Business, Society - Written by on Sunday, August 2, 2009 22:39 - 16 Comments

Unbundling the 20th Century Mindset

Having spent the past three years of my life in the Enterprise 2.0 / Collaborative software market, I remain struck by the industry’s continued lack of ability to define a compelling reason for enterprises to adopt new software applications, such as blogs, wikis, microblogs, etc. In the early days of the Enterprise 2.0 movement, much of this software was dismissed as the next wave of Knowledge Management, which was largely viewed as a zero ROI investment (or at least in the eyes of the venture capital community, it did not produce any break out, high return investments). Today, it is largely viewed as a necessary evil because the likes of Facebook and Twitter are impossible for the enterprise to ignore.

Yet the compelling case remains elusive still. This situation does amaze me, as it seems clear that collaborative management processes, and the software that powers these processes, will drive the next great wave of business productivity. As my nGenera colleague Tammy Erickson likes to point out, the way corporations have organized and managed, and set up processes to get work done has not changed much in over 100 years … yet, the costs of communicating and collaborating have accelerated toward zero and the next generation of workers have grown up on these new collaborative technologies and processes … the train has left the station and it is not coming back. Also, John Chambers of Cisco tends to agree with this statement.

The compelling case for adopting collaborative management and supporting technologies is that they will power the biggest productivity wave since the re-engineering / ERP software / Web 1.0 revolution. However, rather than automating transactional processes, we are now “stimulating and influencing discretionary effort” to drive productivity (hat tip to Tammy Erickson for codifying this concept).

In the old way of work, employees were locked into specific roles and in specific departments, even though they may have had skills and value to offer outside of their strictly defined role. In a company that has adopted collaborative management, the talent is networked and peer reviewed, much like we review products on Amazon or restaurants on Yelp. An employee with available ‘discretionary effort’ (including the skills, and references and ratings to support the claim) can easily be matched brought into the fold by project teams to contribute in a meaningful way for the individual, team and company. Their work becomes unbundled from the task-oriented role of the past, and more woven into the fabric of the company’s operations (e.g. an engineer not only designs products, but has a role in engaging with customers and supporting the products he or she has designed in the past).

In the past, this employee may have had an effective utilization of 60% of their capability … under collaborative management, it is likely to be closer to 100% if not above it, and the employee is more fulfilled and engaged in his/her job.

This is not a theoretical example or exercise. From May 2007 to November 2008, I led the corporate development effort at nGenera where we raised two significant equity financings, one debt financing, closed and integrated six acquisitions, and divested one business unit. Throughout this period, I was the only full-time headcount in corporate development. Other than attorneys, we did not use any outside consultants or advisors. The entire effort was run on relatively large teams made up of employees from functions across the company, each applying discretionary effort away from their full-time ‘role’ to be part of the team. We accomplished an incredible amount operating in a collaborative management process, all without hiring full-time individuals.

Furthermore, take the role and process of customer support as another case example. In the past, a company would have a role defined for a customer support rep. The number of reps, and the management overhead needed to operate customer support overall could be sized by the expected call/contact volume, and the software would be purchased to help automate these transactional roles so each rep could handle more and more contacts. A well run company would have no involvement in customer support by the people who were designing and making / delivering the products or services, and the company would do a decent job of pattern matching similar issues from across the customer base and publishing solutions to common problems. nGenera has solved this exact problem with our Customer Interaction Management, or CIM, software – including, chat, email, phone, knowledgebase applications.

The acceleration of the cost of communication and collaboration to zero presents a new opportunity, almost 180 degrees opposite of what the ideal customer support organization was trained to do in the past. With the simple addition of a customer community, the pivoting of the CIM software suite to a Social CIM (or Social CRM) suite, and the investment in the complexity of fostering and operating the community effectively (no small task), a new collaborative customer management process is possible, with significant productivity and other benefits as an output.

With collaborative customer management, customers can connect with each other to provide support and solutions to common problems, even providing better outcomes than the best synthesis the company itself could provide. Moreover, the employees that are designing and making / delivering the products and services (i.e. the engineers, product managers, marketers) will apply some percentage of their discretionary effort in the community – seeing and helping with real customer issues, and incorporating this real-time interaction into product and service improvements immediately and new product and services offerings that are in demand. Again, this productive use of discretionary effort is likely to also lead to higher job satisfaction and engagement for the designers and engineers, fewer customer support people and overhead, and better results for customers. Lastly, the senior executive team now has a direct line of sight into who are their most engaged employees and what are their key customer, product and services issues.

Now, apply this similar line of thinking on unbundling work across the enterprise to other processes, such as team selling, talent management, citizen engagement, mergers & acquisitions integration, investor relations, and others, and the productivity improvements are compelling. Moreover, the overall competitive velocity and agility of the enterprise will increase dramatically.



16 Comments

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Joseph Logan
Aug 3, 2009 6:39

Very good points. One dynamic I have observed in very large organizations is a tendency for back-office functions–primarily IT, legal, and even finance–to actively discourage adoption. My hypothesis is that we who would like to encourage these collaborative efforts have not done a very good job of addressing points of resistance. I see people do very well at selling benefits but less well at addressing “yes, but…”. Possibly contributing to this dynamic is an absence of line-of-sight from the back office to the core mission of the organization. It is the rare IT infrastructure leader who actively engages with the customer-facing business of an organization. I think one real opportunity is for us to make the risk-averse feel safe.

Brian Magierski
Aug 3, 2009 8:24

Thanks Joseph. Yes, indeed fear and uncertainty are great barriers to adoption, and being prepped for the “yes, but …” follow-up is essential to have successful adoption.

Because of this 100 year legacy of management processes, employees and managers have been trained to fight for corporate survival and career advancement in a different model. This make adopting new processes such as collaborative management non-intuitive and also perceived as negative for career advancement. Thus, the resistance will be enormous at many levels.

As a former P&G employee, I am impressed at how they broke this barrier from way up at the top of the company. When I was there, P&G took great pride in the ability for their R&D group to invent anything and to do a better job than anybody outside of P&G and the P&G process. With the introduction of “proudly found elsewhere” or PFE, P&G broke this barrier and made it a critical success criteria for P&G R&D to find more than 50% of their inventions from outside the company – requiring also a high degree of collaboration amongst P&G’ers as well as between P&G and outside parties.

Ray Watkins
Aug 3, 2009 8:31

I would like to hear how this so-called social software might help to democratize institutions, particularly universities. There’s certainly the potential for creating transparency, but I don’t think it stops there. I think these tools might be able to get rid of a lot of redundant administration, helping to “flatten” the hierarchy.

Brian Magierski
Aug 3, 2009 11:18

Ray, yes I believe you are correct. Social software and collaborative management processes can benefit many entities this way – universities, grade schools, public sector entities, NGOs, etc., not just private sector businesses.

I too would be eager to see case examples.

Joseph Logan
Aug 3, 2009 11:36

Brian – I think you hit it with the P&G example. If the very top people think it’s important, it’s going to happen.

Lucy Garrick
Aug 3, 2009 12:33

Brian,

I am interested in this area and have been following it. In your P&G example: I am curious about how PFE took shape outside of P&G. Was there support to collaborate with organizations outside of P&G, or was this just drawing on ideas outside P&G to create it’s own products or, as is sometimes the case, partnerships. And if the latter, with what sorts of companies did they partner? Was partnership a collaboration? or what we called in high-tech, “black-widow partnerships”?

Brian Magierski
Aug 3, 2009 20:22

Good questions Lucy. I’m not exactly sure, but our Wikinomics team may know.

Also, here is a link to a very good article on the P&G initiative, actually called “Connect & Develop” but translated internally as proudly found elsewhere. It does not directly answer your questions, but is supportive of the overall concept … moreover, it highlights how advanced P&G’s thinking was back in 2000, and is still relatively advanced today.

Here is a supporting quote relative to my post:
“Procter & Gamble has operated one of the greatest research and development operations in corporate history. But as the company grew to a $70 billion enterprise, the global innovation model it devised in the 1980s was not up to the task. CEO A. G. Lafley decided to broaden the horizon by looking at external sources for innovation. P&G’s new strategy, connect and develop, uses technology and networks to seek out new ideas for future products. “Connect and develop will become the dominant innovation model in the twenty-first century,” according to the authors, both P&G executives. “For most companies, the alternative invent-it-ourselves model is a sure path to diminishing returns.”"

Ashish Deo
Aug 7, 2009 6:37

I am just a beginner in this area, having spent my working life in old economy companies. Are there any examples (other than Open Innovation / P&G) of improving internal collaboration within organisations?

A typical company these days often has at least 3 building blocks – brands, functions and countries. I am trying to understand how wiki type collaboration can work say in annual planning cycle? How is the content given final shape / finish?

Lucy Garrick
Aug 7, 2009 9:52

I’ve read and seen articles/videos online about projects at Allstate Insurance and Best Buy. My small start up is doing this, Radical-Inclusion. Lots of companies are using wikis to do all sorts of things. From what I can tell the market is quite nascent and fragmented in terms of what tools are being used for what tasks.

Matt Donnelly
Aug 13, 2009 11:25

I’ve seen that most business people, when speaking about social media at all, tend to refer to the ‘Big Three’ (aka Facebook, Twitter and LinkedIn). This is way too narrow. If we want to think about social media, they need to think about customer service, user-focused Web site experiences, ideation, etc. To my mind, any tool that makes a customer’s interaction with a company more human (more personal) is a social media tool. And, yes, the more human, the more ROI the company can generate. User-specific content and experiences, where their voice matters, is to me just a matter of treating individuals as unique individuals, not as ‘human resources’ or people to ‘target’ with marketing blasts.

Lucy Garrick
Aug 14, 2009 20:57

I this opportunity for unbundling organizational skill in exactly the same way and agree it turns most notions of how we develop relationships and work teams on its head. I do think, however, this needs be done carefully with each organization’s unique circumstances in mind. The possibilities are intriguing and exciting for those with vision and confidence that change can happen.

Matt Whyndham
Aug 18, 2009 11:08

Hmm, OK, and yet …

Essentially you are describing (from the viewpoint of the status quo paradigm) a process for leaking effort in an “uncontrolled” way from around the company to focus on a project. A sort of bottom-up matrix management, perhaps.

I’d like to see more examples of how this makes a company work better, since there likely to be overheads (distraction costs? loss of focus on strategies of the business unit).

By the way, firms that incentivise inter-departmental activities or in-reach (even Universities) already do this to a degree, and the relevant media are corridors, common rooms, conferences etc.

Brian Magierski
Aug 19, 2009 9:42

Matt,
Yes, collaborative management introduces new costs and needs new processes to keep these costs from getting out of control … it is indeed a new way of doing work.

However, rather than thinking of it as an exception process (i.e. leaking effort), it should become the norm. For example, part of an engineer’s or product manager’s job in a collaborative management enterprise would be spending time directly engaging with customers in relevant communities (Facebook, LinkedIn, the company’s own community, user group sites, etc.) to inform them in their job requirements. This new engagement would replace or supplement things like focus groups, etc.

The case studies are newly emerging. We at nGenera hope to post case studies of our work as they show results and we get customer clearance to do so.

The commenters have mentioned a few … P&G, Best Buy, Cisco …

Natasha Nelson
Sep 12, 2009 14:05

Hi there,

I am an IT executive leading Enterprise Architecture initiative in my company, which is very traditionally organized. However, we also have a very forward thinking leadership team. Currently, they are the ones writing blogs and encouraging comments. I would say in the last 12 months, we have been bridging some serious gaps, and the value of new technologies have been clearly identified.

However, I wanted to explain what I am seeing within my smaller “IT organization” universe. We have a collaborate global portal that has many social networking attributes and features, and is available to all IT members worldwide. To my surprise, I don’t see too much adoption for our team members for even simple tools such as wikis, blogs and others. There is some use, but not too many people are actually using it to the extent that I thought they would. When a question is asked to help generate ideas, one, maybe two responses are best case. Of course, we have promoted the portal, we have used all best known practices to design and build it, we marketed it, made it extremely easy to use and accessible, share news and pictures and so on. With 150+ IT staff located in 35 countries, I am struggling to get them to adopt our corporate Social network environment. At the same time, a lot of them are asking to be “my friend” on Facebook or “recommend” them on Linked In which I don’t find too appropriate.

These IT team members report locally in their organizations, with only a dotted line to me. I conduct 3 regional conference calls 3 times a year, and in-person meetings once every two years, so we know one another in person. When we get together in person, the environment is extremely interactive, collaborative and productive. Yet, looking at the electronic collaboration, you won’t believe it’s the same group of people.

I keep asking myself the question of why the resistance? The article make it sound as though it is senior leader’s problem, but here is an example of senior leaders supporting it, technology being made available, but the result is only a mediocre adoption by the people in the organization. Do we need to re-align our org structure to yield better results? Are there processes that need to be in place to actually follow up on things, assign people some specific tasks and due dates?

My feeling is that people see it as “extra” to their main job. Yes, they will get to share ideas and best practices from their colleagues that do the same thing day to day, but perhaps they already have a lot on their plate and don’t have the time…

Everyone’s comments are welcome. Does anyone have an example of some tricks that make a huge difference in a similar situation?

Thanks

Lucy Garrick
Sep 13, 2009 11:05

Natasha:

Building collaboration is not something that senior leaders can mandate, as you know and seeing social media tools as only a technical issue is like seeing pacemakers as a cure to heart disease. The tool is useful but technology adoption is a change management issue. By this I mean to be successful one needs to think strategically and create the conditions for behavior to change – each part is equally important.

There are many factors that could be contributing to the lack of adoption and engagement. A couple of “tricks” might get people to try virtual collaboration, but what sustains it is a shared passion to do something together – that could be learning, a project, etc. The group that gathers there needs to decide what they wish to do first. Then they can decide which tools would be most valuable in their processes. A lot of people use social media as only a translation form real world to virtual and this approach, while useful, limits what is actually possible. As with any new work process it helps a lot to have someone who is experienced in virtual group facilitation help the group.

This is a new area for just about everyone. The way in which users find new needs for the tools is changing daily. I suggest you gather a group of interested parties, get some facilitation assistance and run as a pilot with the express purpose of learning.

Natasha
Sep 13, 2009 16:15

Lucy,

Thank you for your feedback. This makes a lot of sense. It does prove to me that first, we need to organize our global teams to work on the same projects and achieve the same goals. That, followed by the technology tools and with the support from leadership, would make our efforts more effective.

I suspect this could be a common occurence in many enterprises, and it will take some time to re-organize ourselves accordingly.

Thanks again

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