Share the gold mine

X-ray

A Fast Company article from 2002 tells the story of a Canadian gold mine threatened by bankruptcy:

McEwen [the owner] believed that the high-grade ore … was present in parts of the 55,000-acre Red Lake stake — if only he could find it…

Eventually, the group’s attention turned to the Linux operating system and the open-source revolution. “I said, ‘Open-source code! That’s what I want!’ ” McEwen recalls…

Gold nuggetHis reasoning: If he could attract the attention of world-class talent to the problem of finding more gold in Red Lake, just as Linux managed to attract world-class programmers to the cause of better software, he could tap into thousands of minds that he wouldn’t normally have access to. He could also speed up exploration and improve his odds of discovery.

He released all his corporate survey data from the company’s land, information that is:

  • The heart of any mining operation
  • Very expensive to come by
  • Normally an extremely well-kept secret

He organized a contest – on the internet – to point out the best sites to dig. Anyone could access the survey data and participate. The first prize was $105.000.

The result? The company has drilled four of the top 5 winners’ sites, and have found gold in all four. Which proves that you can get very valid and valuable results from this approach.

The first prize winners? An australian geoscience outfit who’d never been to the mine – or even to Canada. Which proves that this approach can open new sources of information that you’d not have access to otherwise.

Corporate information is worth little when it’s locked up. Don’t keep all data in your business a deep, dark secret. Insteat, open your company’s inner workings to the world. The good and the bad!

The perils of secrecy

In the information age, many businesses have fallen into a trap: They have correctly identified information as the key to success or failure, but they have incorrectly concluded that the best way to profit from the information is to lock it away from the world. They make corporate information secret by default.

This goes for financial information, project development, new partnerships, strategies and plans and virtually every other aspect of the business. “Knowledge is our corporate, intellectual capital and we must protect it or it will be stolen from us.” seems to be the thinking.

But this approach comes at a cost:

  • It reduces the efficiency of employees who don’t know what’s going on
  • It makes the company look untrustworthy to the public
  • It limits the potential for generating new ideas and partnership

The opposite approach, to make all information public by default and only keep a few select areas secret, makes much more sense. This is especially true in an information-dense environment which carries a high probability that a company’s dirty secrets will be revealed sooner or later.

In fact, as we saw, releasing top-secret corporate data can be a gold mine. Literally. Here’s another example.

Be open with customers

Another great example of the open approach is Semco. Yes I know I write about them all the time, but they get it, dammit. They get it and they do it. In his excellent book The Seven-Day Weekend, Ricardo Semler tells the story of a negotiation with a potential customer for a huge contract.

Of course Semco had done their homework and made calculations showing what their profits would be depending on what price they could negotiate. At the meeting, Semler showed the customer these calculations, letting them know exactly how much Semco stood to make from the deal. This honest, open approach impressed the customer and Semco got the contract.

Businesses should ask themselves these questions:

  1. What are we keeping secret and why?
  2. What information could we share, that would bring us new ideas, new partners and increased profits?
  3. What risks are involved in sharing this information? Are they offset by the benefits?
  4. What risks are involved in not sharing it?

That last question is often left out, as businesses list the dangers of openness and ignore the dangers of secrecy.

If you liked this post, I’m pretty sure you’ll also like these:

2 thoughts on “Share the gold mine”

Leave a Reply

Your email address will not be published. Required fields are marked *