Overcoming Joy’s Law
No leader or hiring manager would admit she or he can’t hire the smartest and best people in the world. But in 1990 Sun Microsystems’ co-founder Bill Joy made a provocative claim which became known as “Joy’s Law”: “No matter who you are, most of the smartest people work for someone else.” It was in direct response to Bill Gates’ claim that Microsoft was an IQ monopolist.
Joy said, it is better to create an ecosystem that gets all the world’s smartest people toiling in your garden for your goals. If you rely solely on your own employees, you’ll never solve all your customers’ needs. So what are the implications for you and how you run your business given this principle is a reality? How do you harness Joy’s Law to your benefit and get others to “toil in your garden?” Here are three big ways:
#1 Ecosystem Architecture and Design
Look for opportunities in your business model design, physical or software design and systems to build-in co-creation with users, suppliers or other smart stakeholders. In other words, design for an ecosystem. Apple did this when they launched the app store, creating billions in value from an open developer ecosystem that made not only their iPhones highly valuable for their users, but created a multi-billion dollar app business with an ecosystem of over 500,000 publishers. Had they relied on their own team in creating the app content for the store or drove closed partnerships, their fast scale and value would never have been achieved. While now you see many examples of open ecosystem design in the technology industry through use of tools like APIs, what about traditional industries? A good example of this in the automotive industry is the use of generic product architecture. In the past, the auto industry had to manage a huge amount of complexity and variety of components and related costs across automotive platforms and each and every model. Then forward-thinking companies like Ford, analyzed their design complexity and actively sought modular design opportunities in their physical product design, such as designing a modular interface for headlights, so regardless of which supplier or design is chosen now or in the future, minimal re-tooling or costs are associated with it. This also allowed for suppliers to design to standard interfaces, creating greater cost advantages and manufacturing flexibility while increasing the surface level variety to chose from within and across suppliers.
#2 Knowledge Marketplace
If by Joy’s Law no one can have a monopoly on the smartest people, how can you maximize the ability for your organization to benefit from the smartest people outside your organization? By literally getting them to work for you. What I mean by this is by participating in the global knowledge marketplace through sites like expertDB, where a company can flexibly recruit specialized industry or domain experts/researchers/consultants on an on-demand basis. Your organization then benefits from flex hiring for short or long-term projects especially if you don’t have budget or need for full-time hiring, while ensuring you are getting some of the best on the planet to infuse their thinking and insights into your organization. In the chart above based on a CEO survey conducted by IBM, a huge proportion of innovative ideas come from external sources that need to be tapped into systematically from consultants, competitors, customers, associations, to academia and this can be for innovation across functions, not just R&D innovation.
#3 Open Innovation
Open Innovation “assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.” For example in R&D and product development rather than using just an internal team, similar to the theory behind Joy’s Law, you should look for opportunities to engage externally such as start-up acquisitions, partnerships, innovation competitions, buying or licensing patents, or joint ventures and development. These approaches have the significant benefit of higher ROI, higher productivity, and increases the odds of striking gold faster. We are seeing governments embrace open innovation, for example, DARPA crowdfunded it next-generation combat vehicle. Many of the most well know companies in the world rarely rely on solely their internal R&D team anymore, rather they leverage the latest research and expertise that is distributed globally through university partnerships (such as Uber’s infamous partnership with CMU for driverless car technology) or working with industry and domain experts and researchers through sites like expertDB, or Kaggle a platform for data science research competitions. In order to execute open innovation well, there needs to be clear legal view on how external contributions would be handled from an IP perspective.
Phalgun Raju, Founder expertDB
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