If Eric Beinhocker's The Origin of Wealth is a bird's-eye view of the global economy's evolution (and I think it is), then that makes Wikinomics: How Mass Collaboration Changes Everything a close-up portrait of the current generation of that progress.
What's the skinny?
The premise of Wikinomics is that we live in an age when digital information and global communications are easy, cheap, plentiful, and essentially unlimited. Businesses must adapt to the new realities or die.
The four cardinal virtues in the world co-authors Don Tapscott and Anthony Williams present are openness, peering, sharing, and acting globally. My problem with the book is that the first three attributes overlap to a large degree, and it's almost futile to try and keep them separate in an intelligent discussion.
But that's just semantics. The real meat is both plentiful and tasty once you turn a deaf ear to the attempts to squeeze everything into that forced taxonomy.
Free is beautiful
In short, a successful company in the modern age should not be afraid to open its procedures and data stores to the world, and the world can return the favor with mostly free and often surprising insights and behaviors that grow out of the new, open access.
The classic example is Linux, of course. Linus Torvalds got the ball rolling on a new operating system, then turned it loose on the Web. The rogue platform now hosts business-critical applications for many major enterprises. Torvalds himself hardly contributes code any longer -- he's a gatekeeper who incorporates the changes of many thousands of developers around the world into one coherent product. Companies like Red Hat
As the volume's name suggests, Wikipedia is another example. When anybody and everybody can change the encyclopedia, errors should be caught and corrected quickly, and the result is a very usable and up-to-date reference work. That's the same principle that keeps open-source program code like Linux competitive with Microsoft's
"Winning organizations will be those that tap the torrent of human knowledge and translate it into new and useful applications." That's why Facebook became a galloping success story when it opened up programming interfaces to its already large user base, and why News Corp.'s
These are examples of how Wikinomics suggests that business should work right now. Everybody wants to help you, or each other, or some favorite cause, and sometimes just themselves -- and you should just let them.
The Foolish takeaway
The signs are everywhere, if you just look. American Idol wouldn't be a hit without the massive auditions. Without homemade videos, there would be no YouTube phenomenon. Google
If you want your portfolio to survive this momentous shift in the qualities that separate great companies from the also-rans, read this book. I don't care if you get it from an Amazon reseller, the local library, or some fly-by-night downloading outfit. And in a truly open economy, you'll give that business to the one that provides the best value for your money and efforts. That's kind of the whole point.
Further Foolish reading:
Fool contributor Anders Bylund is a Google shareholder but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and some consider Foolish disclosure to be the greatest work of business literature in the history of Western civilization. I'm just sayin'.