The Long Tail in Voluntary...
Transcript of The Long Tail in Voluntary...
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010 1
Rob SpencerPharma External and Open InnovationPhiladelphia, September 2010
The Long Tail in Voluntary Collaboration
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010 2
Many Thanks
contact informationDr. Robin W. SpencerDirector of Research
Imaginatik [email protected]
scaledinnovation.com
Tim Woods, Mark Turrell
Steve Street
John Dila, Gabriel Eichler
Anne Rogers, Kurt Detloff
Jon Bidwell
Howard Smith
Mike Hatrick, Dave Wootten
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Take Home
• The behavior of voluntary contributors is very different from traditional teams.
• All such systems are “long tailed”; half the input (and value) comes from people who contribute only once.
• Internal challenges are an excellent prelude to external approaches.
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Outline
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• Why do things differently?
• The Challenge Model
• The Long Tail in Collaborative Innovation
• Risk-Management Tactics
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Bonafides and Context
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• World’s largest pharmaceutical company
• $7 billion annual R&D
• Tightly focused, managed research teams
• Scientist & manager, 29 years in R&D
• Past 5 years leading innovation initiative
• Retired, 2nd career developing collaborative intelligence systems at Imaginatik
me
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Outline
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Why do things differently?
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
You must master things...
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In Science Business, Gary Pisano notes that biopharma survival depends on mastery of the
• complexity
• uncertainty
• speed of change
of the underlying science.
Gary Pisano (2006) Science Business
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
...that you don’t know inside your company
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Pfizer spent more on research in 2007 than any other company in the world.
JAMA, September 21, 2005—Vol 294, No. 11 1333http://www.nsf.gov/statistics/seind00/access/c2/c2h.htm
Pfizermedical device
firms
foundations & charities
rest of world
other government
biotechnology firms
other pharmaceutical
firms
National Institutes of
Health
USABut that represents only
1.7% of the world’s biomedical R+D spending,
1.4% of the world’s biomedical scientists
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Outline
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The Challenge Model
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010 9
The “Idea Farm” is an all-company collaborative innovation and problem-solving system.
We ran 30-50 campaigns every year.
This approach is known to be effective and sustainable.
Scaling up open collaboration inside is a perfect prelude to Open Innovation.
Pfizer experience
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??
Diverge-Converge
The diverge-converge model is centuries old, proven effective, and scales perfectly with electronic media.
The classic example is the Longitude Act of 1714; see Dava Sobel’s book Longitude
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010 11
Case Studies by Scale and Type
social problem-solving
meeting and decision support
Continuous Improvement
outside supplier & partner challenges
portfolios & priorities : Speed Dates
portfolios & priorities : large challenges
difficult scientific challenges
interactive communications
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Outline
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The Long Tail
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
The Long Tail
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There is a Long Tail of large scale collaboration behavior.
Chris Anderson’s book tells the story for retail books and music. His observations, conclusions, and advice apply directly to collaborative innovation.
It matters because the results are non-obvious, universal, and now predictable.
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Classic vs Long Tail Statistics
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What’s the average height of people?
What’s the average number of ideas from
our employees?
ideas per person
how
ofte
n it
occu
rs• It’s nothing like a bell curve.
• “Average” makes no sense.
• Some people enter no ideas, some enter hundreds. The range is huge.
inches of height per person
how
ofte
n it
occu
rs
• It’s a bell curve.
• “Average” is a useful description.
• The range of values is only a factor of 2.
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Log-log graphs reveal the tail
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linear graph
Log-log plots show the tail clearly.
A straight line on a log-log graph has the form y = Cx-b , a power law.
I graph these like Zipf, with the axes are flipped vs the Pareto convention. Slopes here = b = 1/(α-1)
log-log
Pfizer Idea Farm 2006-200920,000 entries from 4000 authors in >200 campaigns
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Long Tails are everywhere
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• book and music sales
• word usage
• internet hits
• salaries
• avalanches
• wildfires
M. E. J. Newman (2006) Power laws, Pareto distributions and Zipf’s law, http://arxiv.org/abs/cond-mat/0412004v3
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Many Companies, One Phenomenon
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Each dataset is a single campaign at a different company.
Lines all have α=3.0
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These are huge datasets over multiple years and thousands of people each.
These very different businesses show identical behavior patterns.
Cargill, Innocentive, and Pfizer
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Voluntary External Contributions
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An external letter-box system shows exactly the same pattern of contributions.
Data from several years of Pfizer’s open contribution system, courtesy of Doug Phillips
The long tail pattern does not depend on “networks” or “communities.”
one-way only !
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Long Tails in Public Forums
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M. E. J. Newman, Power laws, Pareto distributions and Zipf’s law, 2004
D. Wilkinson, Strong regularities in online peer production, in Proceedings of the 2008 ACM Conference on E-Commerce, Chicago, IL, July 2008
Long tails (power laws) are the norm for large scale voluntary contributions.
Wikipedia and Digg
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
The Value of a Contribution
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The value* of an entry from a top contributor is the same as that from a rare contributor.
The huge number of singleton authors puts their value far ahead of the top contributors.
* Value was measured for multiple large internal challenges, assigned by rankings of the sponsoring business unit.
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Lesson #1
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Voluntary external behavior is different from structured internal behavior.
Internal systems are typically push, external are pull: this is a huge mindset change for motivation and management.
John Seely Brown & John Hagel III, Push Pull -- The Next Frontier of Innovation
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Lesson #2
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Most of your contributions and value come from the occasional contributors.
from authors of 1 idea
of 2 ideas
of 3
Internal contribution statistics are gaussian, external are power law.
Do not bias your system by quantity; you may exclude your best contributors.
Use a structured, scalable approach to evaluating the input.
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Dirty Secrets of 5 Star Voting
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• it’s biased
• it’s compressed
• followers drive to extremes
• don’t make it too easy
How public opinion forms, Fang Wu and Bernardo A. Huberman, Social Computing Lab, HP Labs, Palo Alto, CA 94304, http://www.hpl.hp.com/research/scl/papers/howopinions/wine.pdf
Is the crowd’s wisdom biased? A quantitative assessment of three online communities, Vassilis Kostakos, at http://arxiv.org/pdf/0909.0237
“...when people observe previous opinions ... they tend to follow the trend. As a result ... extreme views get reinforced and become increasingly more extreme.
“... where expressing a view is costly, like when writing a book review...people will tend to ... offset the current view by presenting a differing one.”
“This analysis has shown that the wisdom of the crowd is indeed biased.”
Analysis of Amazon:380,000 reviews of 21,000 books by 134,000 people
Amazon average is 4.4 out of 5
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Lesson #3
25sources: Twitter: Heil and Piskorski, Harvard Business School October 2009; Digg, Wikipedia: Wilkinson, Hewlett-Packard labs; other, this work
What percent of people put in 80% of the content? 80%
Twitter tweets 5%
Digg votes
9%
comments, star votes
21-28%
Wikipedia edits
46%
corporate ideas
58- 68%
info
rmat
ion
cont
ent
The simpler the task, the less representative the results.Be very suspicious of mass ratings.
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Outline
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Risk Management Tactics in Open
Innovation
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Ask Valuable yet Low-Risk Questions
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• Which of our policies and procedures makes your CRO task onerous?
• What are the bottlenecks in regulatory document preparation?
• Can you make this molecule for under $200/kilo?
• We have a new drug for diabetes in Phase III. What could you do with it in other disease areas?
Ask for help in finding problems, not solutions.
Start with optimization, not new opportunities.
Offer an opportunity you wouldn’t exploit anyway.
examples
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Ask Different Questions
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identify inside “impossible” problems
prepare for a partner face-to-face
feedback system for contractors
project tracking for a new collaboration
large-scale electronic RFI - RFP
brokered system for specific sub-problems
inside
supply chain & partners
Open Innovation
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Approach Open Innovation in Stages
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A staged approach prepares for, and minimizes, IP risk when going outside
project team
whole company
partners, suppliersrest of world
know
ledg
e
time
risk
Rob Spencer, Pharma External and Open Innovation, Philadelphia, September 2010
Good Reading
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• John Seely Brown & John Hagel III, Push Pull -- The Next Frontier of Innovation, McKinsey Quarterly 2005 no 3, 82-91.
• John Hagel & John Seely Brown, From Push to Pull - Emerging Models for Mobilizing Resources, working paper, Oct 2005.
• Gary Pisano, Science Business, 2006, HBR Press
• Gary Hamel, The Future of Management, 2007
• Thomas Friedman, The World is Flat, 2006
• Managing Uncertainty, Harvard Business Review
• Strategy Under Uncertainty, HBR OnPoint reprint
• Peter Senge, The Fifth Discipline
Contact information
Robin W. [email protected]
860-326-8077
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Questions ?