The world used to belong to the Protectors, but their day has passed. The baton has been passed. Now is the time of the Givers.
So who are these people, the Givers and Protectors?
The Givers are individuals and companies who share their knowledge. When they make a discovery, they let others know. They share details of their processes, their mistakes and their successes. Academic research has traditionally been the domain of Givers. When scientists make a breakthrough, they release a white paper.
The Protectors are secretive about their discoveries. Their focus is on monetizing their breakthroughs and protecting their commercial advantage. The pharmaceutical industry is one sector that has been dominated by Protectors. When their R&D departments make a discovery, they put a cage around it.
When Apple launched the iPhone, they did something remarkable. They gave third party developers access to their coding so that others could build apps for the iPhone. Protectors would never have done that. Protectors would have developed the apps themselves.
Protectors would never have had the success with iPhones that the Givers at Apple have enjoyed. Why?
For starters, if Protectors ran Apple they could never have developed so many apps so quickly doing it all in-house. Remember, there were 400,000 iPhone apps within a year of the phone’s launch, many of them specialist and even obscure apps that Apple themselves probably wouldn’t have even thought of.
Sure, if Apple had kept app development in-house, they’d have made maybe $5 for each new app sale. However, Apple could see that by letting third party developers create the apps, and taking a commission for selling these apps on the Apple store, they’d still make good money.
In fact, Apple’s accountants would have quickly worked out that 30% of the sale price of 400,000 apps would easily be more than 100% from, say, 500 apps.
There’s another reason for Apple’s decision. Without apps, the iPhone is just hardware. The more apps that are designed for the iPhone, the more people will want to buy the phone.
Recently, Elon Musk, creator of the Tesla electric car, announced that he was giving other companies access to Tesla technology. The Protectors would have said that he’s crazy. His rationale for doing this? Electric cars only become viable when they reach their tipping point – when there are many of them on the road and recharging points are everywhere.
By making his technology freely available, he is betting that the market is big enough for more than one player. He is also demonstrating faith in his own company’s ability to remain innovative and desirable in the competitive market of the future.
Is the Giver practice right for your business? Should you share your breakthrough designs and research findings? Should you consider pooling resources with competitors?
Here are some circumstances in which you might consider sharing knowledge or skills:
You need a disruptive idea
You haven’t even identified your big idea, but you’re looking for one to develop. It’s definitely smart to collaborate. Many minds with diverse experiences have a greater chance of a breakthrough idea. Every one of the major innovations of the past 200 years resulted from collaboration. By sharing your idea to a group, you might get something bigger in return.
Introduction or growth industry stages
This is the market Tesla is in right now. The electronic car industry is in its infancy. Elon Musk believes he has more to gain by sharing a bigger pie than keeping all of a smaller one. Is your business sector in the introduction or growth stage? A good example would be renewable energy – and especially energy storage. Businesses in this industry should be collaborating and sharing breakthroughs.
Commoditized services and products
You offer a product or service that is a core product of your industry, but it has become commoditized. In these circumstances, the service becomes price-sensitive. Anything that reduces the cost of delivering the core service is worthwhile. Economy air travel has become such a service. At the bottom end of the market, travellers expect nothing more than low fares, punctuality and civility. On these criteria, it’s difficult to differentiate one airline’s service from another’s. Could airlines meet their budget client needs by sharing behind-the-scenes functions, for example?
Business sector is under threat
You operate in a sector whose future is shaky – threatened by emerging technology, a change of audience habits, market saturation or environmental & economic pressures. Clinging to your share of a sinking vessel isn’t smart. Pooling knowledge (and using creative thinking techniques) is the only way such an industry can survive and thrive. The coal mining industry is a prime example. The smartest players should be working together right now to redefine their business and reinvent their sector.
The present and the future belong to the Givers. The question is whether the old Protectors can change their ways. Time will tell.