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Charles Leadbeater became a bestselling author thanks to the help of several thousand readers. How? By publishing the first draft of his book, We-think, online, making it available for free, and inviting all-comers to get involved in the editing process. As a result of this mass-collaboration, he saved himself a lot of time, effort and money (the collaborators worked for free). He also injected a lot more quality into the text, keeping it as fresh as possible until the moment it was printed, and won himself a hardcore constituency of readers who would go on to sell extra copies of the final copy by referral.

“There’s this immense sense of frustration after you have written a book that you always want to go back and correct things and add things,” Leadbeater told the London Business Forum at the Lewis Media Centre. “But now I realise it is completely futile, that actually books should be evolving, that they shouldn’t ever be fixed, at least not books like mine that are about contemporary issues and current affairs.”

Of course, the truth is that Leadbeater couldn’t have written We-think in any other way. Its essential message is that mass-collaboration, facilitated by the Internet, is the future of not only publishing but every industry. The Internet allows us to “be organised without having an organisation,” he said, “and this creates new possibilities.”

Some think the Web is just a communications tool, that “eBay is just a kind of flea market taken onto the Internet.” Others think it is going to create chaos because it will “destroy all sorts of established ways of doing business, making decisions, getting things done [and] fundamentally knowing where the truth is.” But these views are completely wrong, Leadbeater argued. They “underestimate the creativity that can be unleashed by the Web and the new ways it can create really powerful things, creatively, which can be really of considerable quality – albeit not the same as things that they might challenge and replace.”

Business people tend to have a lack of urgency when it comes to grasping how Internet-enabled technologies might change their industries. And it’s true, he pointed out, that “most technological change takes 50 or 60 years to have a real impact… because it takes a long time for technologies to become embedded in an organisation’s ways of life, and in consumption habits. The big impacts of the phone or the telegraph or the television came long after they were invented. And this is true of many technologies. The disposable diaper was invented 40 years before it became a mass consumer product because Procter & Gamble didn't invent the diaper, they just understood how you could turn it into a mass product.”

Nevertheless, he pointed out, all this means is that the big impact of the Internet is yet to come, and the magnitude of this impact will be such that we have to start preparing for it right away.

Most organisations still tend to think of their online strategy as an efficiency drive, Leadbeater suggested, but the more significant thing about the Internet is its capacity for collaboration. “Potentially, it could make society more democratic, it could make us more equal in some ways and it could extend freedom. And those are the measures by which we should assess whether this is going to be big and good, not whether it just makes us a little bit more efficient.”

Admittedly, he added, when he posted a video on YouTube to raise such points, one viewer responded by calling him a “Utopian cretin”. Nevertheless, the fact he was able to publish a video and generate several hundred thousand viewers with no prior experience in film-making is, in itself, proof that he’s on to something. You no longer need permission to be a creator of such content, he emphasised. “It seems to me that, say, 20 years ago… the UK’s media and cultural industries were a kind of muddy beach strewn with great big boulders. Those boulders were organisations like Pearson, who owned the FT and still do, the BBC, the ITV companies, News Corporation. Basically business was all about boulders. You sold to boulders and you aggregated audiences around boulders. You supplied boulders and advised boulders, and so on and so forth. It was a boulder business.”

Today, by contrast, if you stood on that metaphorical beach you’d see “thousands upon thousands of people every hour coming and dropping a pebble… so much so that some of the boulders would start disappearing.” Already, Leadbeater argued, we’re seeing this effect in the music recording industry, where the big record labels are seeing their business models – predicated on hoarding and controlling the output of the best talent – subsumed by the many garage bands selling and marketing their own material independently via websites such as Myspace. Indeed, he continued, “most of the business of the future will be about creating, finding, joining together, aggregating, joining up, doing more with pebbles.”

The potential of the Internet to facilitate such processes was brought home to Leadbeater, he said, when he heard about an “alternate reality game” (ARG) called “I Love Bees”. An ARG, he explained, is one that involves its players in a fictional narrative by requiring them to carry out tasks in the real world – solving puzzles, gathering information from specific locations and collaborating via the Internet. The 600,000 players of “I Love Bees,” which was designed as an oblique marketing tool for a video game, were spread worldwide, but they nevertheless managed to solve some highly complex problems at high speed without any kind of central organising force. They self-organised – using various technologies – to define a vision (i.e. identify what they needed to do to win the game) and implement various strategies that would get them there.

Jane McGonigal, the creator of the game, told Leadbeater: “Look if we can get 600,000 people around the world to co-operate this intensively – to first understand a complex problem, then take action on the basis of it and repeat that and become more sophisticated – for a game that’s a stupid as this, what else could we use this stuff for? To learn or to share, or to create, or to borrow, or to provide, or whatever it is? How could we harness that kind of capability?"

The problem for most organisations exposed to this kind of thinking, Leadbeater suggested, is that they find it very difficult to think in terms of unconventional organisational structures. “We’re used to thinking of organisations as pyramids or as a kind of value chain,” he pointed out. But if you were to draw a diagram of Wikipedia, the online encyclopedia that is written and administrated by a community of unpaid users, you’d find it looked very different. “Everyone is just dropping in pieces of information and through their process of trial and error and editing and debate and contest, these imperfect pieces build up and form a kind of bird’s nest,” he said.

Wikipedia effectively has had a “self-creating government”. And its possible for other organisations to generate a similar community of helpful, engaged and value-generating users, provided they follow a few key principles:

1. Focus on an idea that will motivate and attract contributors. “Often, big companies want to get their consumers involved to make them better companies or more profitable, when actually what the consumers want is something that makes their life better.” People are motivated by what they want to do, not what you want them to do.
2. Develop a compelling “call to action”. You have to generate a sense of purpose for something that is “promising but unfinished,” Leadbeater said. “Big companies don’t like things that are unfinished. They like presenting things that are perfectly finished that other people cannot tamper with. But actually the value is in things that are unfinished, because those invite contributions.”
3. Create tools that make it easy to contribute. The connection between highly successful mass-collaboration websites such as Wikipedia and eBay is that they all have “relatively simple-to-use tools that make [their functionality, and by extension their communities] easy to access.” It’s vital that your online presence has a modular structure, Leadbeater said: “What you have to do is allow people to create Lego bricks that can then join together to create something larger.”
4. Give people a way to review their peers. “People like to be judged by their peers as to whether they do good work,” Leadbeater said. “That's a key feature of science. It’s also true in arts and culture and actually the most creative companies – Pixar, for example – is that they have a fantastically strong peer culture.” Business leaders should therefore try to enable a collaborative atmosphere in which individuals are not judged primarily by the people above them but by the people beside them.

“This ‘open source’ way of working will become increasingly influential because it motivates, mobilises and allows people to share in ways that big organisations find fantastically hard,” Leadbeater argued. As more and more young people come to expect a creative role in their favourite products and services, so they will come to expect more “lateral and non-hierarchical” working environments. Companies such as Google and Pixar are already wise to this shift. Traditional organisations such as Arup and even Rolls-Royce are beginning to follow suit. In the future, Leadbeater concluded, it will be essential to offer such structures if you wish to recruit and retain the most talented and innovative people.