Innersource After the Pandemic

Setting the Context

In the book Pivot to the Future, Omar Abbosh, Paul Nunes, and Larry Downes discuss how technology change creates trapped value in a disrupted world. The trapped value gap is the amount of value creation between Business Evolution (value released by incremental business change) and Technology Evolution (potential value release created by new technology), as shown in this diagram.

They further classified the trapped values by the following four categories:

1)     Enterprise: Value trapped in limited use of digital technologies with the power to transform business models.

2)     Industry: Value trapped by lack of cooperation and investment in shared infra such as charging stations for eVehicles.

3)     Consumer: Value trapped in underused private assets such as vacant homes in popular tourist areas.

4)     Society: Value trapped in the failure to engage in profitable partnerships to solve societal issues.

Let’s look at the winners who discovered value and created growth by closing the trapped value gaps, and the losers who didn’t.

In consumer space, Airbnb, Uber, Nike, Adidas and Starbucks are the winners in closing trapped value. In industry space, Illumina and Tesla are the winners in closing trapped values. In society space Tencent (who owns WeChat) is the clear winner.

Let’s look at the losers. The average life span for companies on the S&P 500 has fallen from 67 years in 1920 to only 15 years today. No one in 2010 would have even heard of 75% of the companies on the 2020 list. When technology created a huge amount of trapped value that companies failed to tap into, new entrants suddenly found their dream opportunities. 

For example, when technologies such as GPS, mobile payment, and digital security matured, trapped value was created between Business Evolution and Technology Evolution. This gap created a golden opportunity for Uber to take advantage of technology advancement so they could reinvent a new business model with a great success.

The focus of this article is about trapped values in category #1: Enterprise. Before we look at where most of the value is trapped in enterprise, let’s first understand what it is that impacts business and customers at the core of any enterprise in the digital world: organizational culture. The organizational culture predicts the way information flows through an organization. Good informational flow is critical to the safe and effective operation of high-tempo and high-consequence environments, including technology organizations.

So, the question is how can we shape a better culture through a better information flow? Or on the other hand, how can we enable information flow so that the organizational culture will be more effective and inclusive? Innersource is one effective way to achieve this goal.

Before the pandemic, Innersource had worked in many small, medium, and large enterprises with great productivity boosts. However, the pandemic has accelerated a sense of urgency in two dimensions:

1)     Digital transformation is not just nice to have anymore, it is a must-have for survival.

2)     Before the pandemic, CEOs rated skill gaps as a top business challenge, and enterprises couldn’t hire all the talent they needed for digital transformation. However, the COVID-19 crisis will not change this, and it will in fact make the situation worse due to the shortage of talent given higher demand.

How can Innersource help to tap into more trapped value within the enterprise in a post-pandemic world?

Let’s first look at what Open-source vs. Innersource are.

Open-source and Innersource

Open-source

Open-source is a model for the development, support, and distribution of software that encourages and, in many ways, enforces community stewardship of the technology. Open-source software is used within mission-critical IT workloads by over 95% of IT organizations worldwide, whether or not they are aware of it.

Why does OSS work?

In the book Drive by Pink Daniel, the first chapter talks about an interesting case study involving the first ever digital encyclopedia, which was developed by Microsoft. Microsoft was already a large and profitable company, and with the introduction of Microsoft Windows 95, the company was going to fund this encyclopedia. It had paid professional writers and editors to craft articles on thousands of topics. Well-compensated managers oversaw the project to help ensure it was completed on budget and on time. Microsoft sold the encyclopedia on CD-ROMs and later online. 

The second digital encyclopedia did not come from a company, it was created by tens of thousands of people who wrote and edited articles for fun. These hobbyists needed no special qualifications to participate, nobody was paid to write and edit articles, and they sometimes worked twenty to thirty hours a week for free.

The rest is history. On October 31, 2009, Microsoft pulled the plug on Microsoft Network Encarta, which had been on the market for sixteen years. Meanwhile, Wikipedia ended up becoming the largest and most popular encyclopedia in the world. So what happened? The conventional view of human motivation based on reward has difficultly explaining this result. This book reveals the surprising truth about what motivates us: Autonomy, Mastery and Purpose.

Open-source works when a group of people all embrace a set of shared goals and establish a community based on mutual trust. All three of the following factors are required, and if any factor is missing, the project will fail:

1)     Enough people interested

2)     Shared goals

3)     Trust

If we go deeper, you will realize that open-source truly is a system that works. As we can see, it is aligned with the lean product approach:

1)     Lean product discovery: If a feature is useful, some may volunteer to write the code to implement it. However, if there is not enough interest, nothing may happen.

2)     Lean product definition: The open-source core members are almost always geographically dispersed, so they communicate mainly via email/chat, an agile way to give and receive feedback on decisions.

3)     Lean product development: A good example is Conway's Law—the architecture of the code follows the structure of the organization. This tendency to keep the code modular gives open-source software flexibility and adaptability.

4)     Lean product adoption: Another way open-source self-organizes can be seen in how bugs are identified and fixed. The entire community is constantly using and testing the software.

Why do people use OSS? 

Organizations use open-source software over homegrown or third- party commercial alternatives to gain Cost Savings, Innovation and Flexibility.

Innersource

Innersource takes the lessons learned from developing open-source software and applies them to the way companies develop software internally. Here is another definition of Innersource: an open-source community behind your firewall.

Some of the challenges I have seen in enterprise when taking the close-sourced approach:

1)     Redundant and competing IPs across the enterprise that generate a lot of waste.

2)     Slow innovation and being limited only to the resources you have in your own team.

3)     Minimal reuse, minimal value, minimal feedback, and minimal improvement.

4)     Slow and expensive collaboration through formal management channels.

The primary goals of Innersource are to:

1)     Facilitate component reuse

2)     Enable your talented workforce

3)     Create collaboration as a cultural norm

4)     Make people happier through better and faster innovation

In short, if it is done right, Innersource is one of the most effective ways to tap into trapped value in the enterprise. Please note that Innersource is not just for source code, as it can be used for any content including sales, presales, marketing, education, or delivery IPs in your organizations.

Myths about Innersource

Myth 1: Innersource is a technology problem

Innersource is a cultural transformation that requires an open and transparent culture. When organizations are heavily siloed and sharing across organizations is being punished, Innersource will fail. Therefore, you should always first assess your organizational culture before you start the Innersource practice.

Like any sharing, we must understand the Importance of trust.  In many cases, a sharing economy relies on the will of the users to share, but in order to make an exchange, users have to overcome mistrust. An organization that attempts a sharing economy must be committed to building and validating trusted relationships between members of their community and participants. Beyond trusting others, the users of a sharing economy platform also must trust the platform itself.

In general, you should start Innersoruce practices when you feel there is enough trust between teams across your organization to have others view, contribute to, and give feedback on their work.

Myth 2: Innersource is free work

One of the biggest misunderstandings about Innersource is that it is free work. In the Microsoft product group, who contributes the code? 90% of pull requests originate from within the same team, 9% from a nearby team, and 1% from a distant team. This is even more valid for the services organization because architects and consultants in services have a full-time job supporting customer engagement. When the community builds IPs, it needs investment, resources, and time. If you think Innersource is just free work from everyone who has the time to contribute in your organizations, you will be immensely disappointed with your results.

Myth 3: Innersource is a grassroots activity

The Innersource context, motivation and vision must come from the top, even though there are still barriers to overcome all the way down. Like any cultural transformation, leadership sponsorship and support are must-haves. Leadership must set up the incentivized structure to enable the economy of sharing. The examples of rewards and enablement promoted by the leadership include the following, but are not limited to this list:

1)     Annually required training

2)     Learning Lab Innersource learning path

3)     Part of onboarding

4)     Badging system and credit program

5)     Intranet or blog site with Innersource successes

6)     Monthly webcast or podcast with bragging rights

How to do Innersource

1: People

In general, for an Innersource initiative, you have the following roles:

1) Sponsor: The leadership role responsible for sponsoring the initiative including support in funding, resources, rewards, and formal communication.

2) Product Owner: This role, which part of the core team, is responsible for setting the vision and strategy of the initiative and managing the product backlog and prioritization. This role is part of core team.

3) Maintainer: This should be a dedicated role responsible for the platform, the technology selection, the dashboard creation, and the automation in the platform.

4) Core Team: As mentioned previously, 90% of the IPs in the Microsoft product group are created by this team, so they are the key contributors to the IPs or products. They also approve the pull requests submitted by any contributors. This team must take the time to understand the changes requested, as it sometimes may take a long time to reach an agreement on approving or disapproving the changes.

5) Contributor: Those are the people who contribute to your IPs and Products. They might start to submit an issue, or they submit pull requests for changes and improvement.

6) User: These are the people who will consume the IPs or products, and they might submit bugs or provide comments. The primary goal of Innersource is for reuse.

2: Process

This diagram shows the high-level process of Innersource, but to be more specific, you must define the following processes:

1)     Governance and policy process including pull-request approval policy.

2)     Reward process based on contribution data and IP/Product usage data.

3)     Discover/Use/Contribute/Maintain process with continuous improvement.

3: Technology

Backlog item management: This tool is where the community brings up topics and starts conversations. It is used to find out if someone finds a bug or has an idea for a new feature.

Pull requests: Pull requests are living conversations about changes that developers would like to make. People start working on solutions and review changes that are in progress.

Synchronous chat channels: Synchronous chat channels like Microsoft Teams or Slack are great tools for talking through problems in real time to reach a quick resolution.

Real-time dashboards: Dashboards can provide real-time data such as pull-requests by contributors, the usage data by pages or features, and the contribution rate by regions, and etc.

If you use GitHub Repo, it contains three types: Public, Private, and Internal. The ”Internal” type is specifically designed to support Innersource projects as it enables enterprise visibility within your company.

Final thoughts

We have only one earth to share. The good news in this is that many people realize the benefits of sharing, because sharing in business provides numerous social, economic, and environmental benefits to society. The sharing economy is growing, and it has proved to be a tremendous success in business and in society. For example:

·        Uber is about car-sharing.

·        Airbnb is about place-sharing.

·        Tencent is about internet service-sharing.

·        Reddit is about the anonymous sharing of any topic.

·        Crowdsourcing is about sharing human capital.

·        Open-source is about engineering-sharing.

·        And many, many more.

I believe that Innersource will become a more prominent sharing model in enterprise after the pandemic, as it will create a competitive advantage in this disruptive market by tapping into the undiscovered and trapped value in your organizations. Like many essential things, Innersource is important but not urgent in enterprise, yet highly effective people and organizations always complete these things first. My suggestion: don’t wait until after the pandemic, you should do it NOW.

It is worth mentioning that there is one huge benefit doing Innersource during the Pandemic while we are all under lockdown, it is the emotional support system organically built during sharing and collaboration at Worldwide level. People are much less likely to be depressed in such a depressing time in a trusted community of practices. You don’t have to listen to me, you can ask those who are active in such a community: Michael Watson, álvaro Guadamillas Herranz, Kitty Chiu, Margarita Sanz del Río, Aakanksha Sharma, Deep Mehta, Giulia Cupani, Nithyanathan R, Beste Altinay, Reginald C. Best, Harleen Kaur, Rui Melo, Gu Charlie, Yue Sheng, Bahram Rushenas, Harry Chen, Swathi Ganesha, Bhupinder Singh Narang, Nicolas Mays, Geoffrey Sexton, Dave McKinstry, Pierre Donyegro, Loreto De Funes and many more.

I would like to end with Malcolm Gladwell’s quote in his book The Tipping Point: How Little Things Can Make a Big Difference: “If you want to bring a fundamental change in people's belief and behavior...you need to create a community around them, where those new beliefs can be practiced and expressed and nurtured.” The Innersource community is a powerful way to enable people to work together to solve hard problems in enterprise. 

Special thanks to Natalie Bradley from GitHub who guided us through our own Innersource journey. She has made great successes in many large enterprises in some of the most conservative and highly regulated industries. 

 Be safe, be healthy, and be giving!