CENTRE FOR INTERNATIONAL BUSINESS STUDIES
History Making in User Innovation Networks
Leslie Gadman[1]
Paper Number 2-07
Research Papers in International Business
Abstract
In today’s knowledge economy, strategic outsourcing is an integral part of a company’s value delivery and supply chain activity. Business drivers include increased speed to market, access to world class technology, focus on core competence and total cost savings and balance sheet improvement (Sveiby and Roland 2002, Savage 1996, Gadman 1996). However, for companies whose core competence is the discovery and commercialisation of innovative products and services, the perceived loss of control and leakage of intellectual property makes them less willing to commit to organisational models that are more nuanced and pluralistic (Hock 1999, von Hippel 2002). This paper considers the challenges associated with knowledge disclosure, diffusion and utilisation (Snowdon 2002, Spinosa, Flores and Dreyfus 2001) across user innovation networks and concludes that while successful examples exist in “Free” and “open source” software projects (Raymond 1999) commercialisation of innovation becomes more challenging when increasing levels of personal and financial commitment are required (Mauer, Rai and Sali 2004). Current research into core commitment structures of virtual communities has not been well established. By analyzing data from multiple sources on the Tropical Disease Initiative (TDI) the paper concludes that the success of user innovation networks depends on the desire of participants to acquire history- making identities (Gauntlett 2002, Spinosa et al., 1997) by maintaining identity-defining commitments across the network. Implications for theory and research are discussed.
Key words: knowledge economy;knowledge creation and diffusion; value Networking; Organisational culture and authenticity
Introduction
Since the seminal work of Cyert and March, organisational theorists have recognized that firms are not monolithic profit–maximizing entities but rather complex and structured systems whose overall behavior is affected by decisions made sequentially and independently by their members (Cyert and March 1963; Cohen, March and Olsen 1972; March and Olsen 1972). Consequently, it is possible to conclude that organizational systems are composed of more or less autonomous individuals who utilize possibly different methodologies to achieve some level of performance (Malone and Smith 1988). Differences create pressures for isomorphic adaptation and emphasize the need for legitimacy (DiMaggio & Powell 1983). At the organisational level, institutional theory posits that legitimacy is a key success factor for organizations, defining legitimacy as acceptance of the organization by its environment (Meyer & Rowan, 1977). Consequently, legitimacy is gained by adopting positioning strategies which indicate conformance to the essential characteristics of the institutional environment. It is also the means by which organisations and their constituents define their identities and in so doing favourably shape their environment for their own ends (Gauntlett, 2002).
In order to explore the ways individuals maintain legitimacy while forming their identity in “user innovation networks” it is necessary to understand what kind of practices they perform such that they produce personal and corporate identities that matter. According to Flores and Spinosa (1998), people are considered history making or entrepreneurial (Spinosa, et al., 1997), when they involve two interrelated activities: deciding which actions are appropriate given their intense concerns and positioning their actions so that they are interpreted in ways that attract favourable public attention. Developing such an identity engages listening which ultimately influences others to adopt a point of view more closely aligned with that of the influencer and to take on new practices which change their history. This history making capability requires a keen awareness of his or her intense personal commitment and the skilful expression of that commitment in action in some domain of interaction. Heidegger’s (1962 [1937], pp. 352-8; 434-44) emphasis on shared public spaces offers such a domain and an opportunity to explore “user innovation networks” like the TDI, to examine the positioning strategies of their members and the public and personal identities they create.
Identity building, the internet and shared public space
The internet is revolutionary because its two-way communications technology allows large numbers of people to interact with each other. While some interactions might be considered casual many more are purposefully designed to satisfy concerns. The quality of these interactions is measured by the strength of the commitments generated as one person or group promises to deliver results to another person or group in such a way that ultimately there can be agreement that the promise was met and the need satisfied (Winograd and Flores 1987; Flores and Spinosa 1998)). In other words, commitment structures deliver value because they are bonded by the strength of the collective words of their members and identity built on the extent to which a person’s word is or is not their bond. For example, fedex and amazon.com use the internet to establish legitimacy through conversation-based interactions where they commit to be reliable. They do this by positioning strategies like letting customers know what's going on. Alerting customers if problems occur and offering counter-proposals designed to resolve the problem to a customer's satisfaction. Using customer and inventory databases and well-integrated financial and logistical systems, they use the internet to build legitimacy through core commitment structures based on trust (Winograd and Flores 1987). User innovation networks work in the same way in that they are made up of conversation generated commitment structures formed by the exchange of words in real and virtual space that bond members to one another.
This rich network of commitments delivers value by addressing the deep concerns to those involved and ultimately those who receive the benefits of the network’s output. The essential purpose of user innovation networks is the achievement of synergistic interactions among participants which produce results greater than the sum of the individual parts (Richardson 2004). Comprising largely of people, user innovation networks rely on that most unique of human qualities which is an ability to give their word and for those willing and able to keep their word, to gain a unique identity. This suggests that richly synergistic communities are like magnets attracting people who wish to “show up in the world” and in so doing, make a difference “in the world” that is make a difference such that the world is not the same as a result of their actions. The rewards of membership are capability development as potential meets opportunity and ultimately identity creation by association with a history-making event (Richardson 2004, Olson 1965). According to the private-collective model (von Hippel and von Krogh 2003) newcomersto such communities share with existing developers and derive greater benefits of revealing their innovations, than those outside the community (Callhoun 1986; Taylor & Singleton 1993). This is possible because their ideas can be reviewed and commented upon by other developers and users and in terms of learning benefits, the group’s feedback can be direct and specific to the newcomer. Such architectures of participation (Raymond, 1999) include low barriers to entry by newcomers and some mechanism for balancing the need for control with the need for improvisational innovation. This architecture of participation allows for a free market of ideas in which anyone can put forward proposed solutions to problems; it becomes adopted, if at all, by acclamation and the organic spread of its usefulness. Ultimately, the reward for such rich networking is the ability to progress toward levels of knowledge and discovery beyond those achieved by conventional means especially awareness of one’s own identity through core commitment revelation.
Research on the core commitment structures of virtual communities has not been well established, let alone compared to those of traditional communities and the overall lack of a theory of user innovation networking, suggests a qualitative grounded approach to develop analytical categories and propositions (Glaser & Strauss 1967; Meyers 1997; Strauss & Corbin 1990). The theory development in this paper is based on The Tropical Diseases Initiative (TDI) a decentralized, community-wide effort to conduct R&D for neglected diseases. The paper is organized as follows; firstly, it reviews the research method employed in the study.It then provides a history of TDI related development data. It then proceeds to theory induction by an analysis of contributing behaviour exhibited by members of TDI. The paper concludes by discussing implications of the study for theory and research.
Research method
This section describes the research method employed in the study. One case was selected in order to increase the depth of the analysis, acquire and report experience with the gathering of new and unfamiliar data (Numagami 1998). TDI was sampled because the convergence between computing and biology suggests that comparisons might be made with studies of user innovation networks like Open Source. It is important to attempt comparison because other networks are less precise, less meritocratic, do not play on so level a playing field as software development. Indeed, it could be argued that software developers got to open source first only because they were closest to the tool that made it a feasible means of production: the Internet. Also, due to the potential requirement for significant financial as well as intellectual capital investment (Sveiby 1997) it was hoped that TDI would reveal areas as yet undiscovered in current research into identity creation in collaborative communities. TDI also offered an ideal sample because it was in its formative stage with only four individuals making initial contributions.
The data in this paper covers the opening period of the TDI project (2004) and studies events occurring during its critical launch phase and the challenges of mobilizing newcomers. Data were gathered from a range of different sources and occurred between February 2004 and January 2005. The analysis was inspired by the writings of Winograd, Flores and Spinosa (Winograd and Flores 1987; Flores and Spinosa 1998) and their concept of commitment nets. Such networks describe commitment characteristics and their relationships, which together describe the process of commitment. The characteristics, relationships and actors performing them are identified and described in this section on the basis of the analysis.Flores draws on the works by Heidegger (1962 [1937]), Kierkegaard (1985) and Hegel (1979) and opens the discipline of tracking, mapping, and combining commitments based on the constituting power of human speech. This is explained as follows: “Mapping social institutions in terms of their concern and commitment structure tells us what is genuinely new and what is a new way to accomplish old goals” (Flores & Spinosa 1998, p. 357).
In this paper the social institution to be mapped is the TDI as it takes on a radically new approach to drug discovery in a traditional pharmaceutical industry. If this is accepted, TDI can be seen as a new institution arising alongside an old one and possibly a genuinely new way to accomplish old goals. If we are to evaluate whether a change has occurred, we have to look at the changes in concerns and commitments, i.e., the changes taking place in the respective actors’ commitment nets.“[…] once we become familiar with the way commitments drive action, we no longer believe that we have to understand in advance all the component parts of whatever social action we seek. Rather, we see that we must identify concerns and begin forming commitments to address them. The basic organising skill is forming and managing a commitment to deal with a concern. On the basis of one commitment, many others can be grown” (Flores & Spinosa 1998, p. 357).
Focusing on identity creation, legitimising and positioning behaviours, data were gathered from the project’s web site which contained a “wiki” (a website that anyone can edit and contribute to) and discussion forums which were archived on TDI’s website and open to anybody who wanted to discuss the project. Finally,in order to obtain contextual understanding of the project, data were gathered from publicly available documentsrelated to the open source model in general and to the TDI project in particular. Among the most important sources were the TDI web pages (e.g. the original concept paper by Maurer, Rai and Sali (2004), magazine articles, news features and links to other projects attempting similar challenges).
TDI history and development characteristics
This section provides a brief history of the TDI project, its wider context, objectives and an overall characterization of the development process. The current approach to drug discovery is far from perfect. It is costly to develop medicines and get regulatory approval. The patent system can foreclose new uses or enhancements by outside researchers. Also there has to be a consumer willing and/or able to pay for the resulting drugs, in order to justify the cost of drug development. Pharmaceutical companies have little incentive to develop treatments for diseases that particularly afflict the poor, for example, since the people who need such treatments most may not be able to afford them. Taking up this challenge Stephen Maurer, Arti Rai both lawyers and Andrej Sali a computational biologist have adopted an open-source approach to invent drugs to fight tropical diseases. They believe that open source methods can be used to organize early phase drug discovery and through a website called the Tropical Disease Initiative (TDI) they intend to encourage scientific innovation by making it easier for scientists, universities, and industries to use literature, data, and other scientific intellectual property to share their knowledge with others. Calling their approach “open source drug discovery,” TDI aims to significantly reduce the cost of discovering, developing and manufacturing cures for tropical diseases.TDI intends to achieve its mission by firstly giving hundreds of scientists a practical way to donate urgently needed intellectual resources. Secondly, open source discoveries would not be patented, permitting sponsors to award development contracts to the company that offered the lowest bid. This is critical where the existing business model for drug development leads to high prices and unequal access.
Theory induction
In this section propositions are developed towards a theory of core commitment structures in virtual communities engaged in the process of innovation. Through the application of commitment nets, the propositions are grounded in observed behavioural strategies of founders attempting to bring their innovative ideas into being through collaborative efforts. According to Abrahamsson (2002) the key concepts constituting the basis of the commitment net are actors, drivers, concerns, actions and outcomes. See figure 1. These categories are introduced and defined in the following sections.
Actors
There are three levels of actors: individual, group and organization (Hage 1980, Curtis et al. 1988). For the purposes of analyzing the development of commitment networks in TDI it is beneficial to distinguish explicitly between these different organizational levels for two reasons. First, each organizational level actor participates in TDI for different reasons and subsequently is affected by TDI differently. Second, the distinction between different organizational level actors allows the layered analysis of the changing commitment forms and drivers in the commitment process, which in turn provides a richer view into the dynamic complexities of the commitment phenomenon in the case studied. Adapting the levels of actors to reflect a more interpretive approach the analysis regards actor roles as respectively: improving, integrating and operating (Gadman 1997).
Figure 1. TDI Commitment Net
Reviewing the many TDI conversations taking place over networks such as WIKIs, BLOGS and discussion forums it is clear that TDI attempts to change these commitment networks at each level, so as to increase the ability of the network to produce higher quality results within given time and resource constraints and to make individual members understand the benefits of the TDI core mission. As one of the founders said, “Generally speaking, I'm interested in the web and emerging technologies, and how these can be applied to the scientific process. The TDI concept is an excellent example of this, and potentially a way to do a lot of good, hence my interest”. The leadership action takes place at the improving level where the task is to sponsor the project by providing the resources for performing the improvement actions. Maintaining uniqueness and direction through monitoring progress and promoting the TDI core mission and values throughout the organization takes place at this level. For example, during one conversation the founders talked about the way TDI “fills the current gap in early-stage drug discovery”. It also aims to “tip the economics of developing downstream drugs”. As such, it provides a service to sponsors and the Virtual Pharmas they have funded to manage development.
They also recognised that their "customers" concerns had to be taken into consideration if TDI was to be maximally effective. They needed pharmaceutical and biotech companies to commit their scientists to the effort, to provide access to proprietary data and to grant funding. For example, in one conversation the founders discussed which types of scientists and areas of science were important. “Do we have specific examples of scientists who will (or ought to) be involved”? They felt the TDI would need non-scientists, too. “Social scientists and law professors will be helpful in designing solutions to governance and IP policy questions. Lawyers will be helpful if (a) the TDI site decides to adopt “click - wrap” licenses restricting what people do with its discoveries, and (b) TDI negotiates confidentiality agreements in order to obtain access to proprietary data”. This is a key concept in the commitment net formation where different organizations must also be networked into the TDI project. For example, the founders feared that university administrators would be concerned that scientists were contributing information that could be patented by the university. For this reason, each operative level also included external actors working in joint collaboration with groups of university researchers and internal actors within the TDI organization.