Smart people

“No matter who you are, most of the smartest people work for someone else.”

Bill Joy, Sun’s Microsystems co-founder

Joy’s Law argued that, “It’s better to create an ecology that gets all the world’s smartest people toiling in your garden for your goals. If you rely solely on your own employees, you’ll never solve all your customers’ needs.”

A “smart” person, within this context, is someone with the capability, but not necessarily the willingness to work for someone else.

Many modern businesses face this essential problem: for any given activity, most of the relevant knowledge lies outside of one organization and the greatest challenge is to find ways to access that knowledge.

Companies recruit smart people in an attempt to create a “Scenius” environment to facilitate productivity and creative knowledge exchange to solve their problems. They acquire other companies to not have to reinvent the wheel and jumpstart their innovation. Coined by British musician Brian Eno, “Scenius” denotes the Communal Genius in which extreme creativity generated by groups of smart people. In his own words,

“Scenius stands for the intelligence and the intuition of a whole cultural scene. It is the communal form of the concept of the genius.”

Brian Eno, British musician

Individuals immersed in a productive scenius will blossom and produce their best work. When buoyed by scenius, you find and act upon your inner genius. Your like-minded peers and the entire environment inspire you. At the cross sections of multiple industries, innovation is birthed.

How does a Scenius work? Economist and philosopher Friedrich Hayek observed “knowledge is unevenly distributed.” Rational economic order is impossible because all the knowledge that exists cannot be aggregated. Knowledge is contained in “dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.” When smart people come together to work for someone else, it is altogether natural to breed innovation in such settings.

Eric von Hippel, a professor of technological innovation in the MIT Sloan School of Management, highlights the “stickiness” or cost of acquiring and transferring knowledge from one place to another in a form that’s usable and understandable for someone else. When the company creates documentation and uses acronyms, this makes the knowledge transfer cost low amongst their employees, affording information stickiness to be low. But first, companies must be able to obtain smart people.

When Joy says that most of the smart people work for someone else, it is not because companies are hiring dumb people. It is not because employees in any given company are not smart. It is because of the nature of knowledge – getting hold of it is tough. It is unevenly distributed and sticky- there will always be smarter people out there that you could have to propel innovation forward.

The best bet is attracting the right kind of smart people for your business. The best basketball player may not make the best coach. The best engineer may not make the best computer science professor. The best engineers at Zillow may not make the best engineers at DeepMind.

Discerning such is the most difficult task of all.

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