Huge bonus points to someone that refactors the two below sets of notes!

Michael Parekh's notes

John Seely Brown

• Friction can be good…ideasparkers
• What is really going on in asia/china and india?
• Toyota vs. detroit
• Lowest cost supplier vs. lowest price
• Deep dialogue vs. no dialogue/our way or highway (wmt same sway?)
• Bring us new ideas/innovations vs. shop around new ideas from one supplier to others
• Respect
• Exception conditions as action points
• City of chongging, 32 million people, modest city
• Major producer of motorcycles
• 50% of world's motorcycles
• 1997, japan was dominant, with honda…they've gone into china
• 1997 fundamentally changed
• Couple of entrepreneurs
• Disruptive innovation
• Up until then, honda, top down design, send out specs of that motorcycle and ask for
• New Chinese assemblers came up with bottom up
• Data: 1997, thru wage arbitration, honda reduced cost fair amount, china had been able to do for $700 vs. $900 for honda
• In 4 year period, this new disruptive innvoation, ended up from $700 to $200
• Export of motorocyles was 12% of production, went to 60% in 2002.
• Honda had 90% to 30% of vietnamese market vector from 1997 to 2002
• Little bit like open source/swarm theory
• Disruptive innovation
• Bottom up, local modularity, drawing approved
• This got swarmed down
• Thru tea houses found web of sub sub suppliers
• How to construct this fariing, etc.
• All kinds of dynamic fricton
• Motorcycle assemblers, choose focal design, modularize architectrure, drasing approval
• Frame/engine/suspension/
• Honda no longer has no role
• This was institutional innovation
• Catch is this is not an isolated example
• All kinds of other ecosystems in china and india that are using
• What enables productive friction?
• Focus on action points, not generalitieis, not abstractions
• Performance metrics
• Define clear targets
• Focus on people
• Relevant askills
• Pattern recognition
• Access to context…everyone has access to the context on what went wrong.
• From an IT perspective facilitiating productive friction across multi-tiered process networks turns on:
• Soa plus virtualizaqtion plus social software, IM, wikis
• Key to handling exceptions and learning
• High tech soft touch
• Move from a push to a pull type word
• Ester's taking john's great pitch to the world of politics, education, healthcare, etc.
• John Hagel
• Toyota and motorcycles
• Some of these assemblers are now looking at the automobile industry
• Tightly coupled to loosely coupled assemblies
• e.g. IE and firefox
• India and china are not just markets, but they are catalysts for very substantial innovation, at product and services…blowback
• Will attack entrenched positions
• Localized modularity
• Vague notion of the mdoules are…what the interfaces are…always is a negotiation.
• Esther " you sort of go up and down the fractal scale"…whaa???
• 7500 factories operate
• Li en feng, modular
• MPQ: how much it spending has gone into these communities?
• Difference vis a vis open source…motorcycles are a concrete object
• Software is an abstract architecture…reference implementation
• GREAT POINT: these swarms only work because there is no antitrust legislation and low IP protection…no concern about patents…the big boss probably owns it all.
• This innovation will dissipate when china evolves
• Great point 2: Taiwan's ODMs gave us laptops, cell phones, etc…they pushed up innovation thru the Intels of the world.
• Most of these have been low tech, phone and fax…actually li feng, adamant on not using technology at all…now using .net web services..to take some of this tech

Ross Mayfield's notes:

toyota and motorcycle manufacturers in china case studies in productive friction, disruptive innovation

SOA, virtualization and social software (IM, wikis)

freeze the context of the exception, social software, what led to the exception condition

move from push to a pull.

innovation blowback: too many companies are looking at emerging economies as growth markets for them, but in fact they are catalysts for innovation

localized modularity: notion of what the modules are, but the interfaces for the modules are always a negotiation. brings people into the loop in a fundamental way. loosely coupled software and process architecture. Le & Fung in the apparallel industry uses this for 7,500 specialized supply chain players. Competes with Walmart. Post 9/11 some operations at risk in Pakistan, moved to other suppliers within three weeks. But again the opportunity is the innovation:

• modularity combinations
• within the modules, incremental operational innovation without ripple effects
• productive friction at the boundaries of the modules

This is emerging across enterprises, but an opportunities to bring it inside enterprises, to replace top-down rigid process. Value is in flexibility.

Takes some ideas from open source. Most have reference implementations. Concrete object was an implicit coordination structure, besides processes.

This change needs a different mindset. Dynamic specialization unbundles companies. Product innovation being outsourced, (original design manufacturers) ODMs in Taiwan -- they drove the innovation up through Intel.

Let go of IP and focus on building capabilities to help you move quickly for lower price points and greater reliability in products.

People getting together in a room solve problems, not technology? Social software movement brings people around concrete problems to innovate. most of these process networks have been low tech (telephone and fax in some cases). Le & Fung were adamant to not deploy technology because it is not flexible. Now they see the potential and flexibility. Do loosley coupled business processes and then find the tools to support it. The moment you install an applciation you stop innovation.