Karim R. Lakhani

Lumry Family Associate Professor of Business Administration

Karim R. Lakhani is the Lumry Family Associate Professor of Business Administration at the Harvard Business School and the Principal Investigator of the Harvard-NASA Tournament Lab at the Institute for Quantitative Social Science. He specializes in the management of technological innovation in firms and communities. His research is on distributed innovation systems and the movement of innovative activity to the edges of organizations and into communities. He has extensively studied the emergence of open source software communities and their unique innovation and product development strategies. He has also investigated how critical knowledge from outside of the organization can be accessed through innovation contests. Currently Professor Lakhani is investigating incentives and behavior in contests and the mechanisms behind scientific team formation through field experiments on the TopCoder platform and the Harvard Medical School.

Professsor Lakhani’s research on distributed innovation has been published in Harvard Business Review, Innovations, Management Science, Nature Biotechnology, Organization Science, Research Policy and the Sloan Management Review. He is the co-editor of Perspectives on Free and Open Source Software (MIT Press), a book on community-based innovation. He has also published teaching cases on leading organizations practicing distributed innovation including: Data.gov, InnoCentive, Google, Myelin Repair Foundation, SAP, Threadless, TopCoder and Wikipedia. His research has been featured in publications like BusinessWeek, The Boston Globe, The Economist, Fast Company, Inc., The New York Times, The New York Academy of Sciences Magazine, Science, The Wall Street Journal, The Washington Post, and Wired.

Professor Lakhani was awarded his Ph.D. in management from the Massachusetts Institute of Technology. He also holds an MS degree in Technology and Policy from MIT, and a Bachelor's degree in Electrical Engineering and Management from McMaster University in Canada. He was a recipient of the Aga Khan Foundation International Scholarship and a four year doctoral fellowship from Canada's Social Science and Humanities Research Council. Prior to coming to HBS he served as a Lecturer in the Technology, Innovation and Entrepreneurship group at MIT’s Sloan School of Management.  Professor Lakhani has also worked in sales, marketing and new product development roles at GE Healthcare and was a consultant with The Boston Consulting Group.  He was also the inaugural recipient of the TUM-Peter Pribilla Innovation Leadership Award.

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Books

Journal Articles

  1. Using Open Innovation to Identify the Best Ideas

    Which parts of your innovation processes should you open up to the wider world? To reap the benefits of open innovation, executives must understand what to open, how to open it, and how to manage the resulting problems. According to authors Andrew King of Dartmouth College's Tuck School of Business and Karim R. Lakhani of the Harvard Business School and the NASA Tournament Lab, many organizations "are finding that making open innovation work can be more complicated than it looks."

    Keywords: Collaborative Innovation and Invention;

    Citation:

    King, Andrew, and Karim R. Lakhani. "Using Open Innovation to Identify the Best Ideas." MIT Sloan Management Review 55, no. 1 (Fall 2013): 41–48. View Details
  2. Using the Crowd as an Innovation Partner

    More and more organizations are turning to crowds for help in solving their most vexing innovation and research questions, but managers remain understandably cautious. It seems risky and even unnatural to push problems out to vast groups of strangers distributed around the world, particularly for companies built on a history of internal innovation. How can intellectual property be protected? How can a crowdsourced solution be integrated into corporate operations? What about the costs? These concerns are all reasonable, but excluding crowdsourcing from the corporate innovation tool kit means losing an opportunity. After a decade of study, we have identified when crowds tend to outperform internal organizations (or not). We outline four ways to tap into crowd-powered problem solving—contests, collaborative communities, complementors, and labor markets—and offer a system for picking the best one in a given situation. We emphasize that crowds are complementary to internal innovation efforts and present a new capability for firms that want to accelerate their innovation outcomes.

    Keywords: Innovation and Management; Research and Development;

    Citation:

    Boudreau, Kevin J., and Karim R. Lakhani. "Using the Crowd as an Innovation Partner." Harvard Business Review 91, no. 4 (April 2013): 61–69. View Details
  3. Experiments in Open Innovation at Harvard Medical School

    Harvard Medical School seems an unlikely organization to open up its innovation process. By most measures, the more than 20,000 faculty, research staff and graduate students affiliated with Harvard Medical School are already world class and at the top of the medical research game, with approximately $1.4 billion in annual funding from the U.S. National Institutes of Health (NIH). But in February 2010, Drew Faust, president of Harvard University, sent an email invitation to all faculty, staff and students at the university (more than 40,000 individuals) encouraging them to participate in an ideas challenge that Harvard Medical School had launched to generate research topics in Type 1 diabetes. Eventually, the challenge was shared with more than 250,000 invitees, resulting in 150 research ideas and hypotheses. The goal of opening up idea generation and disaggregating the different stages of the research process was to expand the number and range of people who might participate. Today, seven teams of multi-disciplinary researchers are working on the resulting potential breakthrough ideas. In this article, we describe how leaders of Harvard Catalyst, an organization whose mission is to drive therapies from the lab to patients bedsides faster and to do so by working across the many silos of Harvard Medical School, chose to implement principles of open and distributed innovation.

    Keywords: Health Disorders; Collaborative Innovation and Invention; Boston;

    Citation:

    Guinan, Eva C., Kevin J. Boudreau, and Karim R. Lakhani. "Experiments in Open Innovation at Harvard Medical School." Art. 3. MIT Sloan Management Review 54, no. 3 (Spring, 2013): 45–52. View Details
  4. Prize-based Contests Can Provide Solutions to Computational Biology Problems

    Citation:

    Lakhani, Karim R., Kevin J. Boudreau, Po-Ru Loh, Lars Backstrom, Carliss Y. Baldwin, Eric Lonstein, Mike Lydon, Alan MacCormack, Ramy A Arnaout, and Eva C. Guinan. "Prize-based Contests Can Provide Solutions to Computational Biology Problems." Nature Biotechnology 31, no. 2 (February, 2013): 108–111. View Details
  5. Incentives and Problem Uncertainty in Innovation Contests: An Empirical Analysis

    Contests are a historically important and increasingly popular mechanism for encouraging innovation. A central concern in designing innovation contests is how many competitors to admit. Using a unique data set of 9,661 software contests, we provide evidence of two coexisting and opposing forces that operate when the number of competitors increases. Greater rivalry reduces the incentives of all competitors in a contest to exert effort and make investments. At the same time, adding competitors increases the likelihood that at least one competitor will find an extreme-value solution. We show that the effort-reducing effect of greater rivalry dominates for less uncertain problems whereas the effect on the extreme value prevails for more uncertain problems. Adding competitors thus systematically increases overall contest performance for high-uncertainty problems. We also find that higher uncertainty reduces the negative effect of added competitors on incentives. Thus uncertainty and the nature of the problem should be explicitly considered in the design of innovation tournaments. We explore the implications of our findings for the theory and practice of innovation contests.

    Keywords: Motivation and Incentives; Problems and Challenges; Risk and Uncertainty; Innovation and Invention; Management Analysis, Tools, and Techniques; Value; Software; Competition; Performance; Theory; Practice;

    Citation:

    Boudreau, Kevin J., Nicola Lacetera, and Karim R. Lakhani. "Incentives and Problem Uncertainty in Innovation Contests: An Empirical Analysis." Management Science 57, no. 5 (May 2011): 843–863. View Details
  6. Marginality and Problem-Solving Effectiveness in Broadcast Search

    We examine who the winners are in science problem-solving contests characterized by open broadcast of problem information, self-selection of external solvers to discrete problems from the laboratories of large R&D intensive companies, and blind review of solution submissions. We find that technical and social marginality, being a source of different perspectives and heuristics, plays an important role in explaining individual success in problem solving. The provision of a winning solution was positively related to increasing distance between the solver's field of technical expertise and the focal field of the problem. Female solvers—known to be in the "outer circle" of the scientific establishment—performed significantly better than men in developing successful solutions. Our findings contribute to the emerging literature on open and distributed innovation by demonstrating the value of openness, at least narrowly defined by disclosing problems, in removing barriers to entry to non-obvious individuals. We also contribute to the knowledge-based theory of the firm by showing the effectiveness of a market mechanism to draw out knowledge from diverse external sources to solve internal problems.

    Keywords: Competition; Open Source Distribution; Knowledge Use and Leverage; Markets; Independent Innovation and Invention; Problems and Challenges; Research and Development; Gender Characteristics; Science;

    Citation:

    Jeppesen, Lars Bo, and Karim R. Lakhani. "Marginality and Problem-Solving Effectiveness in Broadcast Search." Organization Science 21 (September–October 2010): 1016–1033. View Details
  7. Community, Joining, and Specialization in Open Source Software Innovation: A Case Study

    Keywords: Civil Society or Community; Software; Information; Information Technology Industry;

    Citation:

    von Krogh, Georg, Sebastian Spaeth, and Karim R. Lakhani. "Community, Joining, and Specialization in Open Source Software Innovation: A Case Study." Research Policy 32, no. 7 (July 2003): 1217–1241. View Details

Book Chapters

  1. Open Innovation and Organizational Boundaries: Task Decomposition, Knowledge Distribution and the Locus of Innovation

    This chapter contrasts traditional, organization-centered models of innovation with more recent work on open innovation. These fundamentally different and inconsistent innovation logics are associated with contrasting organizational boundaries and organizational designs. We suggest that when critical tasks can be modularized and when problem-solving knowledge is widely distributed and available, open innovation complements traditional innovation logics. We induce these ideas from the literature and with extended examples from Apple, NASA, and LEGO. We suggest that task decomposition and problem-solving knowledge distribution are not deterministic but are strategic choices. If dynamic capabilities are associated with innovation streams, and if different innovation types are rooted in contrasting innovation logics, there are important implications for firm boundaries, design, and identity.

    Keywords: innovation; organizational boundaries; Institutional Logics; modular innovation; open innovation; Knowledge Sharing; Innovation Strategy; Organizational Design; Boundaries; Collaborative Innovation and Invention;

    Citation:

    Lakhani, Karim R., Hila Lifshitz - Assaf, and Michael Tushman. "Open Innovation and Organizational Boundaries: Task Decomposition, Knowledge Distribution and the Locus of Innovation." Chap. 19 in Handbook of Economic Organization: Integrating Economic and Organization Theory, edited by Anna Grandori, 355–382. Northampton, MA: Edward Elgar Publishing, 2013. View Details
  2. The Confederacy of Heterogeneous Software Organizations and Heterogeneous Developers: Field Experimental Evidence on Sorting and Worker Effort

    Software development occurs in a patchwork or "confederacy" of different types of institutions (universities, small start-ups, multinational enterprises, government agencies, etc.) utilizing varied work approaches. Here we speculate on one possible explanation for this organizational heterogeneity: it may reflect inherent heterogeneity of the software workforce, in terms of which kinds of organizations individual workers prefer to work within ("institutional preference"). We take very preliminary steps towards investigating this possibility by devising a novel 10-day field experiment to estimate the differences in behavior that are created by sorting workers into their preferred institutional regimes versus having them unsorted. The experiment involved assigning 1,040 elite software developers to either a competitive or a cooperative work regime to create software for NASA's Space Life Sciences Directorate. Half of the subjects-the "sorted" group-were assigned according to their institutional preferences; the other half-the "unsorted" group-were assigned without regard to their preferences. Assignment was done in a manner where sorted and unsorted groups had identical distributions of raw problem-solving ability. We find a remarkably large effect of institutional preference-based sorting on the effort exerted. Sorting on institutional preferences roughly doubled effort within the competitive regime and increased effort by roughly half in the cooperative regime, while accounting for incentives. Our experimental approach and results indicate the importance of accounting for worker preferences in creative activities that drive the rate and direction of inventive activity in the economy.

    Keywords: Innovation and Invention; Software; Product Development; Organizations; Employees; Behavior; Competition; Cooperation; Creativity; Information Technology Industry;

    Citation:

    Boudreau, Kevin J., and Karim R. Lakhani. "The Confederacy of Heterogeneous Software Organizations and Heterogeneous Developers: Field Experimental Evidence on Sorting and Worker Effort." In The Rate and Direction of Inventive Activity Revisited, edited by Josh Lerner and Scott Stern, 483–502. University of Chicago Press, 2012. View Details
  3. Organizations in the Shadow of Communities

    Keywords: Organizations; Civil Society or Community;

    Citation:

    O'Mahony, Siobhan, and Karim R. Lakhani. "Organizations in the Shadow of Communities." In Communities and Organizations. Vol. 33, edited by Christopher Marquis, Michael Lounsbury, and Royston Greenwood, 3–36. Research in the Sociology of Organizations. Emerald Group Publishing, 2011. View Details
  4. Why Hackers Do What They Do: Understanding Motivation and Effort in Free/Open Source Software Projects

    Keywords: Motivation and Incentives; Software; Open Source Distribution; Attitudes;

    Citation:

    Lakhani, Karim R., and Robert Wolf. "Why Hackers Do What They Do: Understanding Motivation and Effort in Free/Open Source Software Projects." In Perspectives on Free and Open Source Software, edited by Joe Feller, Brian Fitzgerald, Scott Hissam, and Karim R. Lakhani. Cambridge: MIT Press, 2005. View Details

Working Papers

  1. From Crowds to Collaborators: Initiating Effort & Catalyzing Interactions Among Online Creative Workers

    Online collaborative platforms have emerged as a complementary approach to traditional organizations for coordinating the collective efforts of creative workers. However, it is surprising that they result in any productive output as individuals often work without direct monetary incentives while collaborating with unknown others. In this paper, we distinguish the conditions necessary for eliciting effort from those affecting the quality of interdependent teamwork. We consider the role of incentives versus social processes in catalyzing collaboration. We test our hypotheses using a unique data set of 260 individuals randomly assigned to 52 teams tasked with developing working solutions to a complex innovation problem over 10 days, with varying monetary incentives. We find that levels of effort are driven by cash incentives and the presence of other interacting teammates. The level of collaboration, by contrast, was not sensitive to cash incentives. Instead, individuals increased their communication if teammates were also actively participating. Additionally, team performance is uniquely driven by the level of emergent interdependence, as indexed by the diversity of topics discussed and the temporal coordination of activity in short focused time periods. Our results contribute to the literature on how alternative organizational forms can be designed to solve complex innovation tasks.

    Keywords: online platforms; collaboration; teams; interdependence; Motivation and Incentives; text analysis; temporal coordination; Motivation and Incentives; Online Technology; Creativity; Organizational Structure; Collaborative Innovation and Invention;

    Citation:

    Boudreau, Kevin, Patrick Gaule, Karim R. Lakhani, Christoph Riedl, and Anita Williams Woolley. "From Crowds to Collaborators: Initiating Effort & Catalyzing Interactions Among Online Creative Workers." Harvard Business School Working Paper, No. 14-060, January 2014. View Details
  2. Performance Responses to Competition Across Skill-Levels in Rank Order Tournaments: Field Evidence and Implications for Tournament Design

    Tournaments are widely used in the economy to organize production and innovation. We study individual contestant-level data from 2,796 contestants in 774 software algorithm design contests with random assignment. Precisely conforming to theory predictions, the performance response to added contestants varies non-monotonically across contestants of different abilities, most respond negatively to competition, and highest-skilled contestants respond positively. In counterfactual simulations, we interpret a number of tournament design policies (number of competitors, prize allocation and structure, divisionalization, open entry) as a means of reconciling non-monotonic incentive responses to competition, effectively manipulating the number and skills distribution of contestants facing one another.

    Keywords: Design; Motivation and Incentives; Competition; Performance;

    Citation:

    Boudreau, Kevin J., Constance E. Helfat, Karim R. Lakhani, and Michael E. Menietti. "Performance Responses to Competition Across Skill-Levels in Rank Order Tournaments: Field Evidence and Implications for Tournament Design." Harvard Business School Working Paper, No. 14-014, August 2013. View Details
  3. Cumulative Innovation & Open Disclosure of Intermediate Results: Evidence from a Policy Experiment in Bioinformatics

    Recent calls for greater openness in our private and public innovation systems have particularly urged for more open disclosure and granting of access to intermediate works—early results, algorithms, materials, data and techniques—with the goals of enhancing overall research and development productivity and enhancing cumulative innovation. To make progress towards understanding implications of such policy changes we devised a large-scale field experiment in which 733 subjects were divided into matched independent subgroups to address a bioinformatics problem under either a regime of open disclosure of intermediate results or, alternatively, one of closed secrecy around intermediate solutions. We observe the cumulative innovation process in each regime with fine-grained measures and are able to derive inferences with a series of cross-sectional comparisons. Open disclosures led to lower participation and lower effort but nonetheless led to higher average problem-solving performance by concentrating these lesser efforts on the most performant technical approaches. Closed secrecy produced higher participation and higher effort, while producing less correlated choices of technical approaches that participants pursued, resulting in greater individual and collective experimentation and greater dispersion of performance. We discuss the implications of such changes to the ongoing theory, evidence, and policy considerations with regards to cumulative innovation.

    Keywords: Knowledge Sharing; Patents; Innovation and Invention;

    Citation:

    Boudreau, Kevin, and Karim Lakhani. "Cumulative Innovation & Open Disclosure of Intermediate Results: Evidence from a Policy Experiment in Bioinformatics." Harvard Business School Working Paper, No. 14-002, July 2013. View Details
  4. The Novelty Paradox & Bias for Normal Science: Evidence from Randomized Medical Grant Proposal Evaluations

    Central to any innovation process is the evaluation of proposed projects and allocation of resources. We investigate whether novel research projects, those deviating from existing research paradigms, are treated with a negative bias in expert evaluations. We analyze the results of a peer review process for medical research grant proposals at a leading medical research university, in which we recruited 142 expert university faculty members to evaluate 150 submissions, resulting in 2,130 randomly-assigned proposal-evaluator pair observations. Our results confirm a systematic penalty for novel proposals; a standard deviation increase in novelty drops the expected rank of a proposal by 4.5 percentile points. This discounting is robust to various controls for unobserved proposal quality and alternative explanations. Additional tests suggest information effects rather than strategic effects account for the novelty penalty. Only a minority of the novelty penalty could be related to perceptions of lesser feasibility of novel proposals.

    Keywords: Project evaluation and resource allocation; expert review; open science; scientific paradigms; field experiment; Fairness; Resource Allocation; Research; Performance Evaluation; Projects; Science;

    Citation:

    Boudreau, Kevin J., Eva C. Guinan, Karim R. Lakhani, and Christoph Riedl. "The Novelty Paradox & Bias for Normal Science: Evidence from Randomized Medical Grant Proposal Evaluations." Harvard Business School Working Paper, No. 13-053, December 2012. View Details
  5. Colocation and Scientific Collaboration: Evidence from a Field Experiment

    We present the results of a field experiment conducted within the Harvard Medical School system of hospitals and research centers to understand how colocation impacts the likelihood of scientific collaboration. We introduce exogenous colocation and face-to-face interactions for a random subset of biomedical researchers responding to an opportunity to apply for a research grant. While the overall baseline likelihood of any two researchers collaborating is small, we find that random colocation significantly increases the likelihood of pair-level co-application by almost 70%. The effect of exogenous colocation on subsequent collaboration was greater for previous coauthors, pairs including a woman, and pairs researching similar clinical areas. Our results suggest that matching between scientists may be subject to considerable frictions—even among those in relatively close geographic proximity and in the same organizational system. At the same time, even a brief and focused intervention facilitating face-to-face interactions can provide information that impacts the formation of scientific collaborations.

    Keywords: Geographic Location; Competition; Groups and Teams; Health Care and Treatment; Research and Development; Collaborative Innovation and Invention; Health Industry; Massachusetts;

    Citation:

    Boudreau, Kevin, Tom Brady, Ina Ganguli, Patrick Gaule, Eva Guinan, Karim Lakhani, and Tony Hollenberg. "Colocation and Scientific Collaboration: Evidence from a Field Experiment." Harvard Business School Working Paper, No. 13-023, August 2012. (Revised September 2012.) View Details
  6. Field Evidence on Individual Behavior & Performance in Rank-Order Tournaments

    Economic analysis of rank-order tournaments has shown that intensified competition leads to declining performance. Empirical research demonstrates that individuals in tournament-type contests perform less well on average in the presence of a larger number of competitors in total and superstars. Particularly in field settings, studies often lack direct evidence about the underlying mechanisms, such as the amount of effort, that might account for these results. Here we exploit a novel dataset on algorithmic programming contests that contains data on individual effort, risk taking, and cognitive errors that may underlie tournament performance outcomes. We find that competitors on average react negatively to an increase in the total number of competitors, and react more negatively to an increase in the number of superstars than non-superstars. We also find that the most negative reactions come from a particular subgroup of competitors: those that are highly skilled, but whose abilities put them near to the top of the ability distribution. For these competitors, we find no evidence that the decline in performance outcomes stems from reduced effort or increased risk taking. Instead, errors in logic lead to a decline in performance, which suggests a cognitive explanation for the negative response to increased competition. We also find that a small group of competitors, who are at the very top of the ability distribution (non-superstars), react positively to increased competition from superstars. For them, we find some evidence of increased effort and no increase in errors of logic, consistent with both economic and psychological explanations.

    Keywords: Competition; Behavior; Rank and Position; Performance; Cognition and Thinking;

    Citation:

    Boudreau, Kevin J., Constance E. Helfat, Karim R. Lakhani, and Michael Menietti. "Field Evidence on Individual Behavior & Performance in Rank-Order Tournaments." Harvard Business School Working Paper, No. 13-016, August 2012. View Details
  7. 'Fit': Field Experimental Evidence on Sorting, Incentives and Creative Worker Performance

    We present the results of a 10-day field experiment in which over 500 elite software developers prepared solutions to the same computational algorithmic problem. Participants were divided into two groups with identical skills distributions and exposed to the same competitive institutional setting. The "sorted" group was composed of individuals who preferred the competitive regime instead of a team-based outside option. The "unsorted" group had population-average preferences for working in the regime or the outside option. We find this sorting on this basis of institutional preferences doubled effort and the performance of solutions-controlling for skills, monetary incentives and institutional details.

    Keywords: Competency and Skills; Collaborative Innovation and Invention; Independent Innovation and Invention; Performance Evaluation; Creativity; Motivation and Incentives; Personal Characteristics; Competition;

    Citation:

    Boudreau, Kevin J., and Karim R. Lakhani. "'Fit': Field Experimental Evidence on Sorting, Incentives and Creative Worker Performance." Harvard Business School Working Paper, No. 11-107, April 2011. View Details
  8. Innovation and the Challenge of Novelty: The Novelty-Confirmation-Transformation Cycle in Software and Science

    Innovation requires sources of novelty, but the challenge is that not all sources lead to innovation, so its value needs to be determined. However, since ways of determining value stem from existing knowledge, this often creates barriers to innovation. To understand how people address the challenge of novelty, we develop a conceptual and an empirical framework to explain how this challenge is addressed in a software and scientific context. What is shown is that the process of innovation is a cycle where actors develop a novel course of action and, based on the consequences identified, confirm what knowledge is necessary to transform and develop the next course of action. The performance of the process of innovation is constrained by the capacities of the artifacts and the ability of the actors to create and use artifacts to drive this cycle. By focusing on the challenge of novelty, a problem that cuts across all contexts of innovation, our goal is to develop a more generalized account of what drives the process of innovation.

    Keywords: Innovation and Invention; Knowledge Acquisition; Knowledge Use and Leverage; Infrastructure; Science; Creativity; Software; Value;

    Citation:

    Carlile, Paul R., and Karim R. Lakhani. "Innovation and the Challenge of Novelty: The Novelty-Confirmation-Transformation Cycle in Software and Science." Harvard Business School Working Paper, No. 11-096, March 2011. View Details
  9. Parallel Search, Incentives and Problem Type: Revisiting the Competition and Innovation Link

    This paper presents econometric evidence of two independent effects of adding more competitors on innovation: 1) a competition effect whereby increasing rivalry shapes, and often decreases, incentives to expend effort and invest in innovation; and 2) a parallel search effect whereby adding greater numbers of "searchers" benefits innovation by broadening the search for solutions. We further show the importance of these effects depends on the nature of the innovation problem being solved. The analysis uses data from TopCoder's software contest platform, on which elite software developers were assigned different problems to solve within assigned groups of direct competitors. Econometric relationships are identified by exploiting random assignment and a separate instrumental variables procedure.

    Keywords: Investment; Independent Innovation and Invention; Motivation and Incentives; Competition; Software;

    Citation:

    Boudreau, Kevin J., Nicola Lacetera, and Karim R. Lakhani. "Parallel Search, Incentives and Problem Type: Revisiting the Competition and Innovation Link." Harvard Business School Working Paper, No. 09-041, September 2008. View Details

Cases and Teaching Materials

  1. Netflix: Designing the Netflix Prize (A)

    In 2006, Reed Hastings, CEO of Netflix, was looking for a way to solve Netflix's customer churn problem. Netflix used Cinematch, its proprietary movie recommendation software, to promote individually determined best-fit movies to customers. Hastings determined that a 10% improvement to the Cinematch algorithm would decrease customer churn and increase annual revenue by up to $89 million. However, traditional options for improving the algorithm, such as hiring and training new employees, were time intensive and costly. Hastings decided to improve Netflix's software by crowdsourcing, and began planning the Netflix Prize, an open contest searching for a 10% improvement on Cinematch. The case examines the dilemmas Hastings faced as he planned the contest, such as whether to use an existing crowdsourcing platform or create his own, what company information to expose, how to protect customer privacy while making internal datasets public, how to allocate IP, and how to manage the crowd.

    Keywords: crowdsourcing; Prizes; digitization; algorithms; recommendation software; Disruption; Transformation; Collaborative Innovation and Invention; Technological Innovation; Knowledge Sharing; Motion Pictures and Video Industry; Entertainment and Recreation Industry; Technology Industry; United States;

    Citation:

    Lakhani, Karim R., Wesley M. Cohen, Kynon Ingram, Tushar Kothalkar, Maxim Kuzemchenko, Santosh Malik, Cynthia Meyn, Greta Friar, and Stephanie Healy Pokrywa. "Netflix: Designing the Netflix Prize (A)." Harvard Business School Case 615-015, August 2014. View Details
  2. GE and the Industrial Internet

    CEO Jeff Immelt considers whether GE is moving fast enough on its new Industrial Internet initiative. The undertaking includes building out an Industrial Internet, connecting machines and devices, collecting their data and operations, and providing services to clients based on analytics of this data and information. The case considers the implications of such an initiative across all 6 of GE's business units, and how best and how quickly to execute the strategy. The firm has committed $1b in investment, building out a new software center in California, and a commercial sales function at headquarters to deploy the new products and services.

    Keywords: technology; operations management; strategy; big data; Business analysis; corporate strategy; Digital technology; Digital Innovation; general management; general strategy; Global Competitiveness; global strategy; innovation; Innovation and Management; industrial internet; GE; Innovation and Invention; Technology; Air Transportation Industry; Energy Industry; Health Industry; Industrial Products Industry; Information Technology Industry; Manufacturing Industry; Medical Devices and Supplies Industry; Rail Industry; Transportation Industry; Technology Industry; North and Central America; Asia; Europe; Middle East; Latin America;

    Citation:

    Lakhani, Karim R., Marco Iansiti, and Kerry Herman. "GE and the Industrial Internet." Harvard Business School Case 614-032, April 2014. (Revised June 2014.) View Details
  3. Ford Motor Company: Blueprint for Mobility

    Mark Fields, Ford Motor Company's COO, had to ensure the company's current business model of building cars and trucks remained strong, while concurrently navigating the company into the rapidly expanding industry of personal mobility. Personal mobility required new technologies and business models that were untraditional at Ford, and Fields had to evaluate the traditional business model colliding with the new business model.
    To direct these new technologies and business models, Ford released its "Blueprint for Mobility," which established near-, mid- and long-term goals to make mobility accessible and affordable to all.
    The case focuses on the launch of three mobility experiments (car sharing, parking, and on-demand ride sharing), and asks students to determine how Fields should balance these types of experiments with the company's traditional operations. Further, was Ford doing enough in the mobility space, and if so, was it moving fast enough? What new sources of revenue could Ford derive from mobility solutions?

    Keywords: Automobiles; Automobile Manufacturing; Ford Motor Company; Mark Fields; Blueprint for Mobility; Dearborn; Michigan; Car Sharing; Parking; On-demand Ride Sharing; Strategy; Business Model; Auto Industry; Michigan; United States;

    Citation:

    Lakhani, Karim R., Marco Iansiti, and Noah Fisher. "Ford Motor Company: Blueprint for Mobility." Harvard Business School Case 614-018, April 2014. View Details
  4. Prodigy Network: Democratizing Real Estate Design and Financing

    This case follows Rodrigo Nino, founder and CEO of commercial real estate development company Prodigy Network, as he develops an equity-based crowdfunding model for small investors to access commercial real estate in Colombia, then tries out the model in the U.S. U.S. regulations, starting with the Securities Act of 1933, effectively barred sponsors from soliciting small investors for large commercial real estate. However, the JOBS Act of 2013 loosened U.S. restrictions on equity crowdfunding. Nino believes that crowdfunding will democratize real estate development by providing a new asset class for small investors, revolutionizing the industry. The case also follows Nino's development of an online platform to crowdsource design for his crowdfunded buildings, maximizing shared value throughout the development process. Nino faces many challenges as he attempts to crowdfund an extended stay hotel in Manhattan, New York. For example, crowdfunded real estate faces resistance from industry leaders, especially in regards to the concern of fraud, and SEC regulations on crowdfunding remain undetermined at the time of the case.

    Keywords: innovation; real estate; crowdfunding; crowdsourcing; Digital Innovation; Commercial Real Estate; online platforms; Disruption; Transformation; Design; Assets; Equity; Disruptive Innovation; Innovation Strategy; Online Technology; Real Estate Industry; Latin America; New York (state, US); United States;

    Citation:

    Lakhani, Karim R., Katja Hutter, and Greta Friar. "Prodigy Network: Democratizing Real Estate Design and Financing." Harvard Business School Case 614-064, March 2014. (Revised August 2014.) View Details
  5. Samsung Electronics: TV in an Era of Convergence

    From the late 1990s to 2006/2007, Samsung Electronics moved from one of 170 TV manufacturers to gain dominant TV market share year over year from 2007-2013. As digital technologies increasingly converged in 2013-2014, the industry faced new questions: What was the future of TV? The case considers Samsung Electronics TV Group's product development processes, as the company's mobile and TV offerings increasingly converged and consumer demands and behavior pushed the historically clear boundaries of product, content, engagement and interaction.

    Keywords: Digital Innovation; technology; technology management; digital convergence; Digital technology; innovation; product development; korea; Samsung; television; Product design; Technological Innovation; Technology; Innovation and Invention; Innovation Leadership; Innovation and Management; Product Development; Product Design; Electronics Industry; Korean Peninsula; Asia;

    Citation:

    Lakhani, Karim, Marco Iansiti, and Kerry Herman. "Samsung Electronics: TV in an Era of Convergence." Harvard Business School Case 614-034, March 2014. (Revised March 2014.) View Details
  6. 3D Systems

    In late 2013, Rajeev Kulkarni needed to decide how best to facilitate the emergence of a broad base of users and content to promote the sale of 3D Systems's consumer-focused 3D printers. As yet, neither the company nor users had identified an indispensable application for 3D printing for consumers, despite a plethora of potential opportunities.

    Keywords: 3D printing; business ecosystems; 3D Systems; Growth and Development Strategy; Marketing Strategy; Copyright; Two-Sided Platforms; Product Development; Customization and Personalization; Manufacturing Industry;

    Citation:

    Lakhani, Karim R., and David Lane. "3D Systems." Harvard Business School Case 614-035, February 2014. (Revised August 2014.) View Details
  7. SAP 2014: Reaching for the Cloud

    In May 2014, Bill McDermott will become the sole CEO of SAP AG, the world leader in the Enterprise Resource Planning (ERP) field. The case occurs in January 2014 at SAP's investors meeting, at a time when the company's stock is near record high. A 2010 strategy committed the company to a transition to cloud computing. The main driver behind this transition was the development of SAP HANA, an in-memory computing technology that combined database, data processing, and application platform functionality. Ownership of cloud infrastructure was a key question. SAP could build, own, and operate its own data centers, or partner to locate SAP HANA and other products with other cloud infrastructure providers, such as Amazon, Microsoft, or IBM. McDermott also had to make decisions around the organization and leadership of the company's cloud efforts.

    Keywords: information technology; Cloud Computing; platform; strategy and execution; strategy and leadership; enterprise resource planning; software; Information Technology; Technology Platform; Information Technology Industry; Germany;

    Citation:

    Lakhani, Karim R., Marco Iansiti, and Noah Fisher. "SAP 2014: Reaching for the Cloud." Harvard Business School Case 614-052, January 2014. (Revised March 2014.) View Details
  8. Nivea (B)

    This supplementary case follows up on an innovative R&D approach by Beiersdorf,a skin care and cosmetics company. The case relates what happened to the product launched by Beiersdorf, to its Nivea line, following the events of the A case, and how the commercial success of the product informed thinking by leaders in R&D for the future.

    Keywords: innovation; innovation management; Research and Development; marketing; Innovation Strategy; Innovation and Management; Research and Development; Product Design; Collaborative Innovation and Invention; Beauty and Cosmetics Industry; Consumer Products Industry;

    Citation:

    Lakhani, Karim R., Johann Fuller, Volker Bilgram, and Greta Friar. "Nivea (B)." Harvard Business School Supplement 614-043, January 2014. View Details
  9. Nivea (A)

    The case describes the efforts of Beiersdorf, a worldwide leader in the cosmetics and skin care industries, to generate and commercialize new R&D through open innovation using external crowds and "netnographic" analysis. Beiersdorf, best known for its consumer brand Nivea, has a rigorous R&D process that has led to many successful product launches, but are there areas of customer need that are undervalued by the traditional process? A novel online customer analysis approach suggests untapped opportunities for innovation, but can the company justify a launch based on this new model of research?

    Keywords: innovation; innovation management; crowdsourcing; Research and Development; big data; Innovation Strategy; Innovation and Management; Knowledge Management; Knowledge Sharing; Research and Development; Social and Collaborative Networks; Collaborative Innovation and Invention; Beauty and Cosmetics Industry; Consumer Products Industry;

    Citation:

    Lakhani, Karim R., Johann Fuller, Volker Bilgram, and Greta Friar. "Nivea (A)." Harvard Business School Case 614-042, January 2014. View Details
  10. A Note on Funding Digital Innovation Startups

    This note provides information on the state of startup financing in Silicon Valley in 2013. It details different avenues startups have to raise funding, including venture capital, corporate venture capital, angel investors, incubators, and crowdfunding.

    Keywords: Startup; innovation & entrepreneurship; venture capital; angel investors; accelerator; crowdfunding; Silicon Valley; Venture Capital; Entrepreneurship; California;

    Citation:

    Lakhani, Karim, Michael Norris, and Andrew Otazo. "A Note on Funding Digital Innovation Startups." Harvard Business School Technical Note 614-039, January 2014. View Details
  11. Google Car

    By 2013, Google, while not a traditional manufacturer of automobiles, had invested millions of dollars in its self-driving cars which had logged over 500,000 miles of testing. The Google management team faced several questions. Should Google continue to invest in the technology behind self-driving cars? How could Google's core software-based and search business benefit from self-driving car technology? As large auto manufacturers began to invest in automotive technology themselves, could Google compete? Was this investment of time and resources worth it for Google?

    Keywords: Digital Services; innovation; technology; auto industry; Technological Innovation; Online Technology; Market Entry and Exit; Transportation; Auto Industry; United States;

    Citation:

    Lakhani, Karim R., James Weber, and Christine Snively. "Google Car." Harvard Business School Case 614-022, January 2014. (Revised June 2014.) View Details
  12. Open Innovation at Siemens

    The case describes Siemens, a worldwide innovator in the Energy, Healthcare, Industry, and Infrastructure & Cities sectors, and its efforts to develop and commercialize new R&D through open innovation, including internal and external crowdsourcing contests. Emphasis is placed on exploring actual open innovation initiatives within Siemens and their outcomes. These include creating internal social- and knowledge-sharing networks and utilzing third party platforms to host internal and external contests. Industries discussed include energy, green technology, infrastructure and cities, and sustainability. In addition, the importance of fostering a collaborative online environment and protecting intellectual property is explored.

    Keywords: innovation; innovation management; crowdsourcing; information technology; Research and Development; Innovation Strategy; Innovation and Management; Knowledge Management; Knowledge Sharing; Research and Development; Energy Industry; Health Industry; Green Technology Industry; Manufacturing Industry;

    Citation:

    Lakhani, Karim R., Katja Hutter, Stephanie Healy Pokrywa, and Johann Fuller. "Open Innovation at Siemens." Harvard Business School Case 613-100, June 2013. (Revised October 2013.) View Details
  13. OpenIDEO

    The case describes OpenIDEO, an online offshoot of IDEO, one of the world's leading product design firms. OpenIDEO leverages IDEO's innovative design process and an online community to create solutions for social issues. Emphasis is placed on comparing the IDEO and OpenIDEO processes using real-world project examples. For IDEO this includes the redesign of Air New Zealand's long haul flights. For OpenIDEO this includes increasing bone marrow donor registrations and improving personal sanitation in Ghana. In addition, the importance of fostering a collaborative online environment is explored.

    Keywords: Social Issues; Product Design; Social and Collaborative Networks; Collaborative Innovation and Invention; Ghana; New Zealand;

    Citation:

    Lakhani, Karim R., Anne-Laure Fayard, Natalia Levina, and Stephanie Healy Pokrywa. "OpenIDEO." Harvard Business School Case 612-066, February 2012. (Revised October 2013.) View Details
  14. TopCoder (B)

    Metrology plays a key role in the manufacture of mechanical components. Traditionally it is used extensively in a pre-process stage where a manufacturer does process planning, design, and ramp-up, and in post-process off-line inspection to establish proof of quality. The area that is seeing a lot of growth is the in-process stage of volume manufacturing, where feedback control can help ensure that parts are made to specification. The Industrial Metrology Group at Carl Zeiss AG had its traditional strength in high precision coordinate measuring machines, a universal measuring tool that had been widely used since its introduction in the mid-1970s. The market faced a complex diversification of competition as metrology manufacturers introduced new sensor and measurement technologies, and as some of their customers moved towards a different style of measurement mandating speed and integration with production systems. The case discusses the threat of new in-line metrology systems to the core business as well as the arising new opportunities.

    Keywords: Industry Growth; Forecasting and Prediction; Change Management; Production; Machinery and Machining; Planning; Quality; Competition; Diversification; Technology Adoption; Measurement and Metrics; Product Design; Manufacturing Industry;

    Citation:

    Lakhani, Karim R., Eric Lonstein, and Stephanie Pokrywa. "TopCoder (B)." Harvard Business School Supplement 612-044, September 2011. View Details
  15. InnoCentive.com (B)

    InnoCentive.com enables clients to tap into internal and external solver networks to address various business issues. In 2008, InnoCentive introduced "InnoCentive@Work" (lC@W), which recognized clients' reluctance to share problems and solutions with an external network. Instead, IC@W enabled clients to foster open collaboration amongst its own employees. IC@W became the fastest growing product in InnoCentive's portfolio. In 2010, InnoCentive added "team project rooms" which allowed small groups of solvers from InnoCentive's community to openly add posts and discussion threads after agreeing to the confidentiality and IP transfer requirements of the client. The case raises the questions of how the team room concept could be improved and how clients could be convinced of its benefits.

    Keywords: Market Platforms; Cost vs Benefits; Intellectual Property; Networks; Collaborative Innovation and Invention; Product; Groups and Teams; Communication Technology;

    Citation:

    Lakhani, Karim R., and Eric Lonstein. "InnoCentive.com (B)." Harvard Business School Supplement 612-026, August 2011. View Details
  16. InnoCentive.com (C)

    InnoCentive.com enables clients to tap into internal and external solver networks to address various business issues. This case focuses on the outcome of InnoCentive's decision to post challenges related to environmental issues created by the Gulf Oil Spill. It reviews lessons learned from this experience and asks students to consider whether InnoCentive should post challenges in response to the nuclear crises resulting from the 2011 Japanese earthquake and tsunami.

    Keywords: Innovation and Invention; Networks; Decisions; Outcome or Result; Pollution and Pollutants; Natural Disasters; Natural Environment; Japan;

    Citation:

    Lakhani, Karim R., and Eric Lonstein. "InnoCentive.com (C)." Harvard Business School Supplement 612-027, August 2011. View Details
  17. TopCoder (A): Developing Software through Crowdsourcing (TN)

    Teaching Note for 610032.

    Keywords: Business Model; Collaborative Innovation and Invention; Software; Product Development; Competition; Online Technology; Problems and Challenges; Perspective; Information Technology Industry; Service Industry;

    Citation:

    Lakhani, Karim R., and Eric Lonstein. "TopCoder (A): Developing Software through Crowdsourcing (TN)." Harvard Business School Teaching Note 611-071, March 2011. View Details
  18. Data.gov

    This case presents the logic and execution underlying the launch of Data.gov, an instantiation of President Obama's initiative for transparency and open government. The process used by Vivek Kundra, the federal CIO, and his team to rapidly develop the website and to make available high-value data sets for reuse is highlighted. The case recounts Kundra's experience at the state and local government levels in developing open data initiatives and the application of that experience to the federal government. The case demonstrates the benefits of making government data available in terms of both engaged citizens and the potential for new innovations from the private sector. Potential drawbacks of open access including security and privacy issues are illustrated. Issues related to the role of government in releasing data and the balance between accountability and private-sector innovation are explored.      

    Keywords: Information Management; Data and Data Sets; Government Administration; Innovation and Management; Knowledge Management; Cost vs Benefits; Government and Politics; Private Sector; Public Sector; Information Industry; Public Administration Industry; United States;

    Citation:

    Lakhani, Karim R., Robert D. Austin, and Yumi Yi. "Data.gov." Harvard Business School Case 610-075, May 2010. (Revised May 2010.) View Details
  19. Myelin Repair Foundation: Accelerating Drug Discovery Through Collaboration

    This case presents the Myelin Repair Foundation's accelerated research collaboration model for drug discovery. It highlights the challenges of building a multi-disciplinary and multi-institutional research collaboration that is attempting to create a treatment for multiple sclerosis based on a novel scientific approach. The case provides details on how norms of academic research and intellectual property had to be updated to enable collaboration. The current dilemma facing the CEO and COO of the foundation relates to setting strategic priorities for research so that a treatment for MS can be ready in the next ten years. The strategic choices need to account for the complexities of drug discovery, the uncertainty of commercial partners' interest in the therapeutic approach and the constrained donor-based fundraising environment.

    Keywords: Research and Development; Intellectual Property; Risk and Uncertainty; Strategic Planning; Collaborative Innovation and Invention; Health Disorders; Pharmaceutical Industry; Biotechnology Industry; Health Industry;

    Citation:

    Lakhani, Karim R., and Paul R. Carlile. "Myelin Repair Foundation: Accelerating Drug Discovery Through Collaboration." Harvard Business School Case 610-074, March 2010. (Revised May 2012.) View Details
  20. TopCoder (A): Developing Software through Crowdsourcing

    TopCoder's crowdsourcing-based business model, in which software is developed through online tournaments, is presented. The case highlights how TopCoder has created a unique two-sided innovation platform consisting of a global community of over 225,000 developers who compete to write software modules for its over 40 clients. Provides details of a unique innovation platform where complex software is developed through ongoing online competitions. By outlining the company's evolution, the challenges of building a community and refining a web-based competition platform are illustrated. Experiences and perspectives from TopCoder community members and clients help show what it means to work from within or in cooperation with an online community. In the case, the use of distributed innovation and its potential merits as a corporate problem solving mechanism is discussed. Issues related to TopCoder's scalability, profitability, and growth are also explored.

    Keywords: Business Model; Innovation and Invention; Two-Sided Platforms; Motivation and Incentives; Social and Collaborative Networks; Competition; Software; Technology Industry;

    Citation:

    Lakhani, Karim R., David A. Garvin, and Eric Lonstein. "TopCoder (A): Developing Software through Crowdsourcing." Harvard Business School Case 610-032, January 2010. (Revised May 2012.) View Details
  21. InnoCentive.com (A)

    InnoCentive.com, a firm connecting R&D labs of large organizations to diverse external solvers through innovation contests, has to decide if it will enable collaboration in its community. Case covers the basics of a distributed innovation system works and the advantages of having external R&D. Links how concepts of open source are applied to a non-software setting. Describes the rationale for participation by solvers in innovation contests and the benefits that accrue to firms. Raises the issue if a community can be shifted to collaboration when competition was the basis of prior interaction.

    Keywords: Collaborative Innovation and Invention; Open Source Distribution; Research and Development; Competition; Cooperation;

    Citation:

    Lakhani, Karim R. "InnoCentive.com (A)." Harvard Business School Case 608-170, June 2008. (Revised October 2009.) View Details
  22. SAP AG: Orchestrating the Ecosystem

    Business ecosystems require careful orchestration and strategic choices regarding make/buy/partner decisions and membership access. This case examines the strategic and technological issues related to managing SAP's thriving ecosystem of user communities, software vendors, integration partners, and technology providers. It details how the ecosystem gets developed and the challenges in meeting the needs of the internal organization, large partners, and small up-and-coming firms. SAP executives, in this case, have to make a decision if a relatively small startup firm should be elevated to the highest strategic partnership level, normally reserved for very large firms.

    Keywords: Decision Choices and Conditions; Organizational Structure; Partners and Partnerships; Business Strategy; Technology Industry;

    Citation:

    Iansiti, Marco, and Karim R. Lakhani. "SAP AG: Orchestrating the Ecosystem." Harvard Business School Case 609-069, April 2009. View Details
  23. Threadless: The Business of Community

    Threadless.com, the online, Chicago-based t-shirt company, was not your typical fashion apparel company. The company, run by Jake Nickell, Jacob DeHart, and Jeffrey Kalmikoff, turned the fashion business on its head by enabling anyone to submit designs for t-shirts and asking its community of more than 500,000 members to help select winning designs. Threadless encouraged community members to actively participate by critiquing submitted designs, blogging about their daily lives, posting songs and videos inspired by the designs, and, most important, purchasing t-shirts that have won the weekly design competitions. In 2007, Threadless was well on its way to selling more than a million and a half t-shirts. The success of Threadless has garnered significant media attention, the New York Times and USA's National Public Radio highlighting its unique community-based business model and has piqued the interest of large traditional retailers. Nickell, DeHart, and Kalmikoff were now faced with making a decision about a potentially lucrative offer from a major retailer offering to carry large volumes of select Threadless t-shirts in its retail stores. Should they accept?

    Keywords: Business Model; Business Startups; Innovation and Invention; Product Design; Partners and Partnerships; Social and Collaborative Networks; Apparel and Accessories Industry;

    Citation:

    Lakhani, Karim R., and Zahra Kanji. "Threadless: The Business of Community." Harvard Business School Video Case 608-707, June 2008. View Details
  24. Threadless: The Business of Community (Instructor's Version)

    The instructor version of Threadless includes the Threadless student version multimedia case as well as four additional videos that can be used to enhance class discussion. The first video presents community reaction to the proposal from the large retailer. The next two videos detail the rationale for the final decision and their future plans. The final video contains a discussion about community participation and questions of exploitation.

    Keywords: Debates; Decisions; Strategic Planning; Society; Entertainment and Recreation Industry;

    Citation:

    Lakhani, Karim R., and Zahra Kanji. "Threadless: The Business of Community (Instructor's Version)." Harvard Business School Video Case 608-719, June 2008. View Details
  25. Cambrian House

    Cambrian House builds internet-based products and services by relying entirely on its user community for all aspects of its innovation and new product development process. Users suggest ideas for new products and services and also participate in a monthly voting process to select the best ideas. The company is now considering the deployment of a prediction market to deepen user involvement and commitment in its innovation; however, it is not sure if it is an appropriate strategy for its community.

    Keywords: Decision Choices and Conditions; Voting; Technological Innovation; Knowledge Management; Marketing Strategy; Open Source Distribution; Product Development; Strategic Planning; Business and Community Relations; Internet;

    Citation:

    Coles, Peter A., Karim R. Lakhani, and Andrew P. McAfee. "Cambrian House." Harvard Business School Case 608-016, March 2008. View Details
  26. Prediction Markets at Google

    In its eight quarters of operation, Google's internally developed prediction market has delivered accurate and decisive predictions about future events of interest to the company. Google must now determine how to increase participation in the market, and how to best use its predictions.

    Keywords: Forecasting and Prediction; Knowledge Sharing; Knowledge Use and Leverage; Market Participation; Information Technology;

    Citation:

    Coles, Peter A., Karim R. Lakhani, and Andrew P. McAfee. "Prediction Markets at Google." Harvard Business School Case 607-088, May 2007. (Revised August 2007.) View Details
  27. Wikipedia (A)

    Wikipedia has emerged as a robust model for content production by volunteers working asynchronously on the Internet with a unconventional model for distributed decision making. The "Articles for Deletion" process in Wikipedia provides unique insight into the inner workings of a distributed community. Wikipedia administrators have to decide if an article on "Enterprise 2.0" should be deleted, kept or merged with some other article. The episode illustrates broader issues of IT-enabled community mobilization and engagement in distributed setting.

    Keywords: Information Publishing; Information Management; Internet; Information Technology; Globalization; Service Delivery; Knowledge Sharing; Knowledge Management; Information Industry; Information Technology Industry;

    Citation:

    Lakhani, Karim R., and Andrew P. McAfee. "Wikipedia (A)." Harvard Business School Video Case 607-712, February 2007. (Revised February 2007.) View Details