VideoIn the media business, pull approaches have transformed more than just distribution channels. On the production side, a vibrant "remix" culture has emerged thanks to the availability of widely affordable digital audio-editing tools, which make it possible for DJs in nightclubs and other music fans to pull in tracks from a variety of music sources and to recombine them. "Blogging" tools help users "publish" their own writings, music, or photographs, most often by pulling in content from a broad range of sources and creatively mixing and commenting on it.
Global process networks. Skeptics might argue that the media business is unique and that its emerging pull systems have little application to sectors whose products are harder to digitize. Yet pull approaches to the mobilization of resources are also taking hold in product businesses, particularly in categories characterized by compressed life cycles and rapidly evolving customer demand.
Consider the three core operating processes of a business: managing supply chains (including manufacturing and logistics), creating and commercializing products, and managing customer relationships. In industries as diverse as apparel, computers, and motorcycles, new approaches to the mobilization of resources — what we call global process networks — are emerging to organize these three processes across hundreds, and often thousands, of enterprises. Such global process networks, which change size and shape depending on the challenge in question, use significant features of the pull model. Participating companies operate across traditional corporate boundaries, collaborate on innovative solutions, and learn from one another in a way that helps them speed up the building of capabilities.
Supply chain management and manufacturing: Li & Fung, a Hong Kong-based apparel producer and distributor that works with 7,500 business partners, in 37 countries, can call on any number of specialists to manufacture everything from high-end wool sweaters to synthetic slacks. The company, one of the new model's most sophisticated practitioners, has rewritten the rules of supply chain management. Traditional supply chain managers focus on limiting the number of partners and on creating tightly integrated operations — the Wal-Mart approach. Orchestrators like Li & Fung are rapidly expanding the range of participants in order to gain access to more specialized skills, as well as nurturing and developing relationships that help all parties build their capabilities more quickly. Li & Fung sits at the hub of a network of specialist enterprises that pull in resources in different combinations and configurations, depending on the nature of demand.
Product innovation: Taiwan's original-design manufacturers, such as Compal and Quanta Computer, offer equally compelling examples of distributed product innovation. These ODMs creatively pull together highly specialized component and subsystem suppliers in order to generate ideas for delivering higher performance at lower cost in a broad range of digital devices, including digital still cameras, mobile telephones, and notebook computers. Instead of designing products in detail from the top down, ODMs specify ambitious performance targets and then rely on this diverse network of technology partners to find new ways of meeting them.
A variety of companies, such as Eli Lilly, Nokia, and P&G, are also deploying informal open-innovation techniques. In 2001, for example, Lilly created a wholly owned subsidiary — InnoCentive — that has recruited a distributed network of more than 80,000 research participants (called "solvers"), in over 170 countries, to help its clients find solutions to difficult R&D challenges. InnoCentive has more than 30 such clients (called "seekers"), including Dow Chemical, P&G, and its own parent, Lilly. When seekers confront a particularly difficult research challenge, they post their requirements to InnoCentive's solver network and offer a bounty to anyone who finds a solution. InnoCentive's success rate is roughly 50 percent — not bad for research problems that the seekers' internal R&D staffs couldn't handle.
Most interesting of all, perhaps, are the signs that InnoCentive's solver network is beginning to self-organize, with diverse solvers coming together to address a specific seeker's needs. This is a classic pull system: when needs can't be easily determined in advance, companies can create platforms to mobilize distributed resources readily.
Employee learning and education: Cisco Systems has shown how organizations can apply the new model to partner-training and -learning activities, which are increasingly important for the smooth functioning of global process networks. The company's groundbreaking (and robust) e-learning platform gives more than 40,000 of its distributed channel partners — with combined sales and technical staffs of 400,000-plus employees — access to training modules at times and places of their own choosing. Cisco and its partners are thus able to solve the problems of customers quickly.
Pull approaches are also highly visible in the context of open-source software. Discussions on that subject tend to focus on the innovative techniques used to produce complex systems by mobilizing highly distributed programming talent. Far fewer observers have noted the significance of open-source software as a platform for effective learning through apprenticeship. Open-source programmers often start with code developed by others and then develop enhancements for specific environments. As the code is generated, it is posted for review and testing by a broad community of experienced programmers. Participants in open-source projects learn at four levels: they observe and work with code from other programmers, they observe their own code in action, they get feedback and commentary from other people who execute their code, and they have access to feedback and commentary about code developed by other open-source programmers. Participants begin on the periphery of the platform and advance, by building their skills, to become coaches and mentors. In this way, they structure their own learning environments, pulling in whatever resources are most relevant and timely.
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