Category Archives: old Enterprise 2.0

Knowledge Workers in the British Raj

Note: This is the second part of a longer series on how social media is affecting management. You can find the first post – The future of (knowledge) work – and subsequent posts – The north-south divide, Working in Hollywood, World of Warcraft in the workplace and Problems and the people who solve them – elsewhere on this blog.

Prior to the industrial revolution, most folk, apart from apprentices and other people in training, worked for themselves. Home wasn’t here and work wasn’t there: they were in the same place and tightly intertwined. For the last few decades though, we’ve all become used to working in the large bureaucracies that most modern companies use to manage their workforces. For many pundits the shift to a more social business – driven by Enterprise 2.0 and Social Business Design – is the chance to humanize these bureaucracies that we’ve created, bringing back some of the more personal experiences we used to enjoy. However, this ignores the fact that while we’ve used technology to change business, business has also evolved to the point that it’s changing how we think about and use technology.

Tomorrow’s more social companies will not simply be our existing bureaucracies humanised. They’ll be something more compact and collaborative, extremely flat organisations where the executive is responsible for steering the boat while handing responsibility for operations over to the frontline. Rather than enabling a more human bureaucracy, one where the power structures are inverted or middle management empowered, Enterprise 2.0 is returning us to an earlier time, more akin to the British Raj in India, when the world was more uncertain and communication within a bureaucracy was slow (when compared to the pace of business). We’re returning to a time when self initiative, the ability to collaborate with your peers, and a focus on bringing whatever skills and tools you can to bear on the problem in front of you, is more important than deep specialisation and formal communication and career structures.

Our companies are not what they used to be

The template for our large, vertically integrated enterprises was stamped out for us by the likes of Cornelius Vanderbilt{{1}} during through the development of the transcontinental railroads in the U.S., and perfected by the conglomerates and multinationals in the sixties and seventies. Our organisations were seen as vast machines, machines staffed and operated by an army of people.

[[1]]Born the son of an impoverished farmer and boatman, Cornelius Vanderbilt (May 27, 1794 — January 4, 1877), died the wealthiest man in the United States and probably the greatest of the nineteenth century railroad barons. Starting with money he borrowed from his parents to buy a boat which he used to ferry passengers between Staten Island and New Your City, he became a American shipping and railroad magnate who acquired a personal fortune of more than $100,000,000.[[1]]

For a long time a company’s workforce was considered just one of three factors of production{{2}}, and a fungible factor at that – homogeneous and easily interchangeable. Recently companies have taken a more humanistic approach, with many human-resources departments proclaiming “people are our organisation’s most important asset,” and driving companies to construct ever more complex career management, renumeration strategies, and recognition and reward schemes to make the most of each employee’s individual skills and foibles.

[[2]]The other factors of production are stocks (including land) and capital goods.[[2]]

A factory in the industrial revolution, where the key to scaling a business was to employ more workers, and then employ an additional layer of management to manage the workers you hired in the first place
A factory in the industrial revolution, where the key to scaling a business was to employ more workers, and then employ an additional layer of management to manage the workers you hired in the first place

Our organisations, however, have been shrinking over the last couple of decades. Initially this was from automation on the factory shop floor, where repetitive tasks were replicated in technology, man replaced with machine. Overtime we’re used technology to chipped away at increasingly complex problems, working our way from simple manual tasks such as swinging a hammer on command, through to today’s modern, automated production line marvels.

At LEGO HQ in Billund, Denmark, where raw plastic is transformed into finished bricks (including stormtrooper helmets), and packaged into sets, with very little human intervention other than to fix machines when they breakdown.
At LEGO HQ in Billund, Denmark, where raw plastic is transformed into finished bricks (including stormtrooper helmets), and packaged into sets, with very little human intervention other than to fix machines when they breakdown.

A similar journey has occurred inside the office: computers (the teams of people computing ballistics tables and payrolls by hand) have been replace by computers (the electronic gizmos prone to bugs), the typing pool was phased out in favour of management using word processors to automate the creation their own documents, and a large chunk of the customer service team has been replaced by self-service kiosks and web sites which allow customers to attend to their own needs. Most recently, the midlevel management responsible for command and control – both between teams, and between teams and the C-suite – is being replaced by software{{3}} as social media tools automate the communication and information aggregation tasks that have traditionally been the domain of middle management.

[[3]]The future of knowledge work @ PEG[[3]]

Our vast, vertically integrated enterprises have been flattened and hollowed out, creating a new generation of organisations which have a large workforce at the coal face working under the direction of a with smaller and more focused team of executives. The frontline is interacting directly with customers and suppliers or managing production, responsible for the day-to-day operation of the business. The executive is looking into the future, responsible for placing bets on where to deploy the organisation’s resources most efficiently to meets tomorrows challenges.

The provincial civil service

The emerging organisational structure we see today is of a different nature to the monolithic institutions required to run the train networks in the 1800s or multinational conglomerates of the more recent past. The impact of the latest wave of automation – the move to social business – is not to simply take the existing organisation and applying a new style of command and control, one based on bottom-up empowerment and where middle management use these new media tools to streamline motivating and managing the teams under their guidance. It’s more akin to the extremely flat structures used by organisations such as the British civil service in India during the 1800s.

As a colonial power, Britain built an administrative centre in India (initially under the monopoly of the East India Company, but later under direct government rule{{4}}), staffed with highly competent expatriate civil servants who had signed on for a tour of duty. This tour of duty was usually seen as the route to wealth and influence, as it was easy to tap-off a little of the money – the vast sums of money – which flowed past these civil servants as it made its way back to the home country. (It wasn’t uncommon for senior members of the British Raj to return to Britain at the end of their tour with suspiciously large collections of expensive trinkets and locked boxes.) A complex bureaucracy developed, constructed around the Governor-General based in Calcutta, with Mandarins gathering staff and wealth as they fed their own feeling of self importance.

[[4]]John W. Kaye (1853), The Administration of the East India Company, Richard Bentley[[4]]

Managing the provinces, however, was a completely different problem. Covering a vast, populated area, and with little incentive for senior civil servants to get directly involved, the provincial civil service had to make do with a very flat organisational structure, one where every manager was responsible for roughly one hundred direct reports. Such a high management ratio naturally precluded many of the practices we take for granted into our large matrix-managed organisations. A manager couldn’t afford to spend more than a few minutes with each of their direct reports in the course of a month, and even those few minutes might not occur as transport and communication were much more expensive than they were today. The high-touch style of management we are familiar with in recent history wouldn’t work.

The expanse of the British empire in India in 1909
The expanse of the British empire in India in 1909

From demand-side to supply-side

The strategy which enabled the provincial civil service to function – and to function very effectively – was clear objectives. Field staff were engaged for their ability and interest in taking on responsibility for a problem on behalf of the management (usually this problem was the collection of the taxes, duties and excises required by the British crown in a specific province). A set of policies and procedures were put in place to ensure that they conducted themselves in a fit and proper manner, however, generally, the field staff were provided with a great deal of discretion in how they achieved their goals, collaborating with their peers were needed.

Behind this flat organisational structure was a hiring and training process designed to find candidates who were focused on solving the right class problem, rather than candidates who specialised in a discipline or process. All candidates had to sit an extensive test covering a broad range of topics, and were then trained in the skills and processes they might need in the field. Their induction was finished off with and apprenticeship under the guidance of an experienced worker. The civil service was looking for those individuals who had the kit bag of skills and the aptitude needed to find their way to their goal on their own. Those selected were then train in the business processes and policies they needed, and provided them with the time they needed to integrate into the community of front line workers. Much like today’s emerging workplaces, the team at the front line was empowered to collaborate as they worked toward their respective objectives, rather than micromanaged.

We like to think that we’re all hired for our unique skills and paid according to the value we bring to the business. Unfortunately this is not generally true. Our large company legacy means that most managers need to think in terms of roles, cogs in a machine that they need to assemble. Measuring each employee by their contribution is a complex and laborious task which does not scale well, so companies manage large populations of employees by defining standard roles tied to specific skill sets, and then measure each employee by their ability to fulfil the role. Hiring then becomes the easier supply side challenge of finding and evaluating people with the requisite skills.

As companies flatten it is becoming less important to assemble large teams with specialised skills. Teams have shrunk as technology has replaced specialists with potent technological tools: the skilled printer replaced by the printing press, the complex task of computing ballistics tables moved from people to machines, the distributed computing specialist made redundant by an open source framework, and your procurement specialist replaced by the on-demand SaaS fulfilment solution.

Our focus has shifted from the capabilities we need to the outcomes we need to deliver. We’re swapped from the supply side problem of finding enough people who have the specialist skills we need to staff our business, to the demand side problem of finding the people who we can delegate some of our problems to. One of the organising principles behind business is changing, driven, most recently by a shift to more social businesses.

The future of our business – post Enterprise 2.0 and Social Business Design – is not in applying a new human-resources paradigm to our existing workforce. Much like the British Raj in provincial India, our businesses need to adapt to an environment where we don’t have the time or resources to micromanage every task. The workforce which staffed our bureaucracy in the past is not the same workforce we need in the future. The future of our business is with a smaller, more dynamic workforce of self-starters, built around flat organisational structures and more general skills which devolve responsibility for operational problems to the front line and empower them to work together and solve these problems under their own direction, while freeing the executive team to focus on steering the organisation through the challenging environment we operate in today.

Continued in The north-south divide.

The north-south divide

Note: This is the third part of a longer series on how social media is affecting management. You can find the earlier posts – The future of (knowledge) work and Knowledge Workers in the British Raj – and subsequent posts – Working in Hollywood, World of Warcraft in the workplace and Problems and the people who solve them – elsewhere on this blog.

Developing and manufacturing a product, and delivering it to the waiting customer, has historically been a significant expedition. We would establish a series of camps – departments, containing the tools and skills needed – along the route from start to finish to support us as we ferried the materials we needed from their source to where they were required. However, the assumptions that drove this behaviour are no longer true. Where previously materials, skills and tools were all in short supply, today we can usually find what we need lying on the ground near where we stand. Developments such Strategic Sourcing{{2}}, Business Process Outsourcing{{3}} (BPO), and Social Media have removed the need for us to carry what we need with us, and has been the trigger for us to start dismantling those departments that we no longer need.

[[2]]Strategic Sourcing defined at Wikipedia[[2]]
[[3]]Business Process Outsourcing defined at Wikipedia[[3]]

The large bureaucracies companies have traditionally required are slowly being collapsed, hollowed out, as we find that we can achieve the same result more efficiently with smaller and more agile organisations. Companies are starting to use a more alpine style{{4}} of operation, leveraging a small carefully, chosen team with more flexible tooling, and relying their own wits to survive in a rapidly changing and uncertain environment. This shift is pushing us to rethink the nature and organisation of our businesses, setting aside many of the specialised departments and resources we relied on in the past to find a new organising principle. The impact will be both subtle and dramatic, with business continuing to do what business does (constrained, as it is, by government and market regulation) while the roles we all play as individuals change dramatically in response.

[[4]]Alpine style climbing defined at Explore Himalaya[[4]]

An interesting thought experiment is to compare the companies we work in to the societies we inhabit. After all, companies are really just small (and some not so small) societies, with all the dynamics and politics of a community of a similar size. The nature of both societies and companies is largely determined by the tools they use{{5}}, as it is these tools that determine how the community functions. Agriculture, for example, requires a society to be stationary and drove the creation of property ownership, while the telegraph enabled the creation of new business models by separating, for the first time, the transmission of information from the carriage of goods, and gave the world Reuters{{6}}. The tools and technologies we use determine the nature of the societies and companies we inhabit.

[[5]]Timothy Taylor (2010), The Artificial Ape: How technology created humans, Palgrave Macmillan[[5]]
[[6]]The history of Thomson Reuters[[6]]

Historically, societies can be broken into two rough technological groups: equatorial and seasonal. Equatorial societies exist somewhere near the equator, living in a climate that varies little throughout the year, other than in the amount of rainfall they receive. Seasonal societies live some distance from the equator in a more temperate climate, a climate that provides them with distinct seasons over the length of the year. The further north or south you go from the equator, the more seasonal the climate becomes.

The climate a society lives in has a strong influence on the type and nature of technologies that it uses. The orthodox strategy in a seasonal climate is to tailor specific toolkits to the challenges faced in each season of the yearly cycle; jackets in winter and shorts in summer. When it becomes extremely cold, it’s wise to bring along the sleds, snowshoes and heavy clothing. However, when it’s warm these the tools in this toolkit are somewhat less useful. Many tools fulfil a specific, and important need at one point in the seasonal cycle, but this also means that we have little use for the tool in the remainder of the year.

Societies in more tropical climates typically adopt a different strategy. Their focus is on creating a single toolkit that has a smaller number of simpler, but more flexible tools. They have little need for specialised tools, as the climate they live in is relatively stable over the year, which means that their success (or failure) depends on their ability to adapt to unanticipated disturbances or unexpected opportunities as they present themselves. While they are not concerned about stockpiling food to survive through a cold winter, they do need to be able to adapt to the sudden appearance of a cyclone. When a cyclone strikes you rarely have time to go and grab a cyclone proof shelter, and you need to be ready to pick up and use the fallen coconuts once the wind had passed. You must to make do with what you have.

In the former, seasonal societies, the emphasis is on the gear. If the gear fails then you do too, often with fatal consequences. This drives you to invest a significant amount of your time and effort into ensuring that the gear can’t fail, striving to add enough nines to the end of that reliability measure to ensure that you’re not left out in the cold. The technologies you develop are complex and highly entailed, addressing specific needs and requiring a long a sophisticated chain of skills, materials and tools to manufacture.

In the latter, equatorial societies, the emphasis is on skill. Your fate is determined by your ability to adapt the resources and tools found in the immediate vicinity to the problem at hand. The tools you need are simple and flexible, either lightweight and compact enough to carry with you or based on technologies which enable you to manufacture them from whatever materials you have at hand. These technologies are only lightly entailed, addressing general needs and requiring a relatively short chain of skills, materials and tools to manufacture.

Companies have traditionally been organised along similar lines to the seasonal societies. The pulse of business beat slowly, and our main concern was to address the specific challenges that existed in each season of this regular cycle. These challenges were also complex and highly entailed, requiring large toolboxes with specialised tools and skills that are highly interdependent. Success depended on the quality of our assets and processes, and our focus was on mobilising enough people and technology to create and staff the processes we needed.

Take, for example, LEO (the Lyons Electronic Office), which may well be the first business computer. Unable to buy a beige box from the local electronics shop, the team at Lyons had to build their computer from scratch, requiring a large team with a number of specific and specialised skills, and three years of effort. I wouldn’t be surprised if they were forced to blow their own vacuum tubes. The result was a machine that, in 1953, could calculate a person’s pay in 1.5 seconds, rather than the eight minutes taken by an experienced clerk. LEO was a long and highly entailed investment.

LEO, the Lyon's Electronic Office, in 1951
LEO, the Lyon's Electronic Office, in 1951

However, since then the pulse of business has increased dramatically. Over the last few decades we’ve gone from worrying about decades to years, and more recently to months and weeks. Soon we might even be worrying about days. The seasons in business are changing so quickly that we are finding it difficult to keep up{{7}}. Our business environment is, in fact, starting to look more like the environment the equatorial societies inhabit rather than the more temperate climes of old: a relatively stable progression over the year, but with a pressing need to adapt to the unexpected disturbances and opportunities as they present themselves.

[[7]]Why we can’t keep up @ PEG[[7]]

At the same time, the nature of the environment our businesses function in has changed dramatically. Many of the skills and tools we fought hard to obtain can now be easily picked up where we stand. From global logistics providers and contract manufactures, through outsourcing, the various consultancies and software as a service, most of what we require can be easily picked off the ground when we need it. LEO doesn’t hold a candle to many of the bureau and SaaS payroll solutions that we can use on demand.

What we need is a more equatorial approach to organising our business, one more in line with reality of the business environment we operate in today. This means stocking our organisation with a small collection of flexible, but potent, people that can rapidly adapt to our changing needs, people who can use a small set of flexible tools to respond to the challenges and opportunities presented to us. It involves pulling down our highly entailed bureaucracies and connecting the C-level with the team at the front line. Overhead functions such as IT and HR will be torn down. (After all, if all our IT exists in the cloud and our company is hollowed out, removing the bulk of our bureaucracy, then we don’t need these departments anymore.) The old value producing functions (manufacturing and so on) will be externalised and bought as a service. More than anything, our success will depend on our ability to mobilise – both as an organisation and as individuals – and adapt the resources and tools in the immediate vicinity to the problem at hand.

This requires a huge shift in how we think about staffing our organisations. Deep specialisation is no longer the benefit it was in the past. While specialisation brings knowledge and insight, it also (typically) reduces flexibility and adaptability. Someone with a decade or more invested in being an IT architect, sales manager, change agent, human capital management expert, process wizard or (even a) social media guru, needs to protect that investment. Their value is in their specialisation; they will defend the status quo and resist being pulled away from what makes them valuable{{8}}. The people we need are sun-shaped{{9}}. They’re highly skilled (though not highly specialised), focused on solving a problem we have, and bring with them a diverse toolkit of simple but flexible tools.

[[8]]From doctrine to dogma @ PEG[[8]]
[[9]]The sun-shaped individual @ PEG[[9]]

Continued in Working in Hollywood.

The future of (knowledge) work

Note: This is the first part of a longer series on how social media is affecting management. I started writing the following to explore a vague idea and see where it might take me, and first stopped writing when it was roughly three thousand words. At that length it was quite a bit weightier than the average blog post – and far too long to read in a lunch break – so I’ve decided to break it into a number of smaller. The first is below, and you can find the other issues – Knowledge workers in the British Raj, The north-south divide, Working in Hollywood, World of Warcraft in the workplace and Problems and the people who solve them – elsewhere on this blog.

What impact will social media have on how you run your business? It’s being touted as everything from a better form of groupware or the next step in the evolution of work management — a new layer on the technology stack that’s starting to be called human interaction management{{1}} (HIM), sitting on top of, and bringing together, BPM, workflow and case management — through to a wholesale transformation of the way your business operates and is organized. Reality (as usual) rests somewhere between the two extremes.

[[1]]Human Interaction Management[[1]]

Are the inmates taking over the asylum?

Social media (Web 2.0, Enterprise 2.0, Social Business Design, and so on) seem to be triggering a change in the command and control structures that we have traditionally used to manage our companies. There is an ongoing discussion within the human resources community concerning what form our future organizations will take{{2}}. The key drivers are streamlined communication from social media, both within and without the organization, and the empowerment of the frontline and delegation of authority due to the increasing need to solve problems promptly within a local context.

[[2]]“Social” is now HR’s baby (sorry Marketing Department) @ Fistful of Talent[[2]]

Old power structures seem – in some cases – to be in the process of being inverted as the people at the front line find that they are now better informed and equipped than their management to solve the majority of the problems confronting the business. If people are your most important asset, then we might just be standing at the start of a revolution as the workers realize that they really do control the means of production.

Wholesale revolution is unlikely though. While employees might be an important asset, and one that has a significant impact on the overall performance of your organization, they are not the asset a business is built to support{{3}}. For many organizations the best result is usually to remove the people, such as with lights-out factories, or some of the new SaaS plays which are replacing people-driven BPO with automated self-service solutions. The dirty secret of Enterprise 2.0 is that it’s being used the same way as every other technology to date: it’s being used to remove people from the equation.

[[3]]Why Enterprise 2.0 and Social Business Design might be of marginal utility for most of us @ PEG[[3]]

On the other hand, it has become obvious that social media is having an effect on our organizations. A key assumption behind most organizational structures is that information is rare and expensive to obtain, pushing us to create organizations that gather information from the front line and aggregate it up to the CEO. This also means that information is the currency of company politics. However, with social media and the Internet information is now – on the whole – cheap and easily obtainable. Controlling the flow of information is no longer possible, leading us to think some amount of disruption of the current order is inevitable as the old power dynamics are destroyed and new ones formed.

One thing is clear though: we need to think about work – and the teams and organizations we construct to support it – differently. The formal, siloed structures we find in many organizations don’t map well to the more dynamic environment that social media is bringing to business. Many businesses now have more in common with the British Civil Service in India – flat structures where the people at the coal face work largely under their own direction, collaborating with others as required – than the vertically integrated titans of industry from recent time.

Computer: an electronic device for storing and processing data

Companies have changed dramatically since the days when the term computer referred to someone who manually computed mathematical functions. Technology has slashed the number of people required to support most, if not all, tasks in the enterprise, making today’s companies dramatically smaller and more agile than their forebears. What used to take rooms full of people now needs – at the most – a small team. This is true across the full depth and breadth of our organizations, from the mailroom and typing pool, finance calculating the payroll through to the production floor in the factory.

Williamina Fleming (standing) with her computers in the late 1800s
Williamina Fleming (May 15, 1857 – May 21, 1911, standing) with her computers in the astronomy department at Harvard in the late 1800s, hired to carry out the mathematical calculations required to classify stars.

Not only has the volume of manual work changed, but the nature of that work has also changed with it. We used to deploy our employees to run the business, focused on the carrying out the plethora of operational tasks required to keep the wheels of commerce turning. Automation through technology has largely taken care of this.

With payroll and the shop floor dealt with, our employees are now more concerned with improving and guiding the business. For many companies the center of gravity of their workforce has shifted away from operations, moving to roles more concerned with the performance of the business: supervisory, design, business improvement and customer engagement.

Supermarkets, for example, have been hollowed out by modern management practices. In the past, store managers were masters of their own domain, held accountable for profit-and-loss and not much else. Today, the only real freedom many store managers have is in hiring the team who staff the checkouts, and keeping them motivated. The vast majority of decisions required to run the store have either been pulled up to head office (such as store layout and pricing moving to a centralized category management team{{4}}) or delegated to suppliers or the staff at the front line{{5}} (determining when to restock, for example).

[[4]]What is Category Management @ Category Management Association[[4]]
[[5]]What we’re doing today is not what we did yesterday @ PEG[[5]]

This makes projects the focus of many modern workplaces: projects to improve systems and processes, projects to bring new products to market, projects to expand into new territories, projects to optimize our product portfolio, and so on. One of the main short-term drivers for adopting social media in the enterprise is supporting work in these projects by providing the workers within them with a better way collaborating and searching for answers to the problems they have.

However, while the demand for work on projects has grown, the size of the teams required to deliver our projects has shrunk. Initiatives which required one hundred people and a billion dollar investments in the fifties, sixties and seventies, can now be delivered by team sizes in the low double digits, if not less than ten people.

The number and variety of careers – the professional community – supported by these projects has shrunk in response. This started with the specialists, but soon moved on to more general disciplines. For example IT platforms and frameworks used in the enterprise today have eliminated much of the need for specific technical specialists (there’s not much requirement for a distributed transaction specialist on most projects now). Some of the new frameworks eliminate the need for even quite common skills, as with databases and Ruby on Rails.

Flat, but not quite flat as it could be

Social media – as with many of the technologies preceding it – streamlines previously manual tasks by capturing knowledge in a form where it is easily reusable, shareable and transferable. What is different this time is that social media is focused on the communication between individuals, rather than the tasks these individuals work on. By simplifying the process of staying in touch and collaborating with a large number of people it enables us to flatten our organizations even further, putting the C-suite directly in contact with the front line.

This is having the obvious effect on companies, eliminating the need for many of the bureaucrats in our organizations; people whose main role is to manage communication (or communication, command and control, C3, in military parlance{{6}}). The big winners from social media will not be, as we first thought, those white-collar knowledge workers who spend their days herding those at the coalface, crafting policies, and worrying about organizational dynamics. The winners will be the team at the frontline and C-suite, as they both bypass the (soon to be removed) mid-level functionaries and engage with each other directly{{7}}.

[[6]]C3 defined @ Wikipedia[[6]]
[[7]]Rise of the task-worker 2.0 @ PEG[[7]]

The net effect of all this is that our organizations and teams are being hollowed out as the middle layers are replaced with software{{8}}. To some extent the chickens have come home to roost; technologies that replaced the people at the operational coalface are now being used to replace the people in the project teams that brought these technologies to the enterprise in the first instance.

[[8]]The IT department we have today is not the IT department we’ll have tomorrow @ PEG[[8]]

Continued in Knowledge workers in the British Raj.

Why Enterprise 2.0 and Social Business Design might be of marginal utility to most of us

It seems that I’ve been pulled into the storm that Martijn{{1}} started{{2}}, and as I live somewhere between the Enterprise 2.0 / Social Business Design cheerleaders and detractors, my position of “E2.0 and Social Business Design is of marginal use for many businesses, but that could change” might need some clarification. The following is a cleaned up comment from elsewhere{{3}}.

[[1]]Martijn Linssen[[1]]
[[2]]Enterprise 2.0 prodigal parent[[2]]
[[3]]It’s quite clear what I think in the post.[[3]]

While Enterprise 2.0 and Social Business Design have proven to provide some benefits by improving communication, the main point of my last post{{3}} was to outline how the nature of many businesses that exist today will limit the utility of these tools. Until we change that we can expect E2.0 etc to provide a lot of benefit to a few companies, but little benefit to the majority.

[[3]]The myth of the inevitability of social organisations[[3]]

We can argue that “people are your most important asset”, but the elephant in the room here is that “the people” are not the asset that the business is built around. For many organisations the best result is to remove the people, such as with lights-out factories, or some of the new SaaS plays which are replacing people-driven BPO with automated self-service solutions.

All businesses today are built around some type of centrally owned asset. This might be a consultancy with it’s methodology (there to provide IP which can be valued on the balance sheet, and to ensure quality), a manufacturer with their factories, a logistics company with trucks and planes, and so on. The asset is easy to find: it’s on the balance sheet.

We hire people to support these assets. Need a button pressed every few hours: hire someone. The people we hire are important, as they can have a huge impact on the efficiency and quality of the outcome. However, they are not central to the business – it’s reason for being.

The nature of business today is to sweat these assets: leverage them as much as possible to make short term profits for the shareholders. (Some people think that this is the wrong attitude, but it is the attitude that regulation and policy encourage and allow.) Most businesses do this by reducing the number of people they need. Swap people for software and see quality go up, costs go down, and capacity go up.

The challenge is for E2.0 and Social Business Design is to succeed in this context.

Some organisations are build around communication with the customer – such as Zappos – and their asset is brand value. E2.0 etc play to this very nicely, and we’re seeing this special case succeeding. There’s some very nice case studies out there.

Other organisations just need someone to pull a lever. A happier and empowered employee is a more productive and effective employee – which is the driver behind human capital management, and one of the principles which underly LEAN – but the old rules still apply. The lever needs pulling, and we want to find the cheapest and most reliable way to do it. Maybe I can just use a rubber band which is replaced once a year? The improved communication E2.0 etc can bring might add some marginal value, but up-ending the business around social business principles makes no sense. This is the general case where we are yet to see E2.0 get broad traction.

At the end of my last post I posit that businesses will move away from the need to own a central asset. When this happens, then we can see broad adoption of E2.0 etc. However, and this is a big however, government regulation is built around the need for companies to have some sort of central asset. Look at regulations like Basel2 and SOX: having and maintaining this asset is mandatory. (The market is the beast that forces you to leverage it, as the government doesn’t care if you go bust). Changing this (as I’ve said before) I a big deal.

That said, we already have a limited general solution to using E2.0 etc. The dirty secret of E2.0 is that it’s being used the same way as most technologies to date: it’s being used to remove people from the equation. Rather than empowering the middle office, E2.0 is being used to eliminate the middle office, within the context of existing command and control structures. (If you want to see where this is going then read up on the British civil service in India, where each manager had one hundred direct reports.) The people left are the folk at the coal face and the thinkers in head office (or, as Seth Godin calls them, the architects).

So, I agree with naysayers that the business case for E2.0 etc “transforming business into a more social business” is not there today. I disagree in that I think it will happen, but we need to up-end regulation first.

The myth of the inevitability of social organisations

In the rush for the new-new thing we’re confusing the means with the end. Business – as currently practiced – has been built around the need to own and manage a central asset. This might be a factory, some IP or even a skilled team. The tools, technologies, and methods we deploy in business are used as they cause the business (the asset) to perform better: bottom line down or top line up, simple stuff. This seems to have been forgotten. Some of the newer tools – such as social business design – can add value in this content, but they are only tools. If they make sense and add value, then they will be adopted. If not, then they will wither and die. For many companies, it looks like they will only provide marginal utility.

Martin Linssen{{1}} seems to have started something of a storm on the Internet by pointing out that the emperor has no clothes{{2}}. He was responding to the noise around “social business design” and “enterprise 2.0”. Dennis Howlett{{3}} then published a nice missive{{4}} that builds on Martin’s observation.

[[1]]Martin Linssen[[1]]
[[2]]the emperor has no clothes[[2]]
[[3]]Dennis Howlett[[3]]
[[4]]Enterprise 2.0 is beyond a crock. It’s dead.[[4]]

The clarity Dennis brought was to highlight that, in the quest for the new-new thing, many marketing machines and practitioners have forgotten that for these tools to be adopted they need to add value, and that it’s hard for them to add value in the command-and-control structures that exist in most companies.

As Dennis astutely said:

When you get down to the nuts and bolts of the problems that prof McAfee correctly identifies but for which no amount of technology will solve it is really simple: the kinds of management and structures you need in order to make these ideas work in a sustainable manner is almost non-existent. Command, control, power and status have a huge part in this. And no amount of putting lipstick on those organisational pigs will change the fundamentals. In one well known case I still see individuals being taken to one side and asked: “Did you really have to say that? It’s not what we expect from people in your position.” Insidious isn’t it?

Today’s business are built around the concept of managing a central asset. This asset might be a factory, it might be a fleet of trucks, the deposits from a community of investors, it might be the methodology and tools a skilled team use, or it might be a brand. Regardless, structures are defined and people hired to support and drive this central asset, and not for any other reason.

Some companies, such as Zappos, have successfully used tools like social media to drive value by improving customer service and reaching customers earlier in the buying process. The problem is that companies Zappos and its ilk only represent a small proportion of the business community.

Think of the contract manufacturers who make the clothing that Zappos sells, or the outsourcers who run the supply chains to and from Zappos’ warehouse. These companies are trying to sweat an asset – the factory or a fleet of trucks and planes – and are usually chasing costs, often by moving to second or third world countries where wages are lower, or by automating first world jobs.

It’s the need to manage a central asset that has driven them to create these vertical command-and-control structures. Sometime the nature of this asset is compatible with the trendy new method – as with Zappos, social business design and enterprise 2.0 – but often it’s not. Yes, these companies could be better run (strangely enough, most companies are average), however, telling these companies to up-end their business models just doesn’t make sense. They’re focused on managing that central asset and there is currently no proof that these new techniques can do that any better than existing practices. As Dennis pointed out, the kinds of management structures to use these new tool in this context don’t currently exist.

Unfortunately the pundits are assuming that a few exceptional companies and individuals represent something the general business community should adopt as is. They are also mistakenly assuming that the claimed benefits – such as “improved communication and customer engagement” – requires us to deploy their favourite technology, tool or methodology.

Quest for the new-new thing
Quest for the new-new thing

Being better at the basics is more important. I know one executive that I had enough trouble convincing to get out of the office to say “Hi!” to his team who were only ten minutes away: he didn’t see the need to communicate with them. There wasn’t any point in even trying to convince him to use any sort of social media tool.

So we need to get a few things out in the open here.

First, social media, enterprise 2.0, and social business design do have the potential to provide value to a business. The case studies are out in the open, so there’s no arguing about this.

However, and second, is that these case studies represent the special case, and not the general case. YMMV{{5}}.

[[5]]Your Mileage May Vary[[5]]

Thirdly, we also know that social media, enterprise 2.0, and social business design require a different approach to command-and-control. Let’s avoid the value judgements as to whether this is good or bad, it just is.

So finally, and fourth, for mass adoption across the entire business community we must acknowledge that the foundation of many companies’ business models needs to change if these new tools are to add value. Zappos makes these tools work, as Zappos’ central asset is their brand, and brand (as an asset) benefits from these tools. Other companies – and this is probably the majority of companies in the business community – are not so lucky. They’ll see more benefit by focusing on the basics.

My view is that there is big shift that is currently building around the need to move away from the idea of a centrally managed asset as the foundation for a company. This is a big deal, as government regulation and accounting rules are built around the idea of a company owning a central asset. All the rules and regulation needs to be rewritten for this to happen. (Note to self: buy shares in accounting firms.)

The most likely new foundation for business is the ability to mobilise stakeholders – from employees, through partners to customers and the market in general. Your value will be defined by your ability to make things happen, rather than the assets you own. This would be world where all costs are operationalized, and our businesses look more like World of Warcraft than the hierarchal command-and-control structures of old. You, as an organisation, will be measured on the strength of your organisation’s social graph. Social business design will be the first port of call when designing your new business, rather than the last.

Until this shift happens it looks like social business design, social media, and enterprise 2.0 will be of marginal utility for many firms. Not useless, just less than revolutionary. However, I do think this (or something like it) will happen in the mid term. Someone will make it work in a private company, and then it will be copied. It will become increasing difficult for old school companies to compete with the new breed, eventually reaching the point where the old school pressures the government into changing the regulations and rules to suit.

Me, until the revolution comes I’m focused on getting out in the field and using all these tools in a new and interesting ways to create as much value as I possibly can, for both employees and the companies they work for.

Managing personalisation is more important than managing change

Death, taxes, and now, change, are the eternal verities. As I said in another post:

The pace of change has accelerated to the point that everyone’s challenge, from Pre-Boomers and Baby Boomers through Generation Y to Generation Z, is how to cope with significant change over the next ten years. If we are, as some predict, moving to an innovation economy, then it is the ability to adapt that is most important. Those betting their organisation on a generational change will be sadly disappointed as no generation has a monopoly on coping with change.

While the youngest generation (whichever that is at a particular point in time) might have the advantage of coming unencumbered to the new ways of working, every generation has a unfortunate habit of treating what they learnt in their formative years (~24) as dogma once they hit their late 20s. Social research has shown that most people’s interest in novel ideas or experiences peaks around the mid to late 20s. (Tell me your favourite band and cuisine, and I’ll tell you what decade you grew up in.) Or, put another way, 24–28 might have the advantage in a rapidly changing world, but once you grow out the top of that age bracket you’ll find yourself at the disadvantage.

However, as with all gross generalisations, and the exceptions are more interesting than the rule; in this case the commonalities between groups are usually stronger than the differences between them. Research like Forrest’s Groundswell show that its more productive to think in terms of personality types.

I prefer to focus on getting stuff done, and ensuring that each and every stakeholder has the tools and support they need to get their job done. This is not a static thing either, something we do once for each stakeholder, as someone’s needs and preferences can change month-by-month, week-by-week, day-by-day or even minute-by-minute.

And this is probably the most important mega-trend we’re seeing emerge at the moment: the drive to continually personalise communication/products/services/tools for each and every individual, rather than trying to divide people into coarse-grained, and increasingly unproductive, demographic groups with predefined needs. If you’re managing change, then you’re still thinking in terms of a static work/home environment that needs to be transformed (however regularly). If you’re managing personalisation, then you’re focused on creating a continually optimised environment for all your stakeholders, ensuring that they have the information and tools they need at that moment. Change isn’t an enemy that should be managed—its a tool to help you achieve, and sustain, peak performance.

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Is Generation X/Y/Z irrelevant?

Generational distinctions seem to make less and less sense every year. While my grandmother never learnt to drive a car, my mother happily uses a computer and the Internet. Yes, the pace of change has sped up, but it appears that so have we. Age is a very crude factor, and as we shift to increasing personalisation age looks less and less relevant as a driver for change.

Why then do we persist in reporting on how each generations’ habits and predilections will transform the workplace, school or retirement village, when in reality these institutions seem to becoming closer together rather than further apart? Competition in the workplace is the main driver for change, with individuals adopting the tools and techniques they need to get the job done, whatever generation they are from.

There’s been a lot of talk about how the next generation (whichever that happens to be) is going to change the world. We had it with the Greatest Generation. We had it with the Pre-Boomers and Baby Boomers. We had it with Gen X. Now we have it with Gen Y. This might have made sense some time ago, when changes in social mores and practices took longer than a single generation. Change takes time, and if the pressure is only gentle then we can expect significant time to pass before the change is substantial.

I remember my grandmother who never learn’t to drive. Back in the day, before World War II, women driving was not the done thing. My grandmother never learnt to use a video recorder, computer, or the Internet, either. The pressure to change was gentle, and she was happy with her lot.

Sociologists now tell to that the differences between populations is often less than the differences within populations. Or, put another way, on aggregate we’re all pretty much the same. The same is true for my grandmothers. While one never learn’t to drive (among other things), my other grandmother charted a different course. No, she never learnt to use the Internet, but she did take the time when her husband went off to war to learn how to drive, and the both had a bit of a crush on Cary Grant.

If we wizz forward to the present day, then we can see the same dynamics at work. My parents have, in the course of only a few years, leapt from a technology-free zone to the proud owners of laptops, a wireless network, and a passion for doing their own video editing. Even mother-in-law, who has zero experience with technology, bought a Wii recently. She also seems to have more luck with the Wii than her video recorder which she’s never been able to work.

The idea that technology adoption is generational seems to have eroded to the point of irrelevance. There was even a report recently (by Cisco I think, though I can’t find the link) where the researchers could find no significant correlation between new technology adoption and generational strata.

Why then do we persist in pigeon holing generations when it is proven to be counter productive? Not all Gen X’s want to kill themselves. I’m a Gen X, I even like Nirvana, and I’ve yet to have that urge. Not all Gen Y’s want to publish their lives on Facebook. And not all baby boomers want to be helicopter parents. The only accomplishment this type of media story achieves by promoting these stereotypes is to massage the ego of their target demographic. To divide people into generations and say that this generation likes certain tools and techniques, and this generation doesn’t, and will never adapt, is naive.

If we must categorise people, then it makes more sense to use something like NEOs to divide the population into vertical groups based on how we approach life. Do you like change? Do you not? Do you value your privacy? Are you willing to put everything out in public? And so on…

The pace of change has accelerated to the point that everyone’s challenge, from Pre-Boomers and Baby Boomers through to Generation Z, is how to cope with significant change over the next ten year. If we are, as some predict, moving to an innovation economy, then it is the ability to adapt that is most important. Those betting their organisation on a generational change will be sadly disappointed as no generation has a monopoly on coping with change.

A more productive approach is to seek out the people from all generations who thrive in change, and aim for a diverse workforce so that you can tap into the broad range of skills this diversity will provide. Ultimately competition in the workplace is the main determinant for change, with individuals adopting the tools and techniques they need to get the job done, whatever generation they are from.

Updated: Elliot Ross pointed out some interesting research and analysis by Forrester. Forrester coins the term Technographics in their Groundswell work, capture how different people adopt social technologies. There’s even a nice tool which enables you to slice-and-dice the demographics. I’ve added the tool below, and highly recommend taking a look at Forrester’s work.

Updated: Mark Bullen over at Net Gen Skeptic does a nice job of bring some evidence to the debate, with Six reasons to be sceptical.

A nice visual argument for the value of mash-ups

As I’ve mentioned before, I would like a nice, clear, crisp definition for mash-up. A definition which captures the benefits that mash-ups can bring, rather than detailing a collection of tools, technologies and standards that we happen to find interesting at the time. For me, this is the TQM argument of fusing data and process to eliminate unnecessary decisions—make-work or swivel chair integration—to create a more efficient and effective work environment.

It’s Just a Bunch of Stuff That Happens has done a brilliant job of capturing this visually (included below). I like the usability aspect this highlights. A mash-up’s focus is cross-application usability—removing the annoyances of dealing with separate information sources. We could simply take these sources and squish them up against the glass, delivering the content into iGoogle or NetVibes gadgets. But what those original push-pins on a map mash-ups did was improve the usability of these information sources by eliminating the decisions required to navigate across them. Just as Apple did with the iPod and iPhone, eliminating or fusing functions to eliminate the (unnecessary) decisions required to navigate the overly complex and confusing interfaces of the mobile phones that came before them.

iGoogle and NetVibes are the Symbian to a mash-up’s iPhone.

Symplicity

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The rise of task worker 2.0

Companies are delayering (again) and pushing decisions to the surface of the organisation, where there is direct contact with customers and partners, in order to be more responsive. Some companies, Zara for example, are making this into a science as they re-engineer their organisations to maximise agility. To do this companies are empowering the people working at the customer and partner interface to solve the problems in front of them, without intervention from head office or middle management.

One interesting effect of this is a shift in the coalface of Enterprise 2.0 adoption. We’ve been focused on the white collar, office bound knowledge worker as the adopter of Web 2.0 tools in the enterprise, with mobility limited to the ability to work from a local coffee shop or an executive tweeting from the airport lounge. However, with decisions devolving to the customer and partner interface we are finding that the middle layers of our organisations are being trimmed, and their responsibilities transferred to the people with direct customer or operational contact. Knowledge workers are being superseded by task workers: people focused on consuming information in the field to solve operational or customer problems.

Think about how Toyota structures production lines—the whole LEAN story—empowering the people on the shop floor (traditional task workers) to solve problems. Or the utility field worker on maintenance, who used to work under instruction from the depot but is now mobile, working remotely. Or the transactional shop assistant who’s focus is shifting from the financial transaction to customer management. And so on.

To a certain extent, Web 2.0 and Enterprise 2.0’s traditional target, the white collar knowledge worker, is being eliminated by the very technology that is intended to empower them. And their replacement, the situated task workers, has been ignored by the Enterprise 2.0 rollout. Or, even worse, we’ve deliberately locked down their computing environment to prevent them going off task.

This creates an interesting challenge. How do we move from our early adopters and use our new collaboration tools and technique to support (and not distract) these task workers, situated in a challenging operational environment?

Posted via email from PEG @ Posterous

We need a better definition for “mash-up”

Mash-up no longer seems to mean was we thought it meant. The term has been claimed by the analysts and platform vendors as short hand for the current collection of hot product features, and no longer represents the goals and benefits of those original mash-ups that drew our interest. If we want to avoid the hype, firmly tying mash-up to the benefits we saw in those first solutions, then we need to reclaim the term, basing its definition on the outcomes those first mash-up solutions delivered, rather than the (fairly) conventional means used to deliver them.

Definitions are a good thing, as they help keep us all on the same page and make conversations easier. However, what often starts our as a powerful concept—with a clear value proposition—is rapidly diluted as the original definition gets pulled in different directions.

Over time, the foundation of a term’s definition moves from the outcome it represents (and the benefits this outcome provides), taking rest on the means which the original outcome was delivered, driven by everyones’ desire to define what they are doing in relation to the current hot topic. Next, the people who consider it to be just a means, often start redefining the meaning to make it more inclusive, while continuing to claim the original benefits. We end up selling the new hype as either means or goals or any half-hearted solution in between – and missing the original outcome nearly completely

The original mash-ups were simple things. Pulling together data from two or more sources to create a new consolidated view. Think push-pins on a map. Previously I would have had to access these data sources separately—find, select, remember, find, select correlation, click. With the mash-up this multi-step, and multi-decision workflow is reduced to a single look, select, click. Many decisions became one, and I was no longer forced to remember intermediate steps or data. 

It was this elimination of unnecessary decisions that first attracted many of us to the idea of a mash-up. As TQMLEAN, et al tell us, unnecessary decisions are a source of errors. If we want to deliver high quality at a low cost (i.e. efficient and effective knowledge workers) then we need to eliminate these decisions. This helps us become more productive by spending a greater proportion of our time on the decisions that really matter, rather than on messy busy work. Fewer decisions also means fewer chances for mistakes.

Since those original mash-up solutions, our definition of mash-up evolved. Todays definitions are founded on the tools and techniques used to deliver a modern web-based GUI. These definitions focus on the technology standards, where the data is processed (client vs. server), standards and APIs, and even mention application architectures used. Rarely do they talk about the outcome delivered, or the benefits this brings.

There’s little difference, for example, between some mashups and a modern portal. We can debate the differences between aggregating data on the client vs. the server, but does it really matter if it doesn’t change the outcome, and the difference is invisible to the user? The same can be said for the use of standards, APIs used, user configuration options, differing solution architectures and so on.

The shift to a feature-function base definition has allowed the product vendors and analysts of seize control of our definition, and apply it to the next generation of products they would like us to buy. This has diluted the term to the point that it seems to cover much of what we’ve been doing for the last decade, and many of the benefits ascribed to the original mash-ups don’t apply to solutions which fit under this new, broader church.

Modern consumer home pages, such as iGoogle and NetVibes for example, do allow us to use desk and screen real estate more effectively–providing a small productivity boost–but they don’t address the root of the problem. Putting two gadgets on a page does little to fuse the data. The user is still required to scan the CRM and order management gadgets separately, fusing the data in their head.  Find, select, remember, find, select correlation, click rather than a single look, select, click.

The gadgets might be visually proximate, but we could do that with two browser windows. Or two green screens side-by-side. The user is still required to look at both, and establish the correlation themselves. The chair might not swivel as much as with old school portlets, but eyeballs still do, and we are still forcing the user to make unnecessary decisions about data correlation. They don’t deliver that eliminate unnecessary decisions outcome that first attracted us to mash-ups.

The gold standard we need to measure potential mash-ups against is the melding of data used to eliminate unnecessary decisions. This might something visual, like push-pins on a map or markup on an x-ray. Or it might cover tabular data, where different cells in the table are sourced from different back-end systems. (Single customer view generated at the user interface.) If we fuse the data, building new gadgets which pull data attributes and function into one consistent view, then we eliminate these decisions. We can even extend this to function, allowing the user to trigger a workflow or process that make sense in the view they are presented, but with no knowledge of what or where implements the workflow.

We need a definition for mash-ups is that captures this outcome. Something like:

A mash-up is a user interface, or user interface element, that melds data and function from multiple sources to create one single, seamless view of a topic, eliminating unnecessary decisions and actions.

This v0.1 definition provides a nice, terse, strong definition for mash-up which we can hang a number of concrete benefits from.

  • More productive knowledge workers. Our knowledge workers only spend time on the decisions that really matter, rather than on messy busy work, making them more productive.
  • More effective knowledge workers. Fewer decisions mean fewer chances for mistakes, reducing the cost of error recovery and rework resulting in more effective knowledge workers.

Posted via email from PEG @ Posterous