Cerebra

Lyn Jeffery from the Institute Of The Future has drawn fascinating correlations between the counterfeit goods industry in China and how their approach can help western businesses innovate faster. Their most lucrative market at the moment is technology, where the counterfeit mobile phone market is said to be worth $15billion, and the Shanzhai produce all of these handsets.

The Shanzhai (A collective network of counterfeit goods manufacturers in China) get products to market faster, in bigger volume and cheaper than anyone else, but how do they do it?

The Shanzhai work in highly effective agile networks, and there are five rules they apply to innovation:

1. Never build anything from scratch
2. Innovate process at small scales (innovate on process not product)
3. Share as much as you can
4. Sell it before you make it
5. Act responsibly within the network

So how does this apply in the content of running an organisation? In a similar way the Shanzhai share innovation within the network, your organisation should allow everyone to innovate, not just a certain department or person. To keep price down, process enhancements are made on the fly, but learnings are shared for the betterment of the group. This insight shows that by breaking down silos and having nearly no red tape, knowledge is shared across the group quickly, for the collective to take advantage of.

The Shanzai, as ironic as it sounds, have a high level of trust within the network and self regulate competition. In the same way business should learn to assume and maintain a level of trust for knowledge sharing within the business, and then try to put as few processes and procedures for that knowledge to move around the business.

This decentralised model to innovation, gives them the speed and agility to survive in a very competitive environment.