by Bill Ives
July 17, 2009 at 2:22 am · Filed under
FASTforward'09
Here is a recent classic from Dion Hinchcliffe, 12 Rules For Bringing ‘Social’ To Your Business, that applies to enterprise 2.0 as much as Web 2.0. He set the stages for his twelve points by defining what this transition to social business is about, “It’s how those companies are going to make the transition from traditional 1-to-1 relationships with their partners and customers to a one-to-many community relationship where the company is only another member of an endless ongoing conversation. This conversation will be the very lifeblood of companies in the future and consist of all the ideas, concerns, solutions, news, learning, product development, sales, marketing, customer service (i.e. the fundamental fabric of the organization) taking place between anyone, anywhere who feels they have a stake. He adds that we have a long way to go to get there but there have been some starts.
I am not going to repeat all twelve points here as you should read Dion’s original work. I will just cherry pick a few for additional comments. He states that while he does like to talk about technology too early, the new technologies have been helped enable this transformation. I agree on both points. Many of the ideas of enterprise 2.0 were around in the early days of knowledge management but the right tools were not there to enable the full vision. To compound this the some of the software vendors high jacked the movement and led it astray.
We need to avoid the same things happening with enterprise 2.0. This should not be a vendor led movement. A panel member at the Enterprise 2.0 Conference Session on Does Social Media in Matter in Marketing advised us to not focus on one tool as another will come along and replace it or go in a new direction. Used to be how to use technology. Now you can build your own technology. The greatest technology does not seem like technology. A good example is the iPhone.
I would add that Twitter is another but I think within the enterprise it works best as feature in suite rather than as a standalone tool. In the same vein, some of the best features of enterprise 2.0 tools is their behind the scenes activity to create a searchable archive of social interactions as a byproduct of their use. We need to keep this simplicity in the tools. Many enterprise 2.0 tools allow you to fit them around the work process rather than the reverse, another way the technology is less oppressive as in the past. So take advantage of this and pick the business process then choose what tool to wrap around it. If the tool does not fit, change the tool and not the process.
In another step, Dion writes that censorship kills participation. This is actually why you need guidelines to make the rules explicit (see recent post on Social Media Policy Guidelines Can Encourage Use Outside Enterprise and Adoption Within). The rules need to be open ended and enable and encourage people to participate. Without clear policy people may be reluctant and think that the old ways on top down enforcement still apply. However, if your rules enforce the old ways, do not bother with social media tools. It is a waste of time.
I will pick one more. Dion writes that you should add a social dimension to your business processes. Enterprise 2.0 increasing productivity by increasing accountability. This was one of the concepts that first got me excited about it (long with the creation of searchable knowledge as part of using the tools I mentioned earlier). I have seen many examples of this such as Al; Essa 2004 work at MIT (An Enterprise 2.0 Poster Child in the IT Department) where Al, the CIO, got 60% of his day back by having all project use a blog dashboard for transparency. Another is Changing Organization Behavior at XM Radio through Enterprise 2.0 and QuickBase where XM Radio had its first profitable project because of the new transparency of the work processes.
This is enough for now. Go read the rest of what Dion wrote.
by Paula Thornton
July 16, 2009 at 3:38 pm · Filed under
Event Announcements
Test the theory. Consider the last thing you were upset by — in one way or another your expectations were not met and/or your trust was violated.
It’s actually more fundamental to the way we’re wired — the principles of our psyche — how we learn and how we leverage our knowledge. We base our knowledge upon “sets of funded expectations”. We assign expectations to concepts and turn them into a set of things that we know. When we share statements of fact, they are based on our expectations about the truthfulness of ‘the thing’. The expectations are economically funded (reinforced) by a number of learnings or experiences.
“If we understand concepts as the fund of expectations in terms of which we structure our experience, it becomes clear that concepts and theories cannot be separated. My concept of a lamp is my theory of a lamp, in the sense in which ‘theory’ means the set of propositions, expectations, insights, that enables me to deal with it.” — Daniel Schön, Displacement of Concepts, 1963 : 8
The adoption of new concepts often requires us to ‘break open’ sets of our existing expectations and rearrange the bank of funds. Opportunity lies where there is willingness to readily do this — the banks are in deficit — the reality isn’t ideal (the process has never made any sense, but we’re bound by our role to embrace it). We’re looking for an alternative — any alternative — to replace it.
Exceptions to this are matters of trust. Some situations are made more deficit by the level of investment it took to acquire the knowledge. A detestable ERP system was difficult to learn and more difficult to maintain, but the funds of experience suggest that something new would be equally difficult to learn and maintain. Besides, we’ve invested so much already — it finally ‘works’ for us. It requires a leap of faith to bridge between a known trust (however deficit it might be) and an unknown trust. The leap can be minimized by making the unknown known.
Adoption of E2.0 is a non-issue where there is an exchange of value for deficit expectations and evidences to reinforce trust. Both of these are readily mitigated by immersion — try before you buy, dabble before you commit. This requires experiences with varied opportunities for low investment (acquisition costs) and high return (expectations and trust). These are the fundamentals of 2.0
Don’t misinterpret that last paragraph. The scenario is not focused on the person buying the tool from the vendor (although, a good vendor will show you their technology framed in your relevant context — help you envision the possibilities). “Try before you buy and dabble before you comment” are part of the adoption model of the employees. These options must be designed into the solution as specific tactics to lower barriers to entry.
If you haven’t done the research to find out what some of those barriers might be and why, you’re not going to be able to address them. If you know what some of the barriers are, you better have some minds other than the technicians to figure out how to customize the solution for implementation.
I’m not suggesting this was ideal or that it should be the norm (and I wasn’t dealing with E2.0 technologies either). I was on a project once (using a major unnamed Content Management System) where it took me 3+ months of sitting with the ‘tool expert’ (who was a whiz at doing installations) to get them to question the possibilities of the tool and really shape it to the needs of the business. Even then, the tool was so badly designed that we barely accommodated the ways in which real people think or work.
There is no such thing as ‘out of the box’, even for E2.0.
by Joe McKendrick
July 16, 2009 at 11:46 am · Filed under
Enterprise 2.0
In one of his more recent posts, FastForward colleague Jon Husband urges organizations to look past traditional return on investment (ROI) measures in today’s Enterprise 2.0 organization, because there are many intangibles that bring value to the organization. Return on Investment in Interaction may be a more effective measure, he says.
Straight ROI is difficult in Enterprise 2.0 environment, but there are some areas that can potentially be measured, as illustrated by Forrester analyst Natalie L. Petouhoff, Ph.D., in a recent study titled The ROI Of Online Customer Service Communities.
The report observes that online customer service communities are now maintained by a host of mainstream companies, including AlterPoint, DIRECTV, Intel, and Verizon. Natalie and her team spoke with some of these early adopters, and concludes that many are delivering an attractive ROI within “a short period of time while delivering better customer experiences.”
Natalie and Forrester modeled some ROI estimates on a hypothetical company with 500,000 customers that receives approximately 30,000 calls per month. In the report, she calculates that over a three-year time frame, such a typical company will probably need to invest approximately $1.2 million for a well-functioning online customer service community.
That million-dollar-plus outlay accounts for expenditures in the following areas:
- Technology: Building the Web site; creating user registration and sign-in procedures; integration with sales and marketing systems; integration with knowledge management system; search capabilities; yearly license fee for a leased platform; analytics package to measure key performance metrics; reporting capability for analytics.
- People: Project manager; community manager; IT resources; training.
- Process: Marketing and launch promotion for the community; creating community plan and policies; ongoing marketing and promotion to continuously engage super users and community members.
Interestingly, many inquiries and issues formerly handled by paid customer service or tech support representatives will be offloaded to super users within the community, Natalie suggests. This also fits Jon’s premise for Return on Investment in Interaction.
The estimated payback in benefits will be seen within the first year, Forrester estimates. The analyst firm’s model suggest that the first-year outlay for the hypothetical company will total about $500,000 in start-up costs, but will return about $900,000 in benefits. Benefits will continue to accrue at about $900,000 a year in the years after than, while annual costs will run about $400,000.
The measurable benefits identified by Natalie include a reduction in agent-assisted interactions, an increase in first-contact resolutions, increased agent productivity, a reduction in agent-assisted email, an increase in product ideation, an increase in relevant Web site content and reduced search engine optimization (SEO) costs, an increase in customer retention and customer lifetime value (CLV).
by Paula Thornton
July 14, 2009 at 4:39 pm · Filed under
Enterprise 2.0
Various Enterprise 2.0 items of note found July 14, 2009 (title links clickable).
The author, @bduperrin, suggests how Enterprise 2.0 can be leveraged for feedback to improve quality, outlining them against a Deming 14-point list. I like the opening:
I’ve always been convinced that enterprise 2.0 had a hudge potential but that it was often wasted because of 2.0 experts’ navel-gazing and a kind of will to marginalize those they consider as backward-looking people. In short, enterprise 2.0 often failed to speak a language that could be understood by the enterprise.
From the Social Computing Journal, the piece starts with a quote from @gyehuda suggesting that we’ve heard enough about culture being an issue, now what? Then the author, @bhc3, goes on to say:
So in that context, what exactly does “culture” mean? There are degrees of readiness, to be sure. Do employees horde information to maintain a career advantage? Is the workplace style competitive, not collaborative?
The question of what exactly is meant by “Culture” got me to thinking about my own experiences thus far in the Enterprise 2.0 field. I’m by no means an organizational behaviorist, and I somewhat question what they can really overcome in terms of entrenched company cultures.
He includes a diagram to reflect his thinking along with some use case considerations. Hutch and I have already had exchanges in the past where I’ve challenged him on his linear thinking (trying to solve 2.0 problems with 1.0 tools/methods) — but it’s all good fodder for the collective conversation.
I’m a bit confused over the combination of Enterprise 2.0 and Library 2.0 (unless we’re talking about a Library as a business entity, otherwise that would be a whole other beast). The poll is open until the end of July. If you haven’t weighed in, you might want to.
E2.0 Sabre Style: SabreTown
They even have a sheriff for SabreTown. A great inside story of an implementation at Sabre and the value gained: “we saved .5$MIL the first year”.
“…it’s good for you”. So postures, @VMaryAbraham, as she goes on to talk about some of the issues with adoption and what to do about it.
by Paula Thornton
July 14, 2009 at 1:46 pm · Filed under
Economics, Enterprise 2.0
“No word in the current business arena is more used with incorrect applicability than the word ‘innovation’.” — Richard Saul Wurman
Before all the cards and letters pour in, I’m taking semantic liberty with the title to make a point — one that is enforced by Scott Berkun in his 2007 book, The Myths of Innovation:
“Any seemingly grand idea can be divided into an infinite series of smaller, previously know ideas…in the work of innovation itself, for most, there is no singular magic moment; instead, there are many smaller insights accumulated over time. The Internet required nearly 40 years of innovations in electronics, networking, and packet-switching software before it even approximated the system Tim Berners-Lee use to create the World Wide Web. The refrigerator, the laser, and the dishwasher were disasters as products for decades before enough of the barriers — cultural and technological — were eliminated, each through insights of various kinds, to make them into true business innovations.”
The basis of my point: there’s a lot of innova-ting that is required to get to successful innova-tions. Focusing on the latter isn’t what gets you there.
There are some who suggest that the real issues of innovation today are in the lack of execution and funding of good ideas. Berkun’s evidence might suggest this not to be the case. Are execution and funding an issue unique to innovation or a fundamental attribute of the business model and its operations?
Organizations operate today leveraging techniques and methods that were optimal for manufacturing — in the early 1900’s. One hundred years later, they (and the highly-protective behaviors that go with them) are ill-suited for survival in today’s economy.
Companies, for the most part, are “enterprises” by legal definition only. To emphasize this point on occasion, I interject the phrase, “There is no Enterprise” — to suggest we’re relying on or blaming something that doesn’t really exist.
From The Matrix:
“Do not try and bend the spoon, that’s impossible.
Instead only try and realize the truth….There is no spoon.”
In reality, for the average worker, the only thing about an enterprise that is real to them is their workspace that sits before them. Decade after decade, survey after survey, the number one complaint from employees: lack of communication. And yet, all the monies and efforts to change that have been for naught. Employees still feel ‘isolated’ in their efforts. Imagine, the millions of people who go to work each day to do their work in isolation from each other — isolation that actually costs a lot of money to provide.
Any real interactions between people on a day-to-day basis are likely engaged via 3 primary business channels: meetings, phone, email. Such interactions are typically focused on: status, issues, actions.
Anything inherently flawed with this scenario thus far? It depends. The evolution of these interactions were shaped by necessity and available technologies. Even the hierarchical nature of organizations was originally the ‘ideal’ for the effective distribution of information. Clay Shirky notes in Here Comes Everybody:
“The value of such hierarchies is obvious — it vastly simplifies communication among the employees. New employees need only one connection, to their boss, to get started. That’s much simpler than trying to have everyone talk to everyone.”
While this might have been true at one time, for the past 1.5 decades the managers I’ve had either don’t have the information I typically needed, don’t have the time to get it (as soon as I need it to do my job), or sadly, tell me the wrong information (the latter has been increasingly the case).
Clay goes on to point out:
“Running an organization is difficult in and of itself, no matter what its goals. Every transaction it undertakes — every contract, every agreement, every meeting — requires it to expend some limited resource: time, attention, or money. Because of these transaction costs, some sources of value are too costly to take advantage of. As a result, no institution can put all its energies into pursuing its mission; it must expend considerable effort on maintaining discipline and structure, simply to keep itself viable…the problems inherent in managing these transaction costs are one of the basic constraints shaping institutions of all kinds.” [emphasis added]
Who’s responsible for managing these transaction costs and optimizing them? Who’s watching them and measuring them and making sure that they’re in line with ’standard deviations’? The Chief Operating Officer? The Chief Financial Officer? Even if they accepted responsibility for these things, how could they manage them when the effort to create needed metrics would cost more than any potential gains?
The Internet changed everything. It allows for the cost of transactions (i.e. one form of an interaction) to approach zero. And yet, wherein are we capitalizing on this same economic opportunity for all of the critical business interactions (ala. transaction costs) internal to an organization?
Businesses who capitalized on Web 1.0 and successfully transact with consumers online achieved success the same way industrial designers optimize manufacturing floors: by design. But have we simply traded one manufacturing paradigm for another? Online transactions are still fundamentally linear. Business is not linear. We artificially force it into being so, that we might make it repeatable (via algorithm) and lock out the variability for ‘quality’ (via binary code). In doing so we lock ourselves into specific scenarios. The minute ANY of the conditions by which the process was optimally designed change, the process is sub-optimal and must be changed. The reality is, conditions ALWAYS change. That means ALL process-driven systems are sub-optimized to reality (unless you’re making widgets).
By focusing on innovation as the output of a business’s mission, businesses fail to do what Clay Shirky noted was important for viability of the business itself: manage the transactions costs of doing business. This is, by my definition, where innovating is differentiated from innovation.
Enerprise 2.0 — and the related premises fundamental to its purpose — is the means to provide the infrastructure to facilitate lower transaction costs and support continuous innovation: innovating.
Looking for ROI to justify E2.0 technology investments is the wrong approach. The technology will get you nothing of value (well, unless you’re using Clayton Christensen’s definition of technology “the processes by which an organization transforms labor, capital, materials, and information into products and services of greater value” — but nobody does).
The real value of E2.0 is unmeasurable by projection (estimates). The real value has to be ‘attained’ by optimizing the factors of the context — the reality of the moment. Many ROI-approved initiatives never ‘attain’ their true value — they don’t need to, they passed the ROI test — a truly regressive form of measurement.
The true potential for optimizing E2.0 investments is to focus on lowering transaction costs, with technology, by design (the proportion of people-focused design investment — including changes to facilitate adaptation and continuity — to hard technology investment should be at least a 9 to 1 ratio).
The Internet lowered transaction costs to the point that many enterprises lose the primary economic advantages that originally made them viable: concentration of capital resources for output. Barriers to entry were lowered for competition, not just in the market but in operations as well. For knowledge workers in particular, most individuals have the necessary resources they need (or can access them) from home — concentrating capital in a central building has lost its former economic advantage, for many business models. Yet we continue to do it, because it’s what we’re familiar with — it’s comfortable…all the way to the collapse of the business under the weight of its own transaction costs.
While there is real threat of traditional businesses being undone by new forms of business models, at the very least traditional businesses need to do everything they can to minimize transaction costs and facilitate continuous innovation to have some hope of survival, to have time to reinvent their methods of doing business.
There are a variety of transaction costs and many ways to minimize them. An immature E2.0 implementation might attempt to facilitate sharing more effectively via blogs or wikis. Does this minimize transaction costs or simply add more transactions? Clay Shirky very brilliantly points out that the true potential is in moving “from Sharing to Cooperation to Collective Action”.
Trying to figure out what all of that means ahead of time to create an ‘optimal solution’ is meaningless. Like knowledge, it defines itself and its relevance within the business context, guided by a design strategy. This is the primary reason that the ‘internet as platform’ is so relevant. This is the same reason that any E2.0 solution should not be an ‘application’, but a flexible platform to accommodate a variety of structures that can be tailored to ‘fit’ situations as conditions change. It means that we need to move from an application-focused paradigm to an architecture-focused one, where we leverage ‘bits’ of structure that are ‘applied’ for a given set of circumstances in the form of: templates, filters and functions.
The rest comes from the most valuable resources business have — the most underutilized resources to date: human wetware. Unleashing the potential of the human mind within a working environment where they can connect with one another — innovating through sharing, cooperation and collective action — is not an option. It is now the ‘cost of entry’ for business survival.
