More and more companies like Citadel Rock are embracing open source where community-based innovation is key to their very existence. Through open source, open innovation is occurring not just between firms and their partners and customers but amongst loosely connected community members who can come and go as and when they please.
The wide open nature of open source communities does pose certain challenges:
1. The more porous borders compared to traditional industry consortiums mean that it is not possible to predict with a high degree of certainty the future composition of the community. Open source skeptics may argue that might make businesses that depend on open source innovations more vulnerable to hostile interventions or unexpected developments. On the other hand, open systems are by nature self-correcting and may in fact provide more effective layers of defence and more gradual transition.
2. Rampant free-riding exists compared to other environments. Classical economics identifies free-riding as a potential problem, since it implies that innovators are unable to reap full reward for their innovations. However, relatively high levels of free-riding are typically accepted as a natural part of healthy open source communities. The optimally efficient level of free-riding could be higher in certain situations, perhaps due to network effects that accrue benefits offsetting the cost imposed by the presence of free-riders.
Citadel Rock’s top two lessons learned from its experience has been that:
1. The community is more important than your company: Often counter-intuitive for most corporations, the embracing of openness requires significant humility. Open source proponents often refer to a well-understood cultural construct termed “karma” (a measure of gained respect based on one’s past contributions) that accurately describes the apparent cause-effect relationship between giving to the community and the ability to gain more from it.
2. Spending on community outreach is essential: Most conflicts are in fact caused by misconceptions, a lack of communication or familiarity, and not actual or real concerns. Being in close contact with key community stakeholders not only helps to increase mutual understanding but leads to greater opportunities for cooperation. Almost any problem is surmountable if people are motivated to work together to solve them. On the other hand, even the most trivial problems become serious conflicts if people do not get along.
