Enterprise 2.0

McKinsey Quarterly article on Crowdsourcing strategy, quoting a few case studies:

One example was HCL, who opened up the Business Planning cycle from a 300 managers to about 8000 employees - results were:

One HCL executive we spoke with credited the new process with a fivefold increase in sales to an important client over two years. The key, the executive explained, was the detailed comments—from more than 25 colleagues, ranging from junior finance professionals to software engineers— that together highlighted the need to reframe the business plan away from an emphasis on commoditized application support and toward a handful of new services where HCL had the edge over larger competitors. The employees provided more than good ideas: several even helped assemble the materials the executive needed to deliver the successful proposal.

The high degree of transparency increased the quality of insights, not just their volume. As Nayar notes, “Because the managers knew that the plans would be reviewed by a large number of people, including their own teams, the depth of their business analysis and the quality of their planned strategy improved. They were more honest in their assessment of current challenges and opportunities. They talked less about what they hoped to accomplish and more about the actions they intended to take to achieve specific results.”

The detailed comments point is interesting, as it suggests the process means the "voice of the customer" or at least the front line - was not moderated by the "In the Shit - to - All is Rosy" command chain

Red Hat similarly opened up the process to more employees, and apperntly:

This effort has reshaped the way Red Hat conducts strategic planning. Instead of refreshing strategy yearly on a fixed calendar, the company now updates and evaluates strategy on an ongoing basis. Initiative leaders use customized mailing lists and other tools to receive input continuously from employees and communicate back to them via town hall–style meetings, Internet chat sessions, and frequent blog posts. The company maintains its annual budget process, which is informed by the evolving funding needs of the initiatives.

The fresh perspectives generated by the new planning process have been instrumental in spurring value-creating shifts in the company’s direction. For example, a respected Red Hat engineer used the new process to make the case for a significant change in the way the company offers virtualization services for enterprise data centers and desktop computer applications. The changes led to the acquisition of an external technology provider—a move that would have been unlikely in the days when the company used its old, less inclusive planning process.

Red Hat’s vice president of strategy and corporate marketing, Jackie Yeaney, cites three key benefits of the company’s new approach:
- First, the process generated “more creativity, accountability, and commitment.”
- Second, “By not bubbling every decision up to the senior-executive level, we avoided the typical 50,000-foot oversimplification” of issues.
- Third, “We improved the flexibility and adaptability of the strategy.”

See point 2 - that "Voice Of The Customer" thing again

McKinsey's analysis is that:

"we’ve found that the actions companies can take that are most helpful in aligning individuals with the organization’s direction are moves like “making the vision meaningful to employees at a personal level” and “soliciting employee involvement in setting the company’s direction.” If that’s right, it suggests that making more employees part of the strategy process should be a powerful means of aligning them more closely with the company’s overall direction."

I think this is misreading the lesson a bit - what is happening in the Case Studies is that the organisation is re-aligning its overall direction to what the employees are telling them about the customer base reality. I'd bet that meant some Uncomfortable Truths had to be faced in the thick carpet suite. As they note, this has big implications on who is in charge, and what Senior management looks like:

Taking these principles to their logical conclusion suggests a shift in the strategic-leadership role of the CEO and other members of the C-suite: from “all-knowing decision makers,” who are expected to know everything and tell others what to do, to “social architects,” who spend a lot of time thinking about how to create the processes and incentives that unearth the best thinking and unleash the full potential of all who work at a company.

And of course, there is always Not Listening:

Another important element of social-strategy leadership is honestly assessing the readiness of the organization to open up and, in light of that, determining the best way to stimulate engagement. This sounds simple, but overlooking it can be costly. As part of a new strategy dialogue, the leaders of one mutual insurance company enthusiastically called upon its workforce to share reflections on an innovative, soon-to-be-launched life insurance product. Despite the leaders’ expectation that the open call would generate a torrent of endorsements, it was met with a deafening silence. Closer inspection revealed that people were acutely aware of the strategic importance that senior management attached to this innovation. And nobody wanted to wreck the party by openly sharing the prevailing doubts, which were widespread. The doubts proved well founded: within a few months of being launched, the new product was declared a failure and shelved.

The Sounds of Silence.....

Article in Techcrunch arguing ERP needs to go all cloud:

SAP and Oracle should be pushing innovative cloud solutions that cannibalize their bases. Instead, they’re attempting to acquire themselves into innovation. That’s not a strategy. That’s a shift into survival mode.

Well, having worked with ERP systems and hosting and the Net for 20 years or so, we'd argue this is like saying all companies should buy electricity from the grid all the time. It is true for some companies all of the time, but for some companies it isn't. And information, despite what CloudCos like to argue, is still far from being a fungible commodity.

The argument though, is that by refusing to go cloud at the droplet of a hat, these companies are not innovative:

In each case, an industry leader first denies the relevance of a technology, then frets over losing marketshare to it, then finally spends big money to acquire it under the pretense that it’s the key to “expanding innovation”. Overnight, that technology is now worth far more in the eyes of customers and investors. But more importantly, the acquisition strategy failed in each case. Instead of leading the way, the deal makers never committed to the technology, and their actions usually helped open the door to a whole new class of companies to take over.

But this is basically saying "ignore your huge installed base to grab this small cool new thing over here". It's like telling Telcos in the 1990s to drop their huge PSTN revenues to embrace the Internet. Any smart company is going to manage the decline of it's bread and butter revenue while slowly moving up its ability in the new. These large businesses do not move when the new new thing is 1% of revenue, they acquire solutions that have come out of the primordial startup soup and jumped the chasm - ie proven themselves - at 5 to 10% of revenues. So to say:

The bottom line is this: A series of cloud acquisitions won’t help lumbering old ERP one bit. Acquiring cloud companies doesn’t make you a cloud company any more than buying a Giants jersey makes you Eli Manning. It’s not a strategy for an on-premise solutions company. It’s an attempt to distract customers and hope they will forget about the ERP boat anchor they’re stuck with.

...sort of misses the point. Yes you are right. And so? Can you buy a massive ERP from a CloudCo? No. Can you run a massive corporate on SOP, some Ajax and a Social Business network that a CloudCo sells? No. So rather than arguing that:

The big ERP players had their day, but now it’s coming to an end. This is the classic Innovator’s Dilemma. For too long SAP and Oracle have watched the enterprise market innovate around them, stuck to their knitting and failed to adapt. The cloud technology wave has passed them by, and now it’s too late.

...it is probably more interesting to ask the following question: Is it easier to stick your current Oracle system on some tins in the cloud, or easier to pull it pull it out and start afresh with a new ERP system?

The answer to that tells you the evolution of the game - which is why we still have Telcos. It's more useful to look at where earlier new point entrants came in. Where did PCs take hold? Where did the 'Net first take hold in corporates? Why hasn't Salesforce.com morphed into ERP.com yet?

Update - in other words, as Vruz points out, the real opportunity for CloudCos is the Medium sized business market (and point functions in corporate divisions)

Scanning the London Social Media week programme I see that we seem to have traded in "Enterpise 2.0" for "Social Business" in about the last 2 years or so (Well, it was Enterprise 2.0 2 years ago in Social Media week ). I naturally got curious about whether it was a new bottle for old wine, or if there is genuinely something new going on. (Ironically, I can't attend as I am far away designing an Enterprise IT strategy, and it encompasses Enterprises 0, 1, 2 and elements of Social media - see further below)

Enterprise 2.0

Wikipedia defines it as:

Enterprise 2.0 is the use of "Web 2.0" technologies within an organization to enable or streamline business processes while enhancing collaboration - connecting people through the use of social-media tools. Enterprise 2.0 aims to help employees, customers and suppliers collaborate, share, and organize information. Andrew McAfee describes Enterprise 2.0 as "the use of emergent social software platforms within companies, or between companies and their partners or customers".

Social Business

This once meant (says Wikipedia):

"Social business, as the term is commonly used, was first defined by Nobel Peace Prize laureate Prof. Muhammad Yunus and is described in his books Creating a world without poverty—Social Business and the future of capitalism and Building Social Business—The new kind of capitalism that serves humanity's most pressing needs.

And I once understood Social Enterprises, which back in the day were:

"A social enterprise is an organization that applies business strategies to achieving philanthropic goals. Social enterprises can be structured as a for-profit or non-profit."

In essence, Social Busines has shifted its meaning to encompass for-profit enterprises, and the aim is to increase profits and reputation. As Wikipedia delicately puts it:

Many commercial enterprises would consider themselves to have social objectives, but commitment to these objectives is fundamentally motivated by the perception that such commitment will ultimately make the enterprise more financially valuable.

So has anything actually changed apart from For-Profits trying to put on prevously Not For Profit clothes? Whereas I think we have seen a semantic shift in the use of the term Social Enterprise/Business recently, no doubt partly motivated by the above, after reading Adam Tinworth's liveblogging, it did seem to me that Social Business is now also absorbing parts of what were once "Enterprise 2.0". I think this was clarified by some of the talks Adam covered, from people I have had a lot of time for, for a long time. JP Rangaswami talked quite a bit about the Cluetrain Manifesto, which was of course a cornerstone of Enterprise 2.0 as well, noting that:

Cluetrain suggested that there were two sets of conversations: one inside the firm, and one outside. And they’re different. If you live in a broadcast and hierarchical world, you have a measure of control – and safety.

Joanne Jacobs also made points that I recall were also fundamentals of Enterprise 2.0 - Cluetrain customer treatment, and crowdsourcing rare expertise

People flock together, but not just for safety, bit for an opportunity to work collectively towards goals, but individually their opinions count. They are a collective of individual opinions. The word “customers” belittles communities to buyers. Of course, we need to make money as businesses. We understand that. If you think of them as buyers, then you are not allowing them to contribute to your business except as buyers.

You’re missing the opportunity to involve your community in product development – and that’s what most business find most challenging. You have to consider you audience as possible experts in what you do – possibly more of an expert than you are.

But if you look very closely at what they were saying, there are some important differences - Euan Semple noted that Social Media is now "in the knitting":

We’re turning social media into a “thing” – it’s the thingification of social media. It becomes sellable, marketable, something people have to do. But what I see is the web becoming part people’s lives, and encroaching into their workplaces. And this is why IT gets jumpy – they have this ordered, structured thing they call the workplace.

JP I think really addressed the main change we have seen, i.e. it has increased the customer voice:

Customer interactions are always referred to in the past tense, because they’re only accessed after they happen. “Transaction processing” – it was once called, and it was expensive. Now, the pervasive presence of technology – and especially mobile – we can produce constant activity stream of what we’re doing. And it’s easy enough to do it in expectation of figuring out how it will be useful later on.

And customers have moved from being able to say nothing, to having a genuine voice. Social businesses are those where people are connected inside and outside of the firm. Customers and staff can interact together in real time. Social can look like social work, or social media, or social science. No-one has a right to define social.

And Joanne warned potential Snake Oil chuggers that it's not a surface fix anymore, another major trend we have found in the last 2 years or so:

Any marketer or PR person in the room who thinks it’s about controlling the message? You’re going to fail. Start thinking organically. Marketing warfare is dead. Get over it. If you think you can manipulate people’s opinions, you will create a muppet community.

Well, in our view what has really changed underneath all this is the sheer number of people using the online ecosystem - social and otherwise - far more heavily to research, to buy, and to get service. Thus there is a reason the "buzzword" has moved on from Enterprise 2.0, but in my opinion there is now a risk the "Social" bit is being seen as the The New Big Thing, rather than a component of what is still an end to end infrastructure, i.e it is stilll just a part of an end to end value delivery chain, and it is only as good as the weakest link. I therefore propose the term "Social Enterprise 2.0" to remind us that it is just a component, and that it won't work properly unless it is looked at systemically.

Now, as you may know, we do a lot of the back end systems work (infrastructure layer, not presentation layer, if you like) and put in our first Social Network based system in 2007. We have been doing a lot of work in this emerging "Social Infrastructure" space over the last 2 years, and here is my take of what "Social Enterprise 2.0" is really all about. As a first point, bear in mind that there are only 2 ways a "For Profit" makes a profit:

(i) Increase Sales - to more people, or charge more for what you sell
(ii) Reduce Costs - labour, material, and (in consumer and network businesses especially) churn

(There is a 3rd option - tax avoidance - but you have to be a very big company with Friends In Power to pull that off it seems).

Anyway, taking these in turn we have found the following:

Increasing Sales

Social Media has two well known impacts here - everyone knows it can recruit more potential customers via word of mouth, viral marketing, friends recommendations etc. But this is pretty well known from Enterprise 2.0 days, and an entire Social Marketing/PR industry has emerged in the last 2 years or so to do all this. I think fewer people know that it can be a useful tool for cross selling, but this is more subtle and requires the company to set up trusted communities, as the ideal is customer A and B telling customer C that they should try Product Y as well as X. Many have tried....

However, our work has also found two other rather more subtle factors:

(i) One of the impacts of Social Media is that the customer service reputation is now a major part of the buying process. c 90% of all buyers go online before buying now, and a bad service reputation is quite a big part of the buying decision (We have researched this for clients - its is a major purchase driver, especially for higher cost/longer duration deals)

(ii) It is fairly well known that if there is a disconnect between the Company Spiel and reality, it is found out much faster, goes farther with social media, and is harder to manipulate. It is also now possible, by tracking the datastream, to understand which disconnects matter most, and understand it early. So far so good - now here is the kicker. More and more customers know this, and are becoming familiar with it, so they expect far more rapid action - and many more of your customers work in customer service in some form or another, or know someone who does, so are becoming far more savvy. And they are getting more clued up about privacy issues too.

In other words, as Joanne pointed out, it is going to get harder and harder to gloss over operational errors with glossy marketing and PR, and datascraping, so the pressure on getting the operations - and infrastructure - right is going to become more critical. Sockpuppeting the comment streams is not good enough anymore....

Reducing Costs

We have seen quiet a lot of trends here, not as visible as in the "presentation layer" but for the reason given above, probably more critical.

Firstly, As Euan and JP allude, it is to enable work methods outside of the traditional enterprise. As Ronald Coase pointed out in the 1930's, the size and shape of any Firm is defined by the transaction costs. The 'Net madks these lower, so it is easier to outsource more and more, and for all functions not to be located in the same geographical area. Or even to be done by humans. Social media has made them lower still, and - to my mind - has lowered the cost of establishing trust (and raised the cost of regaining it, by the way). We believe there will be a major shift in the way enterprises are structured coming, many have predicted it but in our view it has only just begun.

Secondly, as customers increase their familiarity with the online world, their demand for good service is rising - and that means the attention to this area will only increase (and cost more to provide, unless you are a monopoly supplier). In other words, this will be an area of cost increase, that will need to be offset against churn and new prospect recruitment. The precise economics of these correlations are not well understood yet, so lots of trials and errors will follow,.

There is an inreasing amount of data collectible to mine and process, and the necessity - and costs - of doing this will only increase in order to stay competitive. The risk is the temptation to play loose and fast on data privacy and security, but beware - if it gets out that you are a customer privacy risk, the business could crash very fast in a fast-feedback loop world.

And then there is the Great Spoiler, which we have found to be absolutely true in 5 years of this work - your top layer "Social Business" will only as good as the supporting Enterprise 0, 1 and 2 layers around it- ie:

Enterprise 0 - the non IT stuff - the processes, skills and culture of a company - the bedrock layer - will scupper any attempt to add higher layers if it isn't a strong enough foundation. In all our work we have g=found you have to strip back to the processes and skills as a minimum.

Enterprise 1 - the ERP, CRM, EDI, SOP and all the other TLAs that manipulate, manufacture and move base information around the enterprise. If the underlying data is crap, and the ability to see it correctly is non existent, then the Social Business layer will fail.

Enterprise 2 - as in the supporting Web 2.0 systems that support the Social Media modules - crap webpages, poor real time performance, inflexible CMS - these are only as good as the systems they sit on top of.

In other words, there is something new in "Social Business", but there is less to the eye than one may think if one drinks all the Snake Oil (or at least one should note the old bottles it may come from) and a lot of back end work to ensure you do get what you see.

One of the things we write about every so often on here (and were therefore sufficienly motivated to co-write the Big Potatoes Innovation Manifesto) is that Innovation has been morphed in the current corporate climate to mean "continuous improvement" at best, and "don't-rock-the-boatism" all too often (see Innovation - What innovation for starters). Now, some research from Cornell (The Bias Against Creativity: Why People Desire But Reject Creative Ideas) shows that as a species we may be culturally adapted against Innovation and creativity it seems.

The next time your great idea at work elicits silence or eye rolls, you might just pity those co-workers. Fresh research indicates they don't even know what a creative idea looks like and that creativity, hailed as a positive change agent, actually makes people squirm.

"How is it that people say they want creativity but in reality often reject it?" said Jack Goncalo, ILR School assistant professor of organizational behavior and co-author of research to be published in an upcoming issue of the journal Psychological Science. The paper reports on two 2010 experiments at the University of Pennsylvania involving more than 200 people.

The studies' findings include:

- Creative ideas are by definition novel, and novelty can trigger feelings of uncertainty that make most people uncomfortable.
- People dismiss creative ideas in favor of ideas that are purely practical -- tried and true.
- Objective evidence shoring up the validity of a creative proposal does not motivate people to accept it.
- Anti-creativity bias is so subtle that people are unaware of it, which can interfere with their ability to recognize a creative idea.

For example, subjects had a negative reaction to a running shoe equipped with nanotechnology that adjusted fabric thickness to cool the foot and reduce blisters.

To uncover bias against creativity, the researchers used a subtle technique to measure unconscious bias -- the kind to which people may not want to admit, such as racism. Results revealed that while people explicitly claimed to desire creative ideas, they actually associated creative ideas with negative words such as "vomit," "poison" and "agony."

The lesson for companies that want to take advantage of creativity and real innovation is that teh problem not fostering it, but making sure it isn't strangled at birth.

"uncertainty also makes us less able to recognize creativity, perhaps when we need it most," the researchers wrote. "Revealing the existence and nature of a bias against creativity can help explain why people might reject creative ideas and stifle scientific advancements, even in the face of strong intentions to the contrary. ... The field of creativity may need to shift its current focus from identifying how to generate more creative ideas to identify how to help innovative institutions recognize and accept creativity."

Now, I always felt this was the actual case. I think that too often, fighting this problem is too hard as it is institutionalised in most heirarchies, and is a classic "ekephant in the room" - so Creativity Consultants find it easier to sell a comfortable project on "fostering creativity" than a hearts and minds change program based on culling their clients' ability to stop the dangerous mavericks in the business.I never saw companies where there were no creative people - but I don't think I'm the only one who has observed in their corporate careers that the Power of No is an endemic problem - here's Machiavelli on the subject in the 1500's pre-saging a host of 20th century Business Sages:

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order, this lukewarmness arising partly from fear of their adversaries … and partly from the incredulity of mankind, who do not truly believe in anything new until they have had actual experience of it.

QED as they say. Nice of Cornell to put the academic verification in 500 years later

One University has ended its evaluation of Gmail as the official e-mail program for its 30,000 faculty and staff members— Information Week.

In a joint letter last week to employees, University of California-Davis CIO Peter Siegel, Academic Senate IT chair Niels Jensen, and Campus Council IT chair Joe Kiskis said the school decided to end its Gmail pilot, which could have led to campus-wide deployment, because faculty members doubted Google's ability to keep their correspondences private.

Many faculty "expressed concerns that our campus’s commitment to protecting the privacy of their communications is not demonstrated by Google and that the appropriate safeguards are neither in place at this time nor planned for in the near future,” the letter said.

Google officials, for their part, insisted that their privacy controls are adequate

We disagree - we believe that Google's "Free to Consumer" cloud model does not meet the standards that any enterprise larger than a SOHO (Small Office / Home Office) sort of operation would find acceptable (and even a SOHO has near free and more secure options)

Harvard Business Review article on "Eight reasons why managers hate IT" - it doesn't half play to the gallery! But amusingly, it really is just what you'd expect a Pointy-Headed Boss (see above) to say. In Italics I have therefore added "Why IT people hate managers"- tongue in cheek, but you get the point.

1. IT limits managers' authority

IT's bureaucratic processes rival the tax code in complexity. When challenged, IT justifies red tape as necessary because the business makes half-baked requests and is clueless about enterprise impact.

(Wrong target Bozo - its Managers - especially you middle managers - who tie up companies in red tape, political fudges, poorly thought out committee based policies etc etc. The reason our processes are so convoluted is due to your predecessor's Six Sigma Total Corporate Co-Evaluation policy, which then got inflicted on the IT departments - its a sort of Garbage In, Garbage Our process)


2. Consists of condescending techies who don’t listen

The CIO may be impressive, but he or she is also totally unavailable. When you have questions, your only option is someone a few rungs down, who lacks the breadth of expertise to advise senior executives. The irony is, these “techies” often feel just as frustrated by managers who treat them like servant-genies.

(Its called a heirarchy. The IT staff wish they could all just talk to your VP, who can make things happen and fund it without bozos like you and your colleagues squabbling like 2 year olds over a half sucked lollipop and you squeaking about how you just couldn't live without the thingummy button )

3. Doesn’t understand the true needs of the business

IT nags you for requirements and complains that you always change your mind about what you want from your systems. Why doesn’t IT understand that change should be expected in a dynamic business environment where nothing is static?

(Why don't businesspeople understand that a complex system with many linked users cant just be switched around like that?. You can't adjust the position of your clutch and brake on a car, or decide to change which road signs to obey, for good reason - so why should you have the those rights on a computer program? )

(For what its worth, I have been consulting to and working in and around corporates for 20 odd years, in my experience the number of people - IT or no - who really understand the business is very, very small.)

4. Proposes “deluxe” when “good enough” will do

Your “simple” request requires a boatload of specialists and weeks (if not months) of analysis. Yet you wanted a timely, cost-effective solution, not an expensive panacea.

(Oh Boy - and when will managers ever get it that their "simple" often request isn't that simple, and then the toads change their mind once you do build what they said they wanted anyway)


5. IT projects never end

It’s not just that IT projects are never completed on time…it’s that they never feel completed at all. They’re perennially 90% done. "Finished" projects don't have the agreed-to functionality.

(We build the "simple thing" the buggers said they wanted. Then they change their mind, but they don't have the budget to do any more work. And then their own VP tells us that isn't a priority and tells us not to go further but says nothing to his troops so we get the cr*p)


6. Is reactive rather than proactive

When you need help, you feel like a technology pauper, going door-to-door begging for help from functional specialists who complain that you didn’t get them involved early enough.

(The buggers never involve us early enough, they try and do some bodge themselves, then f*ck it up, scream for us and try to pretend they never touched anything. And boy, we should leave them to fix all the viruses they bring in themselves)


7. Doesn’t support innovation

When you try to brainstorm with IT about new technologies you could use to innovate – like 2.0 tools, for instance – they patronize you by dismissing your questions and noting that your people aren’t properly using the systems already in place.

(If IT people had a dollar for every person who now wants some shiny thing they have just read about in some over-the-top blog post hyping the virtue of the new new thing, they'd all be millionaires and living in Florida. Just because some evangelist says X is the new best thing doesn't make it true. And your people aren't using the existing stuff - the last New New Thing you wanted - properly. So, what are the chances they'd use the New New stuff properly, or not be wanting the next New New Thing in 6 months time when you are 90% done on this now Old New Thing (see point 5 above) )


8. IT never has good news

No matter how much you spend or how hard you work, the promise of technology seems perpetually beyond your reach. Even the “successful” launch of new systems is accompanied with the inevitable onslaught of bugs, crashes, and change requests.

(No matter how much you spend or how hard you work, the promise of rational management seems beyond possibility. Even the “successful” launch of new systems is accompanied with the inevitable onslaught of cr*p data, the resultant crashes, and "new features we hadn't thought of" change requests.)

I've worked on both sides on this one, and in my experience both sides are as guilty as each other. If you've never seen "The IT Crowd" sending this whole issue up, you're missing a huge treat.

But I'd expect to see an article like this in a tech hype blog, not the HBR. In my opinion it cheapens HBR considerably - and there is not even anywhere to respond there on the site.

Good thing I have a blog eh

On Tuesday night David Terrar and I ran the first Social media in Enterprise session (#smie on Twitter), as part of London's Social media Week (and Benjamin Ellis took some pictures). We only thought of doing it a week before, in fact one of the lessons of Social media is that it was very easy to organise the event - though one of the social technologies used was email, which many "social" purists think of anathema . Its interesting to look at that in fact - Twitter DMs and email were the main "back end" tools used to organise and co-ordinate, Twitter and blogs were the main tools used to publicise, and a cloud based app - Eventbrite - was used to take tickets and Paypal used to collect payment. All this was set up in about 48 hours, part time (Kudos to Cass Business School for stepping up to the plate). You have to stop and think about how easy it would have been to do that even 5 years ago.

We used the Patchwork Elephant to symbolise how the area was still confused, we are like blind men feeling our way around the elephant and by looking at various viewpoints we may see it completely. But its also a patchwork, in that tere are many types of Enterprises - not for profit vs for profit, physical vs digital, manufacturing vs service etc etc.

Anyway, on to the show - the speakers ran in alphabetical order, but I'm going to re-organise it in sequence of big picture to detailed actions (David has a good summary of teh speakers and their organisations over here on his take of the evening).

Umair Haque talked about "Peak Organisations" - in a fascinating talk, he outlined his thesis that organisations designed on 18th century principles are just not fit for purpose today, and that hierarchies built to organise masses of people to perform the same menial tasks do not work when the key issue is to maximise knowledge work. He went through some of the new principles of organisation design that will maximise value.

Benjamin Ellis took this point to the next level of detail, looking at the differences between corporate hierarchy networks, the "real" networks that make things work (his slides are over here). He then mapped this to how a social media network works and what the likely organisational impacts will be - and where the fault lines are. Now people have been writing about "hollowed out" organisations for years, and Social media gurus have long noted that its structure is more sympathetic to knowledge work - but Benjamin is one of the few I''ve seen pointing out that an in-enterprise social network is very different to a friendship one and has all sorts of "plumbing" issues to work through. (a point later picked up by Mat when he noted two different types of capital - social and financial - existed uncomfortable together. Render unto Caesar....! Adriana and Euan picked up on this in other ways too).

Mat Morrison then took this to another level of detail again, showing work he had done on the actual social networks in real organisations. One of teh fascinating lessons was that a social network left to grow "au naturel" in an organisation is patchy and has a few massive nodes, who cause mass failure if taken out. He showed that a certain amount of design is necessary, as well as "automatic implementation" onto desktops to ensure both that everyone was networked and the resilience was acceptable.

My talk was on the challenges Social Media faces to convince people of its overall Return on Investment, I looked at the potential role of Social Media in 3 key areas of value creation (slides are here):

- Innovation
- Operational Excellence - Sales, Operating costs, etc etc
- Agility - the ability to react quickly to changes in a marketplace, and deal with disruption.

In essence this was a discussion on the business economics of SM, and where the biggest levers may be found, It is dependent on the company - for example SM seems quite useful to handle churn, great if you are in a high churn industry, but if you are a low churn industry its not a great benefit.

Adriana Lukas looked at her experience of implementing social media in large corporates (see her slides here), and drew some conclusions about how to do it effectively. Her view reflected the theme that Benjamin and Umair had already floated about traditional hierarchies being orthogonal to social media structures. She pointed out that even the social media structure in an enterprise looks different. Her main hypothesis is that it is not going to be possible to re-engineer today's organisation to use social media - you have to build them this way from the ground up. to build stuff in businesses you have to have small pilots, below the radar, so you can prove it.

Euan Semple talked without notes (he came on towards the end of the event and I think talking powerpointless was very high impact at that time) about his 10 years of experience of working with social media tools in organisations. His basic point, like Adriana's, was that the way social media works is orthogonal to the way rigid heirarchies work. He then noted that Social Media does actually map quite closely to the way people like to work. He also showed that there is no inevitable move towards Social Media , looking at the Burtian Era in the BBC as an example (John Burt tried to impose a Tory style internal market plus industrial grade hierarchy to a creative public service)

What I took away from this and Adriana's talk is that it may be possible to re-engineer some businesses, similar to the way you had to re-engineer to use JIT techniques - but it is very hard, and JIT only took off in this way because some companies like Toyota had spent decades changing to operate that way, and were now whipping competitive asses.

Sue Black talked case study - how she utilised Social Media for a Not for profit Enterprise - Bletchley Park (where the German codes were broken in World War 2) has been left in a shabby state (the UK does not love its technology heroes much - poor old Frank Whittle, who invented the jet engine, was only remembered by an Industrial Estate named after him for decades). What she described was a masterful use of social media - at very low cost - to mobilise people to help. What really struck me was that Sue didn't pretend she had a perfect strategy, but in fact had to try many different things in the process, some worked, some didn't. A reminder that this is experimental stuff.

Dave Terrar then gave a number of case studies from companies doing things today - Swiss Re, Cisco amd Wachovia, noting that what is now needed is to aggregate an emerging body of knowledge about what works and what doesn't. His key point was that this may move like the ERP market in future:

Although a lot of my social media colleagues favour a bottom up, disruptive or even "skunk works" approach to implementation, which can all work… the old rules of project implementation still apply inside the culture of many, or even most, businesses. Swiss Re is a perfect example of how you get senior executive buy in and sponsorship to ensure success, and then spread the word to 11,500 employees. It was the way we used to get a successful ERP implementation going, and it can be done for the change management required for implementing these sorts of collaboration tools too. One of my key messages is that these tools need to work with, enhance and improve the existing business processes, not go around or subvert them.

I think what we are seeing here is two phases in the evolution of a system (Dave puts Enterprise 2.0 in The Chasm right now) - before ERP there was MRP, and in its early days it was skunkworked, then when it was shown to work it got taken up by a few go ahead companies, whose success drove others to emulate it.

Shefaly Yogendra and Will McInness couldn't make it unfortunately, but have put up thir contributions online here and here. Well worth the read, Shefaly dealing with highly regulated industries and Will taking up the theme of it being inevitable as it works as we do. (I will link to people's stuff as they paste it up)

In the Q&A and discussions afterwards there were quite a few interesting threads around what the endgame will look like - Ronald Coase's work on sizes of firms being driven by transaction costs, abiut Dunbar and the optimal size of hierarchies, about the industrial era organisation of current enterprises vs the organic structure of social media (a few old salts noted the smallest unit in a Just In Time organisation is a self reliant "cell" - a thread I want to push further in future). But one has to come back to a corollary of Umair's thesis - before we see major changes there needs to be a structural change in the way capital is accumulated (the rich get richer regardless) and distributed (small, nimble companies find it far harder to get money than large, sclerotic ones) whereas most of the innovation and value is being created outside of these existing systems.

To end - an observation by Patrick Hadfield:

To change the culture and behaviour in organisations, we need to look at all aspects of working – including the processes and the reward structure. If we don’t tackle these aspects of organisation life, we will have little success: people will work to the outcome they are rewarded for and by which they are managed.

The move to flatter, less hierarchical organisations – even, perhaps, the fabled “virtual” organisations where almost all aspects of business are outsourced – may be the most fertile ground for social media in enterprises: they can be nimble, and they rely on effective communication to function properly. Here, use of social media could provide a real business advantage – and maybe this is where the real value of social media in business will be found.

Afterthought - on reading this, I know a number of people will say "we've heard this before". To them I'd say, you are right - but you have also heard a lot of other stuff, a lot of which is total snake oil, that was NOT said. This is the considered view of a bunch of smart people who have been looking at this for a long time, long before there was a bandwagon to jump on. I'm not saying this is canonical, but i can see the glimmerings of an elephant taking shape. More later, as they say.

A Patchwork Elephant a bit better described, then. There does seem to a considerable feeling to do another one, and there were at least 8 people in the audience who could as easily have been speaking, so I think this may, like our elephant, have legs

Last night we had rather a good session on Social Media in the Enterprise, where we did quite a bit of crystal ball and navel gazing, so its interesting to see Gartner's predictions today. Here they are with my takes:

By 2014, social networking services will replace e-mail as the primary vehicle for interpersonal communications for 20 percent of business users.

“The rigid distinction between e-mail and social networks will erode. E-mail will take on many social attributes, such as contact brokering while social networks will develop richer e-mail capabilities,” said Matt Cain, research vice president at Gartner. “While e-mail is already almost fully penetrated in the corporate space, we expect to see steep growth rates for sales of premises- and cloud-based social networking services. “

My take - what is more likely to happen is they will all be integrated into unified comms systems that can receive and send a message in whatever format one wants. And why cloud based? Enterprise email hasn't needed a cloud based system so far?


By 2012, over 50 percent of enterprises will use activity streams that include microblogging, but stand-alone enterprise microblogging will have less than 5 percent penetration.

“However, it will be very difficult for microblogging as a stand-alone function to achieve widespread adoption within the enterprise. Twitter's scale is one of the reasons for its popularity,” said Jeffrey Mann, research vice president for Gartner. “When limited to a single enterprise, that same scale is unachievable, reducing the number of users who will find it valuable. Mainstream enterprises are unlikely to adopt standalone, single-purpose microblogging products.

My take - the reason enterprises are interested in Twitter and similar is not due to it being a social network, but because its a very flexible transport system. That transport system will find many uses, including M2M, M2P, P2M and P2P functions. It will be used for broad and narrowcasting and be part of the Unified Comms (UC) Architecture.


Through 2012, over 70 percent of IT-dominated social media initiatives will fail.

When it comes to collaboration, IT organizations are accustomed to providing a technology platform (such as, e-mail, IM, Web conferencing) rather than delivering a social solution that targets specific business value. Through 2013, IT organizations will struggle with shifting from providing a platform to delivering a solution. This will result in over a 70 percent failure rate in IT-driven social media initiatives. Fifty percent of business-led social media initiatives will succeed, versus 20 percent of IT-driven initiatives.

My Take - Indeed, but thats a "so what" - its a fairly standard failure rate with new technologies. Lessons will then be learned, best practice will emerge etc etc. The far, far bigger issue that emerged last night is that the way organisations are organised and the way social media works are orthogonal to each other, so it will require big shifts in workflow, processes, culture etc - companies will only do that if they can see a clear ROI based rationale. And because metrics are still new, failure will be as much about mis-measurement as mis-steps


Within five years, 70 percent of collaboration and communications applications designed on PCs will be modeled after user experience lessons from smartphone collaboration applications.

As we move toward three billion phones in the world serving the main purpose of providing communications and collaboration anytime anywhere, Gartner expects more end users to spend significant time experiencing the collaborative tools on these devices. For some of the world, these will be the first or the only applications they use. The experience with these tools for all who use them will enable the user to handle far more conversations within a given amount of time than their PCs simply because they are easier to use. Just as the iPhone impacted user interface design on the desktop, the lessons in the mobile phone collaboration space will dramatically affect PC applications, many of which are derivatives of decades-old platforms based on the PBX or other older collaboration paradigm.

My Take - this is Planet Mobile we are talking about, which is very susceptible to hype. Halve everything. Restated this is that " Within ten years, 35 percent of collaboration and communications applications designed on PCs will be modeled after user experience lessons from smartphone collaboration applications." Much more likely.


Through 2015, only 25 percent of enterprises will routinely utilize social network analysis to improve performance and productivity.

Social network analysis is a useful methodology for examining the interaction patterns and information flows that occur among the people and groups in an organization, as well as among business partners and customers. However, when surveys are used for data collection, users may be reluctant to provide accurate responses. When automated tools perform the analysis, users may resent knowing that software is analyzing their behavior. For these reasons, social network analysis will remain an untapped source of insight in most organizations.

My Take - Companies will try to spy now, staff won't like it, and some companies will go too far - expect regulation to emerge by 2015. Also, not all business functions and companies will have the same "bang for buck" from social media, so many will not really use it very much.

Well, we thought the Apple Tablet would be the Porn device of choice for the New Age. But Apple trumped us and called it the iPad. Suddenly headlines like "No Flash on Apple's iPad" take on a new meaning.....

What were their marketers thinking? As Tom Lehrer noted, when correctly viewed, everything is lewd.....by the way, its a snip at $499!

OK, you can see where this is going - so we will show you one of the many pictures (see above)

As partial recompense here is a rather interesting article on its economics - Peter Thompson:

Lets be clear, in economic terms the hardware of the iPad is not a new product. It's an iPhone Maxi edition. That makes it a line extension. And there is one thing we know about line extensions. You don't need to sell many of them to make money. The reason is that the development costs are low. The R&D spend on the iPad can be made to seem significant and I do respect the care that has gone into the iPad. But the fact shines through, this is just a tweaked up iPhone.

By the way, given the hypesteria, it is delightful to write such a sleazy article

What is it?

As our contribution to London Social Media Week we are putting on Social Media in Enterprises on Tuesday Feb 2nd from 6 till 9pm at the Cass Business School in London (map is over here).

Why? Well, at Tuttle last Friday Dave Terrar and I realised that there was no event for the more B2B and value chain based aspects, ie the Enterprise/Business aspects of Social Media. This is the "Elephant in the Ecosystem" - a huge arena, but hard to get your head around easily and see clearly. So, we decided to put one on - and this is it!

The aim of this event is to look at this unmentioned "Elephant in the Ecosystem" from lots of angles, so we may get a better view of what it is.

So, what we thought we would talk about is how Social Media can be used by:

- Enterprises: How can use it internally to re-engineer themselves,
- Supply and Value Chains: How does it restructure a B2B value chain, which can be complex and global
- How to create sustainable business value, not an easy to replicate one-off.

Also, we want to touch on the Hard Stuff that is brushed under the carpet, for example:

- how to integrate into existing heritage systems,
- how to handle security issues,
- whether a flat social network structure can work in a firm.

And that's never mind the potential Returns on Investment.

The idea is to have a number of short talks from a variety of people with various angles on the subject, and a Q&A session - and then break for drinks and informal discussion.

Speakers are:

- Dr Sue Black, University of Westminster
- Benjamin Ellis, RedCatCo / SocialOptic
- Umair Haque, Havas Media Lab
- Adriana Lukas, Mine! Project & VRM
- Will McInnes, NixonMcInnes
- Mat Morrison, The Magic Bean Laboratory
- Alan Patrick, Broadsight
- Euan Semple
- David Terrar, D2C
- Dr Shefaly Yogendra

Yes, its a lot of people but we rather liked the Mashup Firehose format late last year - a range of short, to the point talks on an angle of the subject, People will be limited to 10 minutes time tops. If it #Fails, we'll try something else next time

We will be adding details of what people will be talking about so watch this space.

That should get everyone's pulse racing - and to make it even better, we are going to Charge You Money - no FreeConomics here - to cover the costs for the tea, coffee, biscuits, nibbles and alcohol you will consume. It will be a tenner (£10), as you can see no expense has been spared

Booking for the Event

So, do not delay - go over here and book now!

Any spare funds at the end of the night will be spent at the pub afterwards....