THE BOSTON CONSULTING GROUP

1
MAKING CONNECTIONSLessons From Open Sourceon
the Power of Networked CommunitiesSoftSummitSan
FranciscoOctober 2005
THE BOSTON CONSULTING GROUP
2
OPEN SOURCE IS ABOUT...

• Breakthrough creativity
• ...solving complex challenges
• ...by participants
• who are geographically and organizationally
  dispersed
• who dont do it for direct monetary reward
• who display unusual passion for the endeavour
• ...in ways that compete aggressively with
  solutions from the most fearsome commercial
  vendors

The basic principles are not new. The full set
of organizational lessons are very new (and still
emerging).
3
IBM AND VIRAL MARKETINGUNTIL RECENTLY, AN
OXYMORON
4
Security breach reported by sysadmin AB to MP and
others. In parallel, security specialist MW
emails MP about same issue. MP does 4 hours of
homework
Slashdot
G2L
Recognized as threat to entire Linux community,
any breach must be kept confidential within a
trusted team
AT
MP studies available data, consults with security
expert DD, and engages with AB by phone
rsync Team
AB
On three hours of sleep, AB digs into 8 hour
forensic investigation, hands to MP
RR
MP
MW
MP pulls in rsync team including AT, RR, plus
Gentoo Linux and other security specialists. MP,
AT and RR write patch and have it vetted by others
DD
In parallel, AT writes technical announcement to
WW Linux community
Participants
WW announcement out to vendor community,
Slashdot, and other lists discussion about
outreach to users
AB
MP
MW
AT
DD
rsync
Work on honey pot started by AB and MW
RR
G2L
Tues, 2 Dec 2003 11 PM GMT
3 Dec 4 AM
8 PM
noon
4 Dec 4 AM
8 AM
midnight
4 PM
8 AM
noon
Time
5
MORE THAN 85,000 MESSAGES A MONTHCOORDINATE THE
LINUX ENTERPRISE
User
Development
Extensions
Corporate mailing lists
redhat- list
suse- linux-e
suse-linux
suse-security
Community mailing lists
debian-devel-changes
debian- devel
linux beer hiking club
linux-raid
linux-newbie
linux-kernel
debian-user
alsa-devel
linux.redhat.misc
linux. redhat. install
Corporate bulletin boards
alt.os.linux. mandrake
comp.os.linux. advocacy
comp.os. linux. hardware
comp.os. linux. networking
comp.os. linux.misc
Community bulletin boards
Posts/month
1,000
alt.os.linux
Note Number of messages posted in June 2000 on
147 relevant bulletin boards and mailing lists
(duplicate postings removed) Source deja.com
geocrawlers.com BCG analysis
6
OVERVIEW OF KEY FINDINGS ON HACKER MOTIVATIONS
Why should we care?
High creativity
?
What motivates hackers?
Fun, skill, freedom and need
Increasing knowledge biggest benefit
Losing sleep biggest cost
Who are these guys?
IT professionals
Generation Xers
Volunteer significant time
What about the community?
Strong identification
Global effort
Peer leadership preferred
7
OSS MAKES A CREATIVE CONNECTION FOR PARTICIPANTS

• Like composing
• poetry or music

48.4
61.7

• This project is as (or most)creative as
  anything I have done

72.6

• When I program,
• I lose track of time

• With one more hour in the day,
• I would spend it programming

60.0
Note ...like composing poetry... answer chosen
as one of top three attitudes by participants
other answers based on degree of participant
agreement with statement
8
ITS ABOUT LEARNING, AND GETTING STUFF DONEMore
So Than A Religious War
Intellectually stimulating
Improves skill
Work functionality
Code should be open
Non-work functionality
Obligation from use
Work with team
Professional status
Other
Open Source reputation
Beat proprietary software
License forces me to
Percent of respondents
Note Question asked for top three motivators of
F/OSS participation, n684
9
MOTIVATIONS AND CONTRIBUTION STATUSSEGMENT
HACKERS
Community Believers (19)
Hobbyists (27)
Motivations
?
Do it because they feel obligation and believe
source code should be open
Do it for non-work
Professionals (25)
Learning Stimulation (29)
Do it for skill improvement and fun
Do it for work need
10
IS YOUR ORGANIZATION THIS CANDID?

• From Linus Torvalds (torvalds_at_transmeta.com)Date
  Tue Jun 18 2002 - 191245 EST Re latest
  linus-2.5 BK broken
• ...This is not rocket science, and I find it
  ridiculous that you claim to worry about scaling
  up to thousands of CPU's, and then you try to
  send me absolute crap like the above which
  clearly is unacceptable for lots of CPU's.
• No, C doesn't have built-in support for bitmap
  operations except on a small scale level (ie
  single words), and yes, clearly that's why Linux
  tends to prefer only small bitmaps, but NO, that
  does not make bitmaps evil.
• Linus
• From Rusty Russell (rusty_at_rustcorp.com.au)Date
  Wed Jun 19 2002 - 102353 EST
• ...Spinning 1000 times doesn't phase me until
  someone complains. Breaking userspace code does.
  One can be fixed if it proves to be a
  bottleneck. Understand?
• Rusty

11
FIRE AT THE KARIYA 1 PLANT OF AISIN SEIKI 418
AM February 1, 1997
Source SMR
12
Fire at Kariya 1 Plant Toyotas sole source of
P-valves (for brakes)
Entire TPS faces shutdown within 72 hours
Denso
Aisin, Toyota and other Tier One Suppliers
collaborate on an emergency production plan
Tier 2 suppliers team up, under leadership of
their Tier 1s
Aisin distributes blueprints, raw material,
undamaged drills, and assigns staff

• 22 of 30 plants closed TPS self organizes to
  save system, e.g.
• Nippon Denso volunteers as the logistics
  manager

• Toyota turned to its RD prototype department

• Koritsu Sangyo, a tiny Tier 2 supplier to
  Aisin, was first to deliver P-valves

Daily Production of Vehicles
First 1000 P valves shipped to Toyota
Units
Daily output of 13,000 vehicles 62 firms
manufacturing P valves
Sat 02/01/97
Tues 04/02/97
Wed 02/02/97
Mon 02/10/97
Wed 02/05/97
Fri 01/31/97
Sat 02/01/97
Sun 02/02/97
Mon 02/03/97
Source SMR, WSJ
13
TOYOTA BUILDS ITS SUPPLY CHAIN TO ENHANCENETWORK
LEARNING

• Across the chain, Toyota builds
• Affiliation, loyalty, shared goals, mutual
  dependence
• Open knowledge-sharing based on a common
  semantic
• Teaming norms
• Trust that all will be treated fairly
• Dense collaboration networks

Common principles used in Japan and North America
Source Dyer and Nobeoka Creating and managing
high-performance knowledge-sharing network the
Toyota case SMJ, 2000
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TPS SUPPLIERS SELF-ORGANIZE ON MAJOR INITIATIVES
Supplier Network Restructures Over Time
Toyota Encouraging Supplier Consolidation,
Collaboration
Toyotas Tier One Supplier Network Increasingly
Interconnected

• Recent projects
• Interior parts and seats (in discussion, August
  2003)
• Brake products ADVICS (July 2001)
• Plastic fuel tanks FTS (Feb 2002)
• Electronic power steering (Nov 2002)
• Map databases Toyota Mapmaster (1998)
• Development/production collaboration
• Safety systems (airbags, seatbelts)
• Engine parts (throttle bodies, injectors)
• Pistons
• Production, business transfer and consolidation
• A/C compressors
• Anti-vibration rubber

Note This network map is partial representation
of existing TPS collaborations Source Morgan
Stanley, August 21, 2003
Recent changes
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WHATS HAPPENING WITHIN THE TPS? (I)
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WHATS HAPPENING WITHIN THE TPS? (II)
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WHATS HAPPENING WITHIN THE TPS? (III)

• Individual Learning Principles

• System oriented principles

• Its the work, stupid
• All work is an experiment
• Standardized documentation
• Leaders as mentors in the work
• Systemic voltage generation (pull, JIT,
  balance)
• Accumulate personal knowledge of work and norms

Standardized interactions Long term
relationships Open knowledge sharing Discretion
ary voltage directed by leadership Stability
and consistency of application of mechanisms
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THE NETWORK LENSMAKING THE INVISIBLE VISIBLE
Traditional views
Network analysis view
Operations
Org. chart
TC
CD
HC
Strategy
Energy
Consumer
IG
FS
Org
Matrix
IT
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KEY PLAYERS BECOME APPARENT IN PHYSICIAN
REFERRAL NETWORK
Example of attending and referring physicians
Situation
High variation in number of referrals made by
physicians Uncertainty about high leverage
marketing targets
Attending physician (250 referrals
received) Referring physician (250 referrals
made)
Source BCG analysis
20
KEY OPINION LEADERS IN MEDICAL MARKET
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TELECOM REVIEWING SALES FORCE EFFECTIVENESSFOR
EFFICIENCY IMPROVEMENTS
Situation
High variation in attrition rates among sales
force reps Network analysis conducted on hiring
patterns of managers
Source BCG analysis
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AN APPROACH TO NETWORK ANALYSIS Five Step Process
Methodology
Objective

1. Develop lay of the land
2. Define the measurement plan
3. Build the fact base
4. Create the diagnostic
5. Launch the network transformation

• Define network aspirations (i.e. good
  collaboration) and characteristics which promote
  it
• Determine methods to observe and measure
  interactions that define good collaboration
• Map networks and analyze quantitative network
  performance metrics
• Synthesize analysis to assess overall network
  performance and develop action plan to pursue
  opportunities
• Design and implement new business processes to
  foster the network characteristics recommended

23
WHERE TO START?Candidates For Networked
Community Action

• Look for target problems or projects
• That have a clear, valuable objective
• Where individual action can make a difference
• That will benefit from lots of eyes
• Cross organization boundaries
• A few ideas to consider
• Your product support knowledge base
• IT or technology standards
• Your IT application portfolio

24
OPEN SOURCE PILOT CHECK LIST

• Global goal A compelling, collective vision
• Individual goals Its the work, stupid
• Peer leadership Fact-based, passionate, open,
  accountable
• Modularity Chunks where individuals can make
  a difference
• Connectivity Connections across silos
• Work norms Disciplined, fact-based interaction
  around the workRelease early/release
  oftenOpenness
• Work space Activity must exist where
  individuals work
• Call to arms Why this effort, why us, why now

Get started. Learn by doing.