing campaign, Radiohead got the market to come to them. Using web technology, Radiohead decided to release free music directly to their fans, a practice that helped to promote their acts and expand their fan base. The free release and choose your own price of their album ‘In Rainbow’ saw increased demand for subsequent recordings. The biggest problem that this might create for other artist is -it’s hard to compete with free! -
The way that we receive and listen to music has changed over the years. The recording industry has shifted from the days of selling vinyl records to selling digital singles and albums online. One of the biggest advantages of shifting to selling digital music is that in this age of technology, more consumers can be reached with this method. Another advantage of digital music is that consumers have more freedom because they can purchase the songs they like individually or they can purchase an entire album. As we read in the HBR article, brick and mortar record stores lost share to mass retailers like Wal-Mart and digital retailers like iTunes. By 2006 digital retailers dramatically altered the way recorded music was sold and priced and a majority of artist’s sales came in the form of individual tracks sales. Labels are resistant to digital media platforms that provide music for download or offer music streaming for a monthly subscription because it takes away from their sales. It also reduces the control that the company has over the artist’s music as it relates to the rights and the royalties.
Radiohead made a bold move by selling the “In Rainbows” album digitally on its own terms. Radiohead offered two ways to purchase their new album: 1) Purchase and download the full album digitally or 2) Purchase a deluxe box set which includes two compact discs with extra tracks, a vinyl record, a hardcover book with artwork and will receive a digital version of the album to listen to until the box arrives. I think that the strategy was pretty successful. I also think that other artist should be concerned because while they are bound to release dates and how they want to present their album, Radiohead has the freedom to do it sooner and quicker. They have essentially cut out the middle man. Also, Radiohead cuts out most of the costs that is associated with having a physical copy of an album thus leaving a greater margin of profit.
-
Celia – Great insights and I totally agree with you. Because of the shift in the culture, there was a need to change to a more customer centric strategy. Since record label failed to adapt to shifting demand and changing methods of consumption, they were no longer seen as a relevant segment of the music industry. Labels would have a problem with digital media because of the control issues. As you mentioned; it takes the control out of the hands of the label and put it in the hands of the consumer – consumers have a greater ability to purchase single songs rather than albums; it is harder to control or predict sales -thanks to Wal-Mart, Target and others; and finally it lessens the control on the artist – artist no longer have to settle with just a small percentage of revenue from music sales.
-
-
Digital media has distinct advantage over physical media related to cost and speed of delivery. Producing digital media requires far less of a manufacturing capability than physical media. With traditional media, the record labels would have needed the physical records, tapes, and CDs, as well as the necessary equipment or outsourcing company to transfer the music to them. Furthermore, if there is any mistake made, there is an incredible amount of wasted inventory. With a digital track, if a mistake is made, it can simply be fixed and the file re-saved.
Digital media also allows much faster turnaround time from when an artist completes a track to delivery. Music can also be delivered more quickly and conveniently to the consumer.
Radiohead understood all of this but also realized that the recording companies were an unnecessary piece of the process. The band posted their album online and asked consumers to place a value on it. According to Rolling Stone, the album sold three million copies in its first year, which would have made it the highest selling Radiohead album to date. Since it is unlikely that everyone downloaded it for free, and Radiohead had very few overhead costs, I expect the effort was a massive success. Going forward, it would create some problems for less established artists who are trying to make money. The market can be set by the leaders. I could see some consumers saying, “Radiohead let me pay what I want. Why should I pay $10 for a band I’ve never heard of?”-
Chris,
I agree it can create problems for other artists, however, I think more would follow Radiohead’s footsteps. There are so many ways to listen to music these days and people are buying less music. With subscription based services and Apple’s iTune’s radio, we don’t need to pay to listen to music. Artists are still making money, if not more these days due to an increase in concerts and licensed material, so why not offer an album for any price. Another example, Apple gave out U2’s album for free last year and there has been an uptick in U2’s older music sales. I think it is all relative and more artists will be doing the same.
-
-
I would think the best advantage record labels would have is the ability to reach more customers. Having albums digitally available globally would increase sales and deliver the product much quicker. Costs would be down since there would be no need for physical items to be shipped. Since the creation of iTunes, people are able to carry almost their entire music collection wherever they go. I don’t remember the last time I bought a physical CD. I upload everything I own to iTunes and access it on my phone or the cloud. I don’t want to carry around a Walkman (those were the days) or cases of CD’s in my car. Radiohead established itself as a world renowned band with over 3 million albums sold. They wanted to reach more customers, so why not let people pay what they want? I know if I have never heard Radiohead and was interested in finally buying an album, I would not want to pay full price. This strategy would allow them to reach more customers, and if they win over new customers, those same customers would purchased the older albums.
-
Owning music physically (CDs, Tapes, DVDs, vinyl, etc.) has changed with digitization. The advantages that digital media has are that fans have the opportunity to listen to music everywhere; and it has gone to the cloud making it easier for distribution. Digital media is resistant because they feel that this is a threat. Artist communicates directly with fans, thanks to social media, which gives them the opportunity to market and sale, their products, thus eliminating the middleman (record label).
Artist is now in the position to own their brands, become independent artists, without the disadvantages that come with signing a record label. Record labels would not be in the position to manage most processes of the artists (i.e. funding, or projects in general), or recover their investments and make good profits. Radiohead sold their album “In Rainbows” without the involvement of a record company, in order to market directly to their audience. They were building an independent business model; they created a very cost effective strategy. Radiohead gave their fans the opportunity to download the album “In Rainbows” at whatever price they wanted to pay; their advertisement was cost effective because they could market their products to the right audience, through social media.
Radiohead had a lot more distribution channels; interaction through social networking would make fans feel closer, because they could give feedback, etc. Radiohead were able to keep most of their money, then selling through the record label. Problems that might be created for other artists are the large sums of advanced money, the connections, reduced risk, working with big retailers, etc., that Artists lose out on, which is provided through record labels. Some artists do not have the advantage that Radiohead had (they already had a huge following).
-
Shenita – You make a very good point. Radiohead had a large following which is really what allowed them to connect with their fans and sell directly to them the way they did. For other artists pulling that kind of crowd and having the money to support a digital sales initiative comes with time and would be harder for newer artists. That is exactly why record labels still exist. They exist to help promote and advocate on behalf of the artists who are starting out and don’t have as much insight into the industry. Once they get to Radiohead’s level of popularity it makes that decision much easier.
On the other hand, I do wonder how it is possible for people to utilize social media to become famous in less than no time. There are many social media celebrities who get famous from a YouTube video or vine going viral. So we have to consider that if they can do it so can other upcoming artists.
-
Thank you for your reply Celia, you make a good point about social media celebrities who became famous on YouTube video’s etc., I believe that some were lucky but the majority would still have challenges with those that are in need of financial assistance for (i.e. tours, special project, publishing, etc.). Also, what about those who are conducting business and have to sign contracts to do engagements, etc.; they may not have the practical understanding of business and still need the support as well as backing from an experienced agent.
-
-
-
Digital media has many advantages for the recording industry from lower costs for physical distribution to expanded opportunities for marketing the digital media. Digital media presents a unique opportunity for the recording industry to produce better quality recordings with greater clarity and then distribute these at a lower cost than traditional media like an LP or CD. Digital media maybe distributed in multiple business models from pay as you listen, to streaming, to buying an album to download all you can for a fixed monthly price. Digital media allows the recording industry to distribute across multiple platforms from mp3 players, computers, stereos, tvs, radios and other technology vehicles which were not traditionally known for music. The prior distribution systems were in-efficient economically for many reasons with artists receiving little of the income from the sale of their records with the majority of the monies going to the record companies. With digital media record companies stood to gain much less hence the resistance to change and the desire to protect their old business models. Since traditional distribution costs were high artists had no choice then to sign with record labels to have their music released while digital distribution has broken this paradigm allowing artists to directly distribute. Radiohead in many ways wanted to break free of the restrictions placed on them by their label and the traditional business models record companies use to place on artists. Digital distribution and the internet has really disrupted the traditional business models of the record industry which use to be extremely lucrative and profitable. Record companies now have to find new revenue sources due to this disruption.
-
From the perspective of the recording industry (record labels), what advantages do digital media have over physical media? Then why were the labels so resistant to digital media?
The clear advantage for the recording industry in regards to digital over physical media is the cost of production and distribution. With physical means a record company has to hire a third party to purchase discs and cases then they have to have the media burnt on to those discs and the cases need to be labeled, after that comes distribution to retailers; all of which costs money. With digital media it basically just needs to be uploaded online to stores like Amazon and ITunes then the consumer can pay to download it. Labels are so resistant to doing this because of the issue that comes with piracy. If the media is available online then in can be copied and shared with anyone but the logic is flawed with this industry because even if they only released it on a physical disc someone would still upload it online. I think the proper way to approach this issue is to make the media available at a low cost and easily across platforms to anyone. Netflix and Spotify have done this very well by making it cheap to purchase media and then open in across platforms. The problem now, especially with movies is even if you get a digital copy of a purchased movie you can only keep it on one device or the media is only available in specific countries leaving the only alternative to pirate that media.
How did Radiohead decide to sell their album “In Rainbows”? How successful was it? What problems do you think this might create for other artists?
Radiohead let customers pay what they wanted for their album In Rainbows. They were successful with this decision but only because they already had a name for themselves so the popularity of this decision offset the losses smaller bands would accumulate. The benefit of this way of selling records is a band can cut out the middle man in distribution and sales but this only works for established bands. The issue this creates for other music artists is that the initial ROI will likely be too low because if people can pay what they want for a not very well known band they won’t end up paying much. Whereas Radiohead already had a huge following so people were more likely to pay extra because they are loyal fans of the band. -
The main advantages to record companies of digital over physical media involve production, distribution, and storage of the materials. With digital media there’s nothing to stamp, package, sell and ship to music warehouses. Speed of distribution is therefore maximized. There also are no other barriers such as import/export tariffs or government censoring that could be involved with physical materials; if the buyer can access the internet, he or she can acquire your songs. Another advantage is price as listeners could purchase only those songs they desire, thus purchasing more of a wider range of music, whereas before each fan might only afford one album.
The labels were so resistant to it because it was disruptive and thus contrary to their culture, processes and business models. According to the “Disruptive Change” article it’s inherently difficult for established companies to react to newer technologies because the processes in place, that have been so effective for so long, fail to produce results in the new model. Basically, the labels were resistant because their profitability was threatened. Like any innovation it takes time for people and business to react to and embrace the change, and yet more time to develop processes and values that will be successful in the new climate.
I posted this same link last week but it again seems relevant here as it discusses how music groups will no longer make money from record sales. Instead they should focus on alternate streams of revenue, using records or MP3s simply as ways to build the name and attract customers to their concerts.
http://www.digitalmusicnews.com/permalink/2014/09/08/fans-arent-going-pay-music-anymore-thats-ok
Radiohead was, apparently, one of the first bands to recognize this and embrace the new technology. They experimented with distribution methods such as the name-your-own-price scheme on their website. They eschewed their previous label and produced the material themselves. Essentially, the experimented and tested to help determine how best to maintain profitability in the new age.
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting A-G 9 years, 7 months ago
Using the Siemens case as an example of pros and cons of open innovation, what should a company consider if it is considering doing something similar?
-
It is a little difficult to use my small veterinary hospital as a way to demonstrate open innovation, but I am presently facing a challenge where this concept can be applied. Though I like to think that I foster a culture of employee empowerment, I have to admit that though I have an engaged staff, major changes we undertake, or innovations, are usually ones I have come up with and researched. Just this week I recognized what a dismal job I think we do managing the anxiety our patients’ experience. We are gentle, and do everything we can to limit patient stress in terms of our environment, but I do not think we use all the resources we have it our disposal, which include various combinations of drugs that decrease anxiety that we could be prescribing and administering. Applying open innovation to this situation, I have called on all of my eleven staff members to come to a meeting prepared to offer suggestions on how we can do a better job with this issue. This is an exercise in internal open innovation. We are likely to need to creatively problem solve in a way that includes innovation to reach the goal I have set and come up with actionable items/procedures. This might be a stretch, but going outside of The Cat Doctor, utilizing true open innovation, I have contacted a pharmaceutical company that is likely to hook me up with a practitioner that specializes in pain and patient stress management. We will be meeting to discuss how we can integrate suggestions this coming week and over the next 4 -6 weeks I envision making many changes to the way our anxious patients are managed. In order to identify if the time and effort we put into this project yields real results, I am going to have to develop metrics so I can measure the effectiveness of the changes we make. My plan is to develop a scoring system that we can use to measure patient anxiety and to measure employee apprehension when working with anxious patients. I hope to add in a way to measure client satisfaction, since client anxiety when their cats are anxious is also something I want to impact. I’ve never really used metrics to measure the impact of a change like this so if any of you have suggestions of additional ways I can track results please feel free to offer suggestions. Hopefully, my “mastery” of statistics thanks to my MBA curriculum will allow me to evaluate the data I generate and, more importantly, it will help me prove to a staff this is a little too change adverse, that we actually moved the needle in the right direction. To really demonstrate the pros and cons of open innovation I’d have to have a control group of patients I managed using only my ideas, since I am the R&D department. That’s where using my hospital’s dilemma isn’t a perfect example, but I think you all get what I am getting at.
-
One of the pros and cons is a lack of anonymity. The pros as outlined in the case is that every employee that participates is accountable for his or her idea. The con is that these employees may be perceived as having too much free time. I experienced that same problem last year when I volunteered to work on another project outside of my department. We were encouraged to do this yet my manager immediately saw that as me having too much free time and rewarded me with more projects. The new responsibilities within my department prevented me from helping elsewhere. I could see that becoming a problem here. The pros is that you are promoting cross-organization collaboration. 3M does a fantastic job of open innovation with competitions and the 15% rule (you can spend 15% of your day brainstorming ideas). Post-It notes came out of this. Another pro could be better utilization of talent. Someone within the company may have a great idea outside of his or her department, but not normally get that opportunity to contribute. This allows Siemens to take better advantage of its internal talent pool. The con would that these new projects could divert employees from completing the tasks they were hired to do. It may be more “fun” to innovate than perform a meaningless task or grunt work. A pro may be better knowledge transfer within the company of new trends, best practices, etc. I think the pros far outweigh the cons. Organizations need to consider how open innovation ties back to overall goals and strategy. If those aren’t aligned, open innovation could be pure chaos.
-
Eric, you make so many great points! I especially like your comment about ideas being generated from outside of a department. So many times departments can get into a “group think” situation that ultimately hinders productivity or is blind to some needs or unintended consequences. Having more input and cross cutting department participation is a great way to overcome this problem and utilize the talent you already have on staff. I can’t agree with you more that the pro outweigh the cons and it’s great to see so many more companies adopting open innovation.
-
Brilliant post, Eric!
I can definitely relate to your volunteer experience for i was recently in a similar situation. Mine was more of an intra-departmental open innovation, though not officially defined as such. I designed and led a project outside of my job description due to certain skills that were not being utilized in my actual job. Though a huge success, I had to devote a notable amount of my personal time and effort into it. However, this devotion was almost misunderstood as me having a bunch of free time so more and more tasks were extended to me without due recognition or reward(s). Oh, it led to some unwarranted rivalry, too. I reckon open innovation will be more successful if incorporated into job description and appropriate recognition is implemented. Open innovation is a program that must be strategically led by leadership and instituted in a manner aligned with the organization culture.
-
-
The pursuit of open innovation and innovation challenge seem to come with mixed acceptance in industry. Some claim there exist reduced R&D costs as collaboration spreads costs across companies and innovators experience intrinsic value that may lead to elimination of high salaries and bonus structures. Collaboration expands thought diversity and increases learning through sharing experiences. Collaboration serves to avoid typical and repeated pitfalls companies experience when innovating independently. Open innovation does have a strong cultural bias. A company with which I have personal experience would not invest time, travel and development for any activity that was not home born, vetted and provided exclusive benefit only to their own company. Their perspective was that they did not want be paying for ideas that benefited other companies. This, in my experience, is an extreme stance. Another company I worked with loved open innovation for the very value of pursuit of discovery even if an ultimate product or invention did not come to fruition. They valued the process and journey that enabled people to learn how to create, innovate and soon or later to have a breakthrough idea. I think it comes down to the company leadership philosophy, the competitive market, the products and ultimately if a company views innovation on a scale that a greater good is created and not from an individual P&L perspective.
-
Great points, Steve !
Whether or not open innovation works for a company truly depends on the factors you listed above. In addition, even if leadership philosophy supports the idea, it has to be widely embraced by the constituents before it can be functional and effective. Competition in another huge point you mentioned, open innovation tends to work better for powerful organizations like Siemens than the smaller ones. For instance, Siemens possesses substantial concept implementation capability and can swiftly beat any competitor to the market. Similarly, smaller companies tend to be skeptical of venturing into such an initiative where they can be easily subdued due to economic factors.
-
-
I really liked the Siemens approach, and I think it has been adopted, with some differences, in other industries. People are generally easy to engage if a contest of any kind if presented in the right way. Therefore, identifying a winner of the context that can receive significative resources to develop ideas is beneficial. Everyone in the organization should be allowed to participate in the contest. A cash prize; business mentorship with strategic planning, access to a broad network of professionals and entrepreneurs, opportunity for financing; research assistance, and guidance with IP strategy; opportunity for beta testing: run pilot studies; legal support; marketing and branding including social media web and content strategy. In other words, I would make sure that asking to employees to come up with innovative ideas is not seen by the employees as a one way avenue. Any large organization employs professionals who have innovative ideas. For the professionals to come forward and successfully contribute to the organization’s innovation pillar engagement and small cash prize might not be sufficient in the long term. More tangible rewards such as patenting, and royalties should be considered.
-
I totally agree with your points Aldo, where I would have concern is how much of an impact is open innovation having on an individual’s day job. I don’t mean to say that I disagree with open innovation in principle, I would just suggest that strict governance be put in place to ensure that open innovation does not have a negative impact on productivity.
-
Love your idea about a contest…We has “brainstorming sessions” with my company to come up with innovative sales pitches, but after the first few meetings attendance died out. It would be really cool if we could find a way to encourage employees to be part of the “think tank”. In the meetings we did have, we found that most of the ideas that were used were from those who weren’t the direct salesperson. It’s a lot easier to come up with fresh ideas when you aren’t the one staring at the same pitch day in and day out. For example, we were pitching Delta a renewal sponsorship agreement with STAPLES Center and we bought antique suitcases with vintage stickers of LA all over them. Inside of the suitcase was a customized jersey, tablet with the sales pitch, and a bound copy of the presentation.
-
-
As in the case of Siemens, I think the most critical aspect to consider is the company culture. It seems that the largest obstacle in Siemens was getting business leaders, employees, and external entities to be on the same page in terms of the value of open innovation. At some points, there seemed to be almost a selfish mentality of not wanting to contribute unless it directly benefit the specific business unit. Although incentives like contests might encourage competition and innovation in the short-term, they will not do the long-term work of changing the company culture. I think a top-down approach where open innovation is imbedded in the company culture would be instrumental to making decisions such as those discussed in the reading.
-
I agree Mariya and will add another important aspect that is necessary for companies to evoke open innovation, they must be willing to collaborate with external partners who have known success in this task. The most obvious partners that come to mind for me is the academia realm. Universities are known for its open source and innovation practices and have made phenomenal advances in science, medicine and technology. Siemens’s recognized this talent and resource and set up a very direct and clear goal for collaboration with its outside partners, many of which included universities.
-
Mariya and March, I would agree with your combined points about the necessity of having an organizational culture in place that not only supports open innovation but creates a sense of urgency about it within the organization. Culture creates the foundation for a long-term strategy and urgency promotes the willingness to collaborate internally as much as externally.
-
-
Great comment Mariya. I agree that a top-down approach could change the culture and be beneficial for a company. However, I also believe that empowering all employees within a department and/or company is of great benefit too. I think, and it’s sad to say, that financial incentive is a huge player when it comes to people’s performance and contribution. Rarely do you hear someone say, ‘no i don’t want that promotion.. or.. no that’s too high of a salary or bonus.’ Sadly, maybe that’s just the work culture I am used to. In my line of work, we are offered higher annual bonuses if our performance throughout the year exceeds expecation and we have contributed to other areas within our department. To that, my coworkers and I work hard to meet and exceed our expectations and even volunteer on various projects throughout the year, even when time is tight and we have to work during our personal time.
-
Mori and March,
Thank you for your comments. Mori, I think human nature will always favor tangible rewards. But I ultimately think that intrinsic rewards (eg. professional growth, satisfaction, discovery, etc), especially when they are cultivated by the structure and the culture of the company, lead to longer-term growth (both individually and as a group). The hard part is developing that sense of intrinsic value for which employees strive to succeed.
-
-
-
Reading through the Siemens case I found the idea of open invitation intriguing. Being on the other side of healthcare, specifically the medical side, I find it very difficult to accept that open open innovation would be effective. Because people are in different specialties with in medicine the idea of giving opinions or thoughts for a differing specialty would be most likely frowned upon and met with derision. Even within my own practice that is multi specialty I wouldn’t think to make recommendations to the other physicians about their particular patient approach. The only aspects of medicine that I could see having open innovation are related to either EMR systems or practice management methodology. Within our practice I believe a competition regarding running of the practice or practice aspects would be viable. This type of competition with reward system and potential utilization of ideas given could have a significant benefit for the practice.
-
Hi Zach,
I appreciate your feeling uncomfortable offering suggestions to a doctor working in another discipline, but I think there are opportunities in those relationships for open innovation. I’m not sure if you think this example applies, but I’m thinking about one of our patients who developed a ureteral obstruction when he was just 1.5 years old. I was lucky that I knew two great collaborators at Penn Vet when Archie was ill, one a board certified internist and the other a board certified surgeon, who had studied over at the medical school with a well-respected human urologist. As a group they collaborated with an interventional radiology group and have since been able to offer a minimally invasive way to bypass the obstructed ureter with a catheter that empties into the bladder. They have taken their innovative way of dealing with a ureteral obstruction to a new institution which saw the potential in their work and offered the duo a chance to expand their research. Perhaps you view this more as sustaining innovation than a disruptive innovation, but I see it as disruptive as it has the potential and already is displacing an earlier approach. I think it is perhaps a little different in veterinary medicine than human medicine because many veterinarians on a regular basis wear many hats, but I think if you allow yourself to develop an inquiring mind and can think outside the box, you might see where open innovation could indeed be effective across specialties.-
Zach,
BTW, I hope you don’t take offense at my post. As a physician I am confident you already have an inquiring mind 🙂
-
-
-
One of the interesting side effects of the Siemens’ case was the creation of types of communities of practice. Utilizing the TechnoWeb 2.0 as the domain, the “self-defined networks” were able to build the community for members to engage, help each other, and share information. This new resource was able to solve problems in real time and rely on the practice to develop the repertoire of resources. This type of outcome may not have been the goal of the project however it does add real value to the company. Not only in cost savings but in creating a corporate culture around innovation and supporting the overall company vision. If other companies are considering adopting open innovation, this case shows that the benefits you get can be very far reaching and sometimes side effects are just as important as reaching the goal.
-
Amanda,
You beautifully expressed what I keep thinking when I examine what Siemens’ was trying to accomplish. Contests might be an incentive for some, but I though I think there needs to be some formal way innovation is managed, I really think this is about developing a culture that truly embraces innovation as an ongoing everyday opportunity.
-
-
Siemens open innovation led to many great ideas within and for the company. I did like the various contests to promote open innovation. Of all, my favorite was the Idea Generation Contests. This particular contest consisted of two phases; the generation and the improvement of ideals. I believe that each component requires a different type of thinking. Some people are great and creative thinkers while other are better at assessment and evaluation of current ideas. I believe this, along with the other contests, promoted collaboration, creativity, and a sense of ownership. Some of the cons to open innovation are revealing excessive information, proper implementation of the process and strategies, and increased complexity of the original idea. However, in my view, the pros 100% outweigh the cons. I think contests and open innovation allows employees to participate with various firm specific process, in turn, empowering the employees and heightening their sense of ownership. We tend to work better and harder if we believe that the end result will somehow directly affect us and/or our lives. A company should always consider their end goal prior to starting any new internal (or external) innovation agendas. Furthermore, allocation and availability of resources along with the financial standing of the company should also be considered.
-
The concept of open innovations is simply that, a concept. There are many ways that it can both advantageous and disadvantageous depending on its use and the organization to which it is applied. First, open innovation still requires guidance as outlined throughout this case. It is not as though a company can say, let’s shut down our internal R&D and leave it up to the open market to decide what we do next and bring the technologies to us. On the contrary, open innovation requires tremendous guidance, as demonstrated by the fact that at Siemens, Lackner devoted a significant amount of CT’s time to assisting the individual firms with various project that brought in new ideas. If a company’s internal R&D is making them a front runner in their industry, then perhaps their internal idea development process is adequate enough that this would be a wasteful exercise. However, if idea generation is stagnant and there is a possibility for external open innovation, then the concept can be quite cost saving. Additionally, the idea of open innovation can sometimes lead to client driven development which can foster business relationships.
On the counter argument side, open innovation can possibly reveal information regarding intellectual property that an organization might not want to be shared. Additionally, as mentioned above, there is a significant resource dedication requirement to choosing the external source that is most valuable. Instead of having your R&D leadership focus on management of internal ideas and staffing, they become focused on deciphering which external idea is best suited and there is a global waste of unused resources in this manner.
-
I think it is safe to say that a company needs to consider multiple factors before implementing open innovation. The best place to start is by having a solid groundwork which clearly identifies the company’s culture, mission, values, finances, processes, overall strategy, and goals. In addition to this, the company should have a clear outline of its Research and Development processes as well as their current resources such as staff and equipment. Once this groundwork is thoroughly understood, I think the next step is to identify whether or not the company needs to remain internal or outsource and go external when it comes to the open innovation strategy. All these factors will vary depending on the type of company. There are pros and cons to this approach and again I think that depends on the type of business. We all hear the commonly used phrase “what may work for one company may not work for another”. I think open innovation is a perfect example of this.
As far as advantages, open innovation has led to cost reductions, product growth, and even groundbreaking discoveries through the use of contests. By implementing contests, this further increases employee engagement and empowerment. It can better assist with problem solving and allows for experts to come together to discuss solutions on a common platform. On the contrary, some individuals find open innovation to be disruptive and even an invasion of privacy if the company chooses to go external. Some companies may be hesitant to share weaknesses or areas that are in need of improvement to potential competitors.-
Liz,
All excellent points in your post. I especially liked how you pointed out that a company’s culture must allow, or embrace, open innovation. I would expect this is unique to only select companies. Do you agree? Maybe open innovation could be utilized on a much smaller scale in any organization, regardless of their cultural correlation. I’m thinking specifically of Research and Design departments. While I expect the majority of my company would cringe at an open innovation strategy, I think our R&D department would find it brilliant and revolutionary. Thanks for the quality thoughts.
-
-
It would benefit any company considering the use of open innovation tactics to evaluate whether this inventive strategy fits with their organizational structure, if it can financially support the task, if it is prepared for public disclosure of future growth initiatives and if its culture fosters such creative outlets.
Organizations must first consider their structure, before embracing open innovation strategies. Decentralized organizations require a unifying network. This network provides company-wide information sharing solutions and ways to avoid redundant efforts across business divisions. Unfortunately, it also requires complex information technology support systems, which, if not already in place, could be both costly and time consuming. Open innovation strategies may experience significant difficulties in extremely complex businesses and industries. Companies considering open innovation solutions should ask themselves if there is a strategic benefit to opening highly challenging and specified issues to public involvement.
Before diving into open innovation strategies for complex technical and organizational solutions, companies should consider its financial impact. Does the cost of creating a platform for open innovation and the corresponding incentives for contributors outweigh the system’s benefits, or vice versa? Companies should value lucrative, whether short or long term, innovative processes much higher than those that produce net losses, though even unprofitable attempts at innovation may lead to future successes and should not go entirely disregarded.
By opening innovation outside the organization’s walls, companies can tap foreign experts and talent pools. For those considering open innovation solutions involving outside (non-employee) contributors, they must weigh the effects of disclosing their latest development interests publicly (possibly with competitors) with the possible benefits of such an initiative. If fearful of leaking first mover information to the public, they might consider fostering an open innovation environment limited to the organization’s boundaries.
Finally, organizations should consider if trust and transparency fit their corporate culture. If not, open innovation may create disruptive feedback within an otherwise purposefully secretive structure. Open innovation should disturb the status quo, challenge norms and find solutions that require additional manpower or knowledge not readily available. Obviously, this type of inventiveness suits some organizations better than others and could be completely unfitting for highly confidential projects/organizations.
-
Jordan,
I think that you are very much correct when you stated that an organization must consider trust and transparency. If these beliefs are not valued within that specific culture, then it’s has the potential to become an extremely bad situation very quickly. Because the purpose of open innovation (OI) is connect individuals with ideas from different departments, companies, and regions, the firm has to be willing to sacrifice some privacy and must take additional steps to safeguard proprietary information from being purposefully or inadvertently released. As you mentioned, a company should desire for open innovation to shake things up and gain additional perspectives from nontraditional sources which can provide new insights into possibly stagnant business ventures that sorely need innovative ideas. Fostering creativity by utilizing modern methods and exploring new, exciting territory is the name of the OI game. Businesses unable to accept that fact should not embrace open innovation. Thanks as always for your great insights.
Bill
-
-
The Siemens case reminded me of what is currently going on in my office. We have been trying to get individuals to have more innovative ideas and we actually created a brand called “Spark Thinking” to promote thinking outside the box. Similar to the Siemens approach we give rewards for the best Spark ideas of the month. While reading the case and seeing the comparisons to what is going on in my workplace , there are a lot similarities. We are in the beginning stages and like Siemens our employees are resistant to give ideas as they all are too busy with their everyday work. We even developed an innovation team where our jobs is to promote thinking outside of the box and get people to put ideas forward. We have implemented “thinking areas” and are trying to get more cross-team collaboration. It seems with the Siemens case that their innovation platform did not get off the ground until they decided to take a different angle and have people work on an internal platform where they had a place to ask each other questions, this may be the approach my company needs to take. I do think it is extremely difficult for people who are very task oriented to think outside the box and actually have the confidence to put their idea forward. Then on the other hand you may have some people who are overly confident and will be upset if their idea is not implemented. Implementing any type of open innovation takes time and a company has to engage their employees so that you have involvement.
-
Kristen:
It sounds like your company is off to a good start. As stated in the Siemens case, employees liked the sharing of ideas and saw the benefit of the sharing by improving their work performance by some of the ideas from others. I think this is an important piece of the open innovation process. When people see the personal benefit a program offers they are much more likely to embrace it and participate. I also think most people are resistant to change and it will take time for your program to takeoff.
-
-
Pros:
• Transfer of knowledge and skills among various business units.
• Lowered R&D costs: Amount spent on contests and rewards may be deemed substantially lower than the actual R&D cost that would have been incurred otherwise.
• Openness to novel ideas: Enabling external participants will definitely broaden the horizons of ingenious concepts that are independent of internal influence.Cons:
• Intellectual Rights complications
• Distraction from core business functionality
• Exposure of ingenious ideas to competitors
• Unhealthy workplace rivalryInspiring a shared vision and aligning the vision with the organization’s values will be impetus to the project’s success. Therefore, a company should first construct a value proposition that will be clearly communicated among all participants in order to generate necessary support. It is also important to implement a thorough cost-benefit analysis as well as market penetration evaluation.
The Siemens case articulated the skepticism surrounding the program and official job responsibilities. As recommended by Viswanathan, Head of Technology & Innovation Management at Corporate Technology, India, a company should consider having designated project leaders as well as official job description that would make the program more meaningful, and instill a sense of purpose in all employees. -
It is important to have a plan for the program. They need to set objectives and give guidelines to make sure the program does not get out of hand. I think open innovation is important to grow just about any business. It is important to be open to new ideas to help improve the processes, products, services, etc. There are different ways of doing things, possibly more efficient and/or more cost effective. Have people outside the immediately department look at a process may give a new perspective that people close to the process don’t see. The concept of “open” innovation may inhibit some people from offering their ideas. Management must create an environment that encourages the sharing of ideas and there are no “bad” ideas. Feasibility and costs must be considered but all ideas should be welcome for discussion. As Siemens discovered, it is important to apply rigorous assessment as to which approaches are worth further pursuing and which are simply lessons learned and not applicable to our business.
-
Using the Siemens case as an example of pros and cons of open innovation, what should a company consider if it is considering doing something similar? I think you have to have the organizational culture in place first before you can push open innovation. Otherwise the con of open innovation is a chaotic environment that can be a huge distraction for the work force. The spirit of open innovation needs to be cultivated in the organizational culture and if it is the pros of open innovation would be the creation of an idea factory that gave employees a tangible place to submit ideas, an environment that could transfer knowledge across the organization fostering collaboration and an organization that better utilized its in-house talent. The Siemens case is an example of the long-term benefits gained in creating an organizational culture around innovation, but I think it’s important to note that this is not a one size fits all strategy. What might be innovative and brilliant for one company may be nothing more than disruptive and debilitating to another. That is why I think it is most important to have the organizational culture in place first to know whether or not the organization can embrace such a strategy.
-
Clint, great point here on culture. Siemens, despite their silo-structure, did have an existing R&D landscape that focused on innovation. So, some of that framework was in existence. I could see this concept being very difficult in some firms where the culture is much more closed in. On the flip side, smaller or mid-size firms may really benefit from OI, to conceptualize what might already be occurring as a natural phenomenon. At my firm, we use chatter which is a part of Salesforce.com to engage in this sort of idea share and knowledge sourcing, explained in the Siemens case. Culturally this worked for us, but could definitely see this being much more challenging in other places.
-
I agree with both that culture can help drive the OI toward successful implementation. As mike mentioned, OI may be easier to embrace within smaller or mid sized firm. But when it comes to mega corporations like Siemens or even my company J&J, the OI is bit challenging. As seen many times with Siemens, the OI may not yield the most desired outcome. The OI in large firm may create much noise in developmental cycle yielding less success, which may warrant more structure. But knowledge sharing is certainly start of the successful product development. After much failure, Satya Nedalla at microsoft has announced the ‘One Windows’ strategy to foster the idea shearing within R&D to yield innovative robust solution. Although too early, we have yet to see how this is going to transform Microsoft’s NPD cycle.
-
-
-
Open innovation, if not a cultural reality in a given firm, may experience initial resistance or hesitation. The size of the firm and existence of a silo-structure will also play heavily into adoption and implementation. Siemens was able to experiment with open innovation across it’s many business units and across numerous topics. However, Lackner faced serious consistency and implementation problems specific to proving that the activities were on-task with business objectives and that open innovation could potentially alert competitors to new projects or programs. On the flip side, Lackner noted ” CT had supported more than 15 “calls for new knowledge and problem solving” in technological areas as diverse as sensor systems for extreme environments, high throughput parcel unloading, electrical grid power storage, and removal of trace contaminants from water. Contributions were generally excellent and yielded new technologies and organizations that could create effective solutions.” The issue at Siemens seemed to come down to an inability to systematically quantify and measure the impact of open innovation. If a company is considering an implementation of open innovation, it would seem critical and based upon learned from Siemens; that a broad base of support must first be established. This may be easier said than done, as the engrained silos and existing R&D processes may be resistant. Sharing success stories from similar organizations would be critical. It is also important to not be resistant to the external knowledge network, based upon fears of disclosure. Had Siemens been willing to explore this concept more aggressively, they may have netted ever better results. It is also important for a firm considering this approach, to emulate the contest strategy employed by Siemens. By leveraging technology across borders and making the contests interactive and engaging, the idea flow can rapidly expand. The final point for a new firm employing open innovation, is to ensure that the return on investment is measured, tracked and reported on. Siemens, despite their wide-scaled experiment, could not identify the return or the true impacts. This miss potentially jeopardized the entire system and gains on going. If the question is being asked whether or not anyone would notice if open innovation were discontinued, there is an absolute issue with the proof of concept.
-
The Siemens approach is a great one that more companies should consider utilizing just for the ideas on solving the problems can be vastly different than what was expected; more broad perspective of ideas and solutions than what can be done internally. It does take building a culture in the company that would support OI by allowing employees to work on other outside projects and would help to break down some of the silos that are all too common in many companies. I think that you have to create an atmosphere where OI is encouraged and welcomed by doing something comparable to what Siemens did. By creating areas where employees can communicate with one another like in a virtual area, it breaks down barriers where employees are more willing to speak freely on their ideas.
-
Siemens was able to experiment with open innovation across several departments and around numerous topics. When looking at Siemens there are some pros and cons to consider – first being lack of anonymity. The pros as outlined in the case are that every employee that participates are accountable for his or her idea – however, the con is the perception that these employees have too much time on their hands. When reviewing the case once can see that contributions were generally well received and led to many new technologies and solutions. The issue at Siemens seemed to come down to an inability to systematically quantify and measure the impact of open innovation – what were the KPIs and how could we track these ideas and put quantifiable numbers against them? This was a huge miss for Siemens and could have jeopardized the entire project. With any new business process you need to develop your “business case” which included identifying the return on investment and ultimately leaves your “flank vulnerable”. When I think about my own company and “open innovation” I can only think of a few cases where we truly collaborate. Several months ago we attempted to have “braining storming sessions” to help people in our office think of new innovative ideas to sell to our partners. However, after a few meetings, attendance dropped and the program essentially diminished. There was no real motive for other people to formally attend and the meetings were extremely earl in the morning. It would be interesting to see if we could develop a program similar to Siemens that encouraged employees to participate while also tracking the progress of the ideas generated.
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting N-Z 9 years, 7 months ago
Using the Siemens case as an example of pros and cons of open innovation, what should a company consider if it is considering doing something similar?
-
I think the most important lesson learned from the Siemens case was articulated by Lackner himself when discussing the resistance they encountered with the initiative to explore external knowledge networks. They were not getting the buy-in from potential reviewers of RFP’s and he realized that “..if you don’t have a clear business impact behind your question, don’t use this approach…”
Companies need to decide what exactly their needs are by taking this approach. Siemens realized that their silo structure did not allow their employees to know what other people in the company were doing. TechnoWeb and “Urgent requests” helped to meet this need. In contradistinction, the OSRAM LED contest is more like open R&D for a particular solution, and lots of money can be spent without any breakthroughs to show for it.-
Saqib, If open innovation is to be successful at say a University hospital, all stakeholders must first understand the reason behind the movement of open innovation and the potential benefits of its’ outcomes and processes. The major hurdle would be the need for resources that many Universities feel are scarce at this time as well as the lack of an articulated ROI from the process. I can think of nothing better than an open innovation on new reimbursement strategies, the benefits and drawbacks of bundle payments, how to effectively implement population health and how can all the medical Universities in Philadelphia pool resources effectively to better serve their communities. You need to clearly discuss with all the Universities the value of pooling their intellectual man power and thinking out of the box to ensure their survival no matter how they may transform or possible merge with one another with the underlying goal of improving patient care
-
Alex – that’s great insight and some very good points you make. Sounds like you are onto something. I would like to think that there can truly be open innovation and collaboration on reimbursement strategies for the important reasons you outlined. Another problem for Philadelphia-area university hospitals to consider tackling with open innovation would be resident education, in particular, meeting the new ACGME requirements of surgical skills training (mostly at the PGY-1 level, but not necessarily). There has been some activity and innovation that programs have developed to meet these requirements creatively while working within budgetary and scheduling constraints. These ideas are shared at AAOS and other medical conferences. By identifying effective and efficient methods of surgical skills training through open innovation locally, better methods can be developed. This, combined with facility, equipment, and faculty sharing would allow our area programs to consolidate these efforts. I can imagine that collaborative, open innovation can lead to a formal schedule of monthly evening surgical skills lab sessions that rotates through each of the programs, but all the area PGY-1 residents would attend.
-
-
-
Open innovation is a priority of the new CEO at my company. When he started, he instituted annual “Hackathons” which are time boxed to one week, but basically allow employees the creative license to develop teams and build/improve upon ideas. Once projects are off the ground, employees are able to work on their own time to further improve the project. A “Garage” opened fairly recently on campus with 3D printers, sophisticated development aids and a dedicated staff to assist employees with their innovations. There’s been some great technology that has come out of these projects including Ability Eye Gaze (http://blogs.microsoft.com/blog/2014/08/13/microsoft-ceo-satya-nadella-reveals-oneweek-hackathons-grand-prize-winner-ability-eye-gaze/), which is a software/hardware combination that provides a better quality of life for people living with ALS.
The positives of open innovation are obvious. For companies that want to adopt this type of program, it is crucial that they understand what they want to accomplish and that they setup some boundaries to scope the effort. Open innovation shouldn’t be totally organic. A company should be willing to invest resources in the form of time, people and facilities to give projects a better opportunity to progress quickly.
-
For any company considering an open innovation initiative, the first step is identifying the metrics to analyze its effectiveness. The company needs to create processes to measure both the strategic and operational costs and benefits of its open innovation project. Secondly, the company has to assess the factors to employees’ resistance, participation, acceptance, and engagement to open innovation. Lastly, the company should be aware of legal issues such as Intellectual Property infringements and patent fillings/sharing when working with external entities through open innovation. As with any major change effort, the company should definitely follow John P. Kotter’s 8 steps to transforming its organization (please see Leading Change case reading from HRM 5054 class) to implement the open innovation initiative.
-
Duke I could not agree more. The fact that there was no measurable or deliverable to show the impact of the “open innovation” theory is hard to grasp. Everything we do is now measured by some metric. I guess one could argue the measurable was the participation within the contests, but what about work time lost with the time committed to these exercises that seemed to not deliver the results that Lackner desired. I think the concept is great in theory in order to drive an open dialogue and tap into the vast “silos” and information/tribal knowledge within Siemens. I just think the execution piece was off, which made it difficult to deliver the success or impact the “open innovation” dialogue had on the company moving forward.
-
Steve, I agree that the execution was off and KPI metrics were never discussed. What is odd is the Exhibit 6 should some great potential for measurable gains in cost and time saved from the use of Technoweb 2.0 but nothing more was done with these “success stories” to really show the true benefits of this open innovation. The main thing that jumped out at me was Lackner questioning whether anyone would miss the open innovation initiatives if it just went away. How much of an impact did they make if this question even came up?
-
Duke,
Good question about Lackner’s question of shutting open innovation down. To be honest I was somewhat confused by that question. I was wondering if what he meant by that is let us see how much we loose when we shut down open innovation. I think, maybe it was more rhetorical than an actual proposal. What do you think he meant by it? -
Hi Duke – I think Lackner was just trying to justify the program from a different direction by looking at the impact of losing the value (current and future) provided by open innovation (ie – look at all we would be losing if we stopped). I’m with you and Steve on needing the metrics to build the case and tap into the silos irrespective of approach. I think Professor Petrucci would be proud of you pulling Kotter’s 8 step change model into the discussion!
-
@Bruce, I think Lackner was frustrated that the open innovation initiatives were being driven by his group. Although some of the business units have reached out to do joint projects, CT still drove or funded the projects. I agree with both you and Paul that Lackner was just stating the loss of value to the company if they shut down the open innovation as it has clearly shown to add value.
@Paul, I am in agreement with your assessment and thank you for stating in a much better way than I could. And it surprised me that I remembered Kotter’s 8 step…this whole learning thing just crept up on me.
-
-
-
-
-
Using Siemens as an example any company considering open innovation should consider their internal culture and their established process of doing business. This would help then adequately plan for a buy-in strategy and any required information session for key potential internal/external participants.The company could also consider incorporating open innovation as part of their corporate strategy and linking it to targeted growth area, this could provide some guidance for building a Metrix to analyze outcome and it would reduce resistant from potential participants who may view open innovation as a “waste of time” or worries that if they participate in the project they would be accused of having nothing else to do. The company should also consider ways of encouraging their business units to work together as partners and not consider the open innovation a completion. This would allow open flow of ideas and collaboration within the organization and also allow their employee to be open to ideas from outside sources as well as get their internal underutilized ideas out to other partners who might be able to incorporate the ideas into other external projects.
-
Christine, I agree with your assessment. In order to have successful open innovation, a company needs to get buy-in across all levels of the organization and it has to become part of the company’s overall strategy and culture. The company also has to make it possible for employees and groups to partner with and easily collaborate and share information with other groups, internally and externally. Without free flowing information between groups working together, I do not think the open innovation strategy would work. Additionally, for many employees they may need to change their mindset as the goal for most companies in the past was to invent or fully develop products internally.
-
The con for the use of open innovation is similar to using large groups of people in a conference room to discuss issues.The group of people need a clear goal that explains what is in it for them personally. If not they will move the subject towards a new goal that is more important to them. This was seen during Siemens attempt to use external sources. The internal members did not believe the project to be relevant to what they were trying to accomplish. This lead to a lack of buy in. This was also seen internally when the number of urgent requests were over flowing inbox’s. Each of us believe our problems to be the most urgent. Siemens had to develop a clear standard to evaluate each requests level of urgency. The pro is always the same as any large group. Once you develop a clear vision or goal that explains personal/professional impact the people will become more focused. Like the saying goes two heads are better than one. Siemens was able to demonstrate this with the LED project garnering over 952 participants and 541 ideas. It would take a group of 10 people several years to develop 541 ideas. For any company considering open innovation the key is to focus the power of all those minds. Do not let it become confused by focusing in several different directions.
-
Hi Bruce – I think you and others here are spot on with the power of open innovation to develop the ideas in a focused way to ensure success. When you talk about the “power of all those minds” it heightens the importance of what was said in the Siemens case – “If Siemens only knew, what Siemens knows”. The sad part is that internally we were saying that at Siemens in 2001 and the current case still references that as fact within the organization. The good news is that even though they are only tapping the surface of what they are capabale of, they are still a great company with remarkable accomplishments.Open innovation that blends their knowledge with external experts in a focused way as you highlighted will take them to that next level.
-
-
It seems that the main thing a company considering Open Innovation should consider is whether or not it is a diversion from their core functions. The danger is that if it is seen as such, employees will have little motivation to participate. Maybe even worse, it becomes a hole for costs to be thrown down if the program takes away from their main duties. So the key will be to strike that balance that encourages participation and but at sustainable levels for the rest of the business. To do that, management needs to figure out precisely where they wish Open Innovation to fit into the corporate strategy. Once that is established, they can communicate where it fits in with the company’s goals so that employees understand why it’s valuable and just how valuable it is. I think that will help create the proper environment for Open Innovation to flourish. At Siemens, it seemed that they jumped into it too fast and without a fully developed concept. While management determined various levels of success, many employees likely did not comprehend it on the same level. If management is wondering if anyone would notice if it went away, there’s been some communication issues in imparting the program as part of the company strategy and culture.
-
Sam, this was a great analysis of the situation at Siemens and how correctly and successfully implement Open Innovation. The well planned steps you identified is a great way to line up the initiative with corporate strategy.
-
-
The size of the company and the subject matter to be involved, I think, can affect the acceptance/resistance of the change from traditional practices to open innovation. A company might learn from the Siemens case to target those areas and projects which would be less likely to stoke resistance of the type encountered at Siemens. Similarly, initial areas to try open innovation should also be chosen based on the likelihood of success. (Proctor and Gamble and Eli Lilly were mentioned in the reading as publicized examples of where open innovation was working, so by studying the areas where it worked for them as well as any other companies who were adopting the practice, there should be areas/concerns within the company which would stand out as most likely to benefit from open innovation.) Additionally, metrics need to be in place to monitor the success of the beginning endeavors, so that, assuming initial success was experienced, it could be touted and used to help convince other parts of the company that it is beneficial and can work in our company. It may need to be introduced on a piecemeal basis with care to continue to select lesser areas of resistance within the company and highest chance of it helping as measured by the metrics you have in place. Momentum of success is a powerful mechanism to get even the most reluctant adopters to buy in to using it in their corner of the company.
-
Looking at Open Innovation from an internal standpoint, I think the three most important things are: establishing goals for the platform, ensuring the interface is intuitive, and ensuring the culture change occurs in enough capacity to support the work. My company attempted to do something similar as Siemens by creating a platform with some social components, search functions, and allowed people to set up community/team pages in order to connect and share ideas. While there have been some successes, the platform has not taken off in the way many executives had hoped. The interface isn’t very intuitive and can be difficult to navigate, the platform was only launched in North America, thus eliminating all of our international employees from participating and, culturally, there’s been a disconnect with middle managers who believe employees engaging on “MainStreet” are wasting time….
-
Hey Ron,
I agree that establishing a goals for the platform, ensuring an intuitive interface, and ensuring the culture change are very important. I also concur with Christine and Jon about getting buy in from employees to create collaboration with employees(stated above). If there is resistance among employees, open innovation will not be sustainable as ideas are needed to keep things going. I feel its a shame that your company had a platform only for North America. Unless you involve every person in your organization, you never know what might be the next great idea. Similar to the last class with Jieliang phone company where a factory worker in an assembly line was able to increase productivity. -
Ron, that is very interesting to learn that your company has something similar to Siemens. Thanks for sharing. Looks like your company has its mixed share of success and failures like anything else out there. Like Lackner says on page 2 of the article, where he questions what if they shut down the open innovation program at Siemens, would it be even noticed or has an impact. I guess have a platform is much better than not having at all. Although it is sad that middle level managers are not aligned with the goal and think otherwise, but who knows they might one day understand the value, I guess. Promoting collaboration and promoting open innovation could be a good thing for the employees and for the company. Siemens did encounter hurdles initially where business units did not embrace the open innovation program, but the benefits overcame those hurdles and they did a great job on open innovation programs.
-
-
I believe open innovation is a great way to encourage employees to be more creative and provides a platform where ideas are shared, where ideas are brought from concept to reality and fosters collaboration among various employees, across various groups within the company.
This could be a great way to promote disruptive innovation. As professor Clay Shirky says in the video where he talks about “The disruptive power of collaboration”, about “Sharing changes everything”, It changes in the way people collaborate. He gave a nice example where he talks about one individual posts about a great idea of radio controlled car but it doesn’t work. So there were so many others who shared the same idea and came together with the solution that could make it work. So it was an effective collaboration.
Similarly I believe if any company is thinking about promoting open innovation, then there are many things they need to consider. Firstly how to foster a culture where collaboration is important, what channel or media the employees should communicate among each other, how do they disseminate the information, knowledge sharing, how do they encourage innovation? The company should encourage employees to stop working in silos and start encouraging collaboration across other groups and across various sites. Incentivizing employees and tying this into their intrinsic benefits will foster a culture and promoting an environment that will help succeed and be more effective. Creating a culture where fostering community of practice type setting will help, if someone has an idea, then other employees who have common interests could meet and share ideas together and collaborate. This way open innovation will have some meaning to it and will encourage other employees who have refrained from being part of it.
Our company where I work, they seek and encourage nominations every year for “Innovation awards” from every group. So every year some innovative product or applications that have helped the company will be rewarded. So for others, this is a great motivation and we all know that it pays for your hard work in the end. This way, it promotes disruptive innovation. -
When considering open innovation a company should consider many things such as the culture of the company, the goals of the company. When creating an atmosphere of open innovation, there may be tons of great ideas that are proposed. Fulfilling all the ideas that are proposed may be a waste of resources, so having a clear set of goals for a company can help narrow down projects of significance to advance company goals. Open innovation can be a source of team work, creativity, efficiency, and productivity. When discussing ideas with everyone in an organization, projects can be improved based on participation from various employees with different skill sets. Cons of open innovation would be a flood of information that it would reduce productivity as employees sort out different information and may use it to fulfill their own personal agendas.
-
Vinay,
In the case of Siemens, it appeared they had more ideas than they knew what to do with and not enough people to push some of these great ideas into implementation. I almost think they had too much talent. I think a lot of time was wasted on these “contests” when a lot of good ideas were never brought to fruition. And then to go bring in external knowledge brokers and leaving projects from internal users open-ended seems like a lot of wasted finances. I think they need someone at the helm that will provide better direction.
-
-
Open innovation works well in a collaborative environment, with Siemens having a silo set-up it made sense to develop and encourage a culture that groups could work together on. By creating monetary rewards and competitions, participants were able to generate and improve on ideas. The TechnoWeb 2.0, allowed employees to collaborate and solve problems not only across departments, but across countries, which could not only benefit the company, but to the individuals also. The idea that they were not alone with a particular problem I would think would be appealing. Often in R & D, just a different perspective can take the project all the way to the end goal. But as the article pointed out, people may get caught up in the contests and focus more on these competitions and take the time away to focus on that and not everyday tasks. There was concern that people would be wasting time, hanging out on the intranet, but couldn’t the same be said for focusing on competitions that have monetary rewards. A bonus for Siemens was that the contests were able to garnish new ideas and new designs, without lengthy time or investment. This worked at a company of their size, but would be difficult to translate to a small or medium company. The time spent on the contests would take away the time spent on projects and every day tasks.
-
The company would need to consider the feasibility of its endeavors. As demonstrated at Siemens, it is important that the winning ideas of the contests are able to be capitalized on in order to maintain momentum of an innovative environment at the company. It is re-assuring for participants when there is a tangible outcome and it encourages people to continue to be enthusiastic. Also, it is important to make sure the tactics and goals of creating an open innovation environment are transparent. The company will more likely be successful if they remove as many barriers as possible for employees to be engaged. This is better accomplished by making sure that they have an understanding that their participation is fully supported.
By far, the most important development for enabling an open innovation culture is creating a medium for ease of communication like Siemen’s TechnoWeb. The objective is to maximize intellectual assets and resources already available. This increases efficiency for facilitating information sharing and cooperation between colleagues.Lakhani, Karim R., Katja Hutter, Stephanie Healy Pokrywa, and Johann Fuller. “Open Innovation at Siemens.” Harvard Business School Case 613-100, June 2013. (Revised October 2013.)
-
Ford Motor Company used an open innovation tactic last year by sponsoring it’s innovate mobility challenge across the globe consisting of 8 regions and cash prizes offered. The competition was based on the best innovative ideas of the vision of transportation in 2025 and beyond. Ford launched its Innovate Mobility Challenge Series in eight different regions which was done to combine global and local players together with one goal in mind which is a smarter and more efficient transportation network for the future. Ford should consider having this as a closed competition to control the ideas which it may agree to act upon in the future.
-
Good point Kerry. I was not aware that Ford Motor Company had such a competition. I can only imagine how many submissions they had to filter through to target ideas that would be appropriately comprehensive and support the Ford vision. I can see the benefit of considering a lower scale, possibly closed, competition as the return on a global challenge would be overwhelming.
-
-
Open Innovation, if launched properly, can have many tangible and intangible benefits for any organization. But, as shared in many of the comments, the needs to be a clear goal, measurable metrics, and participant feedback for it to realize the benefits. Many companies use employee surveys as a means for identifying internal areas of opportunity for improvement, but the results are shared and the participants see no value in the exercise. The concerns about intellectual property need also to be considered if outside participants are included. I would suggest that if you see yourself, as Siemens did, as a siloed organization, that Open Innovation projects driven internally could help to create a total organization.
-
Before instituting a program similar to Siemen’s Open Innovation, a company (of that size, in particular) should establish the ROI. A program of this level, requiring so many manhours (hours that perhaps could have been spent on actual work) and collaboration from multiple business units should be better planned and should also lead to some kind of return for the company. Having said that, I think a company the size of Siemens especially with that amount of knowledge and type of resources, should avoid being an organization of silos and promote open innovation and information sharing.
-
When considering open innovation, there are a lot of things a company should consider. They should first have specific ideas in mind that they know can be carried out. If you are going to run a contest with the intent of implementing the winner’s project, be sure it is something feasible and can be financially supported. You also want to be sure it is in line with your company’s mission and culture. In the case of a company like Siemens, which operates in over 190 countries, it would be beneficial to implement projects that can be used at plants around the world. Siemens employs a lot of diverse talent and were smart to group these people together on the TechnoWeb 2.0 platform to discuss and solve ideas. The problem is that they are so large that I think some ideas get lost and time is wasted on these contests and less on implementation. In short, a company should consider the direction they are going with a project, be sure that funding is available, that the company could utilize this project for long-term growth and profitability, and that it could be adopted globally.
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting H-M 9 years, 7 months ago
Using the Siemens case as an example of pros and cons of open innovation, what should a company consider if it is considering doing something similar?
-
Based on the case study one learns about the significant role of innovation as driven by Research and Development at Siemens. It was noted that in FY2012, Siemens invested more than 4 billion in research and development, which was 5.4% of its revenue.
It only seemed like a logical transition to introduce open innovation. Siemens would experience the pros of improved communication, and the opportunity to exchange ideas that could lead to enhanced processes and products or new processes and products as it penetrated new and existing markets.
The problem facing Siemens was silos. The various Business Units, Divisions, and Sectors had their own interest in mind and they quickly saw the negative side of sharing information. Specifically, who would own the intellectual property rights and how would information be shared outside of Siemens. Lackner addressed this issue using IBM’s “Innovation Jams.” The real problem I took away from the case is culture. This must be the biggest consideration when exploring an idea such as open innovation.
After reading this article I immediately thought of my firm, how we operate in silos, and lack the opportunity to share ideas for not only professional improvement, but to provide clients with enhanced results. The reaction from HR was that this would not go over well due to the culture of our firm. We are so siloed that everyone focuses on their own job and service line instead of figuring out ways to help out each other. The part that blows my mind is we work in hospitals on a daily basis and we see how departments interact and overlap, yet we don’t collaborate with our service lines that inherently have crossovers.
Even if you map out all of the pros and cons of open innovation you need to make sure that it aligns with the culture of your organization. In my case I need to go back to Kotter, create a sense of urgency and begin the process to make change so that we could unfold something similar to Siemens, albeit on a much smaller scale.
If that happens not only can we exchange ideas internally, but we can go outside the firm to better understand different approaches when solving problems in healthcare.-
Will,
You make a great reference to Kotter, and how creating a sense of urgency can help you implement change within your organization. As we can see from the article the open innovation program has many benefits that could be realized by your company or any company which rolls out a similar initiative. Perhaps seeing the benefits of the program would be enough to sway your colleagues into accepting it. If not, you hit the nail on the head about creating a sense of urgency. Once you established that urgency they would be more receptive to your proposal as they would have a perceived need for change. My company actually has a similar program in place and I have seen the results first hand. At my company there is a website on the company intranet called Innovation Greenhouse. It is a forum where employees nationwide can submit proposals for procedural and process changes. This allows people in California to see the comments of those in Delaware, etc. I have visited the site a few time and there have been many companywide changes that have occurred due to the suggestions on this site. Management’s position is that the best people to comment on the policies and procedures are those who are effected by it daily. Furthermore, allowing employees to bounce ideas off each other results in richer more in-depth ideas. I’m sure if you could convince your company to try something similar they would be thanking you for it down the line.
-
Chase,
The idea you mentioned sounds awesome. I would love to be able to bounce different ideas off of individuals in my firm and get feedback so we can at least understand where we are coming from and why something may or may not be introduced. -
Chase – it sounds like your company is successfully implementing (internal) open innovation. If you were there when the concept was first introduced, do you remember the initial reaction? Were employees (and/or management) excited by the idea and possibilities or was the thinking closer to something like “they’ll never act on our ideas?” How did the company build up interest and acceptance in participation? I think it’s great that your management believes in listening to employees regarding aspects of their daily responsibilities, and also acts upon them when warranted — it can make employees feel empowered and engaged.
-
Rachel,
Unfortunately, I was not with the company upon its conception. I have only been with the company a few months and Innovation Greenhouse was already well underway by the time I came on board. You pose some great questions that I would like to know the answer to as well, so I we be sure to reach out to those who were around when the initiative was first introduced. The program definitely makes the employees feel empowered and provides a sense of ownership over the processes in place. Many people have the feeling that if they don’t like a process, they have the ability to change it, which they do. While I can’t speak about how it was initially perceived at the company, I can speak about my initial thoughts. My prior company had a much different view to suggestions from employees. Employees who offered suggestions for improvement were seen as nothing more than complainers, and opportunities for change were not entertained by senior management. So naturally, upon hearing about this program at my new company I was apprehensive. Management and other employees assured me of its validity and provided examples of previous changes. After becoming comfortable with the initiative I actually made a few suggestions for process changes based on my prior experience in the field, and actually have a meeting with senior management later this week to further discuss the proposal (hows that for timing). The fact that I was with my prior company for 4 years and didn’t have the same voice I have here after only a few months speaks volumes. I have seen the results of open innovation programs first hand and think it is a must for every company.
-
-
-
-
I think one of the biggest positives for establishing open innovation in a company like Siemens is aligning the interests of the different departments towards common goals related to business and process improvement. It provides a more clear picture of what is needed and necessary to move the company into the future. As the article describes, the decentralized nature of Siemens made coordinating efforts, “like maneuvering 70 speed boats into the same direction.” They had plenty of good ideas but nothing was being developed for the corporation as a whole. Everything was very segmented. By aligning interests towards common innovation initiatives using tools such as TechnoWeb and Innovation Jams, departments could collaborate on initiatives that served common needs. In addition, allowing external perspective into the mix through their idea generation and other contests introduces fresh ideas into what has been historically a siloed organization.
On the negative side, asking entrepreneurs and innovators to share ideas with those outside of their organization and give weight to external ideas is something that needs consideration prior to implementing open innovation initiatives. As shown with the technology mapping example in the case, the technology did not have “official status” within Siemens because it was outsourced to an external partner. In addition, ensuring that those parties involved with open innovation initiatives are not regarded as doing their jobs and adding value to the company is an important aspect. If you can’t provide definitive answers with regard to “why” initiatives are being implemented, it will be difficult to move projects along. Those involved need to understand the buy in for the initiatives and not regard the work being done with open innovation as outside their job requirements. It needs to become part of each employees daily routine and daily expectations.
-
Nice post, Rich. Couldn’t we also apply some of the lessons we’ve learned the last few weeks with Wyeth and Volkswagen? While I agree these open innovation strategies are one way to align corporate interests, couldn’t Siemens also take the tact of becoming less “multi-national” and more “global” in their corporate structure. The hybrid structure of product teams overlaid on country teams is very difficult to manage and usually doesn’t allow the parent company to take advantage of economies of scale quite as easily.
-
Adam,
That’s a good point. There are some similarities with the other two cases you mentioned. I definitely think becoming more global versus multi-national would be a move in the right direction for Siemens. Although, based on the reading, that sounds like it would be quite a task. Maybe they could coordinate that type of transition one sector at a time or even one business unit at a time to ensure some smaller wins throughout the process. I’m not familiar enough with the company to say which should be the first focus but if those economies of scale are reached in one sector/business unit, I’m sure others would be easier to get on board. Thanks.
-
Yeah, it seems like they lack focus in any one area, like Wyeth did, which then restructured with a focus on pharma only. GE has certainly made a similar corporate structure work, though, so it doesn’t seem like there is a single correct answer.
-
-
-
-
adding email comment notification.
-
The Siemens case provided some useful insights for companies considering open innovation. Many benefits exist with this type of ideation process. One key advantage is that ideas come from various sources, and from people who may not have been consulted with in the past. Good ideas do not always come from the usual or expected sources, and open innovation takes advantage of this. Similarly, collaboration in online open innovation may be between groups separated by distance who may not have interacted otherwise. Lastly, the allowance of idea submission to all employees and the competitive nature of the scheme can drive excitement and higher involvement than standard idea submission methods.
A drawback in the method primarily lies in difficulty or confusion of execution. Management of the scheme should be what a company focuses on if it is considering running an open innovation system. For instance, who runs the program, an individual business unit, or a central ideation group? Similarly, who funds the program? While initial idea submission may be fairly low cost, if in the requirements there exists any concept or prototype submissions, or if there is need for incentivizing participation with prizes for top ideas, funds will need to be allocated. From the Siemens case there is also the financial question of who funds the selected project, the group initiating ideation or the one executing the selected idea? In a similar vein, since this process will run parallel with other idea generation sources, such as focus groups, customer feedback, market analysis, etc., who prioritizes the resources, both financial and manpower? These questions of logistics are the primary concerns that any company running an open innovation program must sort through before beginning. As with anything in business, a clear plan from the outset will lead to better results throughout, with planning including budget, resources, responsibility and authority, desired deliverables, and in the case of ideation, acceptance criteria.-
Dan,
I think that you made excellent points as to what a company should consider when implementing open innovation. In my opinion I think that if the company’s goal is to create alignment it should be centrally funded, at least in the beginning. If the implementation was successful perhaps funding could be migrated to individual business once the inherent value of open innovation is realized, or depending on the project and who is beneficiary, a collaboration of business who would see return on investment would help fund it. As you stated, one of the most important aspects is proper implementation and planning. Great post.
-John
-
-
Siemens reaped many benefits from the implementation of open innovation. These benefits include better collaboration between business units, quick problem solving, and increased sharing of intellectual resources. Unfortunately for Lackner, there was a lot of resistance to open innovation from Siemens’ employees. Many saw the initiative as a waste of time, feared consequences for participation, or saw security issues with opening the competition to the public. When deciding whether or not to implement an open innovation initiative a company should consider whether the initiative aligns with the organizational culture, the scope of the program (internal or external), and whether the initiative is worth the long term commitment.
Lackner was having a hard time shifting the company culture at Siemens to a culture that was accepting of the open innovation program. A company must ensure that this is in line with their organizational goals and that employees will be receptive to it. If open innovative is not in line with the company goals the organization will be fighting an uphill battle from the beginning, augmenting the difficulties of rolling out the new competition. In addition, the scope should be considered before implementation. Is this program going to be internal only, or will outside individuals be able to participate? There is certainly a business case for allowing external people to join, but there is also addition risk. Answering this question prior to roll out will help the organization identify the various pros and cons and prepare for any obstacles that may arise. Finally, the company should ponder whether this initiative is worth the commitment. As Lackner discovered, integrating such a program requires employees to have constant exposure to it, and involves dedicating significant time and resources to getting the initiative off the ground. A company must decide if an open innovation program will be beneficial enough to warrant the investment needed. -
I think that the most important aspect to consider is that your organization’s culture can support it. I think the way to do that is to incorporate open innovation into your values and beliefs. This way you are putting an emphasis on open innovation company wide and you are able to tie that in with performance metrics to get results. Siemens faced obstacles such as silos which created resistance to sharing and didn’t promote innovation across the board. Siemens did a great job of staying engaged and working through implementation conflict in a way that encouraged receptiveness. In my opinion a company should consider adjusting their belief structure if they believe they need to implement open innovation. One thing to consider would be to create incentives such as rewards/awards given out to top innovators or projects and highlighting them throughout the company. I think this would help with unifying and motivating the workforce to work towards the same objective. Additionally, I think that there has to be responsibility and accountability tied into the structure that you develop.
-
John – I do agree that open innovation is highly dependent on corporate culture and the people involved. Using Siemens as an example, some thought it would not be seen as part of their regular duties and some business units were hesitant to support projects. Therefore, implementing open innovation required a shift in mindsets and a change in culture to encourage stakeholders to be opened to external ideas and knowledge sharing. Another requirement tied into this idea of culture is commitment. To foster open innovation, commitment from the top management is also crucial. A culture of open innovation takes time and leadership is bound to change over the course of such a long goal. So continued commitment from the leadership is a must.
-
Rosemarie and John, I do agree that open innovation depends on corporate culture…. In order for a company to increase leverage from the diversity of its people and business, the corporation has to build effective global teamwork. Also, they have to be a company that maintains a culture of mutual respect and diversity within the business and with society as well, in order to be globally successful.
It is imperative that employees embrace shared respect and sustain the organizational culture that promotes diversity.
-
-
John,
Great point on the top down support. This draws in lessons learned from other classes as well. For something to be widely accepted, people need to know that it is important to the powers that be. Any company can (and usually does) say that it supports innovation, but allowing and encouraging the workforce to take time away from other activities to innovate, and to go a step further to provide a forum for innovation, shows true commitment.
-
John, I think that you are right about the need for those looking to promote open innovation between differentiated business divisions within a company to provide real incentives. There is definitely a risk that these innovators are taking when they try to collaborate with others within their company. It would be easy for the engineers from one division with an interest in a project fail to complete the collaboration, while at the same time begin working on a similar process within their own division using the ideas, know-how, and insight learned from engineers elsewhere in the company.
-
John, I also agree that for open innovation to truly succeed, you have to incorporate it into the overall strategy and beliefs of the company. Look at Google. They offer a open space environment for everyone to collaborate and create new technologies. It is up to the management to continue to push for open innovation and create systems such as TechnoWeb or other networking platforms to push everyone to connect.
-
John,
Really good point about values and culture. Clearly, using open innovation helped pull various players together from across the company, so it certainly had a unifying effect on the organizational culture. Adding what you said about intentionally incorporating open innovation into the corporate values system would go a long way toward ensuring the longevity of the program.
-
-
Open innovation emphasizes an organization’s efforts of engaging and collaborating with external sources and its partners in its innovation process. Siemens was able to initiate open innovation collaboration in various fields. The company uses a technology driver strategy by spending 5.4% of its overall R & D budget on long term planning and developing detailed technology road maps within its individual business units. Companies looking to build a platform of open innovation, such as the one established by Siemens, will only be successful if they match their companies external efforts with their internal one. Initially Siemens lacked a truly collaborative, cross functional environment so managers needed to establish a new organizational culture and mindset to support opening up their innovation processes. In addition to the culture, another challenge was management’s ability to integrate and align open innovation process with other relevant processes to ensure key entities are involved at critical points. Siemens had an extensive R & D process and this meant intensive training and internal budgets for divisions and functions. An additional challenge was incentives. Once discovered, good ideas needed to be captured effectively. This required developing a process that will track key innovative measures. Siemens utilized different tools from the open innovation toolbox, innovation jams, idea contests, knowledge brokering and TechnoWeb 2.0. However, In spite of the challenges mentioned open innovation can keep companies a step ahead of its competitors and yield the following benefits.
1) Companies that makes the most of open innovation are highly disciplined in their use of technology and process innovation. Communication is increased, new ideas are tracked and R & D linked with other processes such as manufacture.
2) Open innovations yields access to connection and partners with different technology that was not previously considered. Siemens has collaborated with partners across the globe including different Siemens companies. This approach saves time, reduce development costs and helps to speed up the innovation processes.
3) Enables companies to focus their own innovation efforts on areas where they have clear competitive advantages. This reduces R&D risks and increases funds available for the most promising opportunities. In addition, achieving this focus can assist companies in identifying innovations to sell or license to other firms that could put them to more profitable use.
-
As others have pointed out, culture is the key to successfully implementing open innovation at an organization. The technological tools can be in place and there can be a champion of the cause, but unless the organization’s culture promotes cross-department collaboration, gaining buy-in will be extremely difficult, as evidenced by the Siemens case. Lackner expected push-back because of the decentralized nature of the organization, but the amount of push-back combined with concern about publicizing proprietary information led him to revise the implementation so internal successes could be used as the foundation to support external open innovation concepts. Companies with similar decentralized cultures who are considering open innovation can use this framework (gaining small wins through internal open innovation) to introduce the culture change required to support external open innovation. However, the change in culture needs to be supported by management and reinforced through rewards and accountability on all levels, otherwise it will not be taken seriously by employees, nor will the changes “stick.” Finally, companies considering open innovation need to determine why and how that concept could help them strategically. The first external open innovation project at Siemens failed to move beyond the proposal stage because there was no definitive business impact, which meant business units didn’t want to devote resources to something that was seen as a waste of time. However, once external innovation was focused on developing ideas with a clear business impact, they were much more successful.
-
Rachel,
Great ending to your post. I think this is where my firm gets stuck a lot because we can’t determine if a concept is going to help us strategically. You would think the easy solution is to compare an idea such as open innovation and ask, “Does this align with our strategic goals?” The problem is that our strategic goals aren’t always transparent so it’s difficult to determine if we should move forward.
I think in my case we need a clearer strategy and then new ideas can be introduced.
-
-
I think that one of the first considerations a company needs to make regarding open innovation is just “how open” they are prepared to be. At Siemens, Lackner experimented with all sorts of open innovation concepts, some focused internally, and some looking to external input in the form of contests. I am not surprised that the internally-focused efforts were not met with tremendous enthusiasm, since the company was very differentiated by its lines of business and research…it was not clear in this “collaborative” setting how credit for successful innovation would be distributed, and it was more uncertain from where any funding for these innovations would come. The case review suggests that Lackner was mostly “on his own” trying to pull this off, and as one of my classmates mentioned in their post, if there was a message of a “sense of urgency” sent from the company’s leadership, there would certainly have been more enthusiasm for these programs from the outset. Adopting IBM’s proven concept of “innovation Jams” seemed to have “broken the ice” and the development of the TechnoWeb 2.0 social medium provided an enduring platform to support “internal” open innovation.
To me, the tougher problem is truly “open to the entire world” innovation. It surprised me that Siemens was able to enlist so many outside enthusiasts in its light bulb contest, or any such contest where an individual, non-Siemens employee would be willing to essentially “hand over” their intellectual property (IP) in the form of new ideas that a company can use however they want, without necessarily giving credit to the innovator. About 15 or 20 years ago, in my field (Orthopaedic Surgery) many surgeons openly discussed concepts for implant design with the representatives of manufacturing companies. Most were not being paid as consultants, and many did not have the where with all to complete non-disclosure agreements. Some saw their ideas commercialized, and did not receive a dime for their work. Now, those same types of ideas might be promoted in online open innovation competitions like those described in the article. Is Siemens (or any such company for that matter) really treating the participants fairly? Can Siemens take non-winning ideas and do something “similar” without having to credit the real innovator? JUst something to think about when companies go “external” with their open innovation projects…
-
Using the Siemens case as an example of pros and cons of open innovation, what should a company consider if it is considering doing something similar?
Sieman’s went through a number of different concepts with the main goal of connecting everyone across multiple divisions. There first move to create a “Innovation Jam” was the smart thing to do. It kept all information internal and secure. The network allowed scientists, engineers and everyone else to communicate and discuss current and future projects. As we saw in several past cases, collaboration fosters innovation and the creation of exciting new projects. TechnoWeb 2.0 allowed this type of collaboration and any company wishing to incorporation open innovation into their business, will need to create a system that connects everyone across multiple divisions to openly communicate and innovate. This type of innovation may solve problems quicker, create new devices efficiently or devise a plan someone would be scared to discuss because of risks. Collaboration is why companies such as GE, Google, and Apple are very successful incorporating open innovation into their cultures. Innovation is fused into everyone’s day-to-day activities. Of course, open innovation was rather new to Sieman’s and incorporating this type of thinking takes time and finesse.
-
Open innovation is a fantastic idea that brings new ideas, collaboration, speed and exposure from individuals who may previously never have been able to get their ideas recognized before. It’s the age old adage of two minds are better than one, but in this regards it’s thousands of minds coming together. Gamification also brings a new level of excitement where individuals are more likely to proceed, if it’s as simple as picking a product color, voting for their favorite idea or winning a prize for coming up with the most popular item.
–
When I worked for Lincoln Financial we attempted to implement open innovation and created a group called retirement income securities ventures that was responsible for being not just a think tank, but finding ways to include all of our employees and customers into idea generator. The group unfortunately was one of the first to be removed during the financial crisis as it was easier to cut innovation as opposed to heads. But it’s critical to have a central point that is funded to handle this process as it ensures groups are not fighting over who gets to implement an idea and prevents accountability to fund the process. -
Using the Siemens case as an example of pros and cons of open innovation, what should a company consider if it is considering doing something similar?
Like we saw with Siemens and even with Wyeth, corporate culture like most have been saying, is the key to innovation and open communication in an organization which is something Siemens didn’t utilize to its full potential. The issues Siemens ran into were a lack of collaboration and communication between departments and to an extent they had silos instead of a fully integrated organization. I would recommend to a company that is considering doing something similar to encourage collaboration among departments and get rid of any pre-existing silos. It’s natural that initially an organizations management will get push back from employees if there is a big change (like integrating departments and reducing silos) but if said organization can get past this point they will be better off. Open innovation comes not only from organized teams but from individuals and informal groups when an organization promotes an open and cross-department communication platform as seen with companies like Google. With open innovation comes faster problem solving and better utilization of intellectual resources as well. So again, I recommend that a company should consider changing their corporate culture and policy to promote collaboration between departments and reduction of silos.
-
The Siemens example feels particularly relevant to me because company is currently going through much of the same process. Last month I went through a “Radical Innovation Academy” that was designed as a cross-functional exercise to encourage more collaborative thinking between R&D, product teams, and marketing. The goal was to identify ways to encourage more innovation.
We faced several of the same challenges as Siemens, particularly around the idea of proprietary ideas and tipping off the competition. Outside consultants led the project, and they encouraged us to reach out beyond our walls to experts in our fields. My project – basically a program that could interpret and analyze body language – especially required this type of outside guidance. We were encouraged to reach out to experts in academia and government. However, we faced significant pushback that by doing so we would lose some type of competitive edge.
What allowed us to move forward was that we had the backing of the CEO and upper management to pilot this idea. Other companies should consider this as a prerequisite factor. Support for open innovation must start with leadership. It must be cultivated by leadership and support it. Without this, open innovation simply cannot occur. -
Companies need the maturity of it’s employee’s to see opportunity in long-term improvements by accepting the changes, seeing what needs to be changed and not being afraid of change. It is important for a company to work with other firms, improving customer satisfaction by asking them about their needs, etc. A company should consider working with external partners, to enhance more open communication and idea exchange between business components. In order for innovation not to fail, a company has to methodically assess the opportunities, so innovation will be held within the structure of the company’s technology and marketing capabilities; also, it would be logical with the overall business strategy. Diversified knowledge of staff brings outstanding benefits to a company, which is important for open innovation. The lack anonymity, as well as leaked information on future projects, would be valuable for competitors. A company should consider implementing a strong suppliers culture that provides a long-term relationship, which builds a successful situation for both.
-
There are a number of things that need to be considered by any company before considering an open innovation model. Siemens is a good example of the positives and negatives that are associated with open innovation. Open innovation allows companies to utilize ideas generated internally and externally in order to advance. No company can innovate completely on its own. Most companies operate with multiple silos in various departments which can limit innovation. Siemens wanted to overcome that barrier and thought open innovation would allow the company to an open network enterprise. While there are many positives, there are some cons associated with the idea of open innovation. At Siemens employees were concerned that if they participated in open innovation they would be seen as not having anything to do and other employees would not consider open innovation as a part of their job responsibilities.
Any company considering an open innovation initiative should ensure that there is a culture of openness and innovation to foster creativity. Without changing the mindset of the employees at the company there will be a lot of resistance to the idea and it may not work well. Companies should also consider the structure of the organization and how that will play into the ease of implementing an open innovation model. Siemens was operating by a decentralized structure and managers argued that the business was too complex for open innovation, which went completely against that structure.
Open innovation also raises concerns about intellectual property rights which companies should also consider. It is important to have a creative environment while still protecting the information. Siemens set up Innovation Jams which is a “web based platform that allowed for mass collaboration across business sectors within the safety of Siemens’ firewall. “ Other companies should consider creating multiple platforms so that one can cater to internal developers while another caters to external developers.
-
Using the Siemens case as an example of pros and cons of open innovation, what should a company consider if it is considering doing something similar?
Open Innovation can be a wonderful thing as long as their is buy in from the top and it is filtered down into the company properly. If it doesn’t become part of the companies threads then it will likely run the risk of doing more harm than good. It is something that should be ingrained in the companies DNA and culture in order to thrive. A few pros are that is can be an excellent source of open communication which will inevitably lead to collaboration, the sharing of resources and help with problem solving. Unfortunately, there are also cons like it in the case of Siemens, the entrepreneurship and decentralized model led to the silo effect that prevented the individual groups from wanting to share. At Temple, the silo effect is very much present and was often the cause of unnecessary frustrations of not being able to complete a task because another group’s priorities were not aligned with what you were trying to accomplish.
-
The advantages of open innovation are mainly related to idea generation and tapping into a larger overall fund of knowledge. This paper seems to address two aspects of open innovation – the first had to deal with establishing an online “Facebook”-type communication and alert center to help solve internal problems. I don’t really consider this innovation because it is mainly related to addressing existing concerns with day-to-day operations. The second dealt with collecting creative solutions to business problems, such as marketing LEDs and developing sustainable technologies. This was mainly accomplished through competitions accessed via the internet and made available through partnerships with universities. Developing such open innovation initiatives provides a mechanism by which the company can embrace newer potentially disruptive technologies that might otherwise go under the radar. Also, similar to the “make vs. buy” approach to your employees, OI attracts outside talent to tackle a problem and put the solution to use in a profit making endeavor. In this way they might more effectively be a first-mover or fast-follower because they are essentially inventing the new technologies and methods of application.
The considerations mentioned in the paper mainly deal with intellectual property and ownership, as well as making business intentions more apparent to competitors. Any company wishing to establish such a program should certainly keep these factors in mind. In addition, one should take note of how dispersed and siloed the company is to begin with. For a small to medium sized firm, where everyone is within the same building, perhaps such discussion already takes place on a daily basis, and if not other steps could be taken to encourage collaboration. Another consideration is that these competitions are not designed to develop or create a new business idea; that is, the design team(s) can only go about answering the question at hand. While they attract new talent, there is no mechanism to gain consultancy from the outside sources about which direction they should take their business. Such programs might also create or increase competition within the company and discourage collaboration overall.
In my undergrad years at Lehigh University we took an Integrated Product Development course in which we worked with an established business in developing and marketing a new product. I helped Just Born develop a new candy for instance and Loreal Paris develop a new packaging design. This class was essentially a method for the companies to outsource development to university students who are perhaps more creative and can think outside the box in their approach to the question. Siemens has taken this concept a step further by making the project accessible to essentially the world. -
If I were advising a company considering something similar to the open innovation concept at Siemens, there would be several things I would recommend based on the Siemens case. First, the company needs to get buy-in from non IT leaders up front, to ensure ongoing funding and organizational support for the project. I think this is best accomplished by showing the tangible financial benefits of the program from the outset. In the Siemens case it mentioned how some of the collaborative projects saved days or even months of labor because of the solutions developed by program participants, yet it later mentioned how if they cut the program, nobody would notice. I would recommend to a company introducing open innovation that they start off with a project that would save significant man hours (as happened in the case), then show non-IT leaders the monetary savings resulting from the program. This would give a good first impression and ensure ongoing support for the program. Second, I would incorporate the contests as happened at Siemens, except I would introduce them much earlier in the program – this resulted in high participation and accelerated the open innovation concept in India, and would do the same for a new open innovation program at another company. Finally, depending on the security requirements at the firm, I would bring in external partners from the outset to expand collaboration to the greatest degree possible, thus speeding up the benefits of the program from day one.
-
Overall, I think open innovation’s biggest advantage is its ability to force an organization’s attention on the “unknown unknowns” – those ideas, problems, technologies, and solutions of which a company isn’t aware that they don’t yet know. While I’d think this alone should be one of the strongest selling points for open innovation within a company, there definitely are other factors taken into account when considering open innovation. Probably the most important consideration is a psychological or cultural one, and that is the amount of resistance to change that can be stirred up when proposing something as potentially radical as the idea of open innovation to a company – especially a well-established and silo-prone one. Generally, people are resistant to change, and when one is essentially saying “let’s give up time from our already busy schedules, go beyond the bounds of our own organization, and go figure out what we don’t know,” you’re introducing a lot of new thought and behavior on a group of people that quite possibly have been very successful (and perhaps very comfortable as well) doing what they’ve always done.
The best defense against this kind of pushback probably is a good offense in the form of a solid business case for open innovation. Right up front, if you are asking people to break out of their routines, take time away from their primary duties, and possibly expose themselves to new ideas, you’d better have put together a compelling case for why doing so is good for the company in terms of the bottom line. Along these lines, doing one’s homework regarding other companies in the same industry, or of the same relative size and scope profiting from open innovation would seem a great place to start, and having specific goals in mind that the company has already targeted and failed to meet that could benefit from open innovation would be another. Also, one would have to take into consideration potential roadblocks to effective open innovation initiatives, such as how to identify/adopt the kinds of enabling technologies required to make open innovation happen, and how to respond to legitimate concerns about intellectual property rights.
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting A-G 9 years, 7 months ago
If you were in charge of open innovation at Siemens, what metrics would you use to measure your success?
What do you think Siemens should do next? Are there specific open innovation initiatives that should be […]-
If you were in charge of open innovation at Siemens, what metrics would you use to measure your success?
A performance measurement should exist to empower decision makers and innovation teams and properly assess, control and measure the performance of open innovation activities. I believe there should be three phases of the measurement system: initiation, implementation and the overall key performance indicators (KPIs). For the initiation phase, time and resources would be the focus. I would want to measure the time required and scope of the project including the number of people (internal and external) required. During the implementation phase, again, I’d measure time requirements along with quality (problem formulation) and performance (traffic). Additionally, I would want to understand if the project’s profitable so I would measure cost savings and feasibility of the project. Finally, in the overall KPIs phase, the first and foremost metric would be the degree of management’s commitment as this is the key to the project’s success. The next important measurement is sustainability – will Siemens culture be acceptable to the project. Lastly, I would want to understand the profitability.-
Hi March,
Great idea to implement KPI’s, as I do think that with any new idea getting implemented within an organization there should be some sort of measureable to ensure the effectiveness. You also mention cost savings and profitability, the only reason a company would want to implement open innovation, other than wanting to engage their employees is to make money, I agree this needs to be measured.-
Kristen,
Isn’t it possible for a non-profit to implement open innovation to further its cause not just to make a profit? I’m not sure if the Bill &Melinda Gates Foundation would get your vote, and I honestly haven’t looked at their foundation’s annual report, but what they are doing with Nothing But Nets got me thinking whether the way nets are being provided and the way that the delivery of nets is impacting morbidity and mortality associated with malaria is possibly due in part to open innovation.
-
-
-
This is really a simple task to accomplish but requires diligent tracking of internally and externally developed ideas. You can easily investigate costs of development of successfully patented technologies and compare the costs to their downstream revenue development. This can be done for open innovation projects in addition to the traditional method. You could develop a metric that compares the revenue to the cost of development that could easily identify which is a more successful business practice. Unfortunately, this is an easily influenced system as Siemens internal leadership may dedicate more resources to the business of an internally developed program rather than an external idea and that could potentially drive revenue disparity.
-
David – I’m not so sure I would consider this a simple task. When implementing metrics, there are multiple approaches that must be considered (top-down or bottom-up) along with alignment with corporate vision and strategic goals. This requires cross functional departments to provide ongoing input. Tracking the money can be simple for a small business but for larger organizations, depending on the technology capabilities can be quite challenging. The insurance company I work for went through this process a few years ago and it was an enterprise-wide project since the IT department supports various operational business units. Depending on the system in place for tracking data for each of the business units, it could be very laborious. Another factor too is of course is determining the right/appropriate metric to evaluate.
-
-
If you were in charge of open innovation at Siemens, what metrics would you use to measure your success?
I would start by drawing my response from the last section of the case study: The Future of Open Innovation at Siemens. Luetke-Entrup, Head of Technology & Innovation Management at CT, inquired about determining an ROI (Return on Investment) for the projects. The ROI is a valuable tool used in evaluating the efficiency of an investment by simply dividing the benefit of an investment by the cost of the investment.
Other metrics to be considered are: Breakeven time, Cost Performance Index (CPI), percent of R&D expense as a percent of revenue, and Product Life Cycle. Furthermore, since innovation success cannot be measured based on monetary values only, an article by PricewaterhouseCoopers (PwC) states that prominent companies also use other metrics such as tracking patents, publications, and transfer of know-how to other business units.
What do you think Siemens should do next? Are there specific open innovation initiatives that should be changed, dropped, or retained?
A sentence that struck my attention in the article was made by Ramesh Viswanathan, Head of TCMC, India. He stated that in order to have a successful innovation project, there is need for long-term commitment (Same strategy demonstrated in the AWS case study). He further recommended that the open innovation program should be explicitly defined and included in the job description of the assigned personnel. Consequently, since there were positive and promising reports about the India initiative, I would recommend more support and assessment toward this program in case subsequent trials might yield groundbreaking results.
-
With open innovation (OI) still considered an emerging discipline, it is difficult to determine which metrics to use as none have yet been proven to be truly reliable. Based on its conceptual nature, traditional metrics may not suffice or fully capture the benefits of OI. I found an interesting article which suggests that raising a company’s overall Return on Innovation (ROI) – not the usual return on investment – by implementing measured and managed innovation tools in a structured organizational way. Because only 2-10% of innovation efforts are successful, the study suggests that a company set the proper conditions for ROI in order to increase it to 10-20% so that they can achieve a significant competitive advantage. The article uses the Innovation Radar and the Five Disciplines of Innovation as measureables. The supposed advantage to using this system is that it is able to scale innovation initiatives with little or no additional costs. I believe that as the field matures, very specific performance indicators and metrics with begin to emerge. Companies should then be able to measure traditional metrics such as NPV, ROI (the investment kind), time and resource requirements, and cost reduction benefits.
http://www.innovationmanagement.se/2011/07/13/how-to-increase-your-roi-by-measuring-and-managing-your-innovation-2/
I think that the idea of “shutting down open innovation programs within Siemens to see if anyone notices” as proposed by Lacker in the case study is a really interesting concept. You may at that point be able to garner effective tangible, measureable metric-based results such as reduced development costs, time savings to the organization, and how OI advanced and influenced the overall innovation process with in the firm. Once the total analysis is complete, targeted systems can be introduced to streamline the OI process and make it more efficient. Like Ademola mentioned, OI must be considered as a long-term strategy. Therefore, it is absolutely critical that this approach be supported and reinforced by senior management. Below is a link to an interesting article from Ernst & Young that provides OI scorecards that could also help to shape Siemens open innovation initiatives.
http://performance.ey.com/wp-content/uploads/downloads/2014/05/EY-Performance-Measuring-open-innovation.pdf-
Hi, Bill, excellent points. Assessment of innovation with measurable tools of Innovation Radar and the Five Disciplines are more reasonable and convincing than traditional tools. Nice article. Thank you for sharing.
-
Thanks so much. I’m glad you enjoyed the article! I too think that innovation can be better assessed with the aforementioned metrics better than traditional metrics until business catches up with the discipline. Thanks again for commenting!
Bill
-
-
-
I think the most obvious metric to measure the success of any program is the return on investment. How much will the initiative cost versus how much the company will profit from it. Another metric to be considered is how an initiative will improve a process as far as efficiency. Will the initiative make the process faster, eliminate the number of stations/steps to the end product, eliminate the number of people who work on the process, etc.? An important metric is also will an initiative enhance the corporate culture.
With so many open innovation initiatives I feel it would be beneficial to establish rigorous assessments to determine which innovations are worth pursuing. Initiatives that are not feasible for any number of reasons (including not applicable to our business, too costly to implement, etc) should be dropped. The next step would be to evaluate the smaller list of initiatives to see which ones should be retained for further development. This process should consider the impact the initiative would have to our current business and include a cost analysis to determine ROI.
-
If you were in charge of open innovation at Siemens, what metrics would you use to measure your success? I agree with everyone as posted above. The metrics should include key performance indicators (KPIs), cost performance index, Breakeven point, and product life cycle. However, since it is innovation, there are sunk cost for unsuccessful trial, a tradeoff is expected. The initial purpose of open innovation is to create an open network enterprise to generate idea and problem solving, therefore, the establishment of several internal and outside network are successful in the initiative perspective.
What should Siemens do next? I think the key here is their strategic plan of the Siemens. Once that is clear, then create a set of criteria and using those criteria to carefully evaluate each innovation networks, analyze the operational cost and increased productivity or efficiency. The benefits of each open innovation are clear, and then decide to keep all of them or close some of them based on their sustainability and scalability. I do not concur they just shut down the open innovation as innovation is critical for R&D and sustainability of Siemens. -
On the surface, the easiest metric to measure might be the return on investment, but other metric may be of equal importance. For example, in regards to their medical products, Siemens is a leader in the industry and their open initiative, R&D could have an impact on, say, minimizing the infection rate in a hospital setting during invasive diagnostics procedures or any way to improve patient diagnostic rates with non- invasive techniques. That is where, I feel, open innovation initiatives will be most beneficial which will in turn result in greater return on investment in the long run.
-
If you were in charge of open innovation at Siemens, what metrics would you use to measure your success? I think this would be a most difficult task as you don’t want to develop metrics to try to measure the unknown or an intangible that inadvertently stifles the same flexibility that was needed in the first place to have open innovation. The fast pace uncharted segment of open innovation makes it that much more difficult to get an accurate read when the metrics you start with might not keep up with significantly changing data over time. In a way some metrics can hinder innovation. I think then, if I were in charge I would make sure Siemens’ organizational culture could adapt to the paradigm shift that open innovation brings to the company. The metrics I would use to measure success would be return on investment, culture and leadership. I would use ROI metrics to focus on resources invested and financial gains in order to recognize any value created. I would use organizational capability metrics to focus on Siemens’ infrastructure in order to build a sustainable approach to be fostered by Siemens’ organizational culture; to create a common language throughout the company. And last I would use leadership metrics to focus on the attitudes of Siemens’ senior management in order to harness the necessary support to cultivate an open innovation mindset.
-
If I were in charge at Siemens, we should measure the success of open innovation by establishing value added external relationships with vendors and researchers in order to solve a particular consumer need. They should continue to use 2,000 plus research companies to help work on key open innovation projects. How effectively open innovation is communicated within the industry and how the end user responds to the conception of a new product is extremely important to the long term success at Siemens. Within the technology industry, open innovation is the key to thought generation and forward thinking, therefore even more of an emphasis should be placed on fostering an environment that encourages this within every SBU. Market tests, Marketing, Consumer insights, and Public Relations also plays a significant role in how quickly the market responds, which should be used as a measurement to their success. This metric will also assist with speed to market. Siemens has established a culture that embraces and rewards strategic thinking around open innovation. They should continue to use contests similar to the OSRAM LED Emotionalize Your Light Contest to engage consumers to be involved with their open innovation process and assist with idea generation. This will provide Siemens with access to key consumer groups and people will not only provide ideas, but will be open to providing candid feedback to help measure success along the way. The second stage of the contest already developed a component around building upon the ideas that were generated in Stage 1. As far as I’m concern Stage 2 is the most important phase that Siemens should use a barometer to measure success.
-
Jenica, Enjoyed reading your post. I agree that communication is the most important aspect of an open innovation strategy. It starts with how effective the business case is made to the organization for need to embrace open innovation and then how effectively the feedback from the end user is interpreted and implemented. Effective communication is the most important aspect of establishing both the internal and external relationships in order to enable collective design and gain from it.
-
-
Siemens has made a tremendous investment in open innovation and has looked to companies such as Google and IBM to identify best practices. Adopting innovation jams, engaging academia, hosting internal competitions and knowledge sharing forums are all excellent concepts. To me, the biggest measure of success would be to see which of the ideas are executed and ultimately earn a profit for the organization. As I read the article I couldn’t help but think of the potential impact on productivity that open innovation would have on a company.
While I understand the concept, the volume of hours and energy expended outside of an employee’s discipline would concern me. In some of the numbers quoted in the article I was extremely surprised with the engagement level at Siemens. Again, my assumption would be that they would have executed detailed cost benefit models and estimated the impact of lost productivity offset by innovation. As with any innovation, there isn’t a guarantee of success. Therefore, every hour lost to unsuccessful innovation represents an opportunity cost of tangible work product which is lost. The conclusion of the article was unclear as to what the future holds for open innovation at Siemens. While it does appear that there was material innovative activity across the organization, it wasn’t evident that the activity resulted in accomplishment.
-
I would measure the success of ‘open innovation’ based upon whether the results are actionable and useful. For example, can the ‘innovation’ be implemented (how soon) and if so, what’s the adoption rate? Some innovations might never get implemented, but I’d evaluate whether it has the potential to be combined with other projects. Also, I would focus on employee engagement results. Do these broad innovation RFPs, or campaigns/contests increase productivity and morale? Do employees feel a stronger connection to the company’s mission as a result of collaborating with others in knowledge transfer communities?. My employer uses Gallup to measure engagement — to get a sense of how the leaders are performing.
-
Corey, great point on measuring results only if they are actionable and useful. While establishing a culture that embraces open innovation, it may foster may also generate strong conceptual ideas; however they may not be actionable or useful to the consumer or end user. In order to ensure that open innovation ideas are practical there needs to be a check point along the process to ensure the outcome of the project will add value, is actionable, and useful. My company also uses Gallop, however the one caution is that the company has to be careful on how questions are worded because I have found that certain questions were worded in order to receive more favorable answers. So i’m reluctant to say that candid feedback is not being provided. Also Gallop questions are closed ended, so it does not allow for the associate to express thoughts about what is working and their concerns. So, I’m not sure if Gallop is the best way to go when measuring engagement. I think engagement can also be intangibly measured by taking the time to observe associate’s actions within the organization. Does the environment seem more positive? Are people engaging with each other in a productive and positive way? Are they stepping up to willingly work on projects cross functionally as opposed to being assigned, etc.?
-
-
If you were in charge of open innovation at Siemens, what metrics would you use to measure your success?
Measuring success of an R&D is always a difficult task for any organization. Since all the projects R&D works on do not yield a positive net return, the measuring criteria is quite difficult. For instance, Google’s R&D team has been working on autonomous car for years, how would one assess its success today when the product hasn’t produce any positive revenue? Would one consider it a negative success since its still under development? There needs to be a different scale to assess the performance of a success driven through open innovation. For Siemens, my recommendation would be to slice the metrics in to three different categories. First measurement has to be the number of successful innovation yielded by the organization (in a given period count of ideas moved forward to prototypes and prototypes moved into a market testing). Second measure would be the resources involved to generate one successful product (launch of a product/service). Such measure provides insights to stakeholders and shareholders the performance of the company if the right resources are being employed. As we see in the pharmaceuticals, it costs approximately $ 1 billion to release one product into the market (including the cost of failures in the process). Third metric has to be the return on investment, how fast company can recoup its cost. If a product that was developed for 5 years takes 15 years to yield return on investment then the value of the innovation would be considered lower compared to product that was developed in 8 years but returns were recovered within 1 year of its product launch.
-
Siemens has invested heavily in the open innovation concept, but seems to find itself unsure of how to proceed with all the ideas that were generated. If I were in charge of open innovation at Siemens, I would analyze the strategic objectives of Siemens and establish metrics to measure how far any particular idea/project advances those objectives. An idea is not great in a vacuum – does it fit the goals of the company? I like the criteria used to rank submissions to the ‘Emotionalize Your Light’ contest: creativity, originality, business fit, feasibility and market attractiveness. Perhaps those are ranked in the wrong order, though, and priority should be given to “business fit” as top criterion. I’d go further and say “Alignment with Strategic Objectives at Present Time.”
Certainly any ideas that have no reasonable alignment with strategic fit should be defunded or outsourced. An example is the project that did not have official status at Siemens and so was never implemented, because it was an add-on to technology that had already been outsourced to Sinequa. These types of investments are a waste of Siemens time, and it should focus on innovations that are more related to core objectives.
Another option is for Siemens to do initial R&D on the best ideas, even the ones that don’t seem an exact fit, but then license these out to other countries. This leverages Siemens significant R&D infrastructure without committing it to the entire process of product/technology development. It can generate licensing revenue, and can keep a library of ideas that can be catalogued and referenced for updating if markets or strategic objectives evolve to make them more relevant.
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting N-Z 9 years, 7 months ago
If you were in charge of open innovation at Siemens, what metrics would you use to measure your success?
What do you think Siemens should do next? Are there specific open innovation initiatives that should be […]-
There are a few ways in which I would try to measure the success (or failure) of the Open Innovation initiatives at Siemens. First, a measure success is revenue generation. The program at Siemens is designed to foster collaboration among business units and divisions. If any products or services were originated from the program and brought to market, the sales revenues generated would be the #1 way to measure the success of the program. A second measure of success would be improvements in efficiency or process improvement. In the case it is noted that “users reported saving days, and even months, of work by finding answers, hidden knowledge, cost-saving ideas, and access to suppliers and technologies through TechnoWeb”. The Open Innovation program could be considered a success if it leads to reductions in time to market, increases in employee collaboration and time saving, which (potentially) reduces overall costs associated with products and services development. A third measurement could be culture improvements or enhancements. Promoting Open Innovation in a global enterprise like Siemens, with employees working in countries across the globe, can help to strengthen and promote a global culture of idea sharing and collaboration. This can also help to strengthen the Siemens image, value prop, and attractiveness to the global talent pool.
-
Kevin you are right on. Open innovation is initially a threat to any middle manager who has learned to function efficiently in their role following the processes and values of an organization. The easiest way to measure the success of open innovation at Siemens would be to analyze established processes and see if specific metrics prove that changes brought about resulted in significant change. Remember that profits may not follow initially after a change as there may be a cost or low margin response to a productive change so the metrics would have to be geared to show a change perceived as being in the best interest of the organization over the long run. This can be as assessment of changes to the processes of the company defined as sustained, evolutionary or disruptive with understood and agreed upon timetables in which the markets should respond to such changes. If such a response is realized than the open innovation movement can be supported within the company.
-
I was thinking the same thing, Alex. The number one measure of success would be implemented projects resulting from the Open Innovation initiatives. How many things can they get out of the program and put to use within the company? That could be anything from processes, to technologies, to marketable products. After that, Kevin has some good suggestions for measuring the success of those implemented projects. To me, though, the ideas are a waste of time and resources if they can’t be used by the company when all is said and done.
-
-
Kevin very well said. What good a program is, if it doesnt do any good to the company nor the people in it. I agree, revenue generation with any products/services that were derived out out these programs would be a perfect measure and also a business case to retain such a program. I also second to what you said above by measuring any process improvements that might have helped the department/company as whole, then that is another great way to measure. I also agree this creates a brand within, where it could attract talent, why do people love to work for some and not so much in others not because they pay well, but the culture, the people in it and that’s what makes it a great company to work or be employed with.
-
-
The case was very interesting for me as I worked for Siemens from 1997-2005 and was Controller for Siemens Financial Services, North America (the central division mentioned on page 2) for the majority of that time. Much may have changed in the 10 years since I left, but it sounds like the silo mentality encountered by the CT unit in trying to implement Open Innovation is still in place. I think it’s worse than stated in the case; there are silos within silos that can make the simplest of projects tough to manage. It’s precisely because of that though that I think it’s crucial to continue open innovation at Siemens.
Kevin mentioned a few metrics in his post that I think are great (revenue’s, improved efficiency measure, etc.). The case mentions ROI on the projects. I would take it up a level though on the project ROI. Siemens Business Units are evaluated at the highest level on Economic Value Added (EVA) that is included in quarterly scorecard reporting reviewed by their senior executives. I would recommend that CT make the case for Siemens senior executives to adjust calculations on EVA (a central group adjusts these rules periodically to incentivize certain behavior or programs) to adjust the weighting of capital and operating expenses related to Open Innovation projects (i.e. only count 50% of the expenses for EVA purposes but include 100% of the revenues) to promote more acceptance in the business units. In addition, they should highlight the most successful projects at the company’s annual best practice sharing meetings that are attended by the top executives across the company. It would also be great if they can add a separate Open Innovation category on each Business Unit Scorecard with targets for # of projects and EVA.
-
Paul, thanks for sharing your insight as an insider at Siemens. It is very surprising to hear you mention that the silo mentality you encountered during your time there was actually understated by the case as these cases usually exaggerate the real environment. I really like your suggestion to add a separate Open Innovation category on the BU scorecards with targets for number of projects and EVA. As you noted, I think it would really highlight the benefits of using Open Innovation for projects from a metrics standpoint.
-
Thanks for the insight Paul. I was going to discuss “silos” in my post so I’ll just piggyback on your post. Coming from a company that has silos and an excess amount of “tribal knowledge” I would have to say that is definitely a metric I would implement to measure success. Information sharing within companies that have extreme silos can be extremely frustrating. Employees put in tireless amounts of work to troubleshoot issues that may have already been solved by co-workers, however there is typically no place to find or post that information. Having a place to post questions and have them answered by co-workers could make projects much more efficient. Along with information sharing I would have to make revenues generated a metric as well. Great ideas are great ideas, unless a product is brought to market and monetized. We all work for companies in order to make money, and if the concept of open innovation is no driving towards an end state of capital then employees are just wasting there time. I understand all impact can be valued initially, however systems need to be in place t show the executive team why it is important to invest in open innovation, and typically money talks.
-
-
Paul,
I enjoyed your post and have many questions about EVA and the BU Scorecards. Although I will stick to the question the relates to our subject. How does Siemens account for all the time spent on projects by employees that are not directly associated with that project. For instance when an urgent request goes out and an employee answers this request. To answer the request they had to take time away from their own projects. This ultimately cost the company money (or am I being to nit picky?). Also you have those people putting on the contests and developing the software for Technoweb 2.0 doesn’t this cost need to be compared to the income from the projects?-
Hi Bruce – Thanks , I will answer the best I can with the caveat that it’s been 10 years so much may have changed (although from reading the case not too much). Within the financial accounting systems we had “project codes” set up upon project approval to capture costs across lines of business and legal entities. It’s not a formal timekeeping type of hourly, billing system like at a law firm or accounting practice but it allows employees or departments to allocate a % of their time to specific projects. Budgets and forecasts can also be allocated down to the project code level for management by exception reporting and accountability. If it’s an urgent request like in your example that crosses business lines, it’s usually up to the leaders of the units to determine how to best staff and support. If it’s in the same country, it’s usually not hard to coordinate. Once you cross countries and include multiple lines of business, it can take forever due to the bureaucracy of the reporting structure and internal politics. You are right, it does cost the company money which is why they are struggling to get approval from the various units. They may have an allocated corporate pool of funds allocated to get the program off the ground but yes eventually they will need to demonstrate the revenues, EVA, etc on the overall program. Before I left, they had just started an entity called “Siemens One” in the US to seed fund collaborative projects. I didn’t see it mentioned in the case so looks like they went another way or just never built out on an international basis. Great questions!
-
Paul,
Thank you again for the insight. It would be interesting to see how the “Siemens One” project ended or if it is still around how it has changed things.
Bruce-
Bruce – looks like it have evolved into a One Siemens framework (below are links to Siemens One in 2008 and the recent framework- interesting that their still seems to be deep silos despite these initiatives.
http://www.siemens.com/innovation/en/publikationen/publications_pof/pof_spring_2008/tailored_solutions/siemens_one.htm
http://www.siemens.com/about/pool/en/one-siemens/siemens_ar2013_onesiemens.pdf
-
-
-
-
-
With respect to what Siemens should do next, I think they need to assess the return on investment from the projects generated through the open innovation efforts to date. It appears that nine internal and twenty external projects had been undertaken in the past five years. It would be interesting to see data showing revenue generated, future projections, and whether the time spent on open innovation negatively impacted any other areas of business. One thing that appeared problematic is that Dr. Luetke-Entrup did not have complete buy-in from all of the key business units and leaders across the organization. I think for the open innovation process to work, buy-in from those leaders throughout the organization is necessary in order to create a company mindset or culture toward openly sharing information. The business leaders could, for example, make open innovation part of their group goals and people could be incentivized to generate ideas or request solutions. So overall, if the pilot programs showed promise, I think the next step would be for Dr. Luetke-Entrup to present the results and garner additional support from senior management for the project to encourage open innovation across the company.
-
I agree with comments above, which in general emphasize the importance of ROI for innovation as an important metric. Whereas I think that is the ultimate proof of success, it takes years to realize what the ROI will be for certain innovations, which doesn’t help to assess how an innovation project, or a business unit is doing with regard to innovation right now. Other ways to measure success would be to identify what percentage of a business unit’s members are submitting innovation project ideas, how many of these actually make it to the next stage of development, and what percentage of time and budget are managers devoting to innovation rather than day-to-day operations.
I think Siemens should continue, particularly in light of Paul’s comments above. If the silo structure is indeed entrenched, programs like TechnoWeb and Urgent Request should definitely continue, as should the idea generation contests.
-
Siemens should continue to build upon the great success of Technoweb 2.0. Corporate Technology (CT) should highlight and bring to the forefront the success stories and reported cost savings in labor hours, ideas, and access to new suppliers spawned through Technoweb 2.0 to its senior management in the form of reportable metrics. For instance, the response time and the number of solutions provided when users post Urgent Request should be reported with key performance metrics to reinforce the power of collaboration from a community of technology experts. In addition, CT should continue to support and develop the external knowledge networks to tap into the hundreds of thousands to millions of eager professional and amateur problem solvers. And finally, the internal and external idea generation contests should also be retained as many of those ideas and innovations translated directly into revenue generating products. The successes of the OSRAM LED, Smart Grid, and Sustainability contests are excellent examples of well executed idea generation contests.
-
Siemens should continue their current projects such as Technoweb 2.0, Urgent Requests, and External brokers. These projects have been proven to work when the goals have been made clear. To increase the effectiveness of the use of external sources the goals need to be further clarified as to the impact on the company and the employees personally. As for the contests I would continue to present them in the same fashion but would add the extra ability for employees to present their own projects. I think this idea would be similar to what Google does with their employees. Each employee would be able to present ideas for a competition and if accepted by executives a competition will be generated. Contests such as OSRAM LED and Smart Grid have already proven to generate revenues. With employees generating even more ideas for contests than previously the potential for revenues should increase.
-
Maybe it is the accountant in me talking, but I think that using return on investment is a metric to measure the success of an innovation project is appropriate assuming that the goals and deliverable items of the project have been made clear. Because the silo culture at Siemens is so strong, it is important that they maintain Technoweb and Urgent Requests, as many people have already noted. I am having a hard time thinking of what they should do next because I think they need to stay the course and open up those silos before they can move ahead. Part of the problem is that the people in the upper levels of the silos tend to love them.
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting H-M 9 years, 7 months ago
If you were in charge of open innovation at Siemens, what metrics would you use to measure your success?
What do you think Siemens should do next? Are there specific open innovation initiatives that should be […]-
Clearly, Siemens needs some way of measuring their investment in open innovation. The most obvious way to measure the success of the open innovation projects is through ROI or NPV analysis. By calculating the incremental cash flows created by the open innovation projects, Siemens can consider which projects have been successful and how to properly grade future projects. We also learned about other methods of measuring success back in Week 2 when we discussed systems thinking. For example, Conrad suggests using return on management or activity based management to score information systems projects. Whatever the case, Siemens must develop a standard methodology for assessing the costs associated with open innovation sessions (e.g. the opportunity costs of spending labor hours elsewhere) as well the cost of project implementation versus the revenue generated by the projects coming out of the open innovation sessions.
-
Hi, Adam: These are all solid financial measures. I also believe that Siemens could look at additional measures as well. For instance, they could set goals around the number of new prototypes or products developed each year as a result of open innovation products. This would be a simple measurable outcome. Or they could use employee surveys. Management could insert a couple questions in the survey that asks employees whether they view Siemens as an innovative company. By setting a baseline in the beginning, the open innvovation proponents could get an understanding year over year if they are “moving the needle” perceptually within the company.
-
Yeah, I agree, Chris. Any additional quantification will aid Siemens in determining whether the open innovation sessions are worthwhile. The employee surveys are a really good, outside-the-idea. We do external client surveys with my company to gauge satisfaction, but I hadn’t considered the internal facing ones.
-
-
-
If I were in charge of Open Innovations at Siemens I would use ROI as my basic metric to determine success of this strategy, but sometimes this can be hard to put a number too. I would also look at the ratio of innovations adopted by Siemens versus those that failed to be incorporated. I don’t think this would cover the whole of what would make open innovation successful or unsuccessful, though, as just having an Open Innovation department helps to handle what could be potential disruptive innovation and keep the company relevant as time passes. I think Google does a good job at this. They have a department that does nothing, but innovate, no matter how crazy the idea may seem or how much money may be used to go after them. This allows them to always grow as a company and not get pushed aside by an innovation that eventually shifts the market away from how they do business. Also, using open innovation internal contests, Siemens was able to bring the innovation value to there India division which, although did not have immediate results, may bear fruit in the future. This cannot be quantified. I think Siemens should continue the path of using Open Innovation throughout there company internally and externally. Siemens has allowed for a community of practice within their company through TechnoWeb 2.0, allowing employees to collaborate across divisions and leading to better or faster results that would not of happened otherwise. They need to move closer to this integrated framework within there company so that they can be even more efficient. They may need to rearrange their company to more fully integrate teams rather than continue to have silos. Also, with this community of practice being a success, they need to incorporate this thinking to experts outside of their company and allow cross-company cooperation to move further forward in their business. Who knows? Maybe the expert they need to bring about major innovation for their company is found within another and vice-versa. Allowing for this cooperation could bring about greater success for our society, but also for all companies involved.
-
Hi Brandon,
I was thinking along these same lines. I commend Lackner for Techno Web 2.0, as it is a valiant effort to break through silos and get people engaged, talking, sharing ideas, possibly leading to innovation at Siemens. The self-defined networks that aligned technological and business units will aid in identifying leaders and projects worth pursuing in those communities. The personalized dashboard is a way to connect employees along shared interest and have engagement besides just work. Techno Web 2.0 is a good starter in transforming Siemens environment and culture. Given this is a new process change, data is going to be hard to quantify as this is more step by step achievement in teamwork leading to an innovation outcome. This will take time and continual assessment.To really get innovation going at Siemens and further change the environment, why not institute something similar to Google’s 70/20/10 rule. This would be totally radical and gutsy. Techno 2.0 has established the means to communicate now give employees the time to innovate. A move like this makes innovation a regular job function and becomes routine at Siemens. This amps up results potential and projects can be divided into investment by short or long-term market gain. Of course, a move like is an executive decision requiring executive support but it may be the means to increase innovation that Lackner and Siemens is looking for.
-
-
Innovation can be measured with multiple KPI’s depending on the organization and the organizational culture. Financial metrics like NPV or ROI analysis would be the typical metrics used to measure the success of the innovation in generating return on investment of new product value which in turn should lead to higher revenues and profit for shareholders. Another common financial measure is Return on Product Development Expense which is calculated by
RoPDE = (GM-PDE)/ GM where (GM) is Gross Margin, and (PDE) is Product Development Expense. “GM* may also be called gross profit, determined by subtracting cost of sales from revenue. Cost of sales, or cost of goods sold (CoGS), normally includes the material, labor and overhead associated with delivering a production unit. PDE will typically include the engineering, technician, product marketing and associated management labor expense, fully
burdened (benefits, facilities, IT, depreciation). Stock based compensation can be excluded if done so consistently, which will usually simplify the calculation without reducing the significance of the result.” However some organizations are satisfied with metrics for innovation focussed around soft metrics like how many new ideas are generated, what is the quality of the ideas generated, what is the efficiency of implementing or building proof of concepts for new ideas and the improved results due to the success of the new idea. Some of these metrics would be measured through looking at the overall employee population and determining how many ideas are generated per one hundred employees or what percent of ideas received funding/support to take them to the next level. Ultimately each organization will have different goals for innovation and different metrics for measuring innovation based on the corporate objectives and interests around fostering innovation. -
Track trends so you can establish how rapidly your company is growing. Growth in website traffic, leads to countless opportunities for a company. Social engagement such as, Facebook fans, blog subscribers, etc., could actually have an impact on the bottom line. Understanding both the percentage and exact numbers of each traffic source would aid a company with identifying weaknesses and give them a basis for comparison over time. Monitor the company’s best practices to assess their competitiveness and compare performances against top companies. Facilitate behavioral change by helping staff recognize how their performance relates to the overall business, in order to establish a basis for aligning the company’s incentives with performance goals. Products that are launched needs to be tracked to see the level of it’s marketplace success. Management needs to ensure that R & D, design, etc. is cost effective in its operations. Management making sure that the product’s marketing and sales forecast are correct and that the sales of the products meets the company’s expectation. Siemens have to create an open culture and apply the same system of obtaining knowledge externally. Siemens has to improve open innovation within and outside the company by learning from the past and keep improving in the future. Communication and knowledge exchange improves staff productivity and creativity, which contributes to the success of the company, providing a competitive advantage.
-
In addition to the financial measures already mentioned, like ROI and NPV, I’d suggest that Seimens find a way to measure employee engagement ratio. A company that has engaged employees is more likely to retain those employees and foster innovation. My company distributes an annual survey to obtain a variety of employee metrics, including engagement ratio. We have a lofty goal in mind: 17 engaged employees for every 1 disengaged employee by 2020. In addition to this, they could poll their clients, to determine whether or not there is interest in the innovations being developed by the company.
I think Siemens should continue to challenge their employees to work together and think outside their immediate department. They should offer incentives to those employees who do so and think about counseling those that don’t. If they don’t participate in fear of reprimands from their management, management should be counseled as well. Clearly every idea can’t be financed, but if Siemens can determine what their client’s needs are and put that request out to the masses, as they have started to do with Technoweb, they will have a rich pool of ideas from which to draw.
-
I think Siemens should continue the open innovation program, as it has proven to help engineers find solutions, and has provided tangible benefits to the company. It seems the benefits of open innovation go beyond simply finding IT solutions – the program also has a unifying effect on the company by bringing IT personnel together from various businesses and across geographical barriers. These benefits should be articulated to senior leaders to ensure ongoing support for the program from outside of the IT department. Open innovation at Siemens should also double down on the contests to ensure maximum participation and growth of the program. I also think the company should divide the collaborative projects into two tiers – an internal collaboration tier for sensitive or high-security projects, and an external collaboration tier for less sensitive projects that can include external partners. This would ensure that intellectual property for cutting edge technologies is not compromised by working with outside forces. Additionally, Siemens should institutionalize the open innovation program by developing apps that are distributed to new personnel as part of employee orientation. Ultimately this case was very interesting and introduced to me a concept I haven’t heard of before, but found to be very thought provoking and potentially beneficial for a company.
-
I suppose that the most obvious measure of success of any open innovation initiative would be to look at the costs associated with the program versus the amount of new business said program actually generated. Conversely, one could examine the opportunity cost of not engaging in certain open innovation efforts. At Siemens, it seems that the initiatives involving the promotion of cross-sector and cross-locational collaboration are addressing long-standing problems of siloed processes and lack of communication throughout this large global company. Moving forward, these initiatives (i.e., Innovation Jams, TechnoWeb) or ones like them surely should be among those that are retained.
In the case of using RFPs to solicit new ideas from outside the company, the biggest challenge here seemed to be finding people within the company who were willing to invest the time required to review and evaluate submitted proposals. Objections ranged from taking time away from one’s primary duties, to feeling that internal development of a particular solution was a better use of company resources, to the fact that engaging in such activity wasn’t an officially sanctioned by the company, etc. Moving forward, the company may want to not only give explicit official approval to such activities, but also incentivize employees’ participation in some concrete way. Also, as mentioned in the article, if one doesn’t have a clear cut business case associated with asking people to engage in something like external proposal reviews, the chances of getting the kind of participation you really need from subject matter experts within the company may be significantly limited.
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting A-G 9 years, 7 months ago
This question is inspired by these readings:
Christensen, Clayton M.; Overdorf, Michael (March–April 2000), “Meeting the challenge of disruptive change“, Harvard Business Review
Wikipedia: Disruptive […]-
I do believe that the role of professional managers will continue much like it has in the music industry. In that industry there have been multiple people who have self published their own albums, Macklemore being the most successful, but it is very difficult to gain traction without significant marketing. Through agents and publishers book writers will still be able to focus on the marketing aspect of their books and getting them into stores. Although the advent of iTunes books and Amazon Kindle books has allowed for cheap distribution of written media the problem is still drawing people to your particular books. I have a friend who has self published a number of books on Internet-based products. Initially he was unable to get the large publishers to back his books so he was forced to self publish them and has continued to self publish works since. In his experience the publishers have become less useful and he would never go to them in the future.
-
I agree with you in that the key is marketing. If you know how to market yourself and your book and have the contacts, it is probably worthwhile to continue to self-publish your material. The marketing assistance you’ll get from a big publisher can rarely be matched by someone publishing their own book. Perhaps a savvy self-publisher that worked in that industry and has those contacts would do well. That is interesting about your friend. I have a friend who has self-published books and worked with agents and prefers the agent so he can focus on writing and less on marketing himself and his books.
-
My friend specializes in Internet and software applications. All of his books or for the most part are guides to using either applications, developing websites, or other internet-based programs. He has even converted his books into MP3s for listening without needing to read the articles. Because of his heavy knowledge in software and Internet-based programming he is able to easily self publish all of his books and audiobooks.
-
Hi,
I think this comes down to whether you have the skills to do it all well. I read the book The E-Myth years ago that left a lasting impression on me about how easily you can find yourself not doing what you set out to do. Eric, it speaks to what you wrote in your post, about your friend wanting to focus on the writing not the marketing. So, I too, think there will always be a role for professional managers.
-
-
-
Great insight – love how you made the connection between books and music. However, I will say this – a lot more musicians are getting exposure through various types of social media. People now become famous from YouTube videos which then leads to record deals. Also, another similarity is posting individual songs on iTunes for purchase.
-
-
I have looked into self-publishing a few times so I can only speak on my experiences. I think every aspiring new author would rather work with an agent. A good (keyword) agent has connections to public relations, distributors, and other contacts that are not accessible by most new authors. However, a new author can spend years trying to land a deal whereas with self-publishing, they can start to publish their work and potentially see immediate income. But self-publishing is only the first step. From there you have to schedule your own publicity, do the publicity, etc. That is a lot of work where not only will an agent take care of that, the agent will provide better public relations opportunities. Only a small percentage of self-publishers are making the kind of money outlined in this article. So the answer is yes, there will always be a role for management and yes I’d self-publish until I was able to obtain good management. The age of agents and publishers is far from dead.
-
Good points here Eric. It would seem that the trendy play is for self-publication, but I don’t see high profile authors leveraging this method. Clearly, when it comes to big book deals and large distribution channels, the large brand-name publishers have plenty of power left. That is not to say that the self-publishing trend will continue to grow as more and more people leverage social networks and online tools to market their content. It seems as though I see a new self-published book being marketed every day on LinkedIn, with some levels of success and interest.
-
-
I just completed one of the prework assignments for our upcoming EMC experience, and faced that I’m not sure I have real career goals, since I’ve sort of had my career already and I might just want to sell my practice next year and head to the shore to ride my bike and sail my boat. My fantasy, though, is to do that, but remain engaged in a learning community by creating and teaching an online practice management and business curriculum for veterinary students. I don’t know if I am going to be in a competitive place where people will think I have something valuable to offer, but it occurred to me that self-publishing might be a way to break into this field and could create opportunities. So, yes, I am considering self-publishing. Fortunately, my earnings from this effort, should I take it on, would be more about self-promotion than earning money from a book, so I won’t be relying on book sales to pay my bills.
-
Hi Diane,
The concept of self-publishing seems a little scray to me. Is there a reason you are chosing self-publishing instead of going through a regular publisher? Do you believe that they will change the contents of your book to meet their own agenda? I am curious as to what factors have/are contributing to your decision.-
Hi Mori,
I haven’t spent much time examining this avenue, but when the question was posed this week it got me thinking that self-publishing might be a way for me to find out if people are interested in what I have to say and have to offer. I feel like I am just one of many veterinarians in their sixties that is getting ready to transition out of practice ownership. I think I have something to offer with my new MBA knowledge and practice owner and practitioner perspectives, and think I have something to say that isn’t being said, but am not sure anyone wants to listen. So, self-publishing seems like a way to test the waters and engage in some self-promotion.-
I think your strategy is smart and reinforces the importance of agents and management. Self-publishing is a great way to explore interest in your topic or writings but the end goal for most would be to use that self-publishing to land a book deal. I am sure it happens, but I would imagine it is rare to see strategy in the other direction. Good luck with your endeavor Diane!
-
Diane,
I imagine one of the main perks of self-publishing is that you have completely control over content. There is no one to censor you or your opinions. I think this is something that would be a great bonus if you’re in a situation where your livelihood doesn’t depend on writing books, but rather writing services as a creative or professional outlet.
-
Diane,
I think ‘test the waters’ is the biggest advantage – authors can publish with little risk or liability (unlike a publisher who invests heavily in print publishing, marketing and distribution). But as mentioned above, how you market the product to consumers will be important. For you it may be a veterinarian listserv or professional society, and you may do better self-publishing and promoting through known channels than would a publisher less familiar with your market niche. On the other hand, with low barriers to entry, there are likely to be many more competitors in the self-published online library. How will an author distinguish herself from everyone else, including the popular but sometimes ephemeral blogs?
Good luck with the book!
-
-
Mori, I think you bring up a great point about writers having the content of their submitted work edited to possibly meet a publisher’s agenda and that concern is pushed to the back burner if they have been receiving rejection letter after rejection letter. How many writers would forfeit creativity or allow their work to be altered once they landed a publisher after multiple rejection letters. I can see the intrigue with self-publication. I was listening to NPR the other day and they had an author on who had sent out 31 letters to publishers and received 31 rejection letters. Finally she had submitted her work to the New Yorker and she couldn’t believe they were going to publish it unedited. That’s definitely the exception than the rule. When you get right down to it self-publication simply offers more opportunities for talent to be discovered and works unaltered for good or bad.
-
-
-
I think Christensen’s main point is that disruptive innovation is really on par with being flexible as evolution progresses. Evolution does not happen instantly where a company leaves their old style on Friday and returns to a new market on Monday. Companies evolve differently depending on their size and market but it is clear that all markets must be supported as long as demand exists. Preparation for emerging markets is as important as supporting traditional markets. Certainly, the ever-flattening world will open opportunities for authors to self-publish but I do not believe that there will ever be a universal shift that will eliminate agents and publishers. Some authors desire to write but no be publishers or marketers, others will value taking on the full package. The decision is personal and independent. Disruptive change by its very name predicts that plans and strategies are never fully set in stone. Disruption is outside of the system, the bounds, and the expectations. As such, one cannot say for certain that any past practice or future trending live or die. A company that takes such a firm stance either way is subject to extinction as disruptive changes leave them helpless to adapt.
-
Hi, Steve, I agree with you and like your Friday and Monday theory. I think the disruptive change are transient, and it does provide a significant opportunity to new business and transformation of old business models. The only failure be rooted in innovation that I can see is resistant to change or accustom to new routine.
-
-
While modern technology has increased the simplicity of self-publishing and self-producing and this certainly has disrupted the professional management industry, I believe professional managers still provide a worthwhile and valuable service (if appropriately priced). With modern technology, authors now have the ability to distribute their writing independently. While this might increase their portion of take-home income from sales, this does not guarantee success. Without professional managers, these authors/artists must promote their works outside of proven structures, such as manager-coordinated advertising and events. Publicizing their works becomes a responsibility of their own. Furthermore, self-publishing, for example, requires the author to understand the general book sales industry. I believe the average author or artist would much rather focus on their work than on the business of putting their work in the hands of those who appreciate it. The business aspect of selling the art impedes the artist from continually pursuing their passion. For this reason, I highly doubt I would self-publish a book, at least initially. I think, at the beginning, I would much rather focus on writing than promoting, publishing and distributing my work. I would possibly reconsider this, if reader interest supported the shift to self-publishing.
-
The other aspect I just thought about regarding self-publishing is that success on the internet is frequently grossly inflated or is made to seem much more simple than it is. Seeing success stories of others might make it seem much easier to self publish. Like you said, this might give someone the false impression that the industry is easily navigated when it’s really a large responsibility that doesn’t guarantee success. It reminds me of the people that think they can become millionaires flipping houses because so many people on TV or in social media are successful doing so.
-
Mariya, great comparison to DIY house flipping.. I recently watched an episode of Undercover Boss and was appalled to see the show promote a scam artist, running a pyramid scheme ‘real estate’ company (rated F by BBB). The CEO hosted a house flipping reality show and then made millions by charging up to $40k for ‘business seminars’.
Armando Montelongo, ‘Undercover Boss’: 5 Fast Facts You Need to Know
-
Corey,
Simply unreal. In the philly area, there are ads on the radio all the time for these “seminars.” This just goes to show that people who would truly benefit from self-whatever are people who are just starting out usually, those who cannot afford to invest in their product alone. Unfortunately, this makes them vulnerable to such scams and being taken for a ride. Someone who is already knowledgable in a field, whether it be flipping houses or publishing, would likely not need these kind of services anyway.
-
-
-
Jordan, I totally agree with you, I feel that a majority of authors would much rather spend their time focusing on their work instead of marketing their works. Marketing itself can be a full-time job and can take a lot of effort. The amount of self published books that succeed is really…really small. The article from Forbes reaffirms my previous conclusion that it really doesn’t pay to self-publish: http://www.forbes.com/sites/jeremygreenfield/2013/12/09/how-much-money-do-self-published-authors-make/
-
-
The articles we read that discussed the topic of disruptive change had me looking at various career fields and how they have been affected by innovation. I think it is safe to say that the book publishing industry has seen some disruptive changes secondary to innovative technology as it allows individuals to self- by going online rather than the traditional or “older” methods of using an agent and signing a formal contract with a publisher. My cousin currently works at Random House in New York City as an editor and I can safely say that the publishing business is still incredibly strong as they serve as an international publishing house that is composed of numerous divisions which produce large amounts of published books. I know my cousin believes that there is still so much prestige that surrounds the concept of having your book published by a big name publishing house and the formal contract that goes with it. However, I believe it is safe to say that self-publishing is on the rise and that many individuals are finding success by taking this route. I found the following article which shares some self-publishing success stories which I found to be incredibly interesting.
http://www.selfpublishingadvice.org/tag/success-stories/
Overall, I would say that the age of agents and publishers isn’t 100% dead, but that it has seen a significant impact from new technology that has allowed individuals to self-publish. I think it would be wise for agents and publishing houses to stay with the times and embrace this new age. By doing that, they should stay on top of new and upcoming self-published authors and even find ways to incorporate this into the business to avoid becoming a dying breed. If I were to write a book, I would probably want a professional manager to handle all the legal components so I could solely focus on the art of writing rather than having to deal with all of those pieces. However, if I was facing challenges with getting my book published, I would probably move forward with self-publishing in order to get my book off the ground. Ultimately, it would depend on the situation at hand.
-
Hi Liz,
Thanks for your post and the link. I loved reading some of the stories.
-
-
As I sit here look at these articles printed on paper I’m silently hoping that publishing isn’t dead. I appreciate that people now have options to publish their work outside the traditional venues however I still prefer physical books and magazines. I have always loved having a book in my hand or a paper to highlight and jot notes on so I might sound hypocritical to say that if I was going to write a book I probably would look at self publishing. Getting a foot into the publishing world is hard and if I was passionate about my work I think I would do anything I could to make it happen. That being said, I don’t think publishers and agents will be going anywhere anytime soon. Just as large corporations have public relations sections, independent artists usually don’t have the knowledge, experience, and/or time to do their own self promotion. Even if they start out on their own, if they truly become successful they will need support systems to sustain that success and keep it growing. In a way, you could argue that the option to self publish has decreased risk for publishing companies. They no longer need to rely solely on unknown talent, they can be looking for the next best thing based on actual results. The down side is that every other publisher can do the same as well…
-
As defined in Wikipedia, disruptive innovation is ‘innovation that helps create a new market and value network, and eventually disrupts an existing market and value network (over a few years or decades), displacing an earlier technology.’ After reading the article by Christensen and thinking about my own personal preferences, I truly hope that the role for professional management does not diminish; however, as technology progresses, there is an expiration on the utilization of professional management. As of today, I don’t believe that agents and publishers are dead. I think, as readers, there is a sense of trust in professional management companies, and authors/artists associated with them. I, atleast, believe them to be of better character and more stable; therefore, I tend to purchase novels published through a publishing house. Furthermore, when it concerns writing, I believe that books sold through a reputable publisher are of better caliber and penmanship; fewer grammatical errors. To be honest, I have read self-published books before and have found grammatical, contextual, and spelling errors; and I am not a great write so for me to have found such errors, speaks volumes about the author.
-
Mori,
You brought up a lot of great points. I personally think that there is a certain degree of better overall quality when a book is published through a noteworthy publishing house and agent. I have read some self-published books written by Indie authors and have found multiple grammatical errors as well. This doesn’t seem to be the case for published books. With that said, I agree that the age of publishing houses and agents is not dead, but I think the overall business has been altered due to the innovation of self-publishing. I can’t say for sure, but I would think a lot of self-published authors would prefer to focus solely on the art of writing and would rather have a professional manager handle contracts and the business aspects. Therefore, I think the publishing houses and professional managers need to seek after self-publishers and incorporate this “disruptive innovation” into the current business so their role does not die off. -
Mori – I think you nailed the importance of professionals adding value to products. In theory, self-publishing sounds perfect, cut the middle men out and keep more for yourself, however, good writers aren’t necessarily great editors. For me, I find it difficult to look beyond grammatical errors when reading and sometimes lose focus on the real message. It’s a fault I have and admit it as it can be quite distracting and frankly a real waste of time on my end – perhaps my OCD kicks in too strong. Nevertheless, I would never venture out into self-publishing nor would I recommend others to unless they’re proficient editors.
Liz – I like your idea regarding professional publishers/editors seeking self-publishers as a new business model to embrace the disruptive innovation. Self-publishers have to be receiving more exposure versus doing nothing with their work related to rejections from publishing houses, so in some instances, there’s a win-win if they’re good at what they do.
-
-
I like the general sentiment of this discussion and agree with pretty much all of the thoughts. Self-publishing has its role and has clearly become quite a disruptive technology, especially for established writers whose contracts have expired or for authors that are having difficulty achieving success through the previously available solitary traditional route of publishing houses. With that said, I have to completely agree with the publishing houses having the reputation that Mori describes as their founding ethic or process that will keep them running in the future. Amazon and other online publishers have the opportunity however to disrupt this old way buy simply acquiring the human capital at these firms and paying them in a different cost structure but allowing them to improve online publishing’s reputation for development of high quality publications. Despite this gap, the information about this underlying quality issue is not readily displayed or made available to the general public and the high level reader that has such discerning needs from publications is probably in the minority, much like the LP/record user in comparison to the amount of people using an MP3.
-
I don’t think the age of agents and publishers is completely dead but I do believe that the role has been diminished dramatically. Publishing houses were long the only source a writer had to have his or her work widely distributed. With the popularity of the internet and the availability of publishing aides and markets barrier to entry have been broken down. That being said, professional management for authors and artists will continue to exist. My rationale is that although it has become less complex to have a work published the need for direction and guidance still exists. Not indifferent to the ability to publish one’s own website. Although it is easier to now create a website, in order to maximize traffic consultants are typically engaged to assist in the design and build of most large companies websites. As much as I tend to embrace the “do it yourself” mantra, if attempting to have a book published I would likely seek a professional in this area to give direction and counsel.
-
Scott,
I would argue that it would also depends on what you want to do with the book, or even a website as in your example. If the website is the main interface for your business and a majority of your income relies on its traffic, you would certainly go for a professional to help you navigate the process. But, if it’s a site that maybe 2% of your customers actually see to check your phone number, maybe you could have your cousin who is “good with computers” whip on up for you. Same with books. Some people want to publish a book just to say they are a published author. For others, such as non-fictional books or textbooks or something, you might need someone skilled and knowledgable to help you.
-
Scott, I think it comes down to network and resources. I know a professional opera singer who is naturally talented and has invested a significant amount of his own money in trying to develop himself. He always tells me that there are hundreds of very good opera singers and many of them would be exceptionally good on any stage at any level. So, the question is, who picks the best, and how can we say who really deserve the stage more than someone else if there is such an excess of the same type of talents. In my opinion, it becomes a question of who you know, and how strong are your connections with the right people that can promote the career of unknown artists. I, actually, have a different view on this topic. I think that this is a field where globalization and internet will, only, relatively change the paradigm. The human network will always be stronger and will always drive this process. I see so many similarity with the Academic world too!!!
Aldo-
Mariya and Aldo, Both great points, and I agree if one has a solid network of resources to tap into to get similar counsel that would come from a professional that would likely suffice. As I think about it, another example is in video media. If one has an idea for a TV show, the common practice would have been to find an agent and arrange meetings with production companies. Today, there are many “shows” that can be subscribed to on youtube and the level of effort and cost to establish is minimal. Again, this presupposes that an individual has a “network and resources” to assist, but having the technology to support the goals certainly helps. Thanks again for your input.
-
-
-
Reading books is one of my favorites. I do not think the age of agents and publishers are dead. Along with the innovation of surfing online and eBooks, no doubt the paper copy or print was hit hard initially, but it survived and stays steady recently. I watched one TV show several months ago, which filmed the changes occurred at a small book store at Cambridge. The shoppers were less as compared to decades ago, however, there was still a fixed population, who were loyal to read paper print instead of eBooks. In addition, the publisher changed their business model to accustom to the new changes. Instead of print multiple copies of a book like in old days, they make an electronic copy, and print it out and make a book whenever a customer requests it and it probably only take one hour or so to make a copy for that customer. It thus increases the efficiency, decreases inventory cost and increases the margin of the book store. Innovation always bring some disruptive changes, but the key is how to catch up and take advantage of it from business perspective. I believe there are great amount of evidence to support a necessity for professional management of authors and artists. I would like to publish my own books if I could write and if self publish brings me more profits than traditional publishers do.
-
Xiaoying, thank you for the post; fascinating. I sat and considered how on demand printing would work. It seems perfect for a book store. What better place to browse while the book is being printed. I can see myself do this. I like eBooks well enough but do still most enjoy a book in my hands; nothing to turn on/off. I find myself flipping back and forth, returning to some past page to see how the new page connects. This does not seem to work well with an eBook. Either way though, the thought of having a real book printed from an selection seems workable since I’ll be spending time in the store anyway. Now if I can just get my oil changed while there.
-
-
This question is very similar to the Radiohead example for me. Self-publishing would be easy for someone who has the skills, resources, and the fan base not only to know how to go about it, but also to venture such a risk. In the case of Radiohead, this was an established band with millions of fans/dollars to produce their own album and sell it (mind you they are still making money from it) through their own distribution channels. If the album didn’t sell, Thom Yorke wouldn’t have to worry about paying his mortgage. For writers, especially those who aspire to make it their career, and those that are starting out, the publishing world is scary. Plus, they might rely on the advance from publishers to have food in their fridge. If your very livelihood depends on the success of a book, I would be reluctant to invest my last resources to publish a book on my own. Secondly, I think there’s a crucial filtering process with the use of agents and publishers. They are unlikely to invest in your book if it stinks, or they might give you corrections that might improve your book (let’s face it, we all want to think our creations are gold, but they might not be). If not being censored trumps not being paid, then self-publishing would be worth the gamble. I actually looked into self-publishing before for a short fictional book (just for fun) and was so conflicted and confused on the actual process and investment required from me, that it wasn’t worth the risk and the headache. As suggested by the reading, companies (including major professional agents/agencies) could wise up and see this as an opportunity to adapt to the disruptive change. By offering brokers and agents to help navigate the self-publishing field, one with less restrictions and control, they could profit from those wanting to self publish but not necessarily understanding how.
-
As people have been able to use the internet as a source of information, people are using professional services such as agents or publishers and trying to do it themselves to save money. I do think that when an author gets successful they will then happily hire an agent / publisher as they would prefer worrying about writing and not the business side of things. But when an author is first getting started and cash is limited, I do think that they will try to do as much as they can by themselves. When Googling “how to self publish” many websites came up and even Amazon offers a way to easily self-publish. (http://www.amazon.com/gp/seller-account/mm-summary-page.html?topic=200260520) Personally if I were to write a book, I would self-publish it, most likely on Amazon. I would also then try to self-promote it through as many media sites as I could.
-
With very little knowledge on the topic, I decided to do some additional research: the Washington Post article highlights the challenges of self-publishing while the Huffington Post article advocates the idea. After weighing the arguments, my gut feeling is one that tells me professional management for authors and artists is still very much relevant and still very much necessary. It is a career field that will continue to morph and be shaped by digital innovation but also one that will continue to exist in some form or another. Although self-publishing has provided additional avenues for aspiring writers to enter the market, as the author of the Washington Post article bluntly states, it has become oversaturated and many books go unread or unnoticed. As a result, professional management is almost certainly required to get your work published and necessary to help separate it from the many similar works that abound. None of this is meant to insinuate that successful self-publishing isn’t possible; merely that it can be more a challenging path to navigate on your own. However, if your goal is to simply publish a book (bucket list) regardless of how many people read or hear about it, you should self-publish all day long. I can also relate to Mori’s comments that there is a certain level of trust between readers and companies who represent the authors/artists.
I would consider self-publishing a book only if I had a strong plan, the necessary amount of time to execute my plan, and a clear vision of what I hoped to accomplish. In the Huffington Post article, the author makes some compelling arguments in favor of self-publishing as well as some of the potential downsides. He obviously had the desire and dedication to do so as evidenced by his devotion of over 2000 hours and a year of his life. He used creative ways to raise money (crowdfunding) so he wasn’t forced to take an advance through a publisher. He understands that he will not get the same exposure and that his book won’t be in retail bookstores. He is purely trying to “build his own platform to connect with readers” which, to me, is in and of itself a noble idea.
On a side note, I found a SlideShare page by the same author as the Huffington Post article. It has some interesting perspectives and I especially liked Step 6 which reaffirmed my reasoning to enter grad school!
http://www.washingtonpost.com/blogs/style-blog/wp/2014/10/01/no-i-dont-want-to-read-your-self-published-book/
http://www.huffingtonpost.com/adam-smiley-poswolsky/should-you-selfpublish-yo_b_4909036.html
-
In my opinion there will always be a big difference between the established professionals and the new comers. Where the new comers will always need more support to develop into successful artist, or writers. In the other hand there will be a fixed proportion of successful, recognized professionals that will embark in their own business enterprise. For the young, unknown, and promising professionals sometime having a manager or a promoter, really means developing a network and marketing their product properly; things that might not be sustainable early in the career of talented professionals.
-
Hi Cataldo,
I completely agree. I think this directly relates to the Radio Head example where they already had a good fan base which allowed them to venture out on their own and try non-traditional tactics. If they had been a non-name band, trying to do it on their own it wouldn’t have yielded the same results. I don’t think publishing is much different.
-
-
The growth of technology has surfaced many disruptive market trends from various industries. Health care industry is being struck by ‘EMR’s (Electric Medical Records), the automotive industry is being diverted toward autonomous capabilities, and publishing industry is shifting toward the Internet by self-publishing. The golden era of the publishing a hard copy of a book is evaporating at fast pace to the point where even academia (including elementary schools) are transforming to digital content (textbooks, paper etc.). The model for publishing industry is no longer selling books by earning large margin per sale, however its to sell billion copies to mass public with small margin per sale (make $10 per book by selling 1 or make $1 per ebook by selling 10). The Internet allows global outreach of the media content to enable artists to self-publish and attract customers around the world. Where the previous exposure was limited to region or bookstores, the new era has enabled to reach billions of people across globe by publishing content online. We have seen similar trend in the music industry. The CDs/Cassettes have lost its ground with electronic music sharing. The artists like Beyoncé and Taylor Swift are releasing copies of albums online prior to releasing it on CD. The Internet has enabled creation of disruptive innovation to shift markets by large margins in short duration. If one does not capitalize and adopt toward the trend, then they will likely fail. For instance, last week I visited Rochester NY, previously known for the hub of Kodak factories. Entire town ran to support the giant. Today, there are handful factories that are operating as Kodak, its support industries have been abandoned by owners and are being transformed into historical sites and/or restaurants or malls. What was at the core of the Kodak’s failure, its inability and unwillingness to adapt to the disruptive trend of digital imaging and numerous technologies that Kodak owned leading to ultimate failure. Similarly, the publishing book through old channels is quickly changing toward self-publishing to penetrate to larger audience while keeping the small margins per sale instead of diluting with the publishers.
-
I do not think that agents and publishers will go away. I think that there will always be an industry in this area. I think that with self-publishing that it has opened up a lot of people to become their own authors and it has really clouded the market. When I browse iTunes for books every once and a while, I see a lot of titles that I don’t feel are written with high enough quality that I expect to see because they are actually self published and not gone through publishers.
(http://www.slate.com/articles/technology/technology/2013/06/declining_sales_of_paperbacks_are_e_readers_killing_the_softcover.html)I think that agents and publishers will be in demand to really get books that are carefully, professionally written out there because they have the dedicated marketing for books and publishers. On top of that then there is the note of previously having bookstores and librarians help you choose a book while not being able to get good, effective recommendations on e-books or self published books.
I would consider self-publishing book if I wrote one though to give it a shot. It would just depend on how successful things were if I would consider another book through self-publishing or through a publisher.
-
So I was curious to see if any self published authors have received critical acclaim. According to Google, EL James self published the 50 Shades trilogy and sold over 70 million copies (at the time of Forbes article -link below). Personally, I’m not a fan of ‘popular’ fiction, but it’s obvious there’s a fan base for Indie/self published books, regardless of quality of writing. I’m sure the ebook trend is here to stay, but also hopeful there are enough ‘book lovers’ to sustain print editions. I believe literary agents and publishers are still necessary for ‘serious’ authors, from a PR & editorial standpoint; however, it’s not necessary to go the traditional route to achieve success as a writer. In a sense, everyone who posts/blogs/shares on social media is ‘self-published’ – not sure if that’s good, or bad. To remain relevant in the digital age, the mature book publishing industry needs to focus on disruptive innovations rather than just ‘sustaining innovations’ to attract and retain talented authors. During college I interned at MIT Press. I quickly learned that professors were required to publish to earn tenure and were also locked into using their employer’s university press. At the time, it was probably a win-win situation, but there’s always a trade off. I probably would self publish, but only because my job/livelihood don’t depend on book sales.
-
I don’t think the age of agents or publishers are dead because self-publishing can be a challenge especially if you are an author who does not have the experience or necessary contacts in the industry to successfully publicize their work. Self-publishing is also probably more time consuming than hiring a publishing company to represent your work. Self-publishing can be a benefit because you control every aspect of your creation from publishing, PR and Marketing. Although this can also be a challenge, if you strategically manage it right you can strongly benefit from your earnings. I would personally chose to self publish because I would benefit from the generated revenue and would pay minimal costs for publishing my work. I would make sure I effectively manage my bottom line and controlled the costs of other services that may be needed. As a self-publisher you save a significant cost on the cost of print alone, by releasing your work online. I think the industry would value from a professional management firm or a consultant could provide new authors and artists with direction on the process of self-publishing. They can clearly articulate both the pros and cons to self-publishing and provide guidance.
-
Thinking about Christensen’s model of disruptive change… do you think the age of agents and publishers is dead? Or, will there always be role for professional management for authors and artists? Would you self-publish if you wrote a book? Just as in the Radiohead case study regarding digital media and self-recording, I believe the ability to self-publish is disruptive but not the end of agents and publishers. Although they will be affected by this evolving market, there will always be a market for highly skilled publishing houses. Publishers who can identify and invest in talented writers finding new ways to market and promote them aided by the new technology rather than seeing it as a hindrance to their professional management. The existing network of agents and publishers currently established in the publishing industry is an invaluable resource that can’t be matched by the likes of self-publishing services. A credible publishing house gives legitimacy to an otherwise unknown publication. Although, I believe self-publication provides more opportunities for new talent to be discovered. If I were to write a book, I would strongly consider self-publication because I believe it would be more cost-effective and offer me more options for distribution. But I would also be interested in knowing the ratio of successful self-published writers compared to the number of unsuccessful.
-
One of the most interesting points I found in Christensen’s article was about how big a business opportunity has to be to seem interesting to a large company. I imagine this applies to publishers, who receive many submissions but enter into contracts to publish/promote/sell only those works for which they sense there is a large market opportunity. Where is the room for niche works that appeal to a small but dedicated market base? A specialized technical manual may have a limited readership, but may garner a high price from the small group of people that really need that expertise.
This makes me think of a phenomenon in medical education – dubbed #FOAMed (free open access medical education). The idea is that innovations such as twitter and wiki can disrupt the traditional model of textbook publishing. Textbooks are notoriously out of date by the time they reach the shelves, and one criticism is that medicine has been slow to adopt innovation and new ways of thinking as a result. Paraphrasing, “If you want to learn how medicine was practiced years ago, go to a textbook. If you want to learn how medicine was practiced months ago, go to a medical journal. If you want to learn how medicine is practiced today, go to FOAMed.”
I recently attended a medical conference during which participants were “live-tweeting” the presentations. While I can see this threatening revenue streams for publishers and educators, and perhaps there is less ‘quality control’ on the content, it was interesting to see how much more easily the content was disseminated by this different model. I think this has some similarities to self-publishing.
-
Dan,
Your post makes me think of a Russian saying I’ve heard my entire life: “the only thing that is truly free is cheese in a mousetrap.” It makes me wonder what the trade-off is for providing free open access medical education. Admittedly, I have used many “free” sources to look stuff up (thank heavens for student doctor network) but this is just for facts, not an entire medical education. For the big stuff, I would only trust a text book. Text book authors have a lot riding on providing accurate data – their reputations, publisher relationships, etc. Therefore, for big conceptual stuff, I would never trust something “free.” Also, while medical school is insanely expensive and the thought of my student loan makes me dizzy, I feel that to some extent medical education should be a little expensive and not free. I think this serves as another mechanism to weed out undedicated people. Only those who are truly dedicated to becoming doctors would be willing to take on such a large financial risk to attend medical school.
-
Mariya, great points. I agree there is definitely a place for textbooks in medical education – I still have many of my outdated editions of texts from school, and a 1965 Ciba collection of Netter drawings. Those are irreplaceable.
I guess I was commenting more on FOAMed for postgraduate and continuing medical education, though I think it applies in medical school also, more likely as a supplement. Your comment about reputations on the line is interesting. Many professionals are now using twitter as a platform for networking with colleagues. I’d argue if you post something inaccurate or embarrassing on social media, your reputation will take a bigger hit than if it’s buried in a chapter of a reference text that most will not read carefully. With 140 character limits, every word counts (for you or against you).
-
-
-
Based upon Christensen’s model and distinguishing between sustaining innovation and disruptive innovation, it would appear that self-publishing is highly disruptive. That being said, there will likely be a continued need for agents and publishers to some extent. Authors that are mainstream and desire that hardcover copy on the bookstore shelf, will require the book publisher and their distribution network. Also, high profile individuals who write books will also demand the heavy initial signing bonuses paid by main-stream book publishing firms. Overall however, the trends appear to be a steady degradation of the book industry, a reduction of brick and mortar stores and a migration to e-books. Additionally, and as the article linked below indicates; as more self-publishers gain success, they are sharing the blue-print with the next generation of authors. This phenomenon in itself, is very compelling. Success in this sense will breed more success, which aligns with consumers desires to procure books in an electronic format anyway. There also exists an almost indifferent point of view that most consumers have with respect to publishers, making their involvement less and less important. This type of disruption will require some type of response from publishers to possibly incentivize authors to prefer a relationship with them. At this point, the trends are moving completely in the other direction. If I were to publish a book, I would definitely consider self-publication as getting attention from a large publisher would be challenging. Additionally, the topic of any potential book I would write would likely focus on sales and or business related topics. That audience often consumers these types of materials via tablets or some type of electronic medium. Based upon that and in consideration of my reach with social media (LinkedIn and Twitter), I would first pursue self-publishing prior to engaging with any type of large publishing firm.
http://www.huffingtonpost.com/mark-coker/10-reasons-self-published_b_4915694.html
-
When I read this initial quote/article/question my mind went a million different directions. For one, I just came out of a conference where I found out that 75% of diaper sales are done online 0- meaning only 25% of parents are using brick and mortar as a way to buy their nappies. I think in general one needs to realize brick and mortar is declining as technology is increasing. However, I do think there is value in publishing a book – I love holding a book and having the ability to share it with others (not a Kindle fan). However, if I did write a book I would self-publish if I had the right marketing and PR strategy. At the end of the day I will always suggest than you should have an agency to help create that “buzz” – just because your an author doesn’t mean your an expert on making things go viral.
-
Although the traditional publishing system has been disrupted by innovation and technology, I still oppose the notion that the age of agents and publishers is dead. There are dynamic and giant publishers with extraordinary infrastructure to support an author’s work that would be unavailable otherwise. For instance, e-books which sometimes come with certain features such as professional software programs, instructor-student interactive features, portability, convenience, and accessibility. All these functions may be simply unaffordable for an individual. Publishers often have that production edge where costs can be distributed across mass production. Also, established publishers such as Pearson, McGraw-Hill Irwin have been able to strategize over the years to beat market odds and they are still thriving.
I would not necessarily rule the possibility of self-publishing out because it may be the only viable way especially for aspiring authors. However, self-publishing tends to have inexorable capital-induced limits. Therefore, goal and target are critical factors to be examined before venturing into self-publishing except one is already a megastar.
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting N-Z 9 years, 7 months ago
This question is inspired by these readings:
Christensen, Clayton M.; Overdorf, Michael (March–April 2000), “Meeting the challenge of disruptive change“, Harvard Business Review
Wikipedia: Disruptive […]-
This issue hits at home as I have been trying to publish a personal book for the lay person on back pain. I have tried for two years now to publish the book through the traditional methods of getting an agent who pitches the book to a publisher. I feel that I have been given the run around and have gotten nowhere. I often consult with the medical publishing companies that publish my medical texts and they have swayed me away from self-publishing as they say there are many subtle issues that a self-publisher does not have access to and ultimately I would do better with a Random House or other well-known publisher. Established agents and publishers have the appropriate access to networking and advertising resources along with the experience of getting a book successfully to market. Like any idea, time weakens the message and a lot of what I have to say is getting past its prime so by necessity I may have to jump into the world of self-publishing. I think the issue that I’m experiencing was one of the original reasons for the birth of the self-publishing movement. That is the snobbery of those who control print and of course the less than satisfactory business deals many authors feel they receive. The age of agents and publishers are not dead but I think it is time for me to give the disruptive world of self-publishing a shot.
-
Alex – your problem is shared by many and perhaps self-publishing will be the way to go. An alternative would perhaps be with a lesser-known publisher who are trying to build up their catalog. Asif and I published a two volume textbook with the same Indian book publisher you had previously used. They might not be the best partner for the audience you seek, but perhaps a similar small emerging company might be able to give you a better deal than the big publishing companies as well as the technical and marketing support. Just a thought, although I’m sure you’ve already considered it.
-
-
The advantage to self-publishing is the author’s ability to keep a larger percentage of revenue from sales as profit. The NPR article indicates this could be as high as 70%. Not having to share sales revenues with the publishing companies is a nice option for authors. However, self-publishing also requires self-promotion, self-marketing, and market creation by the authors. Many authors excel as writers, but likely far fewer as great businesspeople – with limited ability to market themselves and their books to the masses. Self-publishing could be a perilous task for an author – writing and publishing the book is one thing, selling copies is a completely different task. The Internet has given the ability for authors to sell ebooks – but authors will still need to create their own network of promoters (independent booksellers, local libraries, cafes, people in their specific industry, for example). With ability to keep a larger percentage of sales revenues, the authors may not need to sell as many books as if through the traditional publishing house method – making it an attractive option overall though.
This is similar to the Radiohead case. The very popular and successful authors (i.e. Steven King, of example) may have the ability to forgo the upfront payments from the publishers to go out on his own and self-publish a book. His chances of making more money are high. A new author, however, with no history of sales success or following is going to have a much harder time making it on his/her own. He/she is going to need the promotion of the publishing company to get the big retailers, Amazon.com, NY Times, etc. to take notice. I think we may see more self-publishing from some of the major authors, but the large majority of authors will still rely on the publishing houses to for their promotions.
If I wrote or had plans to write a book, I would have to consider my own ability to market my work without the help of a publishing company. Am I willing to work as hard (if not harder) on marketing my book as I did to write it? I would also have to consider whether or not I am even being offered an advance or up front payment from a publisher for my book. How much money do I want to make from my work? I would have to consider my audience – or potential market. Is my book a novel for the mass market or a specialty book with limited distribution channels. All of this I would have to consider if I had a book that was ready for publishing. In the end I would have to weigh the pros and cons of each option and consider what my objectives are for the work before choosing to self-publish or go with a publishing company (if it’s even an option).
-
Kevin – nice post, and this is totally similar to the Radiohead case, as you point out. But I wonder – whereas desktop publishing was a disruptive innovation as per the Wikipedia article, is self-publishing truly disruptive? And along those lines, has self-publishing music become a disruptive innovation because it really hasn’t created an big new market like digital music did to CD sales.
-
Kevin – I disagree that self-publishing is a game where newcomers will have difficulty being successful for a few reasons. First, success is a sliding scale, 1 download generated through self-publishing is more than an unpublished book would every get. Second, there is a social/viral factor to self-publishing. YouTube has similar successes of people who build up followings with little more than word of mouth. Third, self-publishing is not that new, it’s just a lot easier than it used to be. Check out some great successes that were self-published the hard way (http://www.huffingtonpost.com/ronald-h-balson/bestseller-success-storie_b_4064574.html).
I believe that the low barrier to entry, low cost and low risk aspects of self-publishing can be a recipe for success. For the same reason, I see self-publishing of music as a real way that people are finding success without having to respect industry traditions.
-
I’ll argue that while one may opt to self-publish in order to get their book into the market, that doesn’t necessarily indicate there is a vast market for the work. One has to consider their objective for their work – to make money by selling a lot of copies or be satisfied with limited sales. E-publishing and online distribution may lower the cost entries into the market, but that doesn’t guarantee any success. Word of mouth marketing is always helpful but one cannot rely on that to happen for them. An author who self-publishes is likely going to need to work hard to build their network and market for their product. The success stories mentioned in the article are the exception and not the norm. For ever author who makes it big there are going to be dozens or hundreds who don’t. I am not arguing that authors shouldn’t consider the self-publishing method but rather the author has to consider their goals for the book and how much effort he/she wants to put into their own promotion and marketing.
-
Kevin – My point is that success is relative and many authors who write books aren’t making a living off of writing alone. There are many examples in this discussion thread alone of people who want to publish something. The driving force could be wealth and fame, or it could be getting your message out to an audience. Take a look at median incomes for different types of writers (http://www.forbes.com/sites/jeremygreenfield/2013/12/09/how-much-money-do-self-published-authors-make/). Success doesn’t necessarily mean selling lots of copies, even if it did, publishing through a company does not guarantee that outcome. When it comes to new authors and publishing, the book/manuscript is already written. The real question is will it even make it to market. Self-publishing is a great way to make sure something makes it to market, that assurance alone may be enough success for some.
-
I too see a similarity with Radiohead case where they went out of the traditional way of selling or pricing their recorded album and found some success by making their album digital. As Joel says, low cost, low risk aspects might be attractive and a viable option to writers who haven’t found any success despite their struggle to find a publisher. Once you have a following, then I guess your fans will look for your next book no matter what route you chose. Cracking into the market for the first time requires perseverance, dedication, determination and also good salesmanship, I guess.
Like you said, in addition to writing a book, if you had to promote, market and sell the book that is a bit much and overwhelming for some but for others that could be the only option after frustration and previously failed attempts to publish. I can also think of independent or amateur film makers as an example here, even though some are very talented, they just cannot find a producer, so after several attempts and failure, they finally would chose YouTube or other independent sites as a way to reach out to the masses hoping one day will bring them much deserved success.
Success is not guaranteed either way regardless of whether you had an independent publisher or you chose to self-publish, but for all the hard work you did in writing for years, making into the market is more of a shear satisfaction than any monitorial benefit of becoming a bestseller, I guess. I may be wrong as I do not have any firsthand experience, but for someone who may have been through the process, may be more satisfying and appealing.
-
-
-
-
-
I agree with the points above made by Alex and Kevin. A colleague and I published a medical textbook a couple of years back with a professional publisher and it was an incredibly time-consuming effort. I learned why authors and editors take the first page to thank their family for allowing them to disappear for two years while writing and editing. I do not think that the age of agents and publishers is dead, because many authors do not have the interest, time, or expertise to produce and market the book. That said, there is no way I would, in addition to the writing and editing, take on the task of self publishing, marketing, and selling a book of that nature. However, I would absolutely consider (someday…) self-publishing a simpler paperback or ebook aimed at a general audience. I contributed to an Amazon ebook that a friend wrote, and it was fun to do and exciting to see the final product, but its not exactly making bank (nor was it expected to). I don’t think our experience is uncommon. Unless you are a talented author or have amazing things to say, most books are not bestsellers and many people who self-publish are not expecting to support a family on its sales, although some do very well. As per the link below, self publishing still accounts for single digit percentages of book sales on Amazon.
-
Saqib, it was very interesting to learn that you are such an accomplished author. As you stated, the sheer amount of work involved in self publishing makes it a labor of love for those who are able to do it. In addition, most who do it are not looking to make the best seller list but rather the joy and satisfaction of putting their work out there. I was surprise to see the low percentage for self publisher on Amazon but it is not shocking for all the reason stated earlier.
-
-
I don’t think the age of agents and publishers is dead because it so difficult to handle the marketing, selling and other aspects as many have detailed in their posts. A friend of mine wrote a book and was rejected for years but finally was finally able to get a deal with Crossroad Press for his fantasy fiction novel Quest of the Thirteen. It probably never would have happened except he was laid-off from his job and therefore was able to dedicate a large majority of time on his own “quest”.
Most would have given up out of years of frustration similar to what Alex also seems to have confronted. If I were to write a book, I would probably self- publish since I don’t have a lot of patience and prefer to do things myself when possible. It’s becoming easier to self publish through using services like Amazon’s Create Space which looks like a viable option for folks like me. I can envision, based on the disruption experienced to date in the industry, that a hybrid market emerges that connects abbreviated e-book self-published authors quickly with agents and publishers.
-
Paul, I agree with you. I also have a friend who managed to publish his collection of short stories through Xlibris while he was unemployed and seeking better opportunities. Unfortunately, he chose not to use the marketing services Xlibris provides for what I think is an additional fee, so the book fell flat. I’m not sure where his book is ranked, but it does have one review on Amazon from another friend of ours. I think his goal was just to get the work finished and out there. I know he plans to pay for the additional marketing services next time around. On the other hand, a relative of mine was published by Random House and was able to make some okay money for her efforts. The book was well edited (the other was not), marketed well (social media, book signings, etc.), and was also well reviewed. She’s now working on her second novel to also be published by Random House. I provide this example just to state that, although self-publishing offers a much needed second option, there is currently still a place in this market for publishing houses. Of course, this could change in the future.
-
-
No, I don’t think the age of agents and publishers is dead. I think the book publishing industry, like many other industries, will just have to adapt to what I consider to be (based on the Wikipedia and Harvard Business Review readings) a Sustaining – Evolutionary innovation type – mostly since self-publishing hasn’t yet completely taken over that market. I do think that, if the industry does not find a way to adjust to the change, self-publishing could possibly fall into the disruptive innovation/technology category. As the NPR article states, anyone can self-publish, but self-publishing does not guarantee that money will be made. Also, as Paul states above, marketing and other aspects might take quite a bit of time, energy, and focus. Although the publishing houses will surely take their cut for this work, it would be easier to allow someone else to deal with the stress.
Having said that, I’ve considered self-publishing a piece I’ve been working on for years now. When I began writing the novel, it was considered taboo and a sign of failure to self-publish one’s own novel. However, friends of mine have self-published and were just pleased to get their work out there finally with the hopes that one of the novels or collections of short stories will lead to something profitable. Perhaps that’s the mindset to have. I still have the 9 to 5 (really 9 to 8!), but if my passion is writing something that others will enjoy, then self-publishing just to get my work read by someone other than my friends might be the way to go and might just lead to something better.
-
Hi LeRena – It’s a shame that people have to almost dedicate the amount of time spent on a full-time job to navigate the waters and get their works published. The creative end should be the hard part, not finding a way to get your message out there. I think the societal contribution and sense of self-fulfillment that brings, as evidenced by your passion to write something that will bring joy to others, is the right motivation. I agree with your mindset and think you should go for it!
-
LeRena, nice post and thanks for sharing. I agree that agents and publishers will need to adapt to the new landscape created by competition from self-publishers. At this point, it seems as though there may still be value in having the large publisher’s expertise for marketing and promotion, but like self-publishing, I think self-promotion and self-marketing could follow as part of the disruptive change. Steve mentioned some good points below about self-promotion using, for example, Google Ad Words to help advertise one’s product. Given these ongoing changes in this industry, I think it will certainly be interesting to see if and how the large publishers change as its becomes easier for individuals to promote their self-published works.
-
LeRena, I agree that in the scenario you describe, self-publishing is the perfect alternative to never getting published. At a minimum it gets what you wrote “out there” and allows it to be seen and hopefully appreciated. If all it did was sit in your computer “collecting dust” because none of the established publishers would handle it, it is beyond frustrating. By self-publishing there is the satisfaction that at least it will be seen, maybe not by a large audience, but it will be seen. Positive feedback could lead to your novel gaining a larger and larger audience as word spreads, and there is the satisfaction that even if it never is widely read, you know that you touched at least those who took the time to post something positive about the book. Lastly, even negative feedback can be constructive for your next novel. None of that would be able to occur without the ability to self-publish. Any monetary profit that you might gain would just be gravy to the satisfaction of knowing your work was being read.
-
-
I don’t think the age of agents and publishers is dead, however, it may be dying. According to this article (http://www.forbes.com/sites/jeffbercovici/2014/02/10/amazon-vs-book-publishers-by-the-numbers/) e-books account for 30% of book sales, which means paper books still dominate the marketplace. My assumption is that most self-publishers would opt to publish e-books rather than paper titles to save on printing and distribution costs. With that said, self-publishing is a disruptive change and if given time, it may very well overtake the market.
There are obvious parallels to digital media in the music industry and Radiohead’s self-release of In Rainbows. The real benefit of these concepts are that they lower the barrier to entry and this certainly applies for self-publishing. I often think about writing books, but get hung up on the barriers to publication. I would much prefer to self-publish and avoid the hassle of the traditional publishing process. In my opinion, it is better to get something in the market rather than wait for publishing deals that may never happen..
-
Joel you’re motivating me to get going on self-publishing. I did a deeper dive into costs for epublishing. It is around 30% cheaper for an established company to eprint than make a paper copy due to the effort and expense that goes into design, layout and copy editing. If you do that on your own you can save but you really need to know the barriers of entry into the market. What makes me and I would imagine others motivated to self-publish is the fact that if we don’t we may never see our personal works find the market place. Self-preservation and the need for significance as well as not wasting valuable work product will be the ultimate motivating forces. This has to be recognized by established firms and they need to work in parallel with self-publishing authors to help in this movement as the technology companies have with different business models in order to not lose out in the future. Epublishing to will certainly grow in size and potentially displace the customer base of traditional publishing companies.
-
Great perspective Alex. I work in software development, so I tend to view a lot of problems through that lens. A very popular trend is to release products early and iteratively update them based on the needs of your users. This basically lets development teams focus the most effort on the things that matter to their users the most. If I look at publishing a book through that lens, I see publishers spending a lot of time and effort making things perfect, because they are going to press which will magnify their mistakes. E-publishers have the benefit of releasing updated versions whenever they want, allowing authors to get publications to a “good enough” state and improve if the need is evident. To me this is the real disruptive advantage to e-publishing. I’ll note, as a reader, I also tend to give e-published books the benefit of the doubt on mistakes. I really don’t expect perfection in the medium, but that might just be me.
-
-
-
After working with an e-commerce account for the last year, and now being exposed to many different scenarios within this course I would definitely self publish and work to establish an online distribution network. Obviously you need capital in order to bring the book to life, stock, and distribute in a brick and mortar space, however with the right online advertising and e-commerce site to download the book you no longer need those resources. Rather than investing in a publisher, I would hire an expert in Google ad words and PLA’s and drive the demand on the internet in order to drive sales. Obviously, I make that sound really easy, but from what I have seen my account sell over the past year I can imagine anything selling via the web given the right advertising.
-
Steve, thanks for the insight from someone well versed in the world of e-commerce. It was interesting to learn of your strategy to promote your book instead of using a publisher. I would never have thought to hire a search expert to drive demand for a book. My first thought would be to go to Amazon and look for the subject matter. I wonder if there are things that a self-publisher can do to drive more sales for themselves directly on Amazon.
-
-
The landscape for publishing books has certainly changed over the last few years with digital technology. Authors now have a way to publish books on their own without going through an agent or publishing company. Amazon, for example, has instructions on its website to walk authors through the steps to publish their works. In view of Christensen’s model of disruptive change, self-publishing through digital means has created a new—not necessarily better—market for authors to distribute and sell their books. The disruptive change would have been in an area that the large publishing companies would likely not have been focused on. But as others here have mentioned, self-publishing and promotion takes a lot of time and effort. As such, I think good agents and publishing companies can still add significant value in terms of marketing and promoting the authors work as well as dealing with the actual publishing through both digital and physical media.
-
While I don’t think that the age of publishers and agents is dead, I do think publishers and agents are becoming less necessary for authors. This is yet another industry that has been heavily influenced by technology. If an author has the time to self publish and promote, they have a chance at succeeding. Though, as Jon Wise stated, the better publishers and agents will likely continue to thrive and possibly with just the higher end client base.
-
I don’t think the age of agents and publishers are dead just yet. They do remain unlike in any other business where innovation is imminent. It’s always hard to break in for the first time, once you do it then you are golden. I think this applies to everything we do in our lives from something being a simple task to the hardest one, just like getting a first real job, once you do, then you know how to crack it the next time or the next. There will always be agents who’d like to help writers succeed. But finding the right one is really hard for the first timers and this is where self-publishing comes to effect. Once you have something self-published, then you have an experience, a track record and also the knowledge that you could utilize to your benefit in case if you happened to bump into an agent or publishers. If I were to write a book, like anyone I would try to seek the help from agents, if I am lucky enough to find one then I will be all set. If not will look for alternative options possibly self-publish as this could at least help me reach out the audience the best I can.
-
The idea of self-publishing is something that seems like it should have been easy to see coming by traditional publishers. As Christensen, suggests, some companies do see these types of innovations coming but simply don’t have the ability to re-position their capabilities to get out in front of the disruptive innovation. I feel like publishers may have made similar mistakes as Polaroid made when they saw the digital photography tech coming (and I believe even had some of their own) but did not shift their values to incorporate it into their business model. There is still time for publishers, though, I think. Seeing the popularity of Amazon and digital editions clearly indicates the market is there for such media. While authors may have the ability to put themselves out there, as others have mentioned, they mostly don’t have the skills, contacts, and/or networks of the publishers to get their material out there in a way that is scalable. Publishers should embrace the digital evolution and reapply their values to this type of marketplace. They can still promote their capabilities at distributing over many outlets and the ability to put forth an advance for authors, and whatever else it is that publishers did before beyond the physical production of books. For those reasons, I don’t think their time has past. If they can make that adaptation, and the cards seem stacked in their favor still, they should be able to continue in the new digital space.
-
Another way that publishers can evolve is to vary their offerings. They could continue to offer their full-service package, but then could add other packages to appeal to a greater number of authors. For example, they could offer a distribution only package, or a marketing only package. This would play to certain subsets of authors who perhaps are good marketers and have a good online following, but don’t have the connections within the distribution system, or who perhaps have those distribution connections, but are not savvy marketers. These services may allow publishers to make some profit off of authors that they otherwise might lose altogether.
-
-
I believe the answer to this question lies with the value and costs of each option. The value of using professional management is the information about the system and the resources to back your product. The cost of a publisher is the upfront time required to convince a publisher to back your product (almost a good ole boy club) and the later percentage of your revenues. As for self-publishing the value is the ease to publish and the low upfront cost (monetary and time). The cost is the lack of representation in several markets. It is much harder to reach large quantities of people with out the resources of a Random House or other publishing company. Self-publishing created a new market for authors similar to how Charles Schwab created a new market for investing with out full-service. Publishing online with out the assistance of a professional brings the cost down but limits the helpful resources at your finger tips. This may be enticing to many people that have been turned down by publishers or believe they can go it alone. Although not all people fall into this category and many find comfort in the hands of a professional. A publisher may find their market share to be smaller but they will not be without customers. They may even have to make changes to confront the loss of customers such as cultural, pricing, or many others. These changes will ensure they do not loose to much of their market share. As long as they continue to offer value beyond self-publishing that customers are looking for than they will remain.
-
I don’t believe the age of agents and publishers are dead, there is certainly a shift in how books are produced. More and more authors do lean towards self-publishing. I too reached out to a friend who has had several books published as well as having a column in a newspaper. Her viewpoint was that there at one time was a stigma to self-publishing but that has since subsided and more and more authors are going that route. With services such as Kindle Direct Publishing allowing authors to create a quality product with better royalties overall, authors are seeking this route. However the drawback to self-publishing is the lack of monetary advance given by traditional publishers to have the book completed. What was also interesting to learn was that her advance she received in 1995 for her first book was $15,000 to her 13th book that was published in 2010 and her advance for that book was $5000. Several of her ‘author’ friends have recently ended a lucrative relationship with their publishers after crunching some numbers and realizing they could make more publishing the next novel by themselves. Now these are best-selling novelists with a dedicated existing following similar to the Radiohead article whereby fans already knew of their music making it easier for them to promote. I think a new author may find it somewhat easier to reach the masses when using an agent/manager and publisher.
-
This question is quite timely. My sister-in-law is currently undertaking the process of self-publish a book and is wrestling with changing direction and working with a publisher. She and a co-author are recent graduates who have designed and educationally focused pop-up book that allows them to use the Art degrees as a display of their talents and are finding that managing the marketing of the book, the printing process, and all of the other nuances of getting to market are far beyond their comprehension. The nature of the finished product virtually eliminates e-distribution, though they did explore partnering with a graphics firm to do so. They have limited capital to fund the project, so they feel that a publisher may help eliminate some of the barriers they are experiencing. This example would lead one to believe that while there are many situations where self-publishing would be the way to go, there are others that involve specific involvement of publishers to assist in the project. As a result, some may view the age of publishers and agents as a decreasing, soon to be eliminated component. Based in my sister-in-laws specific situation, I would say e-publishing fits for many and not for all so while the need may appear to be decreasing as many self-published books become available, the need still does and should always exist. For me, if I were to write a book, I would self-publish and focus on marketing and let the process of writing drive the reward and not the process of the process.
-
I do not think that the age of agents and publishers for authors and artists is completely dead. The tools of how the talent is managed and resources available to do so will change and evolve, but I think that a niche for this will continue to exist. I would imagine that there will always be some artists looking for someone knowledgeable to manage this aspect for them if they do not want to be bothered with it or lack experience. I do think it is easier now more than ever for one to self-publish as there are so many resources and information available to do so. However, I would probably default to using a publisher if I was to write a book as I would be looking for someone with expertise to launch it for me.
-
I don’t think the age of agents and publishers is dead because not everyone has the desire, determination, or knowledge for disruptive change. Professional management can be used to catapult an author’s career in many cases better than the author could themselves. Start-up capital is powerful when trying to market new material of a new author. If I wrote a book, I would definitely attempt to self-publish my material. This approach would allow me to generate sales and create a buzz about my material in if I intended to use professional management in the future. Many recording artists such as MC Hammer, 50 Cent, and others have sold albums out of the trunk of their cars which gave them stronger negotiating power which resulted in lucrative recording contracts and distribution deals.
-
I don’t believe the age of agents and publishers are dead yet, but I do believe that they are becoming an endangered species. Authors are now able to take advantage of the internet to promote and publish their own books. While I am not a big fan of reading, I know many people that read books online. Some include fan-fiction(where ordinary people will write about current books and can create alternate plots and endings based on their imagination). While some are very well written, some may need the help of editors and agents. I do believe there will always be a role for professional management especially for those who are don’t consider themselves as writers. Professional management may be of greater use for individuals who don’t want to deal with all the editing and drafts that may go occur with writing a book. I don’t think I would ever self-publish a book or actually write a book in general.
-
I do not think the age of agents and publishers are completely dead, however I do think they are a slowly dying breed. Professional management for authors and artists will never be obsolete because agents and publishers have the network to get your book the exposure it needs to be successful. Likewise they can work through legal hurdles that can occur with publishing a book. On the contrary, with things like Kindle, blogging, and social media, individuals can generate their own hype and create a buzz about their book. With retweets on Twitter and shares on Facebook, a lot of people are finding success with personal businesses and I imagine could do the same with selling a book. Will it get the limelight a publisher could provide? In most cases likely not, but some best known authors have self-published and proved quite successful.
I personally would not self publish a book I wrote. I imagine it would take up a lot of time, effort, and resources that I do not have with marketing it to people who would be willing to purchase. On the same token, pitching a book and trying to find a publisher has to be a daunting task. Publishers take on risks with publishing a book through your book advance, marketing, and printing so they are just not going to take on any project.
I came across this article of books that were looked over by some major publishers and went on to be a success such as “Once We Were Brothers”, “Fifty Shades”, which began through EL James’s personal website (later published of course) but she created her own stir.
http://www.huffingtonpost.com/ronald-h-balson/bestseller-success-storie_b_4064574.html -
I do think there will always, (well, always is a real long time… but for the foreseeable future), be a role for professional management for authors and artists. It may evolve along the way but it will still be recognizable. So, no, I don’t think the age of agents and publishers is dead.
If the purpose of the author is merely to get his/her book out there where it can be accessed by the public, and he/she has met road blocks and deaf ears through the “normal channels” then self publishing may be the only option. And out of every hundred or several hundreds of books self published there may be a handful or so true success stories. What the “establishment” has that very few authors have, are the contacts and credibility and marketing savvy that will push a book in a way that it is more likely to get noticed… by critics, by opinion makers, and by readers. They know how to find the niche to market it to, if its not a general circulation type book, and they already have the contacts to try to raise some interest in the book they are pushing. Most self-publishers will not be able to devote that kind of time and effort to promoting their book, nor will they have the expertise to be as effective. Take two books of relatively equal quality, appealing to the same audience, and, for the foreseeable future it seems to me that the avenue of choice would be to publish via the traditional route.
That is not to say that there are not several situations where self publishing may be the better option. But, those situations are likely somewhat unique. -
I believe there will always be a role for professional management for authors and artists. That role simply does not look the same now as it did twenty years ago; and twenty years from now it will look different still. The disruptive change of author self-publication loosens the vice-like grip that publishers had on the industry. Now an author can skip the middle-man and pocket a greater profit from their work. Of course, this takes a certain kind of author. This type of author must not only have the ability to write, but to strategize and market their writings. Additionally, the author must have the means of financing the publication of their work. Between social media and movements like crowdfunding, the tools are all there to accomplish this. This movement also helps authors who don’t necessarily want to self-publish. It gives them a bargaining chip. They can take their work to a publisher, and if they don’t like the deal they are offered, they can use the possibility of self-publication to sweeten the deal. In the end, however, not all authors have the means or desire to do this. Therefore, there should always be a place for publishers and agents. This movement could actually create a new niche for social media savvy marketers to become promoters for authors who are self-publishing.
I would consider self-publishing a book I wrote, but not the first one. I would try to first get a book published via the traditional method, just to build name recognition. Once established, I would likely be willing to self publish further works.
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting H-M 9 years, 7 months ago
This question is inspired by these readings:
Christensen, Clayton M.; Overdorf, Michael (March–April 2000), “Meeting the challenge of disruptive change“, Harvard Business Review
Wikipedia: Disruptive […]-
I do not think the age of agents and publishers is dead, but I do think self-publishing, specifically e-book self-publishing, will force certain genres to change their business model. For example, a non-fiction science book published through Oxford University Press is likely seen as more authentic than a self-published science book (unless the author is already established). In this case, being picked up by OUP establishes immediate authenticity for the author, and the customer base for that kind of book requires that kind of verification. A non-fiction book, like this OUP science example, needs publisher support in terms of development, production, marketing, sales, and distribution processes. On the other hand, fiction genres like romance, science fiction, and fantasy may not need to rely as much on an established publisher to reach an audience, especially if they’re digitally self-published. (I’m not trying to put down these genres – my bookshelves are full of fantasy and sci-fi.) The New Yorker published a piece last spring about Harlequin’s declining business, caused in large part by self-published e-books. A more recent article on Yahoo Finance (I couldn’t find the BusinessWeek article I originally read) talks about the romance genre more generally – e-books accounted for almost 40% of new romance book purchases in Q1 2014. Authors who self-publish e-books typically earn a higher percentage of their titles’ sales than they would working through traditional publishers, nor do they need to split that return with an agent. Publishers who focus on those genres need to re-evaluate the business model for e-books if they want to compete with self-publishers. Publisher’s development costs are still the same, but consumers expect to pay less for a digital version and authors want royalties that match those offered by self-publishing platforms, making it difficult to compete with the self-publishing model.
-
Rachel,
Great post and perspective. When I was reading your post I couldn’t help but think about a post I saw recently on one of my favorite apps (KCCO). The post was about the extremes of self published books available on Amazon, needless to say the results were hilarious and incredible. Your point on non fiction is valid and I also think there is an advantage to fiction authors signing with a an agent or publisher from a marketing/advertising perspective. Your post provoked a lot of thought and I am not sure of what my approach would be to competing with self publishing platforms if I was a publisher. I guess I would hope that my brand was established and I was able to provide maybe the initial legitimacy that the author lacked. With self publishers numbers in 40% range (albeit romance novels but eventually will probably transpire across all fiction genres) it seems that Publishers need to reexamine their business model and figure out new and innovative ways to become more profitable. Thanks for sharing.
-John
-
Rachel,
I also agree with what you have written. The genre and the distribution model should be in line. While individually distributed media is certainly catching on (blog posts are a great example for entertaining subjective writing), certain types of media will benefit from the standard models, and big name publishing companies are themselves part of the marketing. If the publishers back it, it must be good. For certain genres, people will tend to go for the formally published works.
One example that may break from this line of thinking is Wikipedia. Although this isn’t true self-publishing, Wikipedia articles are a conglomerate of various people providing input. There is monitoring and vetting of information, but realistically anyone can put information into Wikipedia. And yet this has become the go-to resource for information, whereas encyclopedias are on their way out. You’d think people would be more comfortable getting their information from Brittanica.com, especially considering Wikipedia itself notes that many academics, librarians, and other experts question the reliability of Wikipedia (http://en.wikipedia.org/wiki/Reliability_of_Wikipedia). And yet Wikipedia is becoming the go-to resource for most people, while Brittanica, which has been published for over 300 years, and has proven itself as a reliable source and backer of information, is being utilized less and less.
-
Dan, interesting that you brought up Wikipedia. I worked for a academic/professional reference publisher many years ago. Their catalog mainly consisted of very specific encyclopedias, dictionaries, reference guides, etc (things like “The A to Z Biography of Vice Presidents,” “The Encyclopedia of Women Scientists,” “The Encyclopedia of Animation,” etc.). For years, they could make good money selling those titles to schools and libraries. but the combination of smaller budgets and more “free” information like Wikipedia began to take a toll. However, like you note, many academics and other experts doubt the reliability of Wikipedia (many professors at the university here in town don’t let students use it as a source, but instead as a starting point to get a bibliography to work from). Given that combination of lessening sales and more “free, but not reliable” information, the publishing company focused on transitioning content into a digital form to sell database subscriptions to libraries and schools (think Lexus-Nexus). Over the next few years (probably 2005 – 2008) the publisher transitioned from an all-print model to an almost-all-digital model — e-books and databases — and made multiple acquisitions to beef up the database content so they’d be able to slice and dice to more targeted markets. In this case, the publisher tried to adjust the business model to meet the changing environment. Personally, I don’t trust Wikipedia and try to verify information on more reliable sites — those that are under the umbrella of an organization that needs to maintain some level of credibility. But, I recognize that many people do use it as their go-to source. I guess whether my former company and other similar publishers survive or not depends on the value (and budget) schools and libraries place on giving students access to vetted information versus crowd-sourced information.
-
-
Rachel, Great post. I worked at a large publishing company and your rationale and though process is exactly how the industry is leaning. Self publishing tools are changing the industry dramatically however most of the self publishing platforms like xlibiris or author solutions are now owned by the large traditional publishers like Penguin Random House. Like you stated some genres require extensive editing, research, pre-production, post production and have larger market budgets which require the support of the agents/publishing houses. Many new authors chose to self-publish their first runs thru these digital tools and in many cases they get picked up by a larger publishing house if they reach a critical mass of users. There is a place in the publishing eco-system for both types of users in my view.
-
Nirav — I agree. I also worked in publishing (I spent more than a decade in it before leaving the industry), and I certainly hope there is room for both types — traditional publishers and self-publishers — although traditional publishing needs to make a lot of changes if it wants to survive. Given the options authors have these days, especially established authors whose name will get them publicity, I think traditional publishers need to rethink their digital-related business model/rights/royalties. In one company I worked for the president provided the resources necessary to develop and establish a relevant digital content model. In the other company, that president wanted to “go digital” but wouldn’t or couldn’t provide the resources needed to do it correctly. The result was a digital resource that couldn’t compete against other options available. One company is still under the same ownership. The other sold its assets back to the venture capital firm that helped fund its startup.
-
-
-
I do not think the age of publishers and agents is dead. Instead, the disruptive innovation here has allowed for greater opportunity for artists. Publishers and agents will need to adjust their mindsets in order to capture the new market. Previously, they had monopolies over artists. It was extremely difficult for an artist to get their work noticed. As such, the artists had very little leverage to negotiate with agents and publishers. Today, agents and publishers still have a role, and still can be extraordinarily effective in driving sales. After all, an artist may not be a great business person. With self-publishing, though, artists have more opportunity to negotiate. According to Christensen’s model, the publishers and agents need to reconsider their values. Their resources (what can they do?) and their processes are likely to remain relatively unchanged by this disruptive technology. They must instead reconsider their acceptable margins and overhead, as well as their threshold for taking risks on newer artists.
If I wrote a book, I would certainly seek to self-publish it right away, but I would remain open to striking a publishing deal to help expand. In this way, the artist becomes a bit of an entrepreneur.
-
I do not believe that the age of agents and publishers is dead. While there may always be those who want to get the most of their money and keep their fair share, I also believe that there will be an equal number of people, if not more, who prefer to allow others to manage aspects of the business that they do not care for. This is particularly true in artistic fields – I believe that many artists and publishers will want to focus on their craft rather than publishing and selling aspects. The ability to go online has made the behind-the-scenes work easier to manage in book publishing as in many industries, but to have a book on the shelves of Barnes and Noble or other booksellers requires time and energy spent shaking the right hands and making the right phone calls, along with some amount of recognition. While more established authors may be able to accomplish this on their own, I do not believe that newer authors would have an easy time at it.
A similar scenario exists in real estate. The concept of “for sale by owner” has been around for a very long time, presumably earlier than real estate brokerage, however the trend is that people use realtors despite the going rate (in PA at least) of 3% paid to the buyer’s realtor and 3% paid to the seller’s realtor. While it would be less expensive to sell a home on one’s own, using a company that knows how to list and to market, will host open houses, and will make the calls and set up the legal aspects, among other activities, is a huge weight off of people’s shoulders at a time when they are focused on finding the perfect home and packing up their belongings. Similarly, an artist is focused on creation of art, both wrapping up the last big project and looking for inspiration for the next. I do not think that agents and publishers have much to worry about in the long-term.
Lastly, if I published a book, I would ideally use a publisher for all the reasons mentioned above. That said, no publisher would ever take on whatever nonsense I write, so I’d probably have to self-publish.-
Dan – Your comparison to the real-estate market works really well in this situation. However, there are newer options such as listing with a discount brokerage that gets you listed on the MLS and offers you information as well as access advertising. I wonder if there is some middle ground for publishing where maybe you don’t get a big publishing house behind you, but you get access to quality control and editing services and maybe they don’t even provide any money to print the books so they can limit their risk, but allow individuals they wouldn’t normally publish to have an option besides self-publishing.
-
Dan,
I agree with your points about the real estate scenario. Another issue I’ve seen with the “for sale by owner” or Assist to Sell type scenarios is the more established real estate Buyer’s Agents won’t take their clients to those homes for sale simply because they’re not using the “typical channels”. With the increased availability of information online, it’s interesting to see that for the most part the realtor side of things has had little change. There are some related articles in the news recently about realtors fighting to protect their listings from showing up on Trulia, Zillow, etc.
If you Google MLS vs. Zillow, you can see what I’m talking about. Should be an interesting next few years for the industry.
-
-
I think that agents and publishers serve a purpose from a marketing/advertisement perspective and doing the dirty work. Similar to Dan’s post, I was going to use the example of rental management. I pay a company to manage a house simply because I don’t want to deal with the hassle, at all. By hiring someone else I alleviate that hassle or headache. However I do see self publishing as threat to publishers, or as mentioned in Shirky’s interview self publishers have the ability to make profits go away. With that said, I think the there will always be a role for professional management of authors and artist because they provide a service that provides a direct benefit to it’s customers and also provides convenience. Publishers are still needed the just need to find ways to continue to maintain that necessity as technology continues to mold and shape the market. I don’t think that I would self publish if I wrote a book. If I ever did write a book, I would ship samples to major publishers. Then I would hope that it would be good enough to wow people on their first read and that then I would be in demand and all the work would be done for me. If that didn’t happen then I would assume that it wasn’t meant to be. I will never be an artist/author for a living and therefore the money aspect of it would never be the driving force and I will probably never write a book unless suddenly I find enjoyment in writing out my life stories.
-
According to Nielsen Books and Consumers (publishersweekly.com) for third quarter FY 2014, E-books accounted for 21% of unit book sales, paperback 42%, hardcover 25%. These numbers are evidence that traditional book publishing is not dead and agents and publishers are still highly relevant. Authors and artists need professional management as publishing houses generally accept manuscripts submitted by agents and negotiate contracts with them. Having a productive agent gives authors time to be creative and leaves the business of publishing to agents and publishing houses.
If I were to write a book, I would view self-publishing as an advantage. First of all, I would be able to maintain the copyright and future sales of the work in media. Publishing houses typically own all rights to a work once the contract has been executed. Therefore, they can retain the foreign rights, or sell the work to a television or movie studio without the author’s input. Getting published is great but the tradeoff of having no input on how your work is utilized seems unfathomable. Secondly, if I were to self-publish and the book is a success, I would have better negotiating power with a publishing house. Then I can retain some portion on the copyright, have say in how the work is used, and gain a higher percentage than normal on royalty payments. I am approaching this as a first-time fiction writer and think this would be a good model for first time authors. Self-publishing gives advantage and while agents and publishing houses are still needed, gives assurance that authors don’t have to sign the rights of their work away for the potential of becoming rich and famous.
http://www.publishersweekly.com/pw/by-topic/digital/retailing/article/65053-another-e-book-dip.html
-
I agree with much of what has already been said. While self-publishing is a great way for writers to bring their books to the world, I don’t think they will ever completely take over the traditional use of agents and publishers. I think that agents, in particular, will be phased out more as the need for them is less. Publishers, on the hand, can bring a wider market to a book than someone can bring on there own, particularly new writers. Unless they already have a big following they will not see much sales of their books either way, but even less though if they self-publish over using the marketing of book publishers. One thing I think we may see more of is writers starting out as self-publishers, then becoming popular enough that they get picked up by a publisher, then becoming even bigger, were they can go back to self-publishing and make even more money. All won’t follow that route, but I think this would be a tactic used by some. This is the route I would take if I wrote a book. I think self-publishing is the way to go, but at the same time, at a critical juncture in any writer’s career, the use of publishers for marketing would be a big hand up in the industry.
-
Brandon – it’s an interesting idea that agents will become less necessary while publishers will still remain needed, but I’m not sure one that I agree with. A lot of posts here have mentioned that publishers remain valid because of their marketing capabilities, but I think agents play a similar role. Many agents specialize in certain genres and have relationships with publishers specifically related to that genre (they can make deals to market their clients’ books in groups which can be more cost-effective). However, that agent specialization and agent-publisher relationship can also hurt authors if they’re trying to extend beyond a specific genre. For example, I have a friend who writes YA books and was represented by an agent who carried a client list of other YA authors. When my friend wanted to write an adult novel, her agent wasn’t necessarily as focused on that concept because it didn’t fit in with his other clients nor with his publisher relationships. Ultimately, my friend had to find a new agent and then was able to broker a better publishing deal (including marketing) for her adult novel. She wouldn’t have been able to do that on her own, but with the weight of a successful agent, that deal was possible. I think this is similar to the argument (with which I agree) that successful self-published authors are more likely to get better deals than first-time authors trying to get published through traditional methods. Also in support of agents, many large-name publishers won’t even look at new submissions unless they’re sent in by an agent with whom the publisher already has a relationship. The chances of being picked from a slush pile (unsolicited submissions) are very, very, very small.
-
Thanks Rachel. You brought an interesting view to the table having a friend as an author. I personally don’t know anybody who has written a book. I didn’t think about the importance of an agent when it comes to matching up with publishers. I am sure that this is still important in many cases, such as your friend, but I am wondering if it is becoming less important. I think of the SXSW festival in Austin, TX and how many of the films shown there are independent films that then get picked up by big movie publishers because they become a fan favorite there. I see that as an innovation disruption when it comes to the movie business. I wonder if the book business could do the same thing, where self-published books quickly become a fan favorite then get picked up by major publishers. Now, just like every movie at SXSW doesn’t get picked up, not every self-published book will too. With this way of getting noticed by publishers without needing an agent, necessarily, I think agents potentially could become less important. Not in all cases, certainly, but in some. And, much like the article “Meeting the challenge of disruptive change“ pointed out, it could potentially transform the market before agents are able to adjust to this new way of doing things.
-
-
-
We’re kind of looking at the publisher and agent as being phased out because they are a middle man whose tasks and skills can be completed and learned by the writer. At some point there is going to be a writer that doesn’t want to publish or represent himself. It’s like what Dan said in post, “I believe that many artists and publishers will want to focus on their craft rather than publishing and selling aspects.”
I’ve heard this idea throughout our MBA program. I even remember CW saying something similar in our accounting class. He said if you own a business and make money off of something that is not the focus of your business you don’t count it as revenue. And if messed that up, tell me.
Anyway. That sort of sticks in my head because it is a reminder that the other thing you are doing is not core to your business and you can’t always count on it for revenue. Bottom line for me is this: Do what you do and do it well. Yes, you can learn different things and there will certainly be examples of individuals who can do this well, but there are also going to be plenty of examples of writers who can’t or simply don’t want to.
-
Nice post, Will. I agree with you that some authors, especially ones just starting in the business, will continue to need agents and publishers, since they won’t know how the business works all that well. It will be interesting to see how big name authors opting for self-publishing will affect the publishers’ revenue streams. Will they have to take a bigger cut of new authors business (this is essentially what happened in the music industry)? Or will they come up with a new, sustaining business model for a digital world?
-
Will, interesting post and you make some good points about the writer now being able to remove the middle man by learning those tasks such as editing/designing etc.., However, I don’t think we are at a point where publishing houses will be phased out anytime in the foreseeable future. The saturation of markets – in this case the writing market – only serves to enable top-tier brands to emerge, but it doesn’t phase those brands out. For example, online education has enabled tens of thousands of online MBA programs to emerge, which many say has saturated the MBA market and really diluted the value of the MBA in general. Plus, there are now many open online classes in business management and finance taught by ivy league schools, and anyone with an internet connection can access these classes free of charge. However, I think these dynamics only serve to allow better, stronger brands to emerge and rise above the chaos, such as the Fox School with our #1 ranked online MBA. The AACSB accreditation is now the gold standard for MBAs, and the top fifty schools or so are now held in much higher regard because they stand out from low-quality institutions. I think this same principal holds true with self-publishing; authors having easy access to self-publishing only increases the value of legitimate publishing houses, it does not phase them out.
-
-
Some might argue that the age of agents and publishers is dead, but I believe the opposite is true. We live in a time when anyone can publish a book from their basement with little to no overhead other than an internet connection ,which means the market is completely saturated with books that carry little to no value. According to this Forbes article (http://www.forbes.com/sites/nickmorgan/2013/01/08/thinking-of-self-publishing-your-book-in-2013-heres-what-you-need-to-know/) the average self publisher only sells about 250 books, which is not a very good return on investment for a project that probably took over a year to complete. The reason I say agents and publishers still serve a purpose – possibly more so than ever – is that they add legitimacy to a book, and can help cut through the fog of millions of self published books. Furthermore, they provide an infrastructure of design, editing, and marketing that self-publishers rarely have. If anything, the ease of self-publishing has broadened the writing industry, while widening the gap between high and low tier authors, but I do not believe it has made traditional publishing houses obsolete.
-
Andrew – We have a similar viewpoint. I think at the present time due to the quality and expectations of self-publishers that most individuals that attempt that method will have a minimal distribution rate. However, I guess if I couldn’t get a book published i’d rather sell 250 copies instead of 0.
-
Interesting link Andrew, thanks for posting. I had no idea there were that many self-published books in the market. I completely agree with your position. Publishers and agents exist to weed out the drivel, so as a consumer looking to boost my knowledge on a given subject, I’m happy to pay for their expertise represented in the book’s price.
-
-
Let’s take it from a writers perspective. A decent author who has an agent can often get an advance on their books. This is fantastic from their perspective because if it takes 6 months or a year to write a single book you are looking at not having any income during that time period. From a consumers perspective to often are we fooled by online ebooks or even real books that have been self-published. I’ve received more garbage and useless information that feels like it was written by someone without the ability to properly communicate in the english language from self-publishing. I rely not only on reviews on websites like amazon, but I also expect that when I buy a book from a known publisher that they would have had a team of quality editors, fact checkers ensuring that the quality of the tone of the information is worthwhile. While we will start to see more self-publishing I don’t see the need for a publisher and agent diminishing anytime in the near future.
-
The age of agents and publishers is not dead. The service they provide to identify and promote talented authors will always be needed, even with the advent of self-publishing. Further, some readers will always prefer an actual book to an eBook; it’s in their DNA. I think to stay relevant though, publishers and agents will have to learn to accept the fact that brick and mortar bookstores are becoming a relic and that authors aren’t as dependent on them as they once were. I think of the case of Amazon vs. Hachette publishing, where the two disagreed on eBook pricing, causing Amazon to stop selling all Hachette published books. They worked out a deal in the end, but it proved the power Amazon has over the book business. Publishers can no longer charge what they want for books nor can they take what they want from authors in the form of commissions. They will need to adjust their model to this new world order.
http://www.vanityfair.com/news/business/2014/12/amazon-hachette-ebook-publishing
If I wrote a book, I probably would self-publish, just to have the experience of having done so. In the back of my mind though, I’d hope that a publisher or agent would see my work and want to represent me/publish my book for the masses. There is a bit more literary respect given to a published author versus a self-published author.
-
I have a few friends who consider themselves “authors” and love writing, and write quite well, with Masters and PhD degrees in English lit in some cases. All of them, until recently, “worked” as teachers or tutors, having struggled unsuccessfully to make any money publishing their works. Agents had little interest in them, they received minimal income from their books when published, and had trouble attracting attention to their work because of agents who really did not care much about them in the face of more important/more prominent authors. Now, they are starting to self publish, and they get better visibility for their works, and a lot more money for their work. For the “struggling authors” this is like the end of “tyranny” of the publishers.
On the other hand, I do believe that publishing houses and agents still have a major role to play…they will continue to do a good job of promoting established talent, but hopefully stay out of the way of “the masses” who can begin promoting their own works, driven by their enthusiasm and love of their material.
-
Alan I agree and I imagine that if I were to write a book I would self-publish. If you go through a publishing company they essentially take all the profits, and unless the book is a top seller you’re unlikely to make much from it. Amazon provides an alternative method for the small or medium volume writer to publish their material relatively quickly and easily and at lower cost. However there will continue to be a need for the mass distribution publishing companies to print literature.
-
-
The age of agents and publishers are not dead because many companies (i.e. children books, Bibles, Business, academic publishing, etc.) consist mainly of school textbooks and other related materials, so I doubt if they would just result to e-books, etc. As many industries faced a considerable amount of changes with emerging new technologies, so did publishing. Internet and self-publishing technologies brought more intense rivalry into the market. Before e-book publishing industry, it was highly disjointed and extremely labor intensive. Now, it is easier for publishers to reach consumers. People have electronic devices everywhere, making it simpler for a self-publisher to attain a larger audience. E-books and online publishing had a considerable impact on the industry. Companies that fail to keep up with technological advancement will possibly increase their chances losing their business. E-books, etc., bring convenience to many consumers, than the traditional book itself. Since E-books are cost effective and does not require physical printing, etc., the two priciest elements of publishing has been excluded, decreasing the power of the supplier. Authors have more options for self-publishing, causing their bargaining power to increase. Authors can go straight to retailers without publishers and put their book in stores, demand might good down in the future. The downside of publishing books that could be downloaded opens the door for illegal copies, thus causing huge lost in revenue. The age of agents and publishers are not dead because many companies (i.e. children books, Bibles, academic publishing, etc.) consist mainly of school textbooks and other related materials, so I doubt if they would just result to e-books, etc. Yes, I would self-publish a book.
-
The question essentially whether or not self-publishing is a disruptive technology. To answer that question we first must determine the degree to which online reading via e-books, Kindle, PDFs and the like has displaced more traditional literature media. When it comes to certain literature such as newspapers the internet has certainly been disruptive; news companies are struggling to stay afloat because abundant “free” news on the web. With other literature however the change is not so dramatic. Book publishing for instance continues to be big business. While I couldn’t find good long-term financial information for a publishing company – most members of the “big five” are part of larger conglomerates – but HarperCollins is part of News Corp whose stock ticker is here:
https://www.google.com/finance?q=NASDAQ:NWSA . Judging by their 2-year stock price the company is about holding steady. Hence it certainly seems that self-publishing and other technologies have affected the industry, but have not displaced it, yet.Many people simply prefer a physical book to it’s digital counterpart. There’s actually a debate dedicated to this topic online, with a majority of users (67%) claiming that books will not be replaced: http://www.debate.org/opinions/can-e-books-replace-paper-books . Among the reasons cited are “E-books Lack Soul”, “It’s just not the same”, and “Love to hold and appreciate the books”. I tend to agree; despite the success of e-readers and similar technology, there will always be a subset to people who prefer to see the material in print.
When I was growing up I was an avid reader. I still do read on occasion and have a small library of books. I find it inconvenient to keep and maintain my bookshelves though and years ago noticed how much easier it would be to just store everything on a handheld device. Hence I am a supporter of e-reader technology and I own a Kindle. However I also am of the camp that there are some situations – children’s books for instance with colorful pictures to read bedtime stories, or traveling or camping when you will be “off the grid” – in which a handheld book is preferable.
In summary e-books will disrupt publishing to a certain degree and will be the preferred method of reading for some people. However I do not believe the age of “agents and publishers is dead” and I feel that there will continue to be a need for this service for the foreseeable future.
-
Having worked in the publishing industry I have a unique perspective on this question and I strongly believe the age of agents/publishers is not dead but merely transformed from the traditional models people are use to. Digital technologies and consumerization have change the business models in the publishing industry by offering the average consumer the ability to write a book, have it professionally edited, publish the book and promote the book. The consumer can also have the booked available on amazon as a digital download or as a physical printed product. The self-publishing industry has flourished over the last few years and publishing companies have taken notice by acquiring many of the self publishing platforms like xlibris and author solutions. These platforms while robust do not offer the end to end workflow and capabilities a traditional publishing house would offer an author from detailed review of manuscripts by other subject matter experts in their field for non-fiction books to editorial expertise for a work of fiction. Publishing houses offer legal clearance services where authors have used materials from other sources to ensure copyright and trademark infringement is not happening. These services are lacking in the new ebook publishing platforms. In addition the e-book platforms typically do not provide the marketing and publicity vehicles offered to authors for large popular works like Harry Potter to ensure they are marketed to a wider audience. Based on these simple examples I believe the agent/publishing industry is not dead but has changed its model to offer a different set of niche services. The EBook platforms simply allow more people to publish now where upon a few years ago only a select few were able to get their works into the marketplace.
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting A-G 9 years, 7 months ago
This question is inspired by these readings:
Introduction to communities of practice.
More on communities of practice. Read through all links in sections 1.1 and 1.2: http://wenger-trayner.com/faqs/What […]
-
I am a life-long learner, and am often amazed that I have learned way more medicine since graduating from veterinary school than I did in school. This was largely facilitated by my involvement in two significant communities. A couple of years after graduating, feeling very isolated as the owner of a small feline practice, I got involved in a national veterinary association whose members were all feline practitioners. This was at a time when there were less than two dozen of us in the country. We recognized that cats were not small dogs and that almost all continuing education was focused on dogs, leaving us hungry for at specific information. I was the first informatics chair, and helped establish our presence on the web. Reflecting back on the early years of involvement with the AAFP (American Association of Feline Practitioners) I often learned more in casual gatherings the members had than during lectures were attended. Developing a peer group of the best cat doctors in the country, if not the world, has largely shaped who I have become as a practitioner. AAFP has grown to include more than three thousand members and has been able to establish a recognized credentialed board certification in feline medicine. As practitioners, we also have published numerous practice guidelines to set evidence based standards associated with managing categories of medical conditions we treat that include how to address senior cats’ needs, pain, and vaccinations. Through my involvement in AAFP I connected with members of the International Society of Feline Medicine so am now a member of an international community of feline practitioners. Complementing my involvement with AAFP was my embracing an online community launched in the early 1990s by a classmate at Penn Vet and a collaborator at UC Davis’s veterinary school. These two incredibly forward thinking doctors recognized the need for a community based on managing the ever increasing volume of veterinary knowledge, and embraced that knowledge did not only originated from academicians. They built an online platform that houses message board pertaining to numerous medical disciplines where consultants and peers respond to questions asked by members about medical topics and cases that are being managed. The coolest thing about it is that responses are all catalogued in an amazingly user friendly searchable data base, so any time I want to make sure I am managing a case using the latest and greatest treatments or diagnostic methods, all I have to do is access the Veterinary Information Network. One of the most awesome things about it is that information shared is current, and often include sharing of knowledge before it is published so it keeps a practitioner on the cutting edge. VIN has grown into a robust learning community that includes online continuing education as well. Lastly, a community that I have enjoyed in the last decade is an online community of shelter veterinarians. We have an amazing list serve where practitioners share their struggles with case management and shelter bureaucracy. The Association of Shelter Medicine (ASV) just got approval for board certification and has allowed its members to not only share medical knowledge that has led to significantly elevated the standard of shelter medicine that is being practiced, but the community serves to provide moral support as well.
If there is one piece of advice I would offer to a young veterinarian starting out it would be to join a community and to get involved. Nothing pushes you further than surrounding yourself with those that test boundaries and share your commitment to a goal or cause.-
I find it fascinating that the veterinary and medical field are so similar in how they are set up. I realize that both are medical type disciplines and therefore use similar group and community type organizations. Both fields of organizations that allow for continued medical education as well as community out reach.
-
I would hope that the main similarity between human and animal medicine would the passion of the community members for their work.
-
Yes, Mariya, I too hope passion is the main driver. And of course the desire not to become complacent and always improve on what we have to offer.
-
-
-
-
In healthcare there are a number of entities that fit the example of community of practice. I am a member of NASS, The North American spine society, AAPMR, the Association of Physical Medicine and Rehabilitation specialists and Sermo, a medical organization headed by doctors that are against AMA policies. All of these organizations are medical organizations that as residents and physicians we learn about.The membership allows for the exchange of information and continuing physician education. This includes journals and posters and presentations at national meetings as well as Internet-based case studies. These organizations benefit physicians because of requirements in continuing medical education. Without these organizations we would be unable to meet the requirements of both the state and federal levels.
-
I am a member of a digital marketing community of practice. I meet with other digital marketers throughout the year to discuss best practices, new methodologies, solve common problems, success/fail stories, new strategy, and just try and learn new techniques and strategy from one another. I found the community through Meetup.com and searched for this particular area of interest. I benefit greatly in that I am getting free advice and continue to develop my competencies by learning from other experts in the field. I also benefit in sharing my experiences and help others that may be struggling with a problem I have faced in the past.
-
Hi Eric,
I think communities like you mention, if chosen wisely, can almost serve as your personal board of directors. I failed to mention in my post that I am now a member of a veterinary study group whose feline practitioner members share best business practices. We call ourselves each other’s executive board members, and lean on each other for a lot of problem solving and idea generation.
-
-
Although this is not a professional community, three and a half years ago when I had my first child some of my friends who were in a similar situation as me decided to start a private Facebook page for all of us first time moms. It started off as a few friends to now hosting a 125 members. We not only shared experiences but we also bounced ideas off of each other. We were all going through similar things and rather than googling things on the internet and not knowing what kind of advice you would get, we would ask each other and you would typically get a reply within a few minutes. Another benefit of being a member is ideas that other moms have of things I never even thought of or reviews on products such as the best car seat, without any bias. It definitely helped me get through the first year of parenting without feeling that I was going through this alone.
-
Kristen:
is this just a virtual community or do you guys ever met each other in person?
Aldo -
Hi, Kristen, very interesting, is it similar to Angie’s list without paying membership? Of course, it is more reliable as you know each other. Thank you for sharing.
-
Hi Kristen,
Congratulations on the little one, I’m on number three now and wouldn’t have been able to survive without a similar system. Even though these aren’t traditional working communities they are filling in where traditional community child rearing has declined. Creating these networks are vital for the kids and parents!
-
Thanks for the questions, the great thing about this network that was created was that I know most of the people as we are all from the same home town. Then people added other people they knew and the group grew larger and larger. Xiaoying, I wouldn’t say it was like Angie’s list but more like thebump.com, etc. Amanda, I totally agree with you, I’m sure when my mom raised me there were more mothers getting together and bouncing ideas off each other face to face, but as everyone is getting busier and the virtual world has taken over these communities are great especially as members reply 24 hours a day (especially helpful at 3 am with a crying child :)).
-
-
-
I am a transplant surgeon with a special interest in robotic surgery. Robotic surgery is performed using the DaVinci Technology. This platform enables minimally invasive surgeries that are performed through very small incisions. The robot performs the surgery, the surgeon controls the robot from distance with a series of hands and feet activated controls. The surgeons has a 3D view of the operative filed through a monitor that is connected to a camera which is placed inside the human body and moved around by one of the robotic arms. The arms have ample range of motion. The technology is called Intuitive because its use is in fact intuitive. Robotic surgery was developed by the Army with the idea to provide surgical treatment to soldiers wounded in the battlefield from distance. That application was never successful. However, the technology was eventually bought by Intuitive that made it available in the contemporary operating rooms. Robotic surgery is relatively new, its clinical introduction dates back only to the early ’90. However, it was not until the late ’90 early ’00 that it become a preferred choice of operating for urologists performing prostatectomies, and for gynecologist. In the late ’10 other sub-specialty surgeons that pioneered robotic surgery in their respective field of expertise adopted the technology: ENT, CT, colo-rectal, hepato-biliary, transplant surgeons independently started robotic surgery. Because of the lack of previous knowledge on this technology and the unavailability of formal training in this specific field robotic surgeons got together and developed two societies. These two societies hold a yearly meeting where robotic surgeons coming from different part of the Country share their knowledge. In addition to that, they both have a web site available for robotic surgeons members. The web sites are a repository of videos taped by surgeons and available for members that are in need to learn or refresh specific procedures. In addition to that surgeons constantly chat/blog on a section so dedicated of the website looking for suggestions and/or recommendations from more experienced robotic surgeons. In my case being member of these two societies helped me dramatically because I pioneered in the east coast of US robotic hepatobiliary surgery. When I started, there were only a few other robotic surgeons in the Midwest doing similar procedures. I visited their programs, and they showed me how to start my own program. I now help other surgeons’ member of the same community that wish to do a similar job in their hospitals.
-
Hi, Aldo, very interesting post, I can feel the society have helped so many robotic surgeons as you discussed here. The liver transplant surgery require lots of fine operations in a very limited space with lots of important organs nearby. The online forum and knowledge sharing as well as site visiting are offered through your society really work well and it should serve as a role model for other advanced medical technology. Thank you for sharing.
-
my pleasure, thank you
-
-
-
For the past two years, I have been an active member of NJSCC which is a state consortium for hospital stroke coordinators and neuroscience managers and directors. I became a member after I was originally hired as my hospital’s stroke coordinator, but have remained a member as I transitioned into the neurosciences program management role. The consortium was created with the intention to bring together these types of individuals from around the state in order to discuss best practices related to stroke care and current state legislation related to stroke care. The consortium truly embodies the meaning of community of practice. We meet quarterly and are involved in various activities and discussions. The group discusses common challenges that are faced and the best approach for tackling and overcoming responsibilities such as data abstraction, quality compilation, hospital staff and patient education needs, and reducing door to needle and door to groin times. For those not in the medical field, this is the time it takes to get a stroke patient to two different forms of time sensitive, emergency treatment known as thrombolytic therapy and/or an endovascular neurological intervention such as a mechanical thrombectomy. As a group, we truly identify current gaps in stroke care and how to better overcome them as we share best strategies. The consortium has open discussion panels at each meeting where different representatives from around the state are asked to share recent experiences such as a Joint Commission survey process and also to offer tips for success. One of my favorite parts of the consortium is the group email chain. This email chain has 40+ members from around the state attached and serves as a platform for advice and discussions. If I am ever facing a challenge related to patient care or current state regulations, I can go to this email chain and ask the question to these individuals who are able to better assist me. Normally, I receive at minimum, two to three responses within the hour. In addition to the unlimited amount of support related to best practices, the group also offers opportunities for education. The president sends out event listings for conferences that we are able to attend in order to gain CNEs or CMEs which are contact hours for nurses and physicians. Overall, the consortium has been a support system as it has offered various resources for best strategies and has helped me overcome numerous challenges related to running a Comprehensive Stroke Center. Again, I cannot stress enough how much NJSCC represents a true community of practice.
-
As healthcare workers, we have been invited to join so many different groups, communities of our practice since we were students. I became a member of American College of Physicians when I was a medical resident. I was enrolled by my residency program initially, but I benefit from it significantly since then and it is a good investment in the respect of my residency. The organization is one of the largest physician organizations in the world, and it is privileged. But most importantly, it hosts annual meetings for all members to update our knowledge, skills and information on medicine delivery in the States. It provides subspecialty specific on site or online training frequently, it voices all physician’s concerns and comments on how medicine practiced in every field. It has its own publication to educate healthcare providers and promote medical education. It also offers national and chapter meetings to connect all members at the college, and encourages young physician to aim at high and helps them to achieve their goals.
-
Hi Xiaoying, I really like your use of the word “investment” for your involvement with the ACP. It’s true that for communities of practice to be successful people have to commit time and energy to make them work, which is ultimately an investment of their time and energy. As you note, you do it because you get a benefit from it and I suppose that’s why all of us participate in these types of groups. Even if the benefit is purely emotional it can warrant the “investment.”
-
I really also feel quite strongly about your use of the term investment as it is solely responsible for the enrichment and prestige of the field of practice for which we belong. Without these communities of practice in medicine, we have a far less scientific profession and ultimately less rewarding job.
-
Hi Xiaoying, thanks for sharing. I have a couple of questions. Does the American College of Physicians organization offer services for Physicians to collaborate with each other to determine a patients diagnosis or how to effectively treat an illness?
-
-
About three months ago, I joined the Board of Directors of a small non-profit in the Fairhillls area of Philadelphia. Centro Nueva Creacion provides afterschool and summer experiential learning programs for children middle school age and younger. They needed help with a financial support role. My friend, who is also on the Board, asked me to assist them with building their FY15 budget. I happily agreed to do whatever I could, considering I share the organization’s values and build budgets many times theirs semiannually. A few months after helping with their budget, my friend asked me to join the Board. I dodged the offer. Many months later, I reconsidered it, but this time on my own accord. That same day my friend contacted me with a second request to join. I pretty much saw this as a sign that my membership was destined. I applied for membership and was voted as the Treasurer.
This Board of Directors is a community of exceptional people with shared values who are vested in empowering the children of the Fairhills community of Philadelphia by providing them with an afterschool and summer outlet of educational and artistic acceleration.
For years, I have been compelled to give, whether financially or through time and service, to Greater Philadelphia non-profit organizations motivated to aid our disadvantaged communities, especially their youth. The chance to serve on the Board of Centro Nueva Creación has provided me with a lasting opportunity to transcend volunteerism and influence strategic organizational policies, programs, budgets and development plans. I believe this type of involvement serves organizations best by matching skill to contribution. Serving as a Centro Board member has bonded me to a group of talented professionals who eagerly strive to support this organization that aids local disadvantaged children through education and arts development programs, which we hold in high esteem.
-
I have a similar story Jordan with my son’s school’s PTO. Like you, I got suckered into, I mean elected as the Treasurer. Curses accounting background! 🙂 It’s for a good cause and yours sounds much more interesting. Kudos to you!
-
-
This was a hard question for me to answer. At first I wanted to write about being a Project Management Professional and being able to rely on other PMPs but that’s really very dry. So I’ve decided to write about another community of practice that I joined nine years ago. In Feb. of 2006 my husband, four month old daughter, and I moved from Washington DC to Bogota Colombia. We spent 3 years in Bogota, then moved to Mexico City for another 5 years, and just last year moved again to Tokyo where we’ll be for the next 4-5 years. When my husband joined the foreign service I really had no idea what that meant for our life and now three countries later and two more kids in the mix I can look back and see all that I learned. The ex-pat community has created a page through Facebook for members of the foreign service as a resource for those of us who pick up and move around the globe every couple of years. While many might say that this isn’t really a community of practice I argue that it meets all the criteria. The domain is the Facebook page and the members are able to discuss and help each other share information directly through the site. This information is also archived and saved as a resource for new members who face similar challenges. You can find information related to looking for a house sitter to tips for traveling on a 20 hour flight with infants to specific government regulations related to moving, medical evacuations, and more. This community of practice is different because most of us never meet in person but we learn from each other’s experiences, challenges, and suggestions. I have saved countless hours by going to this community to find answers to questions only someone else in the same community would know. We support each other, we learn from each other, and we make it easier to be in this crazy lifestyle.
-
A community of practice is comprised of a group of people who share a common concern or a passion, learning how to improve upon it while meeting on a regular basis. It has three characteristics; the domain, the community, and the practice. Although I am not a direct member of this organization, I do participate in fundraising and special events for Melanoma International Foundation. Annually, the Foundation holds a walk through Villanova University. The location for the walk varies depending on the number of people who register. The events have various activities for children and have doctors on site for quick skin screenings. My family and I began participating in events held by the Foundation due to a loss of a family member from Melanoma Cancer. Since then, we have participated in the annual walks and various other activities. I benefit from the ‘membership’ as I know that the money raised directly goes to Melanoma research and, in turn, can eventually save a life.
-
Like Xiaoying, I have been a member of SGIM (Society of General Internal Medicine) as well as ACP (American College of Physicians). The domain that is common is the practice of Internal Medicine, the community is a group of board certified physicians that comes together annually and regionally more frequently to discuss advances and thoughts about their practice and additionally publishes a periodical that allows the for the continuous sharing of practice knowledge and research. The individual members have dues that are paid which as Charlene describes, is more like an investment in your own field of practice as it will ultimately provide you more enriched learning opportunity through the sharing of experiences and knowledge. Cataldo brings up a very specific practice that is a little easier to conceptually wrap your mind around the development of a particular individual practice. I think these communities make the practice of medicine more intellectually stimulating and are ultimately better for society at large as it allows for peer-reviewed data.
-
I would say that my medical school class is a community of practice in itself. Although we didn’t necessarily consciously select the community and were placed there by default when entering medical school, I would certainly call us a community that has a passion for a specific topic and that helps each other learn through social interaction. For instance, when we have workshops and are broken down into groups, it is sometimes difficult for each individual to capture all of the learning value of the workshop. Therefore, we communicate through a webpage and through Google docs to make sure everyone gets the necessary information and to contribute additional resources. During doctoring activities, where we have to practice clinical skills, we often practice on each other. The learning experience of getting automatic feedback from our peers helps us improve our skills. Just last week, I tortured a fellow student for a good 5 minutes trying to master the doggy-eared tourniquet, but having that interaction was pivotal in helping me learn the finger movements necessary to get it. This concept can be applied to medicine as a whole, as evidenced by the discussion above. Our preceptors, who voluntarily donate their time and knowledge, are instrumental in propagating the culture and value of our community by ensuring that subsequent generations learn our field well.
-
Hi Mariya,
What a great example. I was thinking about using the OMBA Temple community as the example when I made my post. We have formed our own little network and use Google docs to bounce ideas off of each other as well as support each other when anyone is feeling overwhelmed. The network of people I have met through the OMBA at Temple have made it a bit easier to balance my workload with my school workload.
-
-
As a CFP® professional, I belong to a diverse financial planning community across the country. I benefit from continuing education and networking opportunities, as well as from the CFP Board’s public awareness campaigns targeting potential clients. They offer many career resources, including a private, ‘members’ only LinkedIn page. Additionally, my alumnae association offers access to a vast community of educated women who are committed to helping their fellow sisters solve any problem. There’s a searchable online directory and Linked In page, where you can find mentors to connect with for career advice, etc. Over 5,000 alum belong to a private online FB community, where you can ask any question and get real-time answers. You can also receive virtual encouragement from others who you may never meet in person, or you can attend local ‘meet-ups’ and volunteer together, etc. Smaller ‘interest groups’ are formed for lawyers, MBAs, MDs, new moms, etc. This is a powerful learning/crowdsourcing resource, where everyone’s helpfulness is motivated by a shared bond/affiliation. For example, when I was in-between apartments and living paycheck to paycheck, I was able to find housesitting opportunities.
-
Corey –
I really enjoyed hearing about the organization you’re a part of. I work for a non-profit organization where people pay to become members (but it currently silo-ed by city). It would be AMAZING, if our National headquarters implemented some type of directory (where member could choose to display their contact information). I work in sports & entertainment and there are so many focuses it would be great if we also implemented “interest groups” on a national scale. A huge part of networking to me has to do with the ability to relocate and it’s hard to meet other working professionals outside of our state.
-
-
I consider the military as one giant community of practice comprised of thousands of smaller communities of practice that encompass not only the service member but also their dependent s such as their spouses and children. As a large community of practice, members are bonded together through a shared need to survive and win on the battlefield. Sharing of knowledge is a continuous and ongoing cycle that is passed down from senior members to subordinates which is constantly refined and improved over decades. Quite often, this is the principle means of informing the force as new threats and tactics arise – think improvised explosive devices (IED) and explosively formed penetrator (EFP). Such devices are usually command detonated or by remote control. Before could be IED-defeat measures could be developed and fielded to the entire force, service members relied on lessons learned from other units on how to identify common characteristics and identifiers if IEDs prior to detonation and how to execute proper procedures for securing the area. This method of learning and sharing information undoubtedly saved lives. On a much smaller scale, individual career fields (infantry, IT, MI, mechanics, field artillery, etc) and rank structures (enlisted, officer, etc) all have formed their own unique communities of practice specific to their own unique requirements for learning and sustaining each other. For examples, mechanics stationed at Fort Irwin, CA (in a desert) have many different challenges than mechanics stationed at Fort Wainwright, Alaska (subarctic) and subsequently rely heavily on the mechanics with the most experience in those environments. Military spouses form family readiness groups, host coffee socials, or put together themed events to bring people together to share knowledge and assist others in the frequent challenges of their common lifestyles. Military installations develop youth and teen programs aimed at building teams and support groups for children of service members that can help them deal with repeated relocations. All of these are examples of how military service members became a part of their communities of practice and the benefits that each provides.
-
Bill, I definitely agree that the military is one giant community of practice from family readiness groups to MOS (military occupational specialty) groups. I would also add that this practice continues after service with veterans groups. The VFW (Veterans of Foreign Wars), American Legion, IAVA (Iraq and Afghanistan Veterans of America) and DAV (Disabled American Veterans) are the main groups that all work to benefit their members through sharing knowledge and experiences. The shared information pertains to navigating the VA system, retirement questions, networking with other veterans, survivor support, and reuniting service members with former members of their units. Each community has local posts and the parent organization provides publications, holds conventions and all lobby on capital hill for the support of veterans.
-
Clint,
Great point – I definitely agree that veterans groups are communities of service! I really need to keep these groups in mind upon retirement, especially with regards to navigating the VA system as you mentioned. Thanks for bringing up such a great example.
Bill
-
-
-
I’m a participant and supporter for a mission team that goes to Nicaragua several times a year to help teach locals how to create a healthy and sustaining lifestyle. Based on the definitions for a community of practice (CoP), I believe this team fill this role. Depending on the time of year when the team goes, there is a leader who works with other team leaders to get ideas and keep up-to-date with projects progress so they can hit the road running when arriving in Nicaragua. We all meet as a team to understand what will be accomplished on the trip such as construction projects or various issues to address with the medical staff attending. Graduation rates for the third-world country are incredibly low as families need their children to work in order to eat. Women in particular are unable to get a job and support themselves as they do not know a trade and rely on men to support them. I was on the construction crew that built a building for a beauty salon on my last trip where one of the team member’s who was a hair stylist would train a local and that local would then train other locals.
We have friends who participated in the mission trips and talked to me and my husband about joining. My husband now leads one of the non-medical team’s. The benefits of this CoP is a better appreciation for what we have, particularly toilets and running water. Helping others who aren’t as fortunate as we are is rewarding within itself. When leaving Nicaragua, we know there is at least one thing we left behind that will make someone’s life better, whether it’s an easier way to do something or shared knowledge, we know we’ve made a difference. On the flip side, we always learn something as well, particularly the importance of family and how we should take more time to appreciate the little things and less time focused on material things.
-
Communities of practices that I am a member are two road cycling clubs in Philadelphia. Road Cycling is a passion of mine and when I moved to Pennsylvania 3 years ago, I reached out to two cycling clubs and expressed an interest to join. During the course of the week, there are group rides scheduled every day of the week. Every one has a passion for riding and all members comprise of various experience levels. Based upon your ability you can decide to join a daily riding group that suites your experience level and meets your personal goals. Riding levels range from Professional A+ to Recreational D. In the summer, you can partake on historical rides through Philadelphia where your ride leader leads the group to historical landmarks through out the city. During the historical rides, you learn about key milestones or events that occurred through out history. I have benefited a great deal from being a member of both cycling clubs. I started as a novice rider and have progressed conditionally to an intermediate rider while being a member for the last two years. I have met a lot of different people who share the same passion and learned a great deal about the sport of cycling. I learned the proper techniques of down shifting and up shifting, how to ride safely, and how to keep a constant RPM (revolutions per minute) or cadence. I am looking forward to start riding again with my group beginning in April.
-
Interesting post, Jenica!
I love cycling as well and I’m looking forward to getting a new bike this summer. Your cycling group is truly is a community of practice with informative and fun dynamics to it. I have never been in a cycling group so hopefully I’ll find one that matches my interests soon.
Cycling is great form of exercise.
-
Awesome examples Ademola and Jenica. I agree 100% that athletics in a group format like this is absolutely a community of practice. In the past, I have been part of running clubs and Team in Training when training for various marathons. The shared experience of comparing which sneakers to wear, how to manage “hitting the wall”, training suggestions, the best foods to eat on race day etc., provide tremendous value to members. There is no question from my personal experience, that these types of groups meet the criteria for domain, community and practice.
-
Hi Ademola, do you reside in the Philly area?
-
Jenica,
Can you share the contact information for the two groups you belong to? I’m a true novice, but would love to get involved with a group that shares an interest of mine. Maybe I too can get good enough to be in the intermediate group! -
Jenica, I sort of wish but I currently reside in Ohio.
-
-
-
Jenica,
Great post about the road cycling clubs of which you are a member! It sounds very interesting and, if there are two things I truly enjoy, it’s history and exercising. I think that it’s great that they have different ability groups through which you can progress and learn. My family and I are going to move in a couple of months near Richmond, VA – another historical area – as part of a professional relocation. I just looked up cycling clubs in the area and it looks like they have a few. I will have to contact them as we get closer to our move and get involved our new community. I never thought about joining a road cycling club so thanks for inspiring me to look into and get excited about this sport.
Bill
-
-
When I first moved to Los Angeles, about two years ago, I decided to join an organization called WISE (Women in Sports and Events). I’ve always known of this organization as the National Headquarters are in NYC and they have several other chapters throughout the US. Through monthly board meetings, special events and mentoring programs, WISE offers its members the opportunity to gain valuable insights and connections that can provide them a competitive advantage in their current position and as they advance in their careers.
Not only do these groups of women provide me a great sounding board professionally, but I was also nominated last year to be on the Board of Director for their LA Chapter. As a board member, I really feel as though I have the chance to make a difference in our member’s lives as I get to create the content and also help run a non-profit organization (nuts to bolts). There is so many times where I feel as though I’m not making a difference in my own job – it’s not like I’m saving lives – but if I can help other women reach their dreams professionally that’s good enough for me.-
Joyce congratulations! What an outstanding achievement. What an opportunity to positively influence women within the Sports and Event industry. Does WISE have an annual conference, where women can network and learn about leadership and development opportunities within the industry? Or participate in workshops or listen to speakers who provide insight on how to gain key skill sets and competencies to grow within their organization or industry? How many women belong to WISE?
-
-
What is an example of a community of practice that you are a member of? How did you become a member? In what ways do you benefit from being a member? The community of practice that I am a member of is called the East Coast Gang Investigators Association. It is an association of law enforcement officers that promotes cross-organizational sharing of information from multiple local, state and federal agencies. The individuals that we investigate are not bound by the same jurisdictional boundaries that we are so their activities are recorded by multiple agencies. The benefit of membership is in the first-hand information that is shared within a secured domain. Intelligence can be passed on to other officers without being solicited as in giving others a “heads-up” of increased gang activity or information can be requested of the group pertaining to ongoing cases. I have interacted with community members that I have worked with personally and others that I never met in person, but had similar experiences in the field or contact with individuals that helped with an ongoing case. The association also holds conferences where new tactics and techniques are discussed as well as adapting strategies for enforcement. The community was created by law enforcement officers, but is a voluntary organization and is funded by membership dues.
-
I belong to several communities of practice though I haven’t been active in some of them due to my busy schedule nowadays. One of these groups is Global Accounting Professionals, a LinkedIn-based group primarily for accounting/financial professionals where current topics and best professional practices in the industry are discussed. Also, a wide range of subjects such as technical skills, new policies and laws, and inspirational messages are posted daily. The group currently has over 20,000 members from all over the world and various business backgrounds.
Also, I love history and took quite a number of history classes during my undergrad. I used to be active in at least two online history groups. Active participation is required of one of the groups where I was formally an administrator so I had to step down, at least for now until I can have time to write articles and respond to commentary.
-
As i was writing my post I thought of Linkedin also. Linkedin is an excellent example of an online community which fosters collaboration and knowledge sharing. I too am a member of several communities in Linkedin which I use to better engage colleagues, and learn more about my field.
-
I agree. LinkedIn has evolved to be a dynamic professional tool, depending on what one is looking for.
-
-
-
KPMG released recently what we are referring to as “The Hub, which is a virtual teaming community”. An overview of the objectives of “The Hub” is below:
Welcome to the Hub – the place where you can connect to colleagues around the world, share knowledge, learn from one another, collaborate on ideas and develop innovative solutions for clients. This is a new way of working, one where all the bright minds at KPMG come together in one place. Read the rules of the road and watch the tutorial video – then join the conversation.
The site is meant to collaborate and share knowledge amongst the 162,000 professionals, including more than 9,000 partners, in 155 countries. My primary focus within KPMG is to provide functional and technical support of implementations of the SAP BPC application. My team and I have created a Hub space specifically to collaborate with others in our practice to be able to fine tune our craft. Our team is very passionate about growing our practice and use this forum to share ideas and best practices.
To become a member of our community you need to either be invited or request access. Typically others within our firm to better understand the BPC tool and its capabilities. Additionally, we have had people reach out to us through “The Hub” to inquire on how they could join our practice. I think the benefits are plentiful from the tool and include the following:
• Collaboration amongst our team
• Internal marketing engine across the firm to share our expertise in this space
• Opportunity to potentially identify individuals looking to transition into our practice -
At my company, we have formed a group of sales and operations leaders that meets up weekly. The charter is to advance learning, share best practices and further organizational development. These sessions last about an hour every week and range from reviewing outside learning content, discussing market conditions and best practices and what we can do as a collective group to improve our skills sets and those of the organization. I became a member of this group, based upon a suggestion of a senior leader. He noticed that each of us had excellent processes individually, but there was no mechanism for shared learning. Based upon this, five of us discussed the value of forming a “community of practice” and we have been diligent in this over the past five months. The benefits to membership are multifaceted. There is certainly value in the best practice sharing and idea flow. Often I am able to run situations past this group informally, prior to making a decision on important issues. I also am able to learn from providing advice to these members on their own situations. We also engage in more formal learning forums, such as a management training we plan to attend in May. Additionally, we often call each other in one off situations to seek guidance or feedback. This group has provided an additional resource for me as a professional, to both develop my skill set, solicit unbiased advice and develop long-lasting relationships for the future.
-
Mike, great practice you have adopted with your colleges to ensure each of the leads are able to employ best practice for efficient organization. In my new role within the supply chain side of the business, I have helped start a monthly forum to bring the leaders under one virtual setting to discuss best practices, opportunities for cross training, lessons learned in each region (continents) and a case study review. From our MBA courses reading lots of articles, I developed requirement to review at least one case study each meeting from literature related to our function. I am set to host the first meeting at the end of this month, I hope the new segment is well received from the team. However, I strongly believe each of the community should have external input to ensure new and unique technique is employed from similar functions around the world (resulting from case studies).
-
-
What is an example of a community of practice that you are a member of? How did you become a member? In what ways do you benefit from being a member?
I am part of multiple communities of practice, majority of them as result of them resulting from the professional connections. Similar to how other described in this thread, the communities that I am part of are to share best practices or changes coming forth from different regulators. These communities have helped me a lot over time, as this is medium to help modify your approach at a task/project. They serve as mode of introduction of new and upcoming changes that one can utilize to prepare their organization. For instance, recently, European Union Health Authority published expectations for the authority performing unannounced visits to health care company’s suppliers. The community we are part of had opportunity to share each other’s experience prior to the press release by the authority. This allowed our organization to reevaluate our supplier management process to ensure the risk at supplier and to the parent company is mitigated. Overall the goal of such communities are to bring together industry professional and share/collaborate to yield best practice. -
I volunteer with a local youth soccer club. One of my major roles is tournament director. I would say this croup is a community of practice and I am a member of this group. I ran the tournament for many years and finally began talking informally with some of the other tournament directors in the area. After doing this for a couple of years I learned that there was a lot of value in sharing ideas with other tournament directors. We began to schedule annual meetings with the local tournament directors prior to the tournament season. The domain membership is the tournament directors. Be establishing the informal/formal meetings we created the community. The practice was all tournament directors sharing ideas, discussions on what works, what doesn’t work and why. The benefit is we can learn from each other. We work together to make the tournament experience positive for the clubs running them, the clubs sending teams and most importantly for the participants.
-
Last year I attended a conference on “Emergency Department Operations Research,” along with colleagues in the field of emergency medicine. In distinguishing networks from communities of practice, I’d say the field of emergency medicine is a network, but not every ED doc out there has the same commitment to the domain of interest of clinical operations. By clinical operations I mean studying and improving emergency department throughput metrics, patient satisfaction, reimbursement schemes, and adherence to regulatory requirements. In fact, many docs out there just want to clock in and clock out, and hire practice managers or appoint clinical directors to handle these things.
So as I read about communities of practice, I am thinking that this Operations Research Workgroup is actually a community of practice, focused around the challenges noted above. We engage in discussions via email, surveys, and occasional conferences such as the one last year, to share information and help each other. We share data from our respective institutions, spanning a large geography, and we are each benefiting by implementing best practices and novel approaches that we learn from one another.
I like this idea of communities of practice. Sounds better than “workgroup”….
-
I currently volunteer for the local Boy Scouts to help build their membership. The CoP that I am involved with is other Scouting-type organizations and non-profits that come together through email and meetings to share knowledge, best practices, tips to increase membership, and program ideas.
I have volunteered in various capacities throughout the past the 8-10 years now in Scouting. I have, off and on, been involved the marketing of the program because of my work on the membership committee. It helps to have the CoP because it allows me to get different ideas and practices that work in other organizations that I can bring to the group and primarily the opportunity to contribute to an organization that gives back to the community.
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting N-Z 9 years, 7 months ago
This question is inspired by these readings:
Introduction to communities of practice.
More on communities of practice. Read through all links in sections 1.1 and 1.2: http://wenger-trayner.com/faqs/What is an […]
-
I’m a member of the Accounting Advisory Board for the Rohrer College of Business at Rowan University. The group is comprised of executive-level individuals in business, government and not-for-profit organizations whose background is related to the accounting and finance professions. We provide the school with an external perspective on curricular development, advise on emerging trends in the profession, and promote and participate in appropriate business and student interaction activities.
A senior executive of TD Bank is an alumni of Rowan and he asked me to consider joining because of my accounting/finance background and passion for education and training (I also lead the Finance Training Council at TD in the US). I benefit by at least feeling that I am making a difference in the lives of young students through mentoring and improving the educational experience. I have also made some great contacts and new friends that also volunteer their time and resources.
I recently coordinated a Mock Interview Day with school leadership on March 9 for students to interview with business leaders and receive immediate feedback and coaching to improve their skills. We also advised on development of an MS Accounting program for the school that is under development. We also develop, promote and participate in mentoring programs to provide direct one on one guidance to students.
-
Paul, Im sure after the Mock Interview Day you left feeling that you had really given something back to the students. Often due to budget restrictions there are no opportunities for student to experience ‘real’ situations. Often during college there is so much emphasis to get through the credits and graduate, that the graduate has little or no experience of what to expect when looking/interviewing for a job. I did a lot of volunteer work as I competed my education degree and found that even seniors in high school struggled with what we thought was common sense. Things as basic as sending a thank you note after the interview, or wearing a tie or even better not wearing Vans to the interview. Do you ever get involved in ‘career day’ at a lower lever at say a high school? When I mentored the high school students completed their graduation projects, they were to chose in junior year a person to shadow, a career they may be interested in. I was surprised at some of the choices and wondered would more have chosen areas such as finance if they were given more of an insight. Many of the kids when I asked, would give me the answer ” that sounds boring” not only to finance but to many other careers.
-
Hi Elaine – My feelings were mixed on the Mock Interview because so many students needed improvement but I think the constructive criticism will help them in the long-run. One student told me she wished she had gone through this before a real interview the week before. It’s funny you mention common sense, Elaine – one student didn’t wear a tie, one didn’t know that TD stood for Toronto- Dominion and another handed me a 3 page list of “stuff” that was supposed to be their resume!
I did career days at my daughters schools over the years until they reached the age where I was “embarrassing them”. I do agree with the “boring” tag attached to accounting and finance type roles but I have seen some good programs to try and spice it up a bit (investing games and stock market simulation competitions, etc). At take your child to work day, I try to bring it to life with a lemonade stand business game. It’s always hard to beat the career presentations provided by the Marketing department though!-
Aaah yes Paul I too have reached the ‘do not come anywhere near me, your embarrassing me’ phase. During student teaching I often got crafty with the high school algebra class and have them do things such as a lemonade stand game and owning a store just to try and mix it up as I always got this is boring and I will never use it again moans. It is always hard to beat the ‘cool’ jobs at career day and at the time I lived in New Hope so the town was full of artists and although he has yet to do career day Christian Slater lives there with his daughter….
-
-
-
-
I am a member of a group called the Association of Collaborate Spine Research (ACSR). This came about when a group of spine professors wanted to look at issues in spinal surgery and nonoperative care of spinal disorders in a greater depth. We wanted to explore the issues of treatment of various spinal injuries in which there was no consensus and we wanted to look at issues that were rarely written about in the peer review literature. We decided to have monthly and then weekly conference calls and use the internet and especially drop box to share files and cases. We developed a yearly meeting in a convenient location to meet and we pooled resources and raised money to get together and do research. From this community of practice we were able to collectively publish guidelines on recommendation of treatment for certain cervical spine injures, develop guidelines for the management of chronic low back pain and have joined our physical resources to participate in controlled randomized trials in the management of spinal cord injury and pain management methods. Our next meeting is this May in Miami if anyone is interested in coming.
-
I’m a member of the Foundation for Orthopedic Trauma (FOT), which is a relatively new group comprised of orthopedic trauma surgeons across the US who are focused on resident education, research, and humanitarian efforts in orthopedic trauma. I became a member by applying and getting a recommendation letter from a current member. This community of practice has under 100 members and will likely be kept that way. The impetus for its creation was to meet regularly to share innovative ideas for patient care, fund and support member research initiatives, provide free cadaveric surgical skills training without industry bias for residents, and establish humanitarian efforts abroad, all without the hierarchy and political nature seen in other existing organizations. We met last month in Vegas and I did a presentation on certain rare, but challenging cases of atypical sacral spine fractures and “spinopelvic dissociation”. My aim was to teach some of the residents and younger surgeons, but more importantly to learn from the many skilled and experienced surgeons in the group and to generate useful discussion about how to best treat these patients.
-
Saqib that is a noble undertaking. In medicine, community of practices are so important but often fizzles out without financial support. We in medicine have so long been dependent on contribution from industry for CME learning and vocational meetings. 10 years ago nothing occurred in education without a grant from industry and rarely from the Government. In order for that to change it will take grass root movements like your community to focus on other ways to bring academicians together. I would recommend that we all get together in our communities and figure out ways to continue to fund our research and meetings without the dependence on government and industry which is often comes with strings attached that take us away from our original missions
-
-
I am member of the Society of Marketing Professional Services New York Chapter (SMPS NY), which is an organization for marketers in the Architecture/Engineering/Construction (AEC) industry. I’ve been a member for 2 years now, but attended many of the organization’s free events prior to my membership. I first learned of this group a year after working in the industry as a Proposal Coordinator for an engineering firm in Manhattan. Several years ago, I worked directly under the SMPS South Florida Chapter’s President who mentioned that, if I was truly interested in sticking with AEC marketing (which differs from other types of marketing), I should network with, and learn more from, other young AEC marketing professionals. Aside from networking with my peers and others who have been in the industry for 20+ years, I’m able to learn about current industry-related marketing trends, gain proposal tips, meet (through client panel discussion forums) client representatives, and help those new to AEC marketing by exchanging information through the organization’s website and communicating through various social media platforms (LinkedIn, Twitter, etc.). Additionally, I’m able to attend SMPS sponsored events and conferences and I also gather information on marketing trends through SMPS’ Marketer journal (bi-monthly). SMPS serves as a sort of informational and educational group that also offers various types of support to AEC marketing folks. The Society also offers an industry-specific certification – Certified Professional Services Marketer (CPSM).
-
A couple years ago my team started following the agile software development methodology. We specifically follow Scrum. Along with this transition came an opportunity to be involved in the broader agile community of practice within Microsoft. For background, agile as a methodology is being adopted with varying levels of success throughout the company. The interesting thing about agile is that each team or group that practices the methodology does things slightly differently. The real purpose of the community of practice is to share experiences of what is working versus what is not working. In this community, there is a blend of high functioning teams as well as teams that are struggling to get off the ground and everything in between. For me, the biggest benefit membership comes from have a place full of people sharing knowledge based on their experiences with agile.
-
In my company there is a community of practice within our enterprise technical sales organization. In my role I am tasked with identifying business challenges faced by my customers and proposing technology solutions to help them overcome these challenges. A growing area of interest among our clients is the ‘Internet of Things’ and how IoT solutions can help to solve business challenges. Because IoT is still a very new concept, rapidly changing, my colleagues and I help each other to learn about new ways in which IoT can help our customers. We bring partners into our group discussions, brainstorm ideas and solutions that can be leveraged across multiple industries, and share proposals that can be adapted to fit different clients. We also work closely to help each other understand the technologies behind the new solutions and participate in workforce development courses together. Not everyone in the sales organization is an active participant in the group learnings and idea sharing. There is a core group of a couple dozen always active on message boards, in SFDC, and via email. For myself, even after more than a dozen years in the industry, it is helpful to have a community of colleagues who share a passion for learning, collaboration, and group achievement.
-
A community of practice that I have participated in is the New York Intellectual Property Lawyers Association, in particular the amicus brief committee. When key intellectual property issues make their way to the U.S. Court of Appeals for the Federal Circuit or the U.S. Supreme Court, the committee analyzes the issues and decides whether as a group we should submit a brief to the court in support of a position. Typically, an amicus brief or “friend of the court” brief takes the side of one of the parties in a case, but in this group, many of the submissions are neutral as they try to explain to the courts the potential impact of a decision one way or another beyond just the case at hand. I think being a member of this community has benefited me because it allowed me to hone in on key legal issues facing the pharmaceutical industry which is my area of focus, while learning from other intellectual property lawyers how these legal issues would impact other industries and whether the positions we were advocating would make sense in their areas of focus.
-
A community of practice that I participate in is the Society for Human Resources Management in Lancaster. I first learned of the community while studying for my human resource certification exam. By participating in the group I was able to learn from the seasoned HR professionals in different industries and also go over case studies with HR executives who volunteered their time to help students/new graduates who were pursuing professional Human Resources certification. Being a member of the community allows me to get updates on legal issues and public policy that are/will affect human resource management, access to research data, customized benchmarking reports. Education material and access to knowledge advisory team that can assist with industry specific questions.
-
I am a member of the Project Management Community of Practice (PM CoP) at my work. Before joining the PM CoP, I was a member of a committee known as the Project Management Advisory and Action Team which was tasked to consolidate the documentations and processes that Project Manager (PM) in the my department were using for the projects. We updated the IT Department’s PM Playbook and also made all the documentations available on a new Sharepoint site created specifically for our department’s PM. Once the object of the committee was completed, many members of committee including myself and many PM across our department organized and formed the PM CoP to further collaborate, communicate, and learn from each other. The PM CoP has helped me in many ways. It is chance to network and learn from other PM in the organization. We share lessons learned, pitfalls, successes, and emerging trends for PM. The PM CoP also works with our Project Management Office to offer webinars and PM led learning sessions in order for many of us to maintain our PMP certifications.
-
At my work I am the brainchild of a newly found forum where we meet quarterly to share our experiences and knowledge gained by using an application/software that we regularly use at work. So colleagues from various groups within our company meet, and we have speakers who are our colleagues who like to share their knowledge and also learn from others. Additionally there were many instances where some of us could not go to conferences/seminars outside of our workplace due to work load, timelines, and other commitments, so why not have colleagues who attended these conferences/seminars, come share their knowledge/experiences to us via this media. This way we all benefit from attending this forum/seminar. We all learn together at our doorsteps without having to travel or sacrificing an opportunity to learn.
-
I don’t belong to any professional communities of practice, but reading through the material I couldn’t help but think of becoming a new parent (as I did last month). Since the birth of our son, my wife and I have been going through the ringer of rearing a newborn. We’re constantly trying things to keep him quiet and happy, or to keep him from peeing all over everything, or to get him to sleep. As we experiment we learn. We discuss with each other what we’re experiencing when the other’s not around and we discuss plans based on what we learn. We’ve talked with outside groups as well, including friends and family with children young and old, doctors, and lactation consultants. My wife’s on Google and various web forums every day. Here’s some examples of what our community of practice looks like based off of the list from the article:
Problem solving: The boy didn’t put on any weight last week, how can we catch him up?
Requests for information: Can you Google whatever it is he’s doing?
Seeking experience: Ask your cousin who just had a kid what she did in this situation.
Reusing assets: I used to do this to get the babies I nannied for to go to sleep.
Coordination and synergy: Can schedule our parents to take some time off to watch the baby when Mommy has to go back to work at school before summer break?
Discussing developments: The doctor says he’s doing great and is very strong, so we’ll actually have to watch where we put him down because he might squirm away and fall off a bed or something.
Documentation projects: We track feedings and diapers in an app. I’ll spare you the details.
Visits: This was mostly beforehand, when we went to visit friends with a newborn while we were pregnant.So yeah, that’s pretty much been my world for the last 5 weeks almost. It has been a major learning experience and continues to be one. The benefit is that I have a healthy baby boy that will someday be able to mow my lawn and do the dishes for me.
-
Great post Sam…. made me laugh and took me back to when my kids were babies. What I will tell you is everyone will eagerly share advice with you, even when you don’t ask for it. There is no book on how to do it right, so go with what is right for you, your wife and baby… and breathe….. Oh and PS they never do the dishes without a sigh, and a roll of the eyeballs so best invest in a good dishwasher 🙂
-
Thanks, Elaine. That’s actually in line with the best piece of advice I got which was actually, “Don’t take anyone’s advice.”
And don’t worry, I’m of the frame of mind that those sighs over the dishes were part of the perks of being a parent. When I was a kid, our dishwasher was broken for something like ten years, and whenever my brother and I asked my dad why he didn’t get it fixed, he always replied that he had two perfectly good ones sitting across the dinner table from him.
-
-
Congratulations, Sam! Enjoy these years, even though you probably aren’t getting much sleep right now, they go by in the blink of an eye.
-
Sam, you belong to one of the largest Communities of Practice my wife and I have ever belonged. Parents with older children are always willing to share similar experiences with new parents, love to give advice that will help make your life easier, and reassure you that what you are experiencing, we have all been through. They are, however, also willing to share what you are doing wrong. All I will share, as a member of the new Community of Practice group that you and I are forming at this moment is it gets easier and harder at the same time because every day is a brand new experience, sleep is highly overrated, and your son will never mow your lawn unless you put dollar bills in the yard that he has to mow the grass to find!
-
Nice tip about the dollar bills, Mike! I’ve actually thought about first mandating chores to teach responsibility, and then offering paid ones so that he learns the value of working for what he wants. I plan to be an old school kind of dad, but as always, we’ll see how that goes…
-
-
-
As a Naval Aircrewman for the US Navy I was a member of community of practice for tactics, techniques, and procedures (TTP’s). This community of practice were referred to as Seahawk Weapons and Tactics Insturctors (SWTI). As a SWTI we would continue to test out new or old TTP’s for validity and effectiveness. Some of these TTP’s were thought up by fellow members or brought to members through external sources. SWTI’s are present through Navy helicopter operations. Each helo squadron has an officer and enlisted SWTI. Each Wing (consists of four to five squadrons) has a Rotary Wing Weapon School (RWWS) filled with 25 (15 officer/10 Enlisted) SWTI’s. Over all these Weapon Schools is the NavAir Weapon School with 20 SWTI’s. Information flows between each of the SWTI’s on a daily basis through e-mail and phone conversations. Every month Tactics Review Boards (TRB’s) are held in each RWWS. On a yearly basis publications that house the most current information are updated by the Weapon Schools during a joint TRB or Reblue meeting. These meetings change locations every year and are held to ensure the dissemination of information to all SWTI’s. It is the SWTI’s responsibility to spread the information to every Pilot and Aircreman in their command/community. To become a SWTI you must first meet several prerequisites such as flight time, tactical qualifications, and rank. After the prerequisites have been met then you must be recommended by your command and apply to attend SWTI school at the NavAir RWWS. Once accepted you must attend and pass the 60 day course. After this you are authorized to wear the patch of a SWTI. Although SWTI’s hold the main responsibility of this community of practice others assist and provide feedback on TTP’s to their respective SWTI’s. The result as a massive community of practice that is every changing the way we conduct business.
-
I recently became vice-president of the Great Valley Newcomers Association; we are a non-profit organization founded in 1967, which helps with the transition of families moving to a new area. Board meetings are held once a month where we plan future months and budget review. Many members are from overseas and in the pharmaceutical industry. Placements can often be for short periods of time from 1-3 years. With that can come many challenging aspects with finding accommodation, schooling, doctors and dentist and other health practitioners. It can also be difficult for families moving to the US and leaving family behind. As a group we help with the transition, organizing social events, but making recommendations and assisting wherever the family feel it needs help. Cultural and social norms vary from country to country and this can be overwhelming at times. Throughout the year we hold various charity events to give back to the local community, drawing on the strengths of the board and board members. I became a member myself after moving to the area and was approached by an existing member at a high school event. I myself have no family here and understand the issues that many families face when moving to the US. Everything from where to get your drivers license, once you’ve mastered the art of driving an automatic on the wrong side of the road! I benefitted greatly by having the support of those who had prior knowledge of the area and were willing to pass it along to make my transition to the area smoother. Not only from a social aspect but from a career aspect as there are many different job backgrounds and many are willing to share information, advice and at times give presentations so that others may learn.
-
Elaine,
Great post. I am glad to hear there is an organization or community of practice that assists with the transition. As a Navy guy I can understand the difficulties of moving around. Every new location brings its own challenges that must be met. Having a group around you that can provide tips based on experience or trial and error gives you the leg up you need. Although I must point out its not the wrong side of the road it is the better side of the road. 😉
Bruce -
Elaine,
I really enjoyed your post. This actually reminded me of the expatriate case we read in HR and how tough it is for families to move to a foreign country with no help transitioning. This is particularly hard when you are used to a certain set of customs and enter a country that is not aware of them or understanding of them. Sounds like your group does a great job with helping with the transitions and are dedicated to making the experience for these families seamless in every way possible. The neighborhood I grew up in is very tight knit and often resistant to change. We recently had a boom in real estate which is resulting in a ton of new homes being built as well as bringing in people of all different backgrounds. I think our community could benefit from a program similar to this with helping new neighbors to get to know one another and likewise help with us appreciating the new life and wonderful things our new neighbors bring!
Thanks for sharing!
-
-
In my old job I was part of a massive community of practice for social media. Once social media really took off, and examples of powerful consumer engagement began to occur, many businesses began to scramble to figure out how to get their company involved. This particular community had strategic leaders from company’s earning at least $1B in annual revenue, and including social media leaders from Walmart, Nike, McDonald’s, and more. The community provided an amazing resource where people could ask for, or share, information from developing social media guidelines for employees, to consumer branding and marketing, which platforms were better for what types of goals, and how to manage big data or run successful campaigns. I found it extremely helpful when I first began growing our company’s following, and was able to offer plenty of my own tips for others as I continued to learn about effective practices within social.
-
An example of a community of practice that I am a member of would be the American Pharmacists Association. I became a member back in pharmacy school and I use it to stay connected and informed professionally. I benefit from network opportunities, use it as a pharmacy news outlet and reference its resources for recommendations on things like liability insurance.
-
My oldest daughter was diagnosed with Crohn’s Disease two years ago. As a result, my wife and I became members of CCFA (Crohn’s and Celiac Foundation of America). This group is not only focused on finding a cure for Crohn’s, but also provides a forum for discussion, advise counseling and consoling as well as eduction to treatment options. She also has Celiac,a new as a show of support for her, I adopted her Gluten Free Diet. This group does not come without pitfalls as there are many kids her age, she is 15, who have a far more severe case than she. That, of course, causes us some unneeded concern, but on the whole has allowed us to gat layperson information based on experience the helps us op not only manage her illness, but also better prepares us for physician interaction.
-
This is why you don’t post from the iPad. Spelling corrections made in this version:
My oldest daughter was diagnosed with Crohn’s Disease two years ago. As a result, my wife and I became members of CCFA (Crohn’s and Celiac Foundation of America). This group is not only focused on finding a cure for Crohn’s, but also provides a forum for discussion, advise counseling and consoling as well as eduction to treatment options. She also has Celiac, and as a show of support for her, I adopted her Gluten Free Diet. This group does not come without pitfalls as there are many kids her age, she is 15, who have a far more severe case than she. That, of course, causes us some unneeded concern, but on the whole has allowed us to get layperson information based on experience the helps us not only manage her illness, but also better prepares us for physician interaction.
-
Thanks for your post, Mike. My son was diagnosed with epilepsy years ago and we gained support through the Epilepsy Foundation of Eastern PA (EFEPA). I joined shortly after his diagnosis and participated in a number of evens through them. This foundation has been wonderful with linking my son to children with a similar disease as well as providing information to help cope with his seizures. It is nice to have a group who understands specifically the needs of your child where you can voice concerns and share stories.
-
Kelly, thanks for sharing your experience. Don’t you find that while sometimes you get information from the group that is not what you really want to hear, it is more helpful than friends and family who want to offer support but just don’t know the right thing to say?
-
-
-
-
A community of practice that I am an active member of is with my church. I attend weekly and am also heavily involved in volunteer and fundraising efforts throughout the year. From Operation Santa Claus, to 50/50 raffles, to my weekly contributions, I believe I do my part to support my community of practice. I became a member through my parents along with my five siblings shortly after birth and being baptized into the church. This community benefits me as it is something that identifies who I am. I’m a spiritual person so it helps with me being able to express my belief in God with a community who share the same sentiments. We are able to do this through weekly church services on Sunday mornings as well as various breakfasts together throughout the year. I also find the benefit of personal joy in giving back to a community that has given to me my whole life through volunteering and fundraising to keep my church prosperous during the trying times of the Catholic church.
-
A community of practice that I’m a member of is American College of Physicians. I became involved in the organization during residency where we would go to events and discuss various healthcare topics ranging from internal medicine topics to patient-related care and safety. By being a member, it allows us to continually update and discuss the latest research, and create networking opportunities. There is usually one national meeting held once a year, and 2 local meetings held twice a year.
-
I am a medical student, having entered medical school directly after graduating college. Although I am a founding partner in a fledgling start up company, it is too new to have garnered me any true business experience to speak of. So, I don’t have the “real world” business experience that it seems most, if not all, of the rest of the members of this course. However, I guess you could say that I am a member of a temporary community of practice… the MIS5001 – Spring 2015 – Prof. Johnson — Fox School of Business — Temple University blogging group. This community consists of many very successful and accomplished men and women with real world experience in various fields of endeavor who “come together” regularly to discuss various topics involving information technology management, with a common goal to understand its various aspects better and to draw on each other’s unique experience and perspective. Besides promoting greater understanding of the topics discussed, there are some real world issues and difficulties that one member or another of the group has mentioned and has received some direct and valuable alternative solutions suggested by others in the group.
As mentioned in the reading, it is the combination of three elements that identify a community of practice, and I believe they are all present here; membership in a domain “implies a commitment to the domain, and therefore a shared competence that distinguishes members from other people”
In discussing community, “pursuing their interest in their domain, members engage in joint activities and discussions, help each other, and share information.” We interact and learn together.
As to the practice aspect of this community, although it may not be as laser focused as the example in the materials of a group of engineers working on windshield wipers, there is at least a vague practice of each wanting to gain a fuller understanding of the “tools” of business management and in this blog there “develops a shared repertoire of resources: experiences, stories, tools, ways of addressing recurring problems”—in short a shared practice.
So, although I may be stretching the definition a bit, that’s the best example of a community of practice I can identify as being a member of.
-
-
Steven L. Johnson wrote a new post on the site Discussion for Last Name Starting H-M 9 years, 7 months ago
This question is inspired by these readings:
Introduction to communities of practice.
More on communities of practice. Read through all links in sections 1.1 and 1.2: http://wenger-trayner.com/faqs/What is an […]
-
I am a member of The Appraisal Institute (AI) which is a community of practice related to my field of work. I signed up for membership only within the past few years although I completed my training and coursework to become a Certified Residential Appraiser in Pennsylvania more than ten years ago. Until recently, having membership with the organization did not seem to add much value to my company or myself. Most of the information provided by the organization was readily available from other sources and conferences/seminars were, for the most part, not prohibited for non-members. But, with the increase in regulation and changes occurring in the appraisal marketplace, having an affiliation to an organization such as AI became more important in my view. Being involved in online discussion of the most recent appraisal issues has helped me gain greater understanding of the issues that truly need my attention. For example, a recent initiative started by Fannie Mae called Collateral Underwriter – a program that gives lenders a risk score for your appraisal and compares your adjustment to “peers” – has created a panic and uproar across the appraisal industry. But, while most reports are regarding the initiative as a vehicle to “blacklist” and create unnecessary work for appraisers, my discussions through AI have helped me realize that many are making a mountain out of a mole hill with respect to the issue. The Fannie program has it’s faults but, other than creating an additional layer of review of our appraisals that may add to work for each appraisal, the initiative is only adding a tool for lenders to use and should not affect the way we approach our work. Another valuable resource AI provides is a database of jobs and appraisers looking for work. It has helped us during slower times to find additional work and as the market has been recently improving, will provide a source to find appraisers looking for additional work. The AI affiliation, in my opinion, gives the appraisers available on their website a leg up on the competition and will help me feel a little more comfortable with the person’s credentials.
-
.
-
Rich,
Interesting post. I did not realize that lenders had the ability to blacklist appraisers and their scores. I also thought the lender would accept the score since all appraisers followed a set methodology for their appraisals. I am sure with the toxic mortgage issues over the last few years Fannie Mae and the government regulators have strictly enforced rules for valuations of properties to prevent over-inflation. Thanks for sharing the info.
-
-
I am a member, or part of a group of individuals who’ve taught themselves the art of photography. We mainly shoot luxury and exotic vehicles around the country whether apart of a show, rally or simple get together with friends. It is incredibly fun and in most cases we are able to drive extremely rare exotic supercars. I became a member of this group of individuals in 2009 when I first started with BMW. I was invited to a rally in NYC and from there, I grew to love photography and cars. The article defines “communities of practice” as a group of people who share a concern or passion and in many ways my group of photographers are indeed very passionate about the work they produce and we are constantly learning every time we get together. There are many benefits to being apart of such group. First, you meet a lot of incredible people who own these vehicles and are able to connect with them on levels many do not care for. Second, your work is shared on many sites and in the offices of the vehicle owners. I have a photo of mine in a NYC office and it encompasses an entire office wall. That is something to be proud of.
-
I think I belong to a community of practice based on a shared concern of learning how to adapt to living in our small town. Members of this community come from cities of various sizes across the country, but we’ve all moved to our current location because of employment at the local university (either following a partner who got a job or being the person who works there). For most of us, moving to a place where information about businesses and services is often only available through word-of-mouth, or maybe a Facebook page was quite a shock. We meet regularly and discuss our experiences living in a place that is unlike others we have experienced. We help each other by providing recommendations (or warnings) for doctors, restaurants, auto repair, plumbers, etc., or general information about local activities and ways of doing things. As new faculty members move to town, they’re invited to join us to help them with the adaptation process, as well, and we also call upon people who have gone through the same experiences as us to get their advice and recommendations. Belonging to this community makes it much easier to adapt to living here.
-
JiHae, yes, you’re correct. I did move from the Northeast to a small town in southwest Georgia. The first year we were here, this “community” did not exist. The group started our second year here, and it made a marked difference in terms of getting through culture shock, figuring out how to get things done, and, dare I say, assimilating into the local culture. We’ve been here three years, and I still find the group very useful. Plus, since the basis of the group is founded on people who moved here for the University, the group’s “membership” changes as people come and go, giving us new perspectives and allowing us to help others going through similar experiences. I say go for it and create your own community of practice in your town — it can be very helpful. One question: what is your definition of “the greatest city in the world?”
-
I am a member of the online weather community (which is probably as nerdy as it sounds). It started a few years ago, when I was first starting out as an operational forecaster for my current company. I recognized that I had lots of responsibilities that I wasn’t taught about in college or grad school, so I started looking for other areas to learn. I came across an online weather forum that seemed to have a lot of knowledgeable posters. At first, I started as a lurker, not wanting to disrupt the flow of information. As I learned from the other members, I started contributing to the forum, and eventually, I became a thought leader within the community. Around 2011 or so, the forum lost some of its sense of a community of practice, but many of the members transitioned to Twitter, where the value adding conversations resumed. The knowledge I’ve gained as a member has been invaluable. I didn’t believe it was possible to forecast the weather beyond a week when I left college, but through the online weather community, I’ve been able to increase my ability to make skillful forecasts out to 4 weeks or even longer depending on the situation. Although I’m no longer an active forecaster as part of my role, as I’ve moved up through my organization, I’ve actually hired two people that I met online, simply because I already knew how they forecasted and what value they could bring to our business.
-
This is an amazing post! I think there needs to be more forums and avenues of communication like this for all specialities! Learning from others in the setting of chat rooms seems invaluable. I imagine people are more readily able to admit when they don’t know how to do a particular task, since they are operating in the some what anonymous internet setting. I’ve seen a couple forms like this for medical billing questions – which I’ve used a lot to teach myself about optimal billing practices. However, a lot of those forums were filled with MBA administrators and not many clinicians. It would be great to see something like this with more doctors! Maybe they already exist and I just haven’t happened upon them yet!
-
-
The idea of community of practice is quite interesting. While I was unaware of the terminology, the general idea – that collaboration amongst colleagues leads to the best outcomes – is quite popular today and in general, is a hot topic.
Many hospitals are the antithesis to community of practice – departments are treated as walled off silos, both literally and figuratively. Even within departments, offices are closed enclaves where physicians work in isolation from their colleagues and peers.
Many hospitals are undergoing serious renovations and changes in infrastructure in order to create a more convivial atmosphere that supports and encourages cross specialty collaboration. At Clevland Clinic, administration has created a series of multi-disciplinary work environments were numerous clinicians from various departments see patients and work in the same space. The benefit is that physicians can collaborate with one another and ensures optimal patient care.
This notion is very similar to the idea of community of practice – we all can learn from one another when we are able to engage in meaningful ways with colleagues and peers. In addition, creating a workspace that encourages or forces chance encounters across departments and specialties furthers this concept.
-
I am a member of the Construction Managers Association of America (CMAA). I became a member when a colleague invited me to attend a meeting that the local group was having. There are many different avenues that the group presents to a perspective member. The domain is that it is a group interested in the promotion of the profession of Construction Management and the use of qualified Construction Managers on capital projects and programs. The community is present on a national level, on a local level and there is an online community that is a combination of both national and local. I personally participate on all three levels and benefit from each in a different way. I benefit from the national experience by understanding what is happening across the country in terms of trends, market presence and challenges. I benefit from the local level by interacting with my peers and sharing best practices while also taking part in a good deal of networking. Finally, I benefit from the online community in that it is my go to source to post a question and get instant feedback from a vast majority of people from various backgrounds which helps with the analysis on my end.
-
Little did I know that I helped build a community of practice. I previously did everything in a service line from marketing and sales, to writing contracts, and recruiting. I was asked to drop a lot of responsibilities and focus on interim management recruiting for all five service lines of our firm. To be honest I do not know everything there is to know about the service lines, but I like a good challenge so I embraced it. Instead of turning to good old Google to answer some of my questions I walked outside my office and started asking Directors questions. I had no shame in asking anything and I thought it was going to be a one-way street of Directors teaching me about their service line. Little did I know that wasn’t the case.
Many of the service lines have never taken on interim management engagements so I have been able to explain to them some of the pitfalls, what to write in contracts, and how to approach conversations with candidates and clients. This has created a community of practice that brings a centralized focused on our interim management engagements, and is allowing me to chip away at the fives silos that exist. My ultimate goal though is to apply a lot of the concepts we are learning in this program to help the firm continue to grow. I’m beginning to discover individuals share the same ideas but they are not communicating them to each other. This goes back to a post I had about open innovation and it may also lead to another community of practice.
-
I am a member of Team Jamaica Bickle, Inc. (TJB), a non-profit corporation based in New York. TJB’s main focus is to aid male and female scholastic athletes from Jamaica, Trinidad and Tobago, St. Vincent and the Grenadines, and Grenada participating in the annual Penn Relays. Their services include helping participating schools find acceptable accommodations, counseling athletes and providing them with familiar Caribbean cuisines during their U.S. stay. I became a member first by attending a few of their sponsored event and then I started donating to their cause. I consider this organization my community of practice because over the years when the Philadelphia group met for fundraising and hospitality initiatives, members have helped me adjusted to living in Philadelphia and regularly share information on the whole ‘assimilation process’.
For me there were many critical differences between working in Jamaica, versus America, not to mention adjusting to the frigid temperatures. So, like most immigrants, I found myself dealing with culture shock as I adapted to life in the US. Other TJB members helped me to realize that something had to give, and that trying to control and fix this new environment was a futile effort. Over time they helped me to realize that I could not expect to fully understand the culture of the U.S., and just needed to adapt myself to it in order to succeed. They shared that I needed to be open minded, patience and persistence and get out there and reconnect (very important). One of their most beneficial suggestion was how to deal with behaviors/comments that are culturally bias and sometimes even crazy. For example, at my old job someone once asked me ‘do all Jamaicans smoked weed?’ My answer was yes! Humor goes a long way. Now my viewpoint has changed. I still have my country’s flag on my car and on my desk at work, but from my perspective living and working in the U.S is neither better nor worse. It’s just very different and I still just love being asked the question…where are you from?
-
Rosemarie, Nice post. Penn Relays are always a good time. It sounds like an interesting organization to work with. How many athletes are you helping each year? I would think you have a lot of people to place. My neighbors growing up were from Jamaica and they shared a lot of the same sentiments you noted in your post. In particular, I know it was difficult for the kids transitioning to the new school systems and for their mother because her husband traveled constantly and she was left on her own her without any support systems like they one you described. Thanks for posting.
-
Rich – thanks for your response. I can’t give you the exact amount that TJB helps annually. But last year, the organization helped approximately 400 Jamaican high school athletes and officials from 32 high schools. It took about 60 volunteers to feed, care for and transport the entire group. Last years was Jamaica’s 50th anniversary so the number was a little high, this year it’s about 350 (I read this in the Jamaican paper, can’t find amounts from other areas). It’s really hard for kids to adjust, whether it’s just coming to events like the Penn Relays or permanent residence. My daughter, who is 13, is concerned about moving to a new high school next year, so I can only imagine what immigrant kids go thru. Thanks for your sentiments.
-
-
-
I am a member of a community of practice within my organization. I recently started a new position with a new company. After reading this article I realize that I am in a community with my fellow trainees. Many of the individuals in this program come from different backgrounds, fields, and have varying degrees of experience. However, we are all brought together as we collaborate to navigate through this training and become better medical examiners. We often work together to solve problems, or draw off of each other’s prior experience in certain situations. My fellow trainees have been an invaluable resource in this regard. The article makes a great point about the formation of a community of practice not requiring intent. The other trainees and I often discuss various medical terms and procedures over lunch, not realizing that we are learning from each other. At times, we actively seek out the information from one another. Conversely, there are times when simple recounts about our day spark fruitful discussions that allow us to grow. Now that I am aware of the concept of a community of practice I will attempt to discover additional communities in which I am a part of.
-
I see this type of community being built at many firms during an orientation period. It seems to be a way to get individuals with a diversity of backgrounds together during an orientation, but gives them a common goal and purpose so that when there is a challenge or idea they are no longer off searching for a solution on their own but have a community to work with. It’s an instantaneous network and by bringing you together they are ensuring a more successful training program as you are no longer just a single contributor but are a community of practice.
-
-
Ryann,
I enjoyed your passionate post about our Temple MBA community and agree with your sentiments. This is truly a community of practice, as we are constantly learning and growing from interactions with each other. As you stated, we all may not have the same opinions on a topic but we will certainly learn from the different perspectives presented. You made a great point about applying the input of our cohorts outside the classroom. It’s obvious that our contributions will assist each other in the various classes, but bringing the knowledge and ideas presented in this program to your business endeavors outside of this program is great. Congratulations on your promotion, it’s good to hear that interaction in this program has helped you professional. I’ve experienced the same thing through this program. The concept of a community of practice perfectly sums up this program. Thanks for sharing.
-
Interesting terminology “Community of Practice” that I had previously not heard of. Being a person who has multiple, yes multiple, dogs with special needs I have joined a few different communities that I actively participate in. One of them being the Blind Dog Rescue Alliance which not only helps place dogs who are suffering from blindness, but they have an extremely active forum where members are constantly speaking with one another to learn what works or doesn’t work so that we can become better caregivers for our animals. They have dozens of events each month to not only encourage members in the community to share their knowledge with each other, but in order to inform non-members and hopefully gain new members to the community. I joined the community when my dog went blind as I wanted to learn more about how to care for my dog. I’ve gained quite a bit from knowledge, friendships and shared understanding as well.
-
Noble work Michael. I too volunteer at an animal rescue organization, Main Line Animal Rescue. Their main focus is the abolishment of puppy mills, which is a huge problem in Lancaster, PA. They do this through educational programs and media campaigns, including huge billboards that can be seen along the PA turnpike. The consortium of volunteers at MLAR are passionate about animal rescue and getting the message across.
-
Nicole – I’m thrilled to hear about a local community focused on the abolishment of puppy mills. I’ve often tried to get involved in more local organizations and have found that the ones I attempt to get in contact with never return calls or communication therefore making it so I can’t add value, nor do they add value to me. I’m going to check into MLAR and look into becoming at least a volunteer. You should tell them to checkout an event that is being held in Lansdale https://www.facebook.com/events/393235660850975/ which is a pet wellness fair and they are looking for rescues to come out and bring adoptable dogs with them.
-
-
-
I had the intention of becoming a teacher when I started college but after doing 3rd grade student teaching mid-sophomore year in the Philadelphia School District, I ran back to Temple and promptly changed my major. Those third-graders were tough. Talk about wanting to deck someone’s kid for having a smart mouth. I couldn’t take it. Also, the lack of parental involvement, the test-taking focus, and the diminishing rights of teachers, left me disappointed. A career in teaching was not for me although I still had the passion to teach. I satisfied that passion by becoming a volunteer tutor and am still a tutor to this day.
I teach elementary, middle-school, high-school, and adult students. Teaching has taught me people learn in various ways. I joined a community of practice called “The Ace Volunteers”. Meetings are discussion, examination, and peer coaching with emphasis on visual teaching models to move beyond traditional teaching methods. For example from group instruction, I now teach multiplication by having students design their own multiplication table. They can either use Word or Excel, or use construction paper and cut out the numbers to place on a table they have drawn. By putting in the labor of making their own table students are more inclined to remember it. This produces interactive learning, engagement, and excitement about math – how about that. Teaching is great for me because it allows me to share my time and knowledge in an effort to make a difference in someone’s life. The community of practice is great as well, because I now have additional effective teaching skills to bring about that life altering change.
-
I am a member of ANFP- Association of Nutrition & Foodservice Professionals, which is an association of Certified Dietary Managers (CDMs) from around the United States. We are a collection of Professionals who are focused on bringing nutritional care through dietary management. I became a member by becoming a CDM student and working towards CDM certification. It is required by the company I work for to have a CDM and ANFP is the association that provides the certification and keeps it up to date by requiring continuing education focused on food service management. Also, ANFP provides a magazine to help further food service operations and has an online board where members can go to share knowledge or receive help from other CDMs. This has been helpful for me as I see how different food service operations do things and allows me to adopt some of these to help better my operation.
-
I have been a member of different types of communities of practice groups both inside and outside my organizations. The one I have been involved with the longest has been the Society of Human Resources (SHRM). SHRM is one of the biggest societies devoted to human resource management and has over 200,000 members in countries around the world. At the local level, SHRM is a group of human resource professionals that get together to share information and experiences across multiple organizations. The biggest benefit of being a member is having the ability participate in conferences and attend local chapters’ events. One of the many reasons I continue to be a member is because I know the members of the community have a wealth of information and knowledge to share. So every interaction I have with them will be beneficial because I can ask questions or request recommendations on a particular issue. SHRM also provides a great network of folks across multiple businesses and across multiple functions which can come in handy when looking for employment.
-
Celia: Maybe I’ll see you at the SHRM conference this year! I agree that the biggest benefit of membership are the community events. It’s encouraging to share stories with like-minded people. I belong to an organization called IABC (International Association of Business Communicators). It’s a relief to get our of your silo and realize that there are thousands of people around the world who are facing the same challenges as you. Often, when you’re in your organization, you can feel like you’re on a bit of an island. Getting out there and discussing challenges with “your people” helps reinvigorate you, open you up to new ideas, and ultimately give you more confidence in your work.
-
Chris – I completely agree. I think that communities of practice really give you an opportunity to get out of your work bubble. Every time I go to a SHRM conference or participate in a local SHRM event I come back to work with great ideas and I can’t wait to share them with my team. I think it is good to have that moment away. I have even had people that I’ve met at these events help me solve issues that I was struggling with. Sometimes having a new set of eyes and ears is really helpful.
-
-
-
I didn’t phase my question clearly, although I do like your definition. What I meant to ask is this: What city are you talking about? (I’m just curious.)
-
Wenger’s description of the components of a “Community of Practice” suggest to me that this concept has tremendous applicability to academic medicine. I work within the “Community of Practice” of Spinal surgery. There is a local community (10 spine surgeons at our hospital along with our fellows and residents) and a national community of all practitioners. We have many joint activities and discussions. Locally, our group reviews patients admitted with injuries the night before, and plan out their care in the hospital, and we review the patients who were treated the day before and the plans for those to be treated that day. Nationally, we have periodic academic meetings where original research is presented and critiqued among hundreds of spinal care physicians, and we run continuing medical education courses, both didactic and “hands-on” (cadaver) course, to allow individuals within our community to enhance their practices and skills. Our actual “practice” consists of patient care (nonsurgical or surgical) research (clinical and basic science), and education. These activities present a “living curriculum” for our students, residents, and spine fellows who look to join our community, and prepare for this future by working with us in the office, on rounds in the hospital, and in the operating room.
-
I belong to a number of communities of practice, perhaps most notably is clinical research. This is a community that consists mainly of medical professionals and aspiring physicians. Although I have conducted research in the past, I would say I really became a member when I started working here at the RI. The benefits are many although certainly the interpersonal relationships and discussion and related learning opportunities are important. Working here provides me access to a large volume of patient information. If I were to analyze this data from home for instance, I would be able to do so; however coming into work grants me the opportunity to pick the brains of other like-minded people who might have faced similar situations before. I therefore benefit from learning Excel functions and other tricks that I might not be aware of if left to my own devices. More recently I have become to Excel master that others in my group come to for answers. If there’s anything I can’t do off-hand I quickly look for an answer and get back to them. In this way we are all learning from each other. The medical community at large provide additional learning opportunities through clinical research meetings. There we go to disclose our findings by way of posters or podium presentations and obtain feedback via question-and-answer sessions or personal discussions in social break-outs. Our research, in turn, benefits physicians by keeping them current on treatment modalities and helping them obtain the best possible outcomes for patients.
-
The community practice that I am a member of is the National Association of Social Work (NASW); I became a member approaching four years now. We engage in activities and face-to-face discussion (i.e. trainings, webinars, social events, etc.); assistance is available, as well as shared information on social networking sites (i.e. avoiding mistakes, problem solving, acquiring new knowledge, etc.). Relationships are built and this enables members to learn from one another and improve organizational performance. This ensures that the quality of this community practice is enhanced and executed with the assistance of a united effort.
-
Ryann,
I agree that our OMBA cohort for residency was a community of practices. Our team like yours came from different backgrounds, ages, demographics and professional roles however we all bonded exceptionally well during the week. The team building exercise and particular the leadership development class provided us an opportunity to form and establish deep interpersonal relationship with our group. Since the residency my fellow team members have reached out on advice for classes others may have already taken and we continue to stay in contact even though we are on different tracks on the OMBA carosuel, We definitely formed a community of practice amongst our team to share best practices, experiences, feedback and overall support. -
As an engineer I belong to the community of practice of the IEEE or the Institute of Electrical and Electronic engineers which is one of the largest professional organizations in the industry. The IEEE’s mission is the educational and technical advancement of electrical and electronic engineering, telecommunications, computer engineering and allied disciplines. The IEEE fulfills its mission through a strong online community of blogs, portals, industry events, publications and conferences which provide members with the opportunity to participate and enrich their professional careers. Some of the publications that the iEEE publishes are the leading trade journals in their respective areas of technology including signal processing, hardware design and software engineering. From my participation at IEEE events I have built a strong network of relationships of peers and other leaders who have helped me with problems I have encountered professionally and with my career. From a career perspective the IEEE offers a dedicated job board for members to interact around opportunities at some of the leading companies in technology including Intel, Apple, Google, Microsoft and Yahoo. The IEEE also plays a strong role in the development of technology standards and specifications around technology often leading working groups across industry to help defined standards for new techologies such as WIFI, Cellular, and others. All of these elements demonstrate why the IEEE is such a strong community of practice in the engineering and technology space.
-
What is an example of a community of practice that you are a member of? How did you become a member? In what ways do you benefit from being a member?
A commodity of practice I am a member of is an additional military training and service organization called Arnold Air Society (AAS). When I started training to become a USAF officer in 2011 I had the option to join this organization as a trainee. AAS offers additional drill & ceremonies training along with mission tasking training which puts you under a lot of stress and teaches you to adapt to it. They are also a service organization so there were several mandated volunteer projects along with the training. To become a member you must be an officer trainee in the USAF and you have to work in an additional 5 hours a week on top of your training cycle in order to complete the AAS training. After a year of training I was inducted as a member and became a trainer and have since become the commander of our squadron until January of this year where I stepped down and promoted one of my previous trainees to the commander position for the next 12 months. The benefits of this organization are two-fold. The main benefit is trainees get additional initial training so they are more prepared and more likely to advance in the program quicker than ones who don’t do the training. The secondary benefit is it opens up opportunities for relations with volunteer organizations, for me I built a great relationship with Habitat for Humanity in Camden, NJ. -
When working at the Air Force Research Laboratory (AFRL), I was a member of an R&D community of practice (CoP) involving people working on problems related to the AF Intelligence, Surveillance, and Reconnaissance (ISR) function. Specifically, I was one of those working the problem of detecting and identifying individuals and small groups of people in the battlespace from standoff altitudes. I became a member of this CoP when I was assigned to the lab back in 2009, and was charged with helping find ways to leverage my division’s legacy technologies toward the problems of human-centric ISR. I benefitted immensely from being a member of this CoP, and our R&D efforts did, as well. As one of the few members of our team who was not trained in the physical sciences, I faced a huge learning curve regarding things like airborne radar platforms, remotely piloted airframe operations, global intelligence collection and exploitation practices, etc. Having a network of like-minded researchers and warfighters to reach out to was absolutely invaluable as I got spun-up.
Later on, being part of this CoP paid huge dividends for me, as I worked to identify new opportunities for us to develop and apply our core capabilities to the problem of airborne ISR. Reaching out across the members of this CoP with whom I had spent time getting up to speed on the diverse subject matters at hand, I was able to put together conversations between key researchers on my team and those from other divisions, such as Sensors and Training, to generate new ideas for our strategic plan. Also, I was able to connect our researchers (who were almost exclusively DoD civilians with no military experience) with actual warfighters who would ultimately be the end-users of the technologies we were had in development. By initiating these conversations in the planning phases of our various projects, I was able to ensure that our researchers stayed on task, and that our potential customers were heard, and not at risk of being given something they either didn’t want or didn’t need.
-
- Load More