Tapping Into "Underground Innovators"

[Summer 2005 - MIT Sloan Management Review] How should managers respond when a hacker or other underground innovator alters their proprietary electronic systems? At companies like Sony, AT&T and Microsoft, managers have reacted, as one might expect with alarm and antagonism. Yet there is a better way. When enterprises handle unsolicited innovation well, they discover promising new business models and products. Underground innovators may be categorized as "elites"--who are mostly constructive--and "kiddies"--who are usually destructive. When managers harness elites' desire for recognition and persuade them to work cooperatively, as they did at Epic Games and TiVo, they create an all-around win- win. More