Denis used crowdSPRING to design the logo for his chTONGUEeek website, and discussed his experience with them in this blog.  For his purposes, crowdSPRING was great – he received 69 logo submissions, the opportunity to collaborate with the designer whose proposal he liked the best, and of course, got the logo he needed.   All for $150.

So, this brings us to the issue up for debate among the SXSW panelists (in the video below).   Does spec work (in creative) devalue an industry of designers?

From the perspective of workers within the industry, it’s not surprising that established designers and creative firms would be opposed to spec work;  one panelist discussed a possible industry blacklisting of workers who engage on sites like crowdSPRING.  For more on this perspective, see the NO!SPEC website, where you can read their “Ten Reasons” against spec work, or the article Why Speculation Hurts.

On the flip side, there’s a good argument to be made that sites like crowdspring tear down barriers and facilitate entry into the profession for the young workers looking to build a resume.  As an aspiring young designer, it can be hard to build a professional resume and get your first job (this applies to most professions).  To these workers, there could be a lot of value in gaining experience through crowdspring (and other spec sites).

The panel at SXSW did a great job covering the issues of spec work in design and creative.  But what if we apply this spec work model to other industries?

One of the best perspectives on this issue came from Alan Majer, citing a great example of a family member who works in the medical profession.  Alan’s analogy actually surrounded the provision of a government grant, where $100 000 of funding was available to a company that placed the “best bid” on a given assignment – a fairly common process.  His family member (and her team) put in about a week’s worth of time working on this project.  But so did 50-100 other teams that also submitted bids, meaning that, theoretically, anywhere from 49-99 teams used up about a week’s worth of work for nothing.  If you aggregate the whole process, there was a lot of work put in (with people “dropping their day jobs”) for what amounts out to very little money.

This raises questions about sites like Innocentive, a company that generally gets very good press (in Wikinomics, in the news, and of course, in the blogosphere).  Innocentive is a great way to find innovations, and is an excellent example of how companies can use external collaboration for R&D.  But from a broader economic perspective, could Innocentive also be somewhat damaging to the science industry?  In many cases, Innocentive works well because it connects company X working on project Y with a scientist elsewhere in the world who, unbeknownst to them, has also been working on project Y; a win-win.  But what if Innocentive were promoting spec work?  If a $1 000 000 award is offered to a scientist who can solve a specific problem, and 2000+ scientists worldwide drop their current projects to spend two weeks working on it, doesn’t this seem problematic, in terms of lost production?

I would argue that in the first example (connecting Y with Y), Innocentive is fantastic.  But if it (or sites like it) start drawing too many workers away from their real value-adding jobs, as with Alan’s example above, then it probably is damaging, on an aggregate economic level. 

So is spec work evil?  For logo design on a site like chTONGUEeek, probably not.  But if this model was applied to other industries, it could certainly be damaging. 

One thing I’m willing to bet – we’re likely to see an increase in the use of spec work as more people catch on to Web 2.0, and also as individuals and companies look to cut costs in the new economy.

The shockwave is moving quickly: venture capital stalwarts Sequoia Capital have been instructing their portfolio companies to prepare for a “doomsday scenario”. Cutting fat, eliminating redundancy, and finding the cheapest darn way to do business is now the imperative of all those wide-eyed, once-well-funded start-ups.

My dad once gave me good advice which I didn’t take. “Son, doctors, dentists, lawyers and teachers are recession-proof. Work smart.” For the most part, it holds true (it seems some lawyers are having a hard time). But it seems like you don’t need to be bricks-and-mortar or an M.D. to stay “recession-resistant”. Like magic, outsourcing marketplaces have been going like gangbusters despite economic woes.

The more people who take pages from Sequoia’s warning to slim down to essential personnel and services find that outsourcing fits the bill nicely. It’s like having talent attached to a spigot—you can match the resource-flow to your cash-flow (and work-flow) on-demand. A Reuters article boasts that Elance (a popular outsourcing marketplace) has increased billings by 65% this year—driven by the need for smaller firms to have a flexible, highly-trained workforce.

If this downturn finds you sitting on the couch, reluctantly watching daytime TV, outsourcing marketplaces could be just ticket to get you off The Young and The Restless and back to the ranks of the gainfully employed.

Innocentive, founded in 2001, has grown nearly 30 percent since September of last year from 115,000 members to 145,000. Don Tapscott and Anthony Williams talk about InnoCentive in the Ideagoras chapter of Wikinomics, so it’s no surprise that it’s making waves. What interests me, though, is that this article was the third most emailed article of the day. And just to clarify, it’s the overall most popular, not the just science section. Imagine all of those people reading about ideagoras! Maybe I just get a little too excited to see Wikinomics in the mainstream media, and maybe I’m forgetting who reads the New York Times. But wikinomics is infectious, and I clearly have the bug.

More interestingly though, according to the NYT article, is that the presumptive Republican nominee for president, Sen. John McCain, has “proposed that the government offer $300 million to whoever invents a battery compact enough, powerful enough and cheap enough to replace fossil fuels.” Maybe he’s a little technologically-challenged, but at least it seems he’s ready to collaborate. If the government embraces McCain’s proposal, perhaps we will see a solution sought on yet2.com or Innocentive. Perhaps even you can be a part of that solution.

This week’s edition of the Wikinomics Report Card will focus on General Motors Corporation (GM). In case you missed my first report card about Major League Baseball, you can find it here. Like last week, I will be evaluating GM on the Wikinomics principles of being open, peering, sharing, and acting globally.

Company Background: GM was founded in 1908 and is the world’s largest automaker and leader in global sales for the last 77 calendar years. It manufactures cars and trucks in 35 different countries under the brands Chevrolet, Buick, Cadillac, Pontiac, and many more. Under the strength of Alfred Sloan’s revolutionary corporate structure and leadership, GM was once one of the world’s most profitable companies peaking in the early 80’s with a U.S. market share of 45%. However, the legacy costs and complex accounting systems associated with the Sloan era have hindered GM’s efforts to create a more lean manufacturing process. Stiff foreign competition from companies like Toyota and poor strategic decisions like focusing on SUVs and light trucks in a rising fuel market has led GM to one of its weakest points in its history. Yesterday, its stock reached a 53-year low after Goldman Sachs changed it status to “sell”. GM is hoping that it can weather this storm long enough to introduce its new line of alternative energy vehicles like the Chevy Volt and reclaim some of its former glory.

Being Open: Traditionally, GM has been a very closed organization. Even internally, its different brands acted with a silo mentality. In the Alfred Sloan era, GM used espionage tactics to quell union uprisings and in the mid 20^th century, GM was blamed for killing American public transportation in the Great American Streetcar Scandal. In the 1990’s GM was accused of killing the electric car so that it could sell its high margin SUVs and trucks. GM had a fully functional electric car with the EV1, but scrapped the program entirely in 2003. Despite an offer of $1.9 million for the 78 EV1s already produced and a waiting list of customers, GM stripped the car of its recyclables and crushed them. However, in recent years, GM has made great strides in opening up. GM’s chairman and CEO Rich Wagoner admitted that the worst decision of his tenure was “axing the EV1 electric-car program and not putting the right resources into hybrids. It didn’t affect profitability, but it did affect image”. GM’s R&D chief Larry Burns said that “if we could turn back the hands of time, we could have had the Chevy Volt 10 years earlier.” Admitting this mistake is a big step in being open and acting with integrity in the new era. GM has started by being very public and transparent about its production plans for the Chevy Volt. Also, GM is one of the few car companies to have higher executives and “Car Czar” Bob Lutz blog on a regular basis. GM continues to act more openly, it should be able to repair its damaged reputation.

Grade: D+

Peering: Although peer production of automobiles is very difficult with today’s technology, GM has been able to leverage peering very well in its marketing efforts. From our paper on the 8 Net Gen Norms:

Net Geners are also helping develop advertising campaigns. GM invited consumers to a newly built Web site that offered video clips and simple editing tools they could use to create ads for the Chevy Tahoe SUV. The site gained online fame after environmentalists hijacked the site’s tools to build and post ads on the site condemning the Tahoe as an eco-unfriendly gas-guzzler. GM didn’t take ads down, which caused even more online buzz. Some pundits said GM was being foolhardy, but the numbers proved otherwise. The Web site quickly attracted more than 620,000 visitors, two-thirds of whom went on to visit Chevy.com. For three weeks running, the new site funneled more people to the Chevy site than either Google or Yahoo. Most importantly, sales of the Tahoe soared.

This hugely successful campaign generated a lot of buzz for GM at a very minimal cost. With GM’s negative operating margins, cutting down advertising expenses through peering could greatly reduce costs and improve the bottom line.

Grade: B+

Sharing: GM has done a great job involving itself in joint ventures and collaborative efforts over the last few years. GM is the majority stakeholder in the Korean automaker Daewoo, and has collaborated with many of the world’s auto manufacturers. This includes product, powertrain and purchasing collaborations with Suzuki Motor Corp. and Isuzu Motors Ltd. of Japan, advanced technology collaborations with Toyota Corporation and BMW AG of Germany and vehicle manufacturing ventures with several of the world’s automakers including Toyota, Suzuki, Shanghai Automotive Industry Corp. of China, AvtoVAZ of Russia, Renault SA of France, and most recently, UzAvtosanoa of Uzbekistan.

More importantly, GM has decided to outsource its battery development for its future cars like the Chevy Volt whereas Toyota has decided to develop their battery technology internally. Toyota’s closed attitude and lack of collaboration could eventually lead to a technology gap between itself and GM. While Toyota has profited from selling its superior hybrid software and technology, they may lose out to GM in the future if they remain on this path.

Grade: A-

Acting Globally: GM’s ceo Rich Wagoner expects that 75% of its car sales will be outside the U.S. within a decade. GM is the largest overseas automaker in China and is GM’s second largest market after the United States. After growing sales by 27% each year for 5 years, the GM’s China sales grew 19% last year. This success is largely due to the success of their joint venture between them and Shanghai Automotive. GM is building a new research centre in Shanghai focused on hybrid technology. This is GM’s first venture that is completely separate from Shanghai Automotive. The announcement coincided with the Chinese Government’s powerful National Development and Reform Commission disclosing that it would provide subsidies to alternative fuel vehicles under certain conditions. One major condition was that critical parts must be manufactured in China. While Toyota assembles its cars in China, the critical parts are manufactured and shipped from Japan. This should give GM a big head start in selling hybrid vehicles in China. If GM can repeat its success in China in other emerging markets, it may be able to keep up with Toyota’s sales in the future.

Grade: A-

Overall Verdict: GM is in a very deep hole right now. They are losing around $2 billion a month, and even the new initiatives outlined above won’t act as a quick fix. However, they are building quality cars once again, and seem to be making a lot of great moves. Since the stock is at a 53 year low, this (more like a year from now) may not be a bad time to invest in some GM stock. If the Chevy Volt goes into production on schedule in 2010, high gas prices should propel its sales, and more importantly GM’s corporate image. If 10 years from now, 75% of GM’s sales come from outside the U.S., and its legacy cost issues are solved, they could reclaim the crown from Toyota.

Overall Grade: B

What are your thoughts? Could you see yourself driving the Chevy Volt (above) in 2010?

Carr continues: Google is enabling a revolution of information much in the same way that automation gave us a revolution in turn-of-the-century industrial manufacturing. Instead of automating assembly, the process of researching and identifying useful information is being mentally outsourced. Carr argues that we aren’t as capable of reading dense texts as they used to be (covered previously by Denis), because we have gotten used to Google and the Internet aggressively distilling ideas down to their most granular level; when we see ideas presented in their native context — mingling with other ideas — we are no longer well equipped process them. The extension of this, I think, is that the information that we receive from Google is therefore divorced from its original context, and information without context can be very dangerous.

I  find his argument to be convincing, and completely in line (albeit a bit scarier) with the New York Times article from last year The Outsourced Brain.

While whether or not this is good or bad is still a hot topic of debate, (though our research and writing has concluded that the skills and habits that we’re developing in a digital world are, by and large, very positive) it’s clear that there is a very fundamental change going on in how we access and assess information — a change that affects everyone who’s plugged in, regardless of their generation. I don’t think that this change is going to destroy society, but I think that this ability to examine a complex system and figure out what’s important is itself important, and a skill we’d be wise to avoid losing.

Does technology make you feel empowered? Has the Internet taken away your ability to do the work of discovering facts and subtleties in primary sources? If it has, is that good?

I think that there’s a lot to debate to be had here. I’d like to hear what you have to say.

As always, you can check out the original (and all the other mash ups) at www.dilbert.com.

The idea behind Worldsourcing is really the dawn of the truly global enterprise. Global enterprises operate on a truly global scale; operate with porous corporate boundaries (interacting with “outside” partners in much the same collaborative way that “internal” departments work together); and bring that global approach to all functions (not just manufacturing and customer service). Let’s look at each in more detail:

* Truly global scale. Worldsourcing companies have no single corporate headquarters, which means their senior management teams are often culturally, and physically, dispersed throughout the globe. This gives them a much deeper insight into the challenges and opportunities of globalization than their “multi¬national” brethren.

* Porous corporate boundaries. Worldsourcing companies have porous corporate boundaries – meaning they manage a portfolio of “internal” (same owner) and “external” (different owners) resources in most aspects of their work. This is why we call them truly global enterprises, and not just corporations. The very best cul¬ti¬vate the same kinds of trust-based, highly-collaborative relationships with their partners that they have with internal colleagues – a far cry from the SLA-driven, contractual relationships that often characterize “strategic” outsourcing relationships.

* Across all business functions. While some business leaders have managed global scale and porous relationships in one or two key functions (e.g., manufacturing and software development), Worldsourcing companies take this approach across all business functions – including marketing, product development, sales and customer service. For instance, a product development team based in India may work with a marketing team based in the Netherlands to create new value propositions for sale in markets from South Africa to Japan. This brings global creativity to bear where it matters most: not just in cost-reduction areas such as manufacturing, but in the core functions of business success – innovation and customer relationships.

Lenovo is a great role model in this new world. Another leader worthy of careful attention is Arcelor-Mittal (see this article from The Economist). More traditional “global corporations” such as GE, Coke and Procter & Gamble, deserve mention – but most of these are more truly multi-nationals than global enterprises. They still generally have a strong headquarters, often in America; they still rely preferentially on internal (owned) resources; and they still treat marketing and product development from a central hub.

The other companies that merit attention are the truly global professional services firms, arguably the first truly global organizations. Most notable among these are McKinsey, Accenture and Goldman Sachs, for their true “one global firm” organization and business models. But again, these firms have had little or no success with porous enterprise boundaries; rather, they keep most functions in-house.

Davos buzzword: Worldsourcing.

Outsourcing was about finding the lowest cost to do something. Worldsourcing is about finding he best capability.

Personally I never liked the word outsourcing. Cisco built a networked business model (business web as I’ve been calling it for a decade) and therewas nothing “in” to outsource in the first place. This has always been about your strategy for orchestrating capability not about labour arbitrage. So now we’ve got another buzzword to describe it.