"The overall effect of failure is its likelihood times its cost. Most organizations attempt to reduce the effect of failure by reducing its likelihood" (Shirky, 245).
Shirky goes on to discuss how open source doesn't reduce the likelihood of failure, it reduces the cost of failure. I have never considered this before...but the fact that there may be little or no cost for failure is a pretty good argument for use. It is amazing to think that, in an open system, the cost of deciding what to try (the time is take employees to discuss, etc) is greater than actually trying the idea.
Also, as Shirky mentions, if the cost of failure is less, there may be more opportunity for additional exploration. This important when considering the amount of time and effort that goes into the development of new concepts.
I too find this interesting- this combined with the idea of transaction costs being reduced to zero really changes business. Even those businesses (google, for example) who appear to be cutting edge really may find that their transaction and failure costs are too high to be successful. That so many products and projects fail (with cost, and likely subsequent conservative risk taking postures) in "real" business, I'm curious to see what real affect open sourcing, crowd sourcing etc, have on business. Is it niche? Is it temporary? The success of Linux is a great example of something that really works.. but why isn't Open Office (free open source software like Microsoft Office) succeeding in business? I'm sure there are other examples of this and I'm curious to know why they fail or succeed. Furthermore, I continue to be flummoxed as to why and how people, ideas, things become sensations on the net- how did facebook get big and other social networking sites didn't? Did they just not work?
ReplyDeleteThanks for the insightful and thought provoking post!
Brust