In my most recent post I showed how the community and the police are on a rapid learning curve to use social media to help them cope with the rioters – who also use the same tools.

It is ironic that we in the west now are considering shutting down parts of social media as a response to the UK riots – while we encourage its use by people in the Middle East.

Authorities grappling with violent unrest should avoid heavy-handed clampdowns on social media and instead try to enlist the help of the public against the rioters, said John Bassett, a former senior official at British signals intelligence agency GCHQ and now a senior fellow at the Royal United Services Institute.

“The use of social media in the unrest looks like a game-changer. But any attempt to exert state control over social media looks likely to fail,” he told Reuters.

“A much better approach would be to encourage and support individuals and community groups in identifying alarming developments on social media and even speaking out on the internet against extremists and criminals, and ensuring that the police have the skills and technical support to get pre-emptive and operational intelligence from social media when necessary.” Link

Surely the lesson here is to help the community and the police get ever better at using these tools themselves. To shut them down makes the community and the police blind too! Social Media did not cause the riots – it only makes the rioter more powerful. It can also make the community more powerful too.

Update: Here is how the Police are using Twitter as a Perp Walk:

Lifting a page from the hacker’s handbook, the Greater Manchester Police are naming and shaming rioters on their Twitter feed.

“We promised we’d name all those convicted for their roles in the disorder — here we go …” the police announced, as they began listing the names, dates of birth and partial addresses of individuals tried in connection with the disorder, which flared across Britain.

“Eoin Flanagan (born 01/01/1983), of Carson Road, Burnage, jailed for eight months for stealing clothes,” read one post.

“Jason Ullett (born 15/10/72) of Woodward Court, Ancoats, sentenced to 10 weeks in prison for swearing at police officers,” read another.

And another: “Stefan Hoyle (born 27/01/1992) of St. Stephen Street, Salford, jailed for four months for theft after found with a stolen violin.”

Think of it as a new kind of perp walk, but very much in the tradition of hackers who are fond of outing their rivals online.

The police department’s efforts received both praise and criticism, along with a few questions. The department explained that it released dates of birth so as to avoid confusion with individuals with the same name.

Joe mentioned this week that the use of Social Media still have not taken off in small business.

But we also learned this week that the use of social media and texting is at the core of how the riots in the UK are being organized. The best rioter’s tool – The Blackberry which is encrypted.

Since then, the BBMs regarding Duggan’s death and the ensuring riots have gone viral. The Guardian was shown one message by a recipient which read, “Everyone in Edmonton, Enfield, Wood Green, everyone in north London, link up at Enfield train station at 4pm.” It detailed what items to being–including hammers–for the demonstrations.

The advantage users have with BBM is that the news continues to circulate, but is covert enough that it is difficult to trace. BBMs are encrypted and hacking this network would be incredibly difficult, so protestors are able to stay a step ahead of authorities.

RIM UK has stated that it will help Scotland Yard in any way it can, so the BBM may only have so long to live as a tool for rioters. But most of them are of the young, mobile-minded, tech-savvy generation, and there are a variety of tools at their disposal.

The Police and the community are learning also in real time how to help each other – by also using social media. Citizens are using Twitter and Facebook to help the police have better intelligence and the police are learning this week how best to respond and to monitor.

Here is a Google map that is being run to track incidents

The Police are setting up a Flickr site to help citizens help the police identify rioters

The Guardian has a map that shows incidents all over the UK

The only chance that citizens and the police have to get ahead of this to to get ahead of it – they have to use the same tools better and faster.

I make no ethical comments – this is what it is and there is no going back

This is the reality of our world today – it is rushing to a network state. So if you don’t know how to use this well – you are at extreme risk. You just don’t know what is going on and the pace of your interaction with the world will be too slow. It does not matter how small you are – you will be too slow to know.

Joe wrote this week about how Iceland is using the web to Open up its democracy and then asks the big question – what about corporate life? Will corporations follow?

Geoffrey West’s research suggests that they had better – because it shows that the ultra controlled approach that is the Command and Control Normal now – kills corporations early. They are dying sooner and sooner.

Are corporations more like animals or more like cities? They want to be like cities, with ever increasing productivity as they grow and potentially unbounded lifespans. Unfortunately, West et al.’s research on 22,000 companies shows that as they increase in size from 100 to 1,000,000 employees, their net income and assets (and 23 other metrics) per person increase only at a 4/5 ratio. Like animals and cities they do grow more efficient with size, but unlike cities, their innovation cannot keep pace as their systems gradually decay, requiring ever more costly repair until a fluctuation sinks them. Like animals, companies are sublinear and doomed to die.

The issue is that using a machine model – is that friction builds as well as cost as the corporation scales. The costs rise with revenue. So in the mature part of the cycle, you cannot innovate – you can only manage the numbers/ratios. For example, 10 years ago, Shell set up Shell Renewables. Shell was going to become a leader in non oil energy. Makes sense right? The top people know about Peak Oil better than most and wanted to find a place in the next energy sector. What ruined this experiment was its success. Being a very large organization, Shell did new projects at scale. With two of the largest new Wind Farms online – the CFO and the CEO saw the trap – saw why they had to retreat back into OIL ONLY. Shell had to make the numbers even if by doing so meant that Shell could not position itself to be a leader in New Energy.

Wind farms that do well have an ROI of about 8% they are a utility – like owning a bond. But the Oil business has embedded costs that are linked to the returns on OIL that are much higher than wind. So if Shell did a lot more of these mega wind projects, the ROI of Shell would be reduced and Shell would have an earnings problem. The more wind farms they installed, the more their earnings would drop but their costs could not. They were trapped!

This dooms Shell and all mature companies. We saw that is Big Steel when smaller local mini mills ate into the lower ROI parts of the business until there was nothing left? We see this now with media.

The costs of a press or a studio – are so great that all the majors can do is to defend their existing platform. The New York Times can only hide behind the paywall for a period of time. The studios can only hold off web distribution of video for so long. But their battle to keep the status quo is not stupid – they are stuck with the costs. It is the model of how we do business that is the problem. For in the mature phase, the CEO has to make the ratios and the costs are embedded. In the final phase all the CEO can do is to milk the system.

For all true innovation HAS to start with a modest revenue line. So if you have a large enterprise with high revenues you have also high costs. So a web based news alternative CANNOT earn the revenue that you need to run the Times. So you cannot go there. But of course a new competitor – Huffington? Can and will and in the end will take enough revenue off your top line to kill you.

So are corporations doomed? Well with a sample of 22,000 West makes a good case that the current model does doom you, if you are traditionally organized. So what then is the way out?

West makes the case that Cities live much much much longer. The core of why is the core idea for corporations to study and apply.

“It’s hard to kill a city,” West began, “but easy to kill a company.” The mean life of companies is 10 years. Cities routinely survive even nuclear bombs. And “cities are the crucible of civilization.” They are the major source of innovation and wealth creation. Currently they are growing exponentially. “Every week from now until 2050, one million new people are being added to our cities.”

Cities are much more open as systems and networks. They are much closer to being alive than corporations that rely too much on command and control.

As I write this I am thinking of how Wordpress works. At the core of Wordpress is a for profit organization – but also one of the tasks of Automattic is to ensure the health of an ecosystem that is the larger Wordpress ecology in which thousands of independent developers who do not work for Automattic make a living. I think of Wikipedia. At the core of Wikipedia is a set of rules about how Wikpedia has to work and how people in Wikipedia have to behave. Surrounding this core is a cadre of “White Blood Cells” AKA editors – that ensure that this DNA is kept healthy. I see no way now that Wikipedia will not be here in 50 years.

Why my confidence?

If you look at Wordpress and Wikipedia you will see the key. In a network that really is a network – like Wordpress and Wikipedia – the costs go up in a shallow linear curve while the outcomes rise exponentially. The margin grows so that any bump in revenue along the way – which is of course natural for nothing in Nature runs on any form of straight line – does not take down the organization. But in a traditional organization, the costs rise in direct concert with the revenue and outcomes. This means that once the business approaches maturity, the leadership have to force the numbers, meaning that in the mature phase, the only real focus are the numbers themselves. Not the underlying purpose of the business. The focus becomes defence and self referential. The organization is now doomed. Doomed to suffer a bump in the market or to a new competitor. Look at the case of RIM.  Can RIM come back?

This site has been a place where many of us have tried to see the future for business. We could all agree that more Command and Control would not help. We could all agree that more Social Media used to open up the organization would help.  But what we are seeing now is that for an enterprise to thrive over time – it must become alive! Only a true network can enable this to take place. The few true networks that we can see now, give us a working model of the new enterprise.

Stuart Baker and I are working on what this might be and in the fall we will be posting our ideas.

Our proposition is this. In the 1800’s most business was small, local and unique. The great shift in the 20th century was to consolidate into the enterprise as we know it. This was how to create wealth then. All who stayed back in the small, local and unique died. The efficient machine had to be the model you used. Now we enter a new phase. For the limits of the efficient machine have been reached. The new winners will be those that can adopt the model of the real network.

We all know about how to organize the machine. How to organize the network is all new and mainly unknown. That then is the challenge and the opportunity. Good luck to all of us.

Tesco

Now is this not “thinking”? Tesco bring the store to you – knowing that you have no time or energy left.

I am impressed – now we are seeing Social Media and Mobile in ever more pragmatic ways.

Text Books the bane of all students – now your son can rent them from Kindle

Both these stories show how we can use social media and online to help people deal with real issues.

They are very mainstream – so what is your opportunity? How can you make a real problem go away?

Don’t you feel something big in the air? The Wirearchy amplified events in the Arab world this spring and many regimes have fallen. Do you think the rest of the rulers feel safer now or more vulnerable?

In the last 2 weeks, the establishment in the UK has been rocked. Again the amplification and openness of the Wirearchy has prevented the old system from being able to contain the firestorm. It is also early days, but it is not just the Murdochs who have been shaken but the entire establishment. Do you think that this will blow over and all in the UK will go back to normal?

In the US our political system is log-jammed at a time when it has to cope with all sorts of real problems – do you think that we will avoid a crisis here at home?

Are you ready as a individual or a CEO to cope with what is unfolding?

This global meltdown and systemic failure of our system is I think the real context for social media and its tools and your adoption of them. The Wirearchy is the only way to survive. The Hierarchy is the sure way to die.

Many have thought that they could adjust slowly to the Wirearchy.

It was great to see how they are slowly being adopted in the enterprise. It is now common knowledge that we have to be more human in our work and how our work must do something that offers real value to all not just to a few owners.

Many know that we should go here. But maybe not just yet – so much risk in changing right?

Bu now all the risk is in not being there. The system has tipped and total turbulence is here.

Chaos is our new normal. Will the Euro continue and what will happen if there is a default? How will America get though its own financial and fiscal crisis? What will this mean to the election. What new weather event will affect us and the global system? Will the millions of underemployed, unemployed sit quiet?

And in this context a new kind of competitor that has been forced into being by the evolutionary pressures of this time.

An entirely new economy, based on the small tribal networks, will emerge very quickly out of the desperation of the people who have no alternative. They need no capital. They don’t need what you needed. They can get the best people. They can go from an idea on napkin to your doom in 5 years.

All organizations who rely on concentration will be too slow to keep up as the pace of change accelerates.

If you as a person cannot find your way through this and if you the CEO of a large organization cannot be agile enough, these waves will take you down.

So it is now “Change or Die”.

We have had a lock out of the postal workers here in Canada for about a week – preceded by a series of rolling local strikes. What the unions want of course is job security and to hold onto their pensions.

But the result appears to be that they have cut their own throat. The heart of their business is business mail – principally bills! What we have seen is a massive switch to online billing that is being made ever easier by the billing companies. (Globe and Mail)

Count Nicole Mackoway among the people who saw the strife at Canada Post as a good time to make a switch. Ms. Mackoway, a stylist based in Edmonton, decided to get rid of all her paper bills – two power bills, two credit card bills and three phone bills.

“I hate getting bills in the mail anyway – this way any mail that comes will be fun,” she said.

ING Direct, a bank that conducts its business by Internet or phone, had 350,000 customers switch to online banking in the past two weeks. Almost half of its 1.8 million Canadian customers now receive their banking statements exclusively online.

“The postal strike created a small catalyst at a time when it’s already easy to make a change to online,” said Peter Aceto, chief executive officer of ING Direct Canada. “Canada Post has gone from the thing we relied on most to communicate a few decades ago to becoming a smaller part of our lives.”

Canada Post will lose at least $2,352,000 a year in revenue from ING Direct on stamps alone, assuming the company sends each of those 350,000 people one letter a month at the commercial price of $0.56 a stamp.

It isn’t just banks that will save from the switch to online bills and statements.

At Shaw Communications Inc., a telecommunications company, about 70,000 people signed up for online billing in June.

“That’s probably 10 times more than we would normally see,” said Peter Bissonnette, Shaw’s president.

“Clearly the labour disruption has driven that behaviour,” he said. “We’re very pleased that customers are finding other ways to do their billing.”

Enmax Corporation, a Calgary-based utility, had 5,000 customers enroll in its online billing system – a “very dramatic increase,” spokesman Ian Todd wrote in an e-mail.

Soon, like the telephone the only mail we will get is junk mail. For the only calls I get these days are spam too.

In many countries the post office has been privatized. The call to privatize Canada Post will escalate.

The US Mail is not exempt from any of these pressures and surely the clock is ticking here too. (Link to an excellent article and infographic here)

The web takes no prisoners.

IDC has provided a study on a useful topic, Determining the Value of Social Business ROI: Myths, Facts, and Potentially High Returns developed by Erin Traudt, Mary Wardley, Michael Fauscette, Dr. Natalie Petouhoff, Kathy Herrmann. It explores the criteria for validating enterprise social software purchases and social business transformation through return-on-investment (ROI) measurement. They also looked at the market potential. IDC’s Social Business Survey reports that enterprise social software adoption still has room to grow, with 41% of respondents indicating that they have already implemented an enterprise social software solution. This leaves 59% who have not implemented a solution. With this much adoption anticipated, IDC forecasts that emerging social platforms market will generate revenues of nearly $2 billion by 2014, experiencing a compound annual growth rate of 38.2% over the 2009-2014 forecast period.

However, IDC cautions that work needs to be done to reach these numbers. Erin Traudt, research director, Enterprise Collaboration and Social Solutions at IDC is quoted, “widespread industry adoption of enterprise social software is relatively immature and executives want a clearer understanding of the potential gains, costs, and return on investment that social business initiatives can have on a company’s bottom line.”

The reports goes on to state that when conducting ROI on social business initiatives, the traditional rules of business still apply. This is regardless if a company deploys social business initiatives to assist customer service, marketing, public relations, product innovation, employee collaboration, or other functional areas of the organization. The report comments, “It is rare that organizations know how to calculate ROI for traditional company projects; the addition of social business initiatives adds another twist, making it seem difficult to calculate social business ROI, but in reality it is possible.”

I agree that it is possible. However, to be effective it should demonstrate how social software improves performance on key business metrics that are often process aligned. One of the obstacles to getting a clear ROI is that much of the well-publicized social media use cases have been in the area of marketing, an area where ROI is more elusive. McKinsey showed us that ROI can come from both external marketing use cases and internal ones that are more aligned with work processes.  They found improvements through the use of social software in such metrics as reduction of communication costs, increased speed of access to internal experts, decreased travel costs, and increased employee satisfaction. This is a nice mix of hard edge and softer returns but each gets to the bottom line.

McKinsey also found that usage is strong as nearly half of the companies that have implemented social technologies have at least 51 percent of their employees using them. Like IDC, McKinsey saw firms increasing their investment in social software. In 2010, nearly two-thirds of respondents at companies using social technologies say they will increase future investments in these technologies, compared with just over half in 2009.  These two reports complement each other.

Two announcements this week I think show how the 2.0 web is going to the next phase – where the “rebels” go mainstream and spell the end of the traditional services.

I wont say much more about MSFT’s purchase of Skype – other than this. It spells the end of telephony as we used to know it. Communications will inexorably shift to the mobile platforms and will make video the centre piece. The Mainstream will be Dick Tracy! And this is my point. Mobile is the new platform and video will become so ubiquitous as to replace voice. The rebels are now the players.

In commerce Visa has just thrown down the gauntlet too.

Visa has just announced that it too will make mobile its future. It will take on PayPal directly.  Here are the features:

Visa expects to launch the digital wallet in the U.S. and Canada in fall 2011.

Key features of the wallet are expected to include:

• Click-to-buy: Shop conveniently and securely by simply entering an email address, alias or online ID and password, instead of a billing address, account number and expiration date. In addition, Visa is exploring dynamic authentication technologies that will bring added layers of security to online purchases.
• Cross-channel payments solution: The wallet consolidates multiple Visa and non-Visa payments accounts and can be used in mobile, eCommerce, social network and retail point-of-sale environments.
• Preference management: A menu that enables consumers to set preferences for how their wallet will work, allowing them to customize and control the features of their personal wallet from privacy settings to designating which account will be accessed based on merchant type or purchase amount.
• Merchant offers: A service that allows consumers to personalize their shopping experience by opting-in to receive money-saving discounts or promotions from participating merchants.

“The widespread adoption of Internet and mobile technology is changing the way people connect and transact across the globe, so we’re focused on delivering locally-tailored payments products and services,” said Saunders. “We are introducing new solutions for eCommerce and mobile devices that provide the same ‘Visa-quality’ experience—convenience, reliability and security—people enjoy when using their Visa cards at a retail location. In doing so, we are accelerating the global shift to digital payments by harnessing our brand, products, network and 50-plus years of payments experience.”

Mobilizing Payments in Emerging Economies

In certain emerging geographic markets with significant mobile penetration, Visa will work with financial institutions and mobile-network operators to provide consumers with a secure, reliable and globally accepted form of payment and the ability to transfer and receive funds, manage financial accounts or top-up wireless air time using their mobile handset. The wide range of features and functions being developed for the digital wallet will allow Visa to pursue a number of strategies to tailor or bundle services to local needs.

• In countries like India and Russia, where card issuance and mobile subscriptions are high, but card usage is relatively low, Visa will help drive account activation and usage by working with financial institutions and mobile operators to link existing card portfolios with mobile devices to give handsets payments functionality.
• In countries within Africa and the Middle East where mobile device usage is high and traditional electronic payments infrastructure is less developed, Visa will work with mobile network operators to link new virtual mobile prepaid Visa accounts to mobile phone numbers to enable cash-in, cash-out, personal payments and mobile payments —including bill payments and wireless airtime top-up. Visa also intends to connect existing “closed loop” mobile money services that today provide basic mobile banking and payments services to unbanked and under-banked consumers to its global, open loop network—VisaNet. The integration will open closed loop systems, and provide consumers and merchants with unprecedented scale, functionality and acceptance beyond their existing local geographic footprints.

Across all emerging geographic markets, Visa’s sophisticated payments technology and significant work in establishing global payments standards will aid in navigating the complexity of the myriad of network operators, handset models and operating systems in use globally, helping to enable millions of new and existing Visa account holders to simply use mobile technology for payments services.

Communications and Commerce now. What next? Education and Healthcare seem next.

Maybe there will have to be a Skype and PayPal in these sectors first. And when the mainstream buy in as we see above the shift will be made. Oh yes and are not books and film there too?