2.0 Another View – A way to deal with the biggest threats to your enterprise

September 16, 2009 at 12:35 pm · Filed under 2.0 Business Model, 2.0 Design Thinking, Bryant Park Project, Business Model, Enterprise 2.0, Enterprise Social Computing, NPR, PBS, Platforms, Public Media, Public Radio, Public TV, Relationships

I was talking yesterday to a CIO of a major financial services firm. He and his colleagues have been wracking their brains over how a 2.0 view would make a difference. Of course a lot of their discussion revolved around technology and the social aspects both in the organization and outside it.

I bet that many organizations are also having the same internal conversations and being as frustrated as he is.

Looking at where the death threats are is a more productive area of discussion.

For public media Death lurks here – We have to have a much wider based and much larger public that thinks that we are not merely important but VITAL to them. If we don’t we wont make it.

“Wider based” means that we have to break out of our current demographic – of on TV being over 50, mainly white middle class and well educated – on radio of being over 40 and the same.

The challenge of doing this has been the restrictions of our “Air”. We have only 24 hours and one place on the dial.

So to change programming enough to bring in a very different demographic is to piss off the existing foundation with no real chance of adding the new. Example, the CBC have quite good show on the Native Canadian world – my bet is that most of the traditional audience switch off immediately and that First Nation’s people are not going to be tempted to become enthusiastic listeners of the CBC based on one program. This type of programming is lose lose. For NPR it was a new hip morning show called Bryant Park. What station in its right mind will drop Morning Edition for a new entrant aimed away from its main audience?

So long as Public Radio and TV have a secure foundation on their Air – they cannot expand their audience.

Also loyalty and more important financial and voting support merely based on liking content is no longer enough. When I came to Canada in 1972, I was used to the BBC and became a fanatic PBS watcher. There was no other source of good content then. Now there is tons of great content elsewhere. The old tie to content is much weaker.

So how then can Public Media avoid DEATH? How can it expand its reach to a much wider and diverse public? How can it deepen the connection beyond the relatively weak one of content?

An answer is appearing in the work of 70 plus stations working in the 32 worst hit markets in the US where the Economy is destroying the middle and lower classes. In this project – called Facing the Mortgage Crisis – stations are working with each other to pull together/convene groups of community support into a platform that can help people cope with this the greatest crisis to hit most Americans since the 30’s.

This is where the DEATH threat can be answered and this is where Social Media and the whole 2.0 perspective is invaluable.

Here stations are helping people who do not and will NEVER watch our mainstream Air. BUT they do interact with our specialty Web Sites that are focused on this issue and hence on them. More we do a lot face to face. Sometime at the station and many times in libraries and other places of trust such as churches. More, we give the community partners a face and a voice too.

It is the 2.0 web that is at the heart of this ability to offer something meaningful to people who will not connect to our traditional content on our traditional air. Ironically, as the crisis affects all, many of the white middle class are now in the same boat. They too use our 2.0 world as a new resource. In time a common crisis, as in war, brings all together. All people share a common fear and grief. All wonder what to do and how to keep going? All worry about their kids.

I predict that something great can emerge from our web – but it is not about getting more people to watch Nova or listen to All Things Considered.

So what then was my CIO’s Death fear?

I offered up this to chew on. They are in the mutual fund business. Their funds are sold by brokers who do not work for them.

Trust in Brokers, in the market and even in the idea of getting rich by punting in the markets has been weakened. Fund managers still tout their ability to realize performance that can only be achieved by taking huge risk.

What would happen to their business if we had a 1933? After the crash in 1929, the market recovered as it is today. But like today, the market came back independent of how people lived and how the economy at the human level existed. It was a second bubble. The market crashed again and the great depression hit full force. Employment did no rebound until 1941. Stock prices and activity in the market did not return until 1954.

What if we have another 1933 in 2010? Would such a collapse end all faith in the current financial system? What is the risk of that happening – 10% – 30 % – 50% – 60%  – whatever the risk is substantive and worth planning for.

My idea of his DEATH threat was that if they did not do something to show that they could be trusted, that if we had a 1933, they would disappear as did most people like them in 1933.

So how could they become legitimately trusted? How could they hold onto to a public that had lost trust in the system? My advice was this.

Most people are fiscally illiterate. Most know nothing about household economics in the Greek sense of the basics of the human financial life cycle. People know nothing about how to save and why, borrowing, cash flow, how mortgages work, compound interest. Most know nothing about the value of and how risk works. Why you can take risks early but not late in life etc. If they did most would not be in the trouble that they are in now. Most think that it is normal and to be expected that they can get Maddof returns year after year not seeing that such returns imply impossible risk.

The entire fund business is like the food business – we have been trained to seek something that is not sustainable – double digit returns for ever and cheap food forever. Can we train people to be more real? I think not but people can train each other.

Most people now are waking up to the fact that they don’t know enough about money and how it affects their life. They are hungry to learn more. To take control over their financial lives, just as many today are using the web to take control over their health.

What if this firm was to set up a foundation to act as the Trusted Place on the web where people could teach each other all these things?

Here is where all the rules of 2.0 would come into play. The web, interactivity, social groups, partners – the whole gamut of 2.0 is here. By learning how to do this here, the old firm will also then see with new eyes what else they can do back in the mainstream.

I asked in closing what would this mean in terms of the brand and the industry if they were to do this? What if they did a really authentic job of providing the trusted space where people could help each other take back their financial power?

He could see in a heart beat that this would change the relationship – just as I am seeing signs that FTMC is changing the relationship with Public radio and TV.  At first the two worlds of the “Academy” and their traditional business would be separate. But over time there would be some kind of convergence. For who of us knows as much as we should and who of us does not have something to offer?

In time the very nature of the business would change too as will in the end mainstream TV and Radio – but this way the change would be shaped by the active participation of millions of people formerly known and “audience” or “Clients” who right now don’t even have a name.

For what is the label for a person who is part of the ecology that is the new wider enterprise?

So what do you think? Can you radically change your foundation offering without killing the golden goose? Think GM or the Newspapers – all their cash flow came from the old – but DEATH was waiting for sure. How could they have found another part of life where they could have added real value and so attached a much bigger group of people to them?

I am sure that there is an answer. Do you have one?

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Congratulations to FASTForward Colleague Jevon MacDonald

September 2, 2009 at 5:23 pm · Filed under 2.0 Business Model, 2.0 Design Thinking, Jevon MacDonald, Organizational Design, Social Computing, User Revolution

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… on what he calls “the most exciting day in his professional life“, as the Dachis Group announces that it will work with Headshift to grow its capabilities in bringing social business design and implementation to the business world.

Here and elsewhere I’ve often written about the growing evidence that social computing will become the core foundation of knowledge work … the major vendors are all focused on social-media centred enterprise collaboration and productivity platforms as a major line of business, and there is a growing realization that the participative dynamics of the pervasive hyperlinked web environment are here to stay.  Today’s work needs to be, and will be designed in and for social networks

The Dachis Group has re-visited the whole-systems thinking / cybernetics arena of 25 – 30 years ago and updated it to present a holistic value proposition for today’s interlinked and participative era, and are calling it “social business”.

I think I’d argue that business has always been a social undertaking, but that we passed through a period of management philosophy cum reductionism (through the prism of “management science”) whereby enormous gains were obtained over more than a half a century through a relentless focus on efficiency and redundancy.

Now we are in (back to, some would say) an era where information is passed around and shaped into knowledge through interaction with others, it just happens faster by many orders of magnitude.  And so, it ups the ante for understanding how to operate effectively in the fast-flowing communications networks that characterize the environment.

I suspect that soon all or most of the major consulting firms will be headlining their social media consulting practices (now that working with all these tools and web services has become too important to be left to amateurs

Amongst all the offerings we are sure to see, clearly the Dachis Group is bringing a systems perspective to their three-pillared vision (business partner optimization, workforce collaboration and customer participation).  In presenting the model, they state that the way(s) work and business are done are in the midst of massive transformational change.

Interconnected ecosystems of interest, efficiency and purpose are clearly central to today’s and tomorrow’s organizational effectiveness.  Focusing on the right levers has always been the essential value in and by strategic consulting, and these are bright and experienced people.  I am sure they will add an useful perspective to understanding how “social” and “business” will co-exist as we all learn how to operate in tomorrow’s postindustrial societies.

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We are growing: Dachis Group expands with Headshift

We believe that organizations across the globe will begin to view “social media” as social business and when this happens, integration, scale and adoption will become complex issues which will only be solved through a purposeful act of coordinated activities built upon a solid strategic foundation. Enter social business design as a systematic comprehensive approach that orchestrates social business across three core areas: business partner optimization, workforce collaboration and customer participation.

These three areas of business possess ripe opportunities for the emergence of improved outcomes ranging from cost savings to new product/service innovations and increased revenue streams.

These are outcomes which happen when organizations connect and expand their ecosystems, evolve toward a more open culture and empower employees, business partners and customers to actively participate in their business.

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Reliability vs. Validity

August 7, 2009 at 5:41 pm · Filed under 2.0 Business Model, 2.0 Design Thinking

While a recent post on intent was successful in the dialog that ensued, I’m still trying to fully appreciate (there’s a lot to appreciate) the significance of Roger Martin’s explanation of the tension between Reliability and Validity (June 2007, IIT-ID conference). It makes me consider if the pursuit of intent and all the design research that goes with it, is effectively a means to strike a balance between the two.

I’ve been listening to this piece over and over again — each time additional depth is gained (including evaluating Martin’s style as to ‘how’ he tells the stories to his audience, and where he chooses to focus). It’s a topic he’d written about previously for Business Week, but his talk makes it a lot more meaningful and significant. He illustrates the significance of the tension by differentiating them:

Reliability

• Consistent, Repeatable, Predictable
• Certainteed Outcomes
• Validated on Past Data
• Measurable, Avoids Bias
• Limited Variables

Validity

• Diverse Variables (possibilities)
• Embraces Bias
• Validated by Future Events
• Outcomes Vary by Context
• Relies on Heuristics and Analogies

The challenge is that they’re inverse concepts. Moving toward one, requires minimizing the other. Does it mean that there’s not a middle? Not at all — indeed that’s the real goal. While Roger (probably for great ‘making a point’ purposes) puts business on one side and designers on another, I fundamentally believe that optimal design is actually in the middle (middle, not being a spacial thing, but somewhere other than one of the ends). Design is simply asking business to shift away from the thing that it’s intent on driving toward: science. But reality suggests that there is no ‘ideal’: there are too many extenuating circumstances (context). Therefore, the only way to optimize is to add a good dose of art. Design is what happens when you successfully find the optimal blend between science (the observable facts) from the art (celebrating the ‘unseen’).

Martin notes in his Business Week piece:

If a corporation wants to enjoy the benefits of design in its products, services, processes, or business models, it must go considerably beyond simply hiring designers or declaring itself design-oriented. The CEO must take responsibility for safeguarding validity. If the CEO doesn’t, the corporation’s natural inclination toward reliability will win out.

…certain corporate divisions — including powerful ones like finance — are more insulated from direct market pressures and can more easily slide into deep reliability.

Every CEO needs…to understand that he can’t let finance or any other division run roughshod over validity, or he’ll unknowingly drive design thinking completely out of his corporation. That’s why an additional task for the CEO is to act as the CVO — chief validity officer — in order to protect and nurture a design culture.

P&G’s CEO A.G. Lafley in a discussion with Roger Martin in 2008 is a living testament of this vigilence. He shares the tremendous effort it took to shift their business to a design culture. Between the many insightful examples of ‘how’ P&G shifted their business, by Claudia Kotchka, you can hear her repeatedly give credit to Lafley for being responsible for initiating and supporting the shift to design thinking at P&G.

Enterprise 2.0 is a shift to validity over reliability — not to replace one over the other, but to move toward a balance — bringing the yin to balance the yang, while celebrating the significance of both. Trying to implement a shift to validity while trying to hang onto the ways of reliability (without changing them radically) will lead to continued failure. As well, abandoning reliability will also fail.

Enterprise 2.0 is specifically set up to fail faster — make the future turn into the past sooner, but do so with smaller risk, smaller investments, smaller bits of focus. Or to use another 2.0 term — it’s the mashup between the two, making it fundamentally different than either one.

Circling back to the opening statement, I truly do belived that one means by which to bridge this gap is to bring the reliability artifacts of validity to the table — create the corresponding collection that was described as design research or customer insight, in the former piece.

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Broader E2.0 Horizons

July 21, 2009 at 5:00 pm · Filed under 2.0 Business Model, Enterprise 2.0

The fundamental principles of E2.0 can be applied in a variety of ways to radically improve everything we do in business. Challenged by simply getting businesses to see beyond a focus on the simplist of tools (e.g. blogs, wikis), let alone embrace the thinking that goes along with simplifying business effort, it’s difficult to rush into a vision of the total breadth of possibilities.

While I’ve always purported changing everything we know about software development, I was thrilled to see an old name appear again recently suggesting the same. Reflecting on the influence Tom DeMarco had on me via his book Peopleware (first published in 1987), I recalled that he’s likely the first author to focus on issues beyond the technology itself (esp. culture and context). His opening chapter stated (bear in mind these words were first written over 20 years ago):

“Since the days when computers first came into common use, there must have been tens of thousands of accounts receivables programs written. There are probably a dozen or more accounts receivables projects underway as you read these words. And somewhere today one of them is failing.”

“Suppose that at the end of one of these debacles, you were called upon to perform an autopsy. (It would never happen, of course; there is an inviolable industry standard that prohibits examining our failures.)…One thing you would not find is that the technology had sunk the project.”

In a more recent piece “Software Engineering: An Idea Whose Time Has Come and Gone?“, DeMarco reflects back on an even earlier book of his from 1982:

“In my reflective mood, I’m wondering, was its advice correct at the time, is it still relevant, and do I still believe that metrics are a must for any successful software development effort? My answers are no, no, and no. The book for me is a curious combination of generally true things written on every page but combined into an overall message that’s wrong.”

“I still believe it makes excellent sense to engineer software. But that isn’t exactly what software engineering has come to mean. The term encompasses a specific set of disciplines including defined process, inspections and walkthroughs, requirements engineering, traceability matrices, metrics, precise quality control, rigorous planning and tracking, and coding and documentation standards. All these strive for consistency of practice and predictability.

Consistency and predictability are still desirable, but they haven’t ever been the most important things. For the past 40 years, for example, we’ve tortured ourselves over our inability to finish a software project on time and on budget. But as I hinted earlier, this never should have been the supreme goal. The more important goal is transformation, creating software that changes the world or that transforms a company or how it does business.”

Most tools labeled Enterprise 2.0 just scratch the surface of enabling people to change the way they work, but not necessarily change the work itself. Indeed as John Tropea (@johnt) suggests the greatest natural adoption of these tools is using them to work around existing business processes. Creating Enterprise 2.0-class software that can fundamentally change business models and operations is a whole different beast.

I don’t think I truly appreciated or was willing to embrace all of what Sameer Patel (@SameerPatel) purported in a couple of pieces, perhaps for concern that it would muddy the already murky waters. In his piece “Don’t Confuse Enterprise 2.0 With Social Computing Concepts“, it took me a while to recognize that he was suggesting in his first diagram that the list did not EQUAL Enterprise 2.0 (as is the tendency for most to suggest), but was indeed part of it.

Sameer also begins to suggest the tackling of major portions of enterprise operations — I believe I got hung up while looking at his original list because of their Web2.0 implications (many of them have both Web 2.0 and Enterprise 2.0 perspectives and focuses). His recent coverage of a more specific example (supply chain), adds significant depth to his earlier points. I also believe there are broader implications for functional-area-focuses like supply chain. Without any intent for the term to be adopted, it simply makes a point, that these are in themselves industries of practice that transcend the enterprise. The term Industry 2.0 helped me then differentiate what the larger potential of a shift in productivity tools would look like if we could speedily replace the ERPs of today.

For me, it was the Tom DeMarco reminders that helped add clarity to it all. And in the end, I have to confess that ALL of this (exposure to the recent DeMarco piece, continued dialog with great practitioners like John Tropea and Sameer Patel) is only possible because of the enabling channel of exchange Twitter provides.

It seems to me that there is an issue greater than adoption at play here: hesitation to recognize the breadth and depth of adaptation that needs to occur across the entire enterprise and every aspect of the business model.

I do know one thing: we’re not going back.

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Zappos: A 2.0 Company

June 12, 2009 at 8:44 am · Filed under 2.0 Business Model, Business Model, Enterprise 2.0, FASTforward'09, Innovation, Organizational Design, Social Work-net-ing, Socialprise

Just before flying home from FASTforward ‘09, in February, I took advantage of being in Las Vegas to visit Zappos, an online retailer that has been repeatedly recognized for its unique culture (not to mention their own book on the subject) and embracing social media. CEO, Tony Hsieh, was even on Oprah last October. So what more could I possibly add here?

I focused ‘between the lines’ and ‘outside the box’ — the larger experience of what makes Zappos, well, Zappos. I’ve watched a lot of videos about the place, follow Tony on Twitter, and even did a brief piece on them before, but as with other 2.0 experiences, immersion makes all the difference.

The ‘get to the chase’ version:

• The Zappos environment is a full-blown corporate anomaly: full of things that most corporations would dismiss as being “unproductive”, “chaotic”, “unmanageable” and “unprofitable”.

Between the Lines: Note on video…the flags on poles…critical artifacts of the culture.

• People LOVE to work here (earning a spot on Fortune’s coveted”100 Best Companies to Work For” 2008 list). Why not? They get to follow their passions (even if they want to invite Ellen to come to Zappos) and evolve their own path of doing ‘work’, all while having LOTS of fun.
• The results: 2008 sales = over $1BIL
• Bottom Line: This crazy stuff works and they’ll even tell you how to do the same.

The ‘insights’ version:

• The Zappos experience begins way before the on-site tour. Even vendors coming on sales calls are picked up in Zappos-branded vehicles (3 SUVs and a bus in the fleet) at the airport or their hotel.
• My driver, Zack, was the Shuttle Manager. He was eager to talk about just how much he loves the company and its culture (even as a New York transplant). He worked his way into his job because he just likes to drive, which he sees a lot of: 4-5 drivers make 150-200 runs a week!
• During major conventions shuttle runs get a bit hectic, but Zack was proud that they were able to ramp up and cover 300 runs during the February 2009 CES convention (having a work culture that allows them to tap into volunteers throughout the company, makes a huge difference).
• Walking through the doors is not like entering any other company: people in motion and endless visual stimulus. Everything has been thought of, including checking in your luggage, complete with a ticket, and getting you a drink.
• Tours at Zappos are like a parade — tour guides carry a flag/banner, which alerts employees to greet guests. My guide, Jerry, while retired from Nordstrom (a company also founded on great shoe sales and service) had infectous energy that belies his ’silver’ exterior. The tour itself cannot adequately be described in words — the videos are a must watch.

Between the Lines: Our tour was cut short as CEO Tony Hsieh was available, so we headed straight for the ‘jungle’ (the location of his office) to catch Tony for his interview where he reminded me again of their ‘other’ brand 6PM.com.

• Not to downplay my chat with Tony (he gets so much press already), I was anxious to talk briefly with Alfred Lin (@Zappos_Alfred) because he holds both the COO and CFO roles, which I asked him about. His answers were insightful and his presence clearly belies his kid-like avatar on Twitter.

• I was a bit surprised to find out just how far they take their Core Value “Do More With Less”. Clearly operating as a 2.0 company, internally they leverage only very basic technology (email, wiki, blog, newsletter, word-of-mouth), in very simplistic ways — allowing for natural collaboration and connections of a tight culture to carry the rest.
• To dip yourself into the Zappos culture on an ongoing basis, be sure to check out employee voices via their many blogs.
• Oh, and did I mention, they sell shoes, accessories and clothing?

The last half of the Tour is shared in two parts.

• On average, 4-8 tours come through every day — more during the annual shoe conventions. While Jerry and Donavon are the primary tour guides, any employee can take the tour guide course and serve as a fill-in. This wasn’t staged — this is the ‘norm’ in their culture.
• The entire environment is a testament to their culture, of constant motion, immersion and learning. There are 4 bookcases at the entrance with multiple copies of ‘current reads’ for employees to grab and enlighten themselves — including Tribal Leadership (Zappos sponsors a downloadable audiobook version).
• Learning is for EVERYONE, on both sides of the coin — giving and receiving. Classes are ‘live’ and taught by employees. If you’re moving ‘up’ to a role, you’ll be taught by people currently ‘in’ the role. Likewise, you’ll teach those coming in behind you.
• Inspired by some of the things gleaned from Tribal Leadership, a more structured “Pipeline” path was created for classes. Training Supervisor, Loren Becker, readily shared the outline of the Pipeline program (which she merely had to print from the Zappos Wiki and had in my hands within minutes). Simplistic, there are:
  • Core-Level Classes (in 6-month segments)
    For the first 18 months of employment, a total of 213 required hours — the majority of which is “Customer Loyalty Training”, plus books to be read.
  • Management-Level Classes
    Includes 37 required hours (with department-specific specialization added in) and 6 recommended books
  • Leadership-Level Classes
    Includes 32 required hours (including hours to ‘teach’ classes, as noted previously).
• “Introduction to Coaching” is taught by their own full-time coach for employees, Dr. Vik — who sold his Northern California Chiropractic practice to join the team (in the Part 2 video, just before we arrive at Dr. Vik’s office, someone asks Jerry to have Dr. Vik ‘come down’ when he has a moment — there are a lot of word-of-mouth activities going on all the time). Not only did I get my own Zappos Vision planner, I also got a copy of Dr. Vik’s DVD “Taking It to the Next Level” (explained briefly here).

Special thanks to Elizabeth Gregersen who handled all of my arrangements and who was patient with my questions after the fact (here’s Liz and Jerry just having fun — its encouraged to do so). My apologies that it took so long to get this posted (it’s been a steep learning curve to edit/load the videos). If there is any information in the videos that is out of date, please let me know.

For a ‘more professional’ version, check out the ABC Nightline segment.

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