Web 2.0 is all about tapping the power of social networks to get results that no individual organization can achieve on its own. Using collaborative tools such as blogs and wikis, companies tap into what authors Satish Nambisan and Mohanbir Sawhney have called “the global brain” to solve a wide variety of problems. Such collaboration is easy to imagine in the high-tech world of Facebook, MySpace, and Orkut; after all, Facebook’s decision to let software developers build applications for its site unleashed a creative surge that made the company the darling of millions of users. Can similar principles also be put to work in the dull, bricks-and-mortar world of manufacturing? Might they work, for instance, in such an old fashioned industry as gold mining in the Indian market?
Indeed they can, according to Wikinomics co-author Dan Tapscott. In his introduction to We are Smarter than Me, a Wharton School Publishing book co-authored by Jon Spector and Barry Libert with thousands of contributors, Tapscott cites the example of Goldcorp, a mining company that employed social networks as astutely as any self-respecting techie.
Headquartered in Vancouver, Canada, Goldcorp was in serious trouble a few years ago. Its workers were unhappy, the company was groaning under a load of debt, and the gold market was shrinking. According to Tapscott, it was on the brink of collapse – principally because its geologists “could not determine if its ailing mines held any more ore.”
Then Rob McEwen, Goldcorp’s CEO, took a step that was both unprecedented and radical in the mining industry. He “published all the company’s previously secret geological data on the Web and held a contest to see if someone could help find gold on the property,” Tapscott notes. Soon more than 1,000 entries rolled in – from students, consultants, and geologists from around the world. Some of these “open-source” solutions were based on technologies that Goldcorp had never heard of – and the company’s prospects unexpectedly began to shine brighter. Says Tapscott: “For $500,000 in prizes, Goldcorp found more than $3 billion in gold and the company’s market value multiplied many times over. By opening up and collaborating, Goldcorp’s shareholders prospered.” He estimates that $100 invested in Goldcorp in 1993 was worth $3,000 by 2007.
Thanks in part to this innovative strategy, Goldcorp continues to go strong. Though Kevin McArthur has now replaced McEwen as the CEO, the company remains one of the world’s top gold mining firms.
Indians can learn an important lesson from Goldcorp’s experience, considering that more and more companies here are using social networking to reach far-flung employees and customers. Goldcorp’s experience shows that when a company “harnesses the power of external knowledge” and reaches outside its own corporate walls, it can often find innovative solutions to problems. Open source software programs such as Linux and the collaborative endeavor Wikipedia are hardly alone in their ability to use the Internet to achieve astounding results. Even in a fuddy-duddy field such as mining, tapping into social networks can help a company strike gold – literally. The technology can be used by any manufacturer – or any type of company. After all, bringing more minds to the party means more good ideas and innovations.
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