E2.0: Unleashing the Potential

September 16, 2009 at 4:43 pm · Filed under 2.0 Design Thinking, David Weinberger, Emergent, Enterprise 2.0, Innovator's Dilemma

“technology…processes by which an organization transforms labor capital, materials, and information into products and services of greater value.”
Clayton Christensen, The Innovator’s Dilemma

Technology?

The term “technology” is as misused as the word “diet”. Anything you eat makes up your diet. You can’t go on a diet, you’re already on one. You can, however, go on a “restricted diet” or a “reduction diet”. The key modifiers are often dropped.

Andrew McAfee purports that Enterprise 2.0 is “not not about the technology.” Using the Christensen definition noted above, this is true. But is Andy missing a modifier? His writings seem to focus on “digital technology”, which can indeed enable Enterprise 2.0. And yet, many of these technologies have been available for over a decade. How significant then are these technologies and where’s the issue?

Digital technologies labeled Enterprise 2.0, will not provide 2.0 results if implemented with 1.0 thinking.

2.0 Thinking: Embrace Dichotomy

How is 2.0 thinking different? It relies on a shift away from many commonly held beliefs. It is not an abandonment of such beliefs, but requires that they be suspended to move to a more flexible, adaptive middle. It requires the ability to embrace dichotomy, to simultaneously consider opposing concepts to find new possibilities (see “The Opposable Mind” by Roger Martin, Rotman School of Business and “The Innovation Paradox” by Richard Farson and Ralph Keyes).

Digital technologies are, well, fundamentally digital. They operate off of algorithms and binary code. As such, they provide approximations of reality. But knowledge work is not inherently defined by processes. Forcing knowledge work into processes defined by algorithms and binary code introduces ‘rounding errors’. The more algorithms and binary code you string together into a single solution, the more error you introduce.

The promise of object-oriented theory was to create reusable pieces of code. This was a fallacy. The true potential was not in the code itself, but in reusable functions – algorithms of process (the real essence of SOA).

Consider the following continuum:

Based on observations from Roger Martin, the adaptive middle requires a move away from (not an abandonment of) binary code. The entire continuum is relevant — optimal flexibility synthesizes all of these. Where the dynamic middle falls, depends on the context of the problem or opportunity at hand. Consider the left side Art and the right side Science. Synthesized, they lead to the optimal: context-relevant design.

One discipline that relies on the synthesis of art and science is architecture. While digital architecture might be considered both art and science, Enterprise 2.0 requires a form of Enterprise Architecture akin to, but not equal to the Zachman Framework (frameworks, the conceptual equivalent to technology platforms). No one individual can or should defend the various perspectives needed to shape such an architecture.

Structure Minimized, Not Eliminated

Fundamental to Enterprise 2.0 is simplicity. The most simplistic form in nature is that which emerges, governed by the laws of complexity – the middle between chaos and order (basic premises of complexity science, including feedback loops are assumed and not detailed here).

Emergence is strangled by order and dissipates in chaos. It requires “Small Pieces Loosely Joined”. In his book by the same name, David Weinberger lays out a “unified theory of the web”. Enterprise 2.0 embraces a unified theory of work, celebrating the most adaptive resource a company has: its people.

Enterprise 2.0 unleashes the potential of corporate resources by shifting control. While management does not go away, it is not an activity in the hands of a few.

Gary Hamel suggests, “Management is out of date. Like the combustion engine, it’s a technology that has largely stopped evolving…” Management is not a group of people with a title, it’s “the capacity to marshal resources, lay out plans, program work, and spur effort” and “is central to the accomplishment of human purpose.”

Fluid Structure: Think Lava Lamp

There’s no ‘big bang’ theory. Emergence does not evolve from nothing – it requires structure. Endless possibilities of form emerge from the elements and constraints of a lava lamp. Break the container and the possibilities of the elements end.

Where does structure come from? It depends – this, the ultimate design answer. The right answer comes from the context of the business.

There are no checklists for creating an Enterprise 2.0-enabled environment. The business is already operating. The challenge is akin to repurposing a Boeing 777 into a 787 Dreamliner mid-flight, except there is no ‘finished’ design, but there is a starting architecture (heuristics). Most progress is tested/validated in-flight.

The term “repurposing” should not be taken lightly. Tremendous potential exists for leveraging what’s already in place: “Thus the task is not so much to see what no one yet has seen, but to think what nobody yet has thought about that which everybody sees” Arthur Schopenhauer. One form of this is the mashup, but there are many other ways to leverage existing resources by using pieces of existing designs and solutions or modifying them with new functional or UI patterns.

While digital technologies contribute to the structure, they are only seeds. At the lowest level construct, Blog technology is not different than a Wiki: both provide functions to create and display content in a specific format. The main distinctions in Blogs and Wikis are the functions and formats they provide. But the same is true for all other common desktop applications. A Blog or a Wiki is no more inherently social than email.

Indeed, Blogs and Wikis are common to desktop applications in one very negative way: they can create more silos of information faster. This is the antithesis of the flexibility required by Enterprise 2.0. There must be a guiding architecture for Enterprise 2.0 success, one that separates the UI from the functions, the format from the content and data. A digital technology that earns an E2.0-relevant label, will be built around or support such an architecture, one that understands and leverages the fundamentals of fluid structure.

Architectures rely on operating assumptions: an HVAC system must be kept in good repair to maintain comfortable temperatures for building occupants. Enterprise 2.0 requires some form of facilities maintenance. The evolving details of the care and feeding of the environment can be embodied in a Governance Model, not to be confused with highly regulated models often used for restraint. The E2.0 version is more heuristic than algorithmic, but includes a blend of recommendations and process. It may define formal and informal roles. It simply reflects agreements.

No Beginning, No End

There is no prescribed starting point for Enterprise 2.0, but there is one capability that emergence fundamentally depends on: the ability for people to find each other by things that define relevance – work, topics, skills, affiliations, trust. As well, people must have ready access to relevant ‘raw materials’ for their work. Shorten the distance to finding relevant resources.

To be truly emergent, Enterprise 2.0 must be seamlessly integrated with knowledge work. It cannot be an appendage; it should not require adoption.

Enterprise 2.0 is inherently social. It is not about managing knowledge but is about rendering knowledge. It is enabled by, but is not achieved by installing a digital technology. It unleashes the potential of humans not with workflow, but by flowing work and thought on persistent conversations.

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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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McKinsey Survey: Seven Out of 10 Seeing Web 2.0 Business Benefits

September 2, 2009 at 5:33 pm · Filed under 2.0 Design Thinking, Enterprise 2.0, Enterprise Social Computing, User Revolution

McKinsey has just published the results of a survey of nearly 1,700 executives from around the world which paints a highly positive picture of the business returns being seen from Web 2.0 deployments.

Close to seven out of ten respondents (69%) report that their companies “have gained measurable business benefits [italics mine], including more innovative products and services, more effective marketing, better access to knowledge, lower cost of doing business, and higher revenues.”

This is probably the most significant set of survey findings I have seen yet that document actual benefits being seen from Web 2.0/Enterprise 2.0 deployments. There has been quite a stir in the blogosphere lately about the lack of actual results being seen from these new methodologies (check out Dennis Howlett’s latest post on the topic, along with my colleague Paula Thornton’s observations).

What kinds of benefits, exactly, does McKinsey see coming out of Web 2.0 sites? In the survey, half of respondents report that Web 2.0 technologies have fostered in-company interactions across geographic borders, 45 percent cite interactions across functions, and 39 percent across business units.

The measurable benefits cited span both knowledge management and simple cost-cutting:

Increasing speed of access to knowledge            68%

Reducing communication costs                           54%

Increasing effectiveness of marketing                  52%

Increasing speed of access to internal experts     43%

Increasing customer satisfaction                          43%

Decreasing travel costs                                       40%

Increasing employee satisfaction                          35%

With the growing availability of services over the network, you can see how there will be increased velocity of knowledge and improved communications. It would be interesting to see how employee satisfaction, cited by more than a third, is measured.

Interestingly, the highest-rated Web 2.0 technologies/services in terms of business benefits delivery among companies are video sharing and blogging.

The top-rated technologies in terms of internal use include the following:

Video sharing         48%

Blogs                     47%

RSS                        42%

Social networking    42%

For external use, such as connecting with partners and suppliers, the following technologies delivered the most benefits:

Blogs                        51%

Video sharing           50%

Social networking      49%

RSS                          45%

The more the technologies are used, the more benefits seen, the survey also shows. As McKinsey puts it:

“Web 2.0 delivers benefits by multiplying the opportunities for collaboration and by allowing knowledge to spread more effectively…. Among respondents who report seeing benefits within their companies, many cite blogs, RSS, and social networks as important means of exchanging knowledge. These networks often help companies coalesce affinity groups internally. Finally, respondents report using Web videos more frequently since the previous survey; technology improvements have made videos easier to produce and disseminate within organizations.”

McKinsey also observes that more than half of the companies in the survey plan to increase their investments in Web 2.0 technologies, while another quarter don’t expect their level of spending to change. The study also suggests that the turbulent economy may have increased interest in Web 2.0 technologies.

Of course, there are still about a third of respondents that absolutely have not yet seen any business benefits from Web 2.0. What is not clear is whether employees at these companies are using Web 2.0 under the radar, and thus progress cannot yet be measured.

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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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