Exonovation--Leveraging the Innovation of Others

Abstract

The S&P 500 isn't what it used to be: in 1930, companies on that list could expect to remain there for 75 years; today the average tenure is 15 years. In 1950, profits earned by the S&P 500 companies was 18% of US GDP; in 2000 it was only 6%. The very concept of innovation as a competitive advantage is increasingly contradicted by financial and economic metrics, not to mention a wide range customer surveys. An operational strategy identified by John Seely Brown and John Hagel in 2005 argues that the only sustainable edge is to leverage innovation from the edge, a model that Red Hat has been successfully practicing since day one. This talk will explain how Red Hat operationalizes the strategy presented by Hagel and Brown, how Red Hat's outstanding financial performance is predicted by this model, and how Red Hat's basic product--IT Value--is essential to restoring the S&P 500 to economic and competitive sustainability.