Exonovation--Leveraging the Innovation of Others

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.