Here comes everybody (clay shirky) p248-50, 79
80/20 OPTIMISATION
“institutions exist because they lower transaction costs, relative to what a market could support. However, because every institution requires some formal structure to remain coherent, and because this formal structure itself requires resources, there are a considerable number of potentially valuable actions that no institution can afford to undertake. For these actions, the resources invested in trying them will often cost more than the outcome. This in turn means that there are many actions that might payoff but wont be tried, even for innovative firms, because their eventual success is not predictable enough”
“in business, the investment cost of producing anything risks creating a systematic bias in the direction of acceptance of the substandard”
“because of transaction costs, organisations cannot afford to hire employees who only make one important contribution-they need to hire people who have good ideas day after day.”
- group forming and idea spaces follow a power law distribution, so most people aint gonna be prolific, but their occasional contribution may be outstanding
“the institutional response to this imbalance is to ignore the people with only one good contribution; the dictates of 80/20 optimisation forces a firm to maximise its output by ignoring casual participants. As a result, many good ideas are simply inaccessible in an institutional framework, because most of the time most institutions have to choose ‘steady performer’ over ‘brilliant but erratic’.”
“It’s not that organisations wouldnt like to take advantage of the idea of the occasional participant-it’s they cant. Transaction costs make it too expensive”
“this is what is wrong with a lot of 80/20 optimisations-the belief that truncating the system at the head will optimise its effectiveness; in many cases it actually cuts off a critical piece of the overall ecosystem”
- this is in reference to acknowledgement of a power law distribution, with the mode (most common frequency type of contribution) being very low ie. the majority of people in a community have something in common, and that is their contribution is very low…systems like Wikipedia would not be successful without the thousands of low frequency contributors. The irony is that in an enterprise forum 2 or 3 contributions from a person may in the end have more value than a person who contributes a 100 times as much.
