Diego Rodriguez and Doug Solomon

Leadership and Innovation in a
Networked World

In 2001, Scott Johnson was a successful Silicon Valley entrepreneur. He had every-
thing he wanted in life, except for one thing: afflicted with Multiple Sclerosis (MS)
for 25 years, he lacked a clear path back to full health. That year, he read a brief arti-
cle in BusinessWeek about the possibility of myelin repair. Myelin is the protective
coating surrounding nerve fibers in the brain and spinal cord. It is the destruction
of myelin in MS that causes the symptoms of the disease, and even death.
Understanding how to repair the myelin damaged by MS could mean stopping the
disease in its tracks. So began an investigation that led Johnson in 2003 to found
the Myelin Repair Foundation (MRF), a non-profit medical research foundation
dedicated to accelerating basic medical research into myelin repair therapies that
could dramatically
from MS.
Of the many medical research foundations doing good work out in the world,
MRF is unique because of its collaborative, plan-driven, managed approach to
realizing innovation breakthroughs. Realizing that a broad network of
researchers could do more than individual investigators working in relative isola-
tion, Johnson pulled together five leading scientists and their labs asking them to
work together in the name of collaborative discovery. Any patents resulting from
collaboration within this merged network of researchers would be allocated to the

lives of people suffering

improve the

Diego Rodriguez is a partner at IDEO and leads its Palo Alto Office. He co-leads its
global Design for Business group, where he works with clients on marketing and ven-
ture design issues. Diego is also an Associate Consulting Professor at the Hasso
Plattner Institute of Design at Stanford Unversity (the d.school), where he teaches
design thinking classes. Prior to IDEO, he held operating positions at HP and Intuit.
Diego earned undergraduate degrees in engineering and the humanities at Stanford,
and an MBA with Distinction from Harvard Business School.

Doug Solomon is Chief Technology Strategist at IDEO. Prior to IDEO, Doug was
Vice President of Investments at Omidyar Network, helping pioneer a new approach
to investing for social impact. He was also Senior Vice President of Corporate
Development and Chief Strategy Officer at both Apple and Palm, in addition to hold-
ing leadership roles at Interval Research and several technology startups. Doug
earned a Masters Degree in International Public Health from the East-West Center,
University of Hawaii, and a Ph.D. in Communication Research from Stanford
University.

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Diego Rodriguez and Doug Solomon

foundation, and royalties shared among all participating institutions. The result
is a new hybrid model for medical research that borrows from both the worlds of
business and science.

This networked approach to leading innovation seems to be working. MRF
says this approach is cutting in half the time it takes to discover a viable therapeu-
tic drug. In 2006 Johnson was recognized among 50 individuals worldwide by
Scientific American for innovation and policy leadership. At that point he said,
“Before we started this, if you asked experts how long it would be until myelin
repair drug targets might be licensed, they replied 15 to 20 years. With this
process we expect to license the first target by 2009.” In 2007, after only three years
of research, the MRF scientific team had identified 13 novel therapeutic targets,
and more than a dozen new research tools, assays and animal models. MRF has
filed nine patents on those discoveries to date. When compared with leading
research universities, this result is more than three times greater per million dol-
lars in research expenditures. By embracing the networked nature of our modern
world, the model MRF is developing and demonstrating has the potential to speed
all medical research, bringing treatments to those who suffer from other chronic
or debilitating diseases for which there are no effective treatments or cures.
Networked innovation looks promising. How might it better fit into our future
ways of creating value in the world?

REVISITING EXISTING PARADIGMS OF INNOVATION

The idea that innovation works via networks of people and things is nothing new.
Innovation has always been about spreading new ideas through populations and
systems.1 But until very recently, the way we’ve approached the human aspects of
innovating, as well as how the technological elements serve to support it, has been
very limiting.

As a society, when it comes to people we still celebrate the myth of the lone
inventor. Particularly in the U.S. —perhaps as a result of our cultural fantasies
about heroes of the Wild West—we idealize individuals. These range from sports
figures like Dale Earnhardt, Barry Bonds and Tiger Woods, to business and tech-
nological innovators such as Steve Jobs, Sergei Brin and Larry Page, even Bill Gates.
Accordingly, much of the thinking about innovation has focused on individuals.
Up through the 1960’s, the innovation in thinking about innovation was largely
about engaging individual creativity. This was seen in the plethora of books on cre-
ative people (such as Einstein and DaVinci) as well as books about creativity meth-
ods.2 Through the 1970’s, the innovation in innovation was group-based thinking.
Methods such as the Delphi Technique used expert opinion aggregation,3 and
brainstorming were all the rage. But the prevailing conventional wisdom was still
that the group is only as smart as its smartest member and the techniques used
were designed to elicit the best ideas out of the group. More recent notions (and
research evidence) indicate that group dynamics and hive mind thinking are quite
powerful, but are not well acknowledged. Today, we have evidence that, when it

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Leadership and Innovation in a Networked World

comes to taking on challenges, groups made up of “normal” people often outper-
form those made up of people with the “right stuff.”4 While golf may be a solitary
sport and hitting home runs is too, building an iPhone is clearly not. At its best,
innovation is more than a team sport — it is a networked, collaborative adventure,
and if we can begin to imagine new paradigms for collaboration, and the appro-
priate models for leadership within collaborative teams, we’ll be more likely to find
the kind of success demonstrated by MRF.

New communication and
collaboration platforms,
media, and tools now
allow many-to-many
collaboration at a scale and
cost that could never have
been achieved in the past.

Until this decade, the ability to use technology to enable networked innovation
was very limited. The primary technologies used to facilitate group innovation
were paper and, more recently, the whiteboard and dry erase marker. Certainly
telephones and faxes helped link people, but the utility of a live call diminishes
quite rapidly as the number of participants grow. However, a great deal has hap-
pened in the past decade that is revolu-
tionizing collaborative innovation. New
communication and collaboration plat-
forms, media, and tools now allow
many-to-many collaboration at a scale
and cost that could never have been
achieved in the past. The Internet, an
overnight success three decades in the
making, along with its younger cousin
the Web, really does change everything.
For the first time, we now have tools that
enable the free exchange of information
across many individuals with remark-
ably low friction. As a thought experi-
ment, imagine a single person or non-
networked organization answering hundreds of inquiries per day in a productive
and effective fashion. In the industrial-world paradigm, this would require dozens,
even thousands, of customer support representatives. It would probably feel a lot
like calling an airline. And yet a technology-enabled organization like Google
responds to over 200 million search queries per day with sub-second response
time: new technologies can change our sense of what can be done at scale.

Unfortunately, by seeking the rare brilliance of a limited few instead of the sta-
tistically likely success of the connected many, the “lone genius” worldview has
limited our ability to make meaningful progress in everything from technology, to
organizations, to education, and all the way to society. We’ve done very little to
systematically develop technology to support the innovation process. Overall, we
are still in the “horseless carriage” days of living in a truly networked world. We
can do better, but how do we begin to engage this new way of being? We believe
a path to the future can be found by paying conscious attention to evidence of
what works in the world today, and by asking the following questions as we work:
• What are some of the enabling collaborative tools available today?

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Diego Rodriguez and Doug Solomon

• What lessons can be learned from organizations doing networked innovation?
• How do things get done in a networked world?

WHAT ARE SOME OF THE ENABLING
COLLABORATIVE TOOLS AVAILABLE TODAY?

As mentioned earlier, many of the new approaches to collaborative leadership and
innovation are enabled by a foundation of Internet and Web technologies and
offerings. These help people come together across time and space, at an extreme-
ly low cost. Critically, they allow for the aggregation of like-minded people, who
may be geographically or politically dispersed, to find each other and engage in
discussions and transactions of many various types.

There are many new collaborative tools that can be used for innovation:
Instant messaging. The ability to easily send short messages back and forth to
others who are present using computers and mobile devices. To grasp the scale of
this communication mechanism,
in China during the 2007 New Year’s
Celebration, more than 16 billion instant messages were sent via cell phones.5

Conference calling. Previously only available to corporate entities, now virtual-
ly anyone with a connected computer can initiate and participate in a conference
call with others worldwide. We recently held a conference call with 25 people on
the line, and the give-and-take of that conversation was an order of magnitude
richer than what we would have experience via 25 separate phone calls.

Video conferencing. This is the addition of live video to conference calls or one-
to-one messaging, a prime example being Skype (free), HP’s Halo or Cisco’s
Telepresence systems (not free, but simply amazing). Seeing the person you’re
talking with not only helps build an empathic bridge, but greatly facilitates the
transmission of visual data—in our experience, showing a prototype of a new
product to someone is difficult, but easy on-screen.

Shared whiteboards and documents. These allow people to interact in real time
and share documents, photos, drawings or presentations where anyone can edit or
annotate the shared media. It reinforces collaboration and iteration. You know
Just imagine: with
the saying “a picture is worth a thousand words”?
each photo you show, your meeting could be 1,000 words shorter!

It’s true.

Virtual spaces places. Web offerings such as Second Life (see case narrative by
Cory Ondrejka in this issue) and Kaneva that allow people to interact in real time
within a virtual three-dimensional world, are influencing the ways social and busi-
ness networks evolve. One of us recently put together a lesson plan for a class at
Stanford University by holding a very productive session by meeting in a city that
you can only find inside of a popular massively multiplayer online game. Sure, we
could have met instead at our local Starbucks, but we felt the stimulating environ-
ment of this online fantasy world would better help us uncover an innovative
approach to the class. And we did it from the comfort of our own living rooms.

Wikis and blogs. Web tools that have become widely available in recent years,
making publishing quick and easy. They encourage dialogue and sharing, via asyn-

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Leadership and Innovation in a Networked World

chronous posting of comments, documents, discussions, and editing of shared
media. Both of us publish frequently to blogs and wikis, and as a result have been
able to make connections to people in Europe, Asia, and Africa who we would oth-
erwise never have met. Blog search engines, such as Google Blog Search and
Technorati (to name only two of many), allow people to easily search a huge quan-
tity of very dynamic information. Technorati claims to search 103.6 million blogs
and over 250 million pieces of tagged social media, and they do this with a very
small latency period, versus the longer search frequency of standard search
engines. This allows for blogs to serve as an early warning system for everything
from wars to pandemics, and even celebrity sitings.

Question and answer sites. Many websites, such as Yahoo Answers, Windows
Live Q&A, Wondir.com, and Ask the Imam, allow groups of people to easily share
their knowledge and create new value. Recently, one of us had a nasty problem
with the burglar alarm of his 1989 car waking the neighborhood night after night.
After posting a question on a car repair Q&A site, he received a detailed step-by-
step guide with photos on how to easily deactive the alarm written by a mechanic
with over 30 years of experience.

This is not meant to be an exhaustive list of collaborative technologies. And
for those of you who live on the Web (or who have teenagers who do so) it may
seem downright obvious. But, in our experience, even these simple tools can have
a powerful energizing effect on the ability to innovate in a networked fashion.

WHAT ARE SUCCESSFUL EXAMPLES OF
NETWORKED INNOVATION EXTANT TODAY?

Barring an unforseable calamity that causes a reversion to old technologies and
cultural norms, the changes just described will only continue. Examples of organ-
izations that are using this new approach to leadership and innovation in a net-
worked world are very diverse, but we’d like to highlight the following:

Global Social Business Incubator (GSBI). Based at Santa Clara University, it
provides an innovative mix of both physical and virtual collaboration and educa-
tion to enable social entrepreneurs to scale their endeavors and achieve sustainabil-
ity. GSBI has a two week “course” they offer each year, as well as pre and post-
course mentoring and collaboration using a wiki platform with a distributed net-
work of experienced entrepreneurs and business experts who volunteer to help the
social entrepreneurs grow their organizations through better business plans, finan-
cial models, improved presentation skills and fundraising strategies.6

Innocentive. A commercial spin-out of Lilly, it uses a network of researchers
and scientists to speed up scientific and medical discoveries. Innocentive provides
an online innovation marketplace to bring together “seekers” who want solutions
to problems in the sciences (physical, math, chemistry, life, and computer), engi-
neering and design, business and entrepreneurship, with 125,000 “solvers” located
in 175 countries around the world. The “seekers” offer cash rewards for solutions
to their problems that are meaningful to individuals. They provide an anony-

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Diego Rodriguez and Doug Solomon

mous system for linking these two groups and for safeguarding the intellectual
property. They encourage non-profit organizations to use their service and are
beginning to move from a one to one relationship to the development of a com-
munity collaboration model.7

Meetup. By providing tools anyone can use, this group brings virtual and phys-
ical worlds together to foster collaboration and action. Meetup completely levels
the playing field for people to first meet through the web, and then gather in per-
son, usually at a public location, and explore their mutual interests, whether they
be yoga, classical music, or bulldogs. This company was very instrumental in the
last US Presidential campaign, and is expected to be even more useful in the next
one by allowing grassroots organizers to publicize their interests and find like-
minded people to collaborate with.8

Mozilla Foundation. Enabling a network of open source contributors, the
group guides development of the extremely popular Firefox web browser. Mozilla
works with thousands of people to deliver Firefox and a variety of other offerings.
In an interesting evolution of the open source software development model, these
people contribute not only to the code base, but help with go-to-market activities
as well.9

Wikipedia. An open source encyclopedia on the Web that is changing the way
we reference information and ultimately, collaborate. Unlike traditional compen-
dia, it is written in a collaborative fashion by its readers, no matter who they are or
where they might be.
In a true open source fashion, Wikipedia is constantly being
updated by massive numbers of people working in parallel, so individual entries
are kept up to date, and errors can be surfaced and corrected quickly.
It is perhaps
the leading example of a wiki in action.10

X PRIZE Foundation. A group using competitions and prize models to accel-
erate innovation. Although the prize model is not new (per Wikipedia, between
1907 and 1919 the Daily Mail newspaper in the UK offered 14 prizes for various
achievements in aviation), because of the Web and modern media, the scale and
reach of the X Prize Foundation is unprecedented. They are branching out from
their first prize in human spaceflight to many new domains including genomics
and automotive challenges. As with Mozilla and Meetup, the X Prize Foundation
is not a network per se, but rather a central node in a network of its own making.
Their primary contribution is to encourage others to collaborate in order to solve
extremely difficult challenges.11

Clearly, there is a great deal of variety in how these examples create and enable
collaboration.
In fact, there is a continuum from the most highly collaborative
groups such as Wikipedia and Mozilla, and those that are using collaborative tools
but dealing more on a one-to-one, or one-to-group basis for now. All of these
organizations are at just the beginning of a journey, enabled by technology and
great ideas, to a much more collaborative future.

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Leadership and Innovation in a Networked World

Employing an Open, Collaborative Approach to Networked Innovation

Looking forward, how could the approaches described in this essay, and in other
articles for this special issue of Innovations, change the way we do business and
lead our organizations? As a person interested in innovation, ask yourself
whichever of the following questions may be relevant to you. First, we will ask
questions that are largely about Looking Inside your organization, then, equally,
if not more importantly, we will ask questions about Looking Outside your
organization’s four walls:

Looking In
• What if I had the ability to gather the right people, for the right discussion,

at any time? For any problem that I have?

• What if I could communicate with any employee or customer at any time?
• What if I could gather information remotely and confront problems direct-

ly, rather than through intermediaries?

• What if organizational models were more like good software is today,

always in “beta” and never set in stone?

• What if anyone in my community or company could contribute in their
own way to any project or problem they feel they have something to add
to?

• What if leadership could be fluid and change as needed, so that the right

leaders are leading the right challenges?

Looking Out
• What if I could carry a high-definition video conferencing system in my
pocket and could meet face-to-face with anyone in the world, anytime?
• What if I could draw on the talent pool of literally the entire world to build

the best team for a given project, without leaving my home?
• What if the right talent self-selected for any project or endeavor?
• What if leadership and new challenging ideas could come from outside the

walls of my organization on an as-needed basis?

Source: IDEO

WHAT CAN WE LEARN FROM THESE
LEADING NETWORKED INNOVATORS?

The central theme that emerges from these examples is the opening up of organi-
zations to outside experts, to their customers, and to loosely affiliated supporters
in many new ways. We also see that people who are passionate about something,
such as individuals participating in open source development, or even civilian
space aviation, will contribute their own knowledge, time and money to a group

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Diego Rodriguez and Doug Solomon

effort without guaranty of any material reward. We learn that collective efforts,
such as Wikipedia, can be even more powerful and effective than non-networked
commercial efforts due to the scale and diversity of participation involved. We see
emerging ways to bring the benefits of the virtual world and those of the physical
world together, such as MeetUp. Finally, we see ways, such as those used by
Ashoka and many other social change organizations, to find solutions to complex,
globally scaled social problems which, by using collaborative networks of like-
minded individuals and institutions, provide an opportunity to supercede existing
political systems and governments in the name of progress. Ultimately, innova-
tion is gradually being understood as something done by groups of people and not
by lone individuals.

Open innovation, using the skills and smarts of whoever wants to contribute,
is taking the place of closed innovation, even in traditionally closed businesses
such as drug companies or academic research. This is clearly just the beginning,
and these leading organizations are just a glimmer of what is possible. One of the
authors recently led a social investment fund and reviewed hundreds of new
approaches to using collaborative tools and the Web for innovation that really
matters to individuals and society. Particularly inspiring has been the large num-
ber of entrepreneurs based in developing countries who are empowered by new
tools and media to undertake activities that would have been previously impossi-
ble.

HOW DO THINGS GET DONE IN A NETWORKED WORLD?

Many of the examples just discussed also represent the trend of traditional models
of centralized, top-down leadership being replaced by networked systems of elec-
tive action. Mozilla’s open source Firefox browser is winning market share from
Microsoft’s Internet Explorer. Wikipedia has decimated the traditional encyclope-
dia industry. The power of older top-down, command and control organization-
al models is diminishing. Newer organizations such as Google, Amazon, eBay, the
X PRIZE Foundation and many others rely on affiliations with individuals and
other organizations that are outside of their direct control and their physical walls.
For example, without eBay’s tens of millions of buyers and sellers who voluntarily
affiliate over time, it would be nothing more than an empty web store.

At a personal level, this requires a different way of being. What it means to be
a “leader” in a networked context is vastly different from what we’ve been taught
via the autobiographies of the Iacoccas and the Welches. What we’ve found is pro-
ductive behaviors found in networked organizations where the physical and for-
mal employment rules of the Eisenhower era are no longer valid.
Joi Ito, a
respected technology entrepreneur and investor, recently spoke about insights
gained from leading a team of 300 real people inside of World of Warcraft (a game
played over the Internet which today boasts over 8 million users) and how success
there demands behavior different from that found in a traditional business organ-
ization. Joi said

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Leadership and Innovation in a Networked World

I haven’t found a single MBA so far who is good at leadership in this sit-
uation. Most of the people who are good at leading here are people who
are good at listening. It’s actually very similar to leadership in open
source… It’s a kind of imagination and emotional thing… it’s when you
have a band or an orchestra together and suddenly you are in “the zone”
and everything just feels right—you’ve just got it just right… When you’re
in the zone it just feels right and everything works together.

…thing is an indication of a behavior change. That’s why it’s important.
It’s important that we have millions and millions of people who are
learning how to interact this way, and can we think up projects that tap
that.12

Even big, successful businesses are beginning to embrace new models of leadership
and innovation. John Chambers, CEO of highly successful Cisco Systems, spoke at
a recent Fortune Magazine conference and shared his new realization that net-
worked innovation is more than a buzzword. He has begun to change the manage-
ment paradigm of Cisco to one of networked innovation; moving from tradition-
al command and control systems to a distributed and highly networked system
built on capabilities and skills rather than rank and reporting structures. Enabling
this change is a suite of technological tools such as telepresence systems to replace
physical meetings. Chambers is betting publicly that this change will lead to a 10%
annual productivity increase for Cisco over the next decade.

People in organizations who want to be more innovative in a networked world
should keep in mind five things (each of which merits its own article or wiki, so
please forgive our brevity):

Raise awareness of the need to change. Many collaborative innovations have had
a disruptive effect on legacy organizations. For example, eBay has threatened the
intermediaries who control many existing industries, such as brick and mortar
stores, used car dealers, and realtors. Similarly, Innocentive is able, with a cash
reward measured in the thousands of dollars, to achieve results in finding new
molecules that cost millions of dollars if done via the traditional closed laborato-
If individuals can imagine how collaborative
ries of companies such as Pfizer.
innovation can eclipse their organization or industry, they can then raise the
awareness of a need to change within their organization. This awareness, and
willingness to act, is critically important for organizational survival, let alone con-
tinued success. However, while collaboration can not be enacted by top-down
decree, without strong support from the top it is very difficult for a change of this
magnitude to be successful.

Experiment with new resources and tools. There is a confusing array of resources
and tools available for collaboration and innovation. Some of them are optimized
for organizations, while many come from the consumer marketplace. There are
few examples of best practices in the selection and use of collaborative tools, but
organizations such as McKinsey, Disney, and many others are experimenting with
providing these tools to their employees and outside affiliates. Web offerings such

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Diego Rodriguez and Doug Solomon

as Amazon, Salesforce, and Google are also experimenting with providing tools
and programming interfaces to outsiders in an attempt to encourage the produc-
tive use of their tools in new applications. Leaders need to ask themselves and
their peers, how might they experiment with these types of tools in order to learn
to apply them in a meaningful way in their own organization? This often requires
changing the way that information technology is purchased and developed within
a large organization, allowing the use of open source software, and encouraging
the adoption of services available. There is no single solution; this will be a learn-
ing process based on prototyping and experimentation.

Devolop new collaborative processes. Collaborative tools alone are not suffi-
cient. Having great ideas is also not sufficient. Organizations need to be able to
take advantage of
innovations that
emerge from collaboration via a set of
repeatable processes. This is easier
said than done, as established organi-
zations often have antibodies that
emerge to crush new processes that
don’t easily fit. Building collaborative
processes to test out innovative ideas
and nurture them to the marketplace
are essential. Organizations need to
think about whether these processes
are in place, how consistent they are
with the spirit of collaboration and the
norms and values they want to build,
and how to shepherd them along to

Learning how to work
successfully in an
interconnected and
collaborative world is not a
challenge that individuals
and organizations can
today avoid or ignore.

success.

Provide infrastructure to enable collaboration. Tools and processes are not
enough; to be effective we need to change or adapt the way things get done. We’ve
discussed how getting things done in a networked world differs sharply from the
older styles of leadership still in practice today. The good news is that even the
biggest of the big are starting to experiment with new behavior modes. Procter &
Gamble and the Centers for Disease Control, for example, have each begun to
adopt collaborative innovation. Cisco Systems, as mentioned earlier, is moving
aggressively from command and control to networked and collaborative leader-
ship. Effective networked innovation requires organizations to consider how to
provide a supportive infrastructure and culture to enable collaboration and
encourage its effectiveness.

Build a culture of collaboration. No one, as far as we know, has ever created a
collaborative culture by issuing an edict that employees must henceforth collabo-
rate with each other. It takes a thoughtful approach to organizational change to
build a culture of collaboration that enables networked innovation to happen.
This culture is relatively uncommon in most large businesses, universities and
research organizations, which is why the success achieved by MRF is so exception-

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Leadership and Innovation in a Networked World

al. Values, at the end of the day, speak to what organizations care about and how
they ultimately make decisions. Networked innovation must create value for
organizations and individuals alike in order to be considered successful and be
adopted over the long-term. For example, it is very clear how dating sites, such as
Match.com, create value for individuals through a collaborative way to find soul-
mates, or how question and answer sites such as Wondir.com create value for peo-
ple wanting to help each other. We should each ask ourselves how we can build a
culture of collaboration that includes aspects such as tool selection, training,
incentives, metrics of success, and—perhaps most important of all—celebrations
of successful collaborations and collaborators.

Learning how to work successfully in an interconnected and collaborative
world is not a challenge individuals and organizations can, today, avoid or ignore.
We can all shape and define a collaboration as a result of our own experimentation
with new tools and methods. Fortunately, there are many motivated and engaged
people out in the world facing the same challenge as each of us and seeking new
collaborative partners of their own.

1. Everett M. Rogers, Diffusion of Innovations (5th edition), New York: Free Press, 2003.
2. For example, Roger von Oech, A Whack on the Side of the Head, Creative Think, 1973; and James
L. Adams, The Care and Feeding of Ideas: A Guide to Encouraging Creativity, New York: Perseus
Books, 1987. Both are great books, but focused on individuals more than groups.

3. Bob Johansen, Get There Early: Sensing the Future to Compete in the Present. San Francisco, CA:

Berrett-Koehler Publishers, 2007

4. Charles A. O’Reilly and Jeffrey Pfeffer, Hidden Value: How Great Companies Achieve

Extraordinary Results with Ordinary People. Boston, MA: Harvard Business School Press, 2000.
5. See .
6. See .
7. See .
8. See .
9. See .
10. See .
11. See .
12. Excerpt from speech given by Joi Ito at 23C3, Dec 30, 2006:

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