Cloud Citizen

What if you had a socially constructed operating manual that reliably delivered sustained strategic superiority?

Of all the thinking exercises a company goes through, the most important concerns that which sustains the competitive advantage that keeps its customers loyal and prevents them defecting to rivals.

So, if a company’s strategy is its life-support system, the most important question any business must answer every day is, is our strategy working?

It is said that a strategy must become an organisation’s way of life, but of course this is so only if the answer is yes.

If your own life depended on it, you probably wouldn’t buy a life-support system that didn’t come with an operating manual. So, why wouldn’t you aim to develop one that provided a better way of building more robust, responsive strategy for your business?

Likely as not, in any business, to achieve any of the array of possible favourable outcomes, effective strategy formulation will no longer be a one, two or three-man job, because the world is changing and the tools are here to enable a better job to be done collectively.

A company must develop a way of giving shape to its strategy that makes sense from the sum of the intelligence and experience available to it, not just a sub-set.

By engaging social technologies in this pursuit, many minds may make lighter work of developing new opportunities, because each has a perspective and critical sensitivities no other shares. But, collectively, they will only transform the scope for better strategy formulation if their understanding of the context in which they are making their contribution is common and shared.

As that is not the case in an overwhelming majority of companies, this is likely only to happen best when organisational learning, focused and directed for this purpose lies at the core of effective strategy formulation.

Community learning is a powerful force. There is energy to be tapped here, and common purpose and interest, because it protects livelihoods and provides opportunities for personal growth.

More importantly, when everyone is learning together, the most compelling purpose for applying that growing intelligence is to focus on strategy, because the articulation of strategic need paints a shared destiny and reveals the competencies on which the future organisation must itself be built.

As it is the stone on which the attainment of factors critical to success will be built, the explicit recognition of required competencies will come to shape the organisation itself. It will focus the learning of the learners.

Given a new, shared sense of where it is heading, the organisation has many new choices.

What delivers operational excellence to the business but does not deliver explicit strategic advantage may no longer need to form a core part of its operation. That which is not strategic may be achieved and managed in other ways, perhaps even outsourced.

Better knowledge and awareness improves focus on what matters most.

Much less a document than frame of self-constructed understanding, the operating manual for developing better strategy is built through the active engagement of precisely those sensitivities and insights that enable the organisation to learn from itself, that keep it in business and grant it the strongest possibility for sustained strategic superiority.

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Social business re-engineering: what is your strategy?

Over many years, companies have made major investments in technology to give their businesses a distinctive edge, a new competency that competitors find it hard to match.

Now, rather than the implements themselves, it may be the way which in certain instances cheap, generic tools of shared, social creativity, paid for by subscription, are used that provides the competitive advantage. As Michael Dell claimed for his Dell Computer back in 1998, some may be able to substitute intellect for inventory.

The tools place emphasis back on the inventiveness of human beings working together and their combinations of unique competencies that are valuable, rare, and difficult to imitate, and can not be substituted by other resources.

The social technologies and the flow of human capital that is their currency will unleash a wave of change within organisations and the way work is done, the like of which we have not seen since, as Harvard Business school professor Gary Hamel put it in mid-2011, the pyramids were built.

Hamel suggests one of the next major waves of innovation will be in management itself. His The Future of Management remains essential reading on this subject, despite having first been published in 2007.

It looks as if we will see the age of social re-engineering and the evaluation of a new ROI, the return on intellect, or on innovation or imagination, take your pick.

It is clear that not everyone will benefit from this.

The 2009 movie, Transcendent Man, about technologist and inventor Ray Kurzweil, suggests that as we build the next technologies with the ever-improving tools of the present, progress is exponential and may lead to humans encountering the “singularity”, an age in which humans and machines find integration and humans may be able to live forever. He puts this date at 2045.

Clearly, better enabled and more effectively enabled teams of human beings will contribute to this acceleration, which will influence the ways in which companies select and reward their teams. Effective knowledge contributors are likely to be high on their pick lists.

Nevertheless, how your workers are engaged, what they know and how that information is brought together in the creation of sustainable businesses which have the potential for creating competitive advantage is likely to become a defining differentiator.

Achieving the organisational agility future competition will demand is in large part about removing factors that impede it and reinforcing those that enable it.

The future differential is likely to be found in how distinctively a company can fashion its human response to keep it ahead. Currently, however, rigid hierarchy, in a world that favours networks, geography and 20th century management models are the major obstacles in many mature organisations wrestling the challenge of nimbleness.

Social technologies enable people to come together to dream up ways of doing a better job. How this is done itself creates a new kind of competency.

They make a team of committed people better attuned to spotting opportunity and they can help to facilitate a state of permanent and ready inventiveness.

Within any business, there are many layers of intelligence that remain unused and much game-shaping tacit knowledge to be drawn on which has to date has been underexploited.

When many organisations continue to retrench those with long-established workplace knowledge, this may come to be valued more highly when socially constructed knowledge itself is valued at premium.

This blog and the conversation it aims to become part of focus on organisational activities that can lead to new future states for businesses that wish to stay abreast of the change.

It looks at innovation as enabled by a collaborative "Enterprise 2.0" approach to its management. Enterprise 2.0 presupposes that an organisation’s forces for innovation can be more effectively harnessed, even across distance, by stimulating the creative collisions of tacit knowledge and insights of those who work within an organisation.

It looks at agility, and the future being about networks of competencies coming together in endless new and unprecedented reconfigurations to create and capitalise new learning and knowledge.

It talks about the need for purposeful organisational learning that ensures opportunities to share and learn are built steadily through networking the insights of those who do the work, where it happens.

One purpose of such learning will be to identify both ways in which work can be done better, where businesses are weak or vulnerable and to focus insights at the interface of change itself.

This has some profound learning for management, but once organisations find this is good for business, it will drive further exploration in every field of commercial endeavour.

And because all business models are vulnerable to the forces of time, it will expose those whose duration is up, just as part of the natural cycle of creation and destruction always has done.

Hierarchies are out, learning networks are in, so it’s time to get with the new ways of doing things. For some, it may prove easier said than done.

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What is organisational capital?

I wrote this a year ago for a client in human resources consulting but I think it still holds up, so I’m posting it here.

There's a new management mandate taking shape, at whose core flexibility and expectation of a new return on investment in people processes lies front and centre. It is manifesting under an emerging and compelling theme: organisational capital.

Human input into workplace productivity has been notoriously hard to measure. It's not hard to see the effects of well-executed management in a balance sheet, but much more difficult to evaluate it with quantitative rigour. Yet, clearly productivity growth at any level is the outcome of improved management practices and operational processes. Its ingredients are enabled clearly enough by investments in information technology, but the quantum of IT expenditure alone is insufficient to explain economic advances.

Leading United States researchers [such as Professor Erik Brynjolfsson, Director of the MIT Center for Digital Business] describe organisational capital as an intangible asset that, just like other assets, creates a stream of value over time. As such, investments made in organisational capital - which can be described as the enabling layer of raw human capacity and its flows of applied intelligence and creativity laid atop the information tools of the workplace - can be considered in similar terms to that in any other corporate asset.

Businesses spend a lot of time and effort to optimise the ways in which they work and can correlate improved practices with better goods, services and growing revenue. In this equation, investment in technology is the driver of complementary returns – in process redesign, training and strategic advances – and of new products of improved quality, timeliness, variety and convenience.

But in standout companies, success is all due to differentiating human input and the skills with which people are engaged and their knowledge transformed.

A company may be equal to the sum of the values of all the assets it owns or controls, but in such companies organisational capital’s effective people engagement comprises the hidden equation driving the outstanding growth in their ledger.

Signs both anecdotal and borne out by academic enquiry suggest a philosophy abroad in the ranks of human resources consistent with a concerted, if as yet unlabelled as such, push for the development of organisational capital.

Among its themes:

• Organisational agility in the face of fast-changing business cycles cannot be achieved without a view of integrated organisation design and people as structure. This requires seamless and integrated functioning of talent management beyond divisions, silos and champions within a developing architectural view of the organisation. With adaptability at its core, skills development of those who can work across structural, technical and functional business divisions makes talent increasingly a board-level issue.
• Responsive, rapid strategic and tactical business model change demands a comprehensive portfolio approach be taken to human capital planning. This balances the HR system and adapts certain philosophies of supply chain risk reduction to the just-in-time human resources challenges of increasingly project-driven organisations. It implies a need for organisation-wide talent pooling, improved forecasting of the demand for talent and the development of more effective enterprise talent scorecards.
• In workplace practices themselves, leading organisations must focus their learning and development activities increasingly on "execution as learning". Instantaneous feedback loops using efficient collaborative "2.0" technologies will revolutionise knowledge transfer in increasingly mentoring-intensive organisations, as fast learning on the job becomes the norm and workplace innovations are enabled through worker freedom, stimulation and engagement.
• HR management will itself be transformed by a wave of improved enterprise technology for managing human capacity. Its software will be ubiquitous, available on demand, and multi-language, and its automated functions will facilitate the emergence of performance-based cultures based on clear engagement metrics. Adopting a single model, simplifying and maximising workplace potential, this revolution presages the need within organisations for clear articulation of HR technology road maps that facilitate the development of the human architectures that deliver leaps in organisational capital.
• The demands of such flexible, adaptive workplaces will require HR increasingly to see itself as a marketing function to attract and retain connections with workers of value. The likely demographic constraints of an ageing workforce will encourage the development of strong networks both within and without the organisation to attract and retain workers but the development of strong brand and employee value propositions will increasingly position HR itself as a core strategic marketing discipline.

Increasing organisational and business-process change, broader sharing of information, decentralised decision-making and increasing connections of pay and promotion to performance will likely lead to greater investments in training and education.

But with an improving understanding of the metrics of human performance finding its way into boardroom discussions and on to corporate balance sheets, the ever greater leverage of human capacity will find its clear and unambiguous enveloping market rationale in the push for increased corporate organisational capital.

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What has an Alice Springs baker got to do with the state of learning in your business?

I always liked the story about the Alice Springs baker, told on the ABC, who, asked whether he was scared that if he invested in training his staff that they might leave, replied, yes, but what if I don’t and they stay?

With the social era of the web now well under way, collective workplace knowledge, its effective use and purposeful creation and transmission is going to create a lasting and decisive differentiator between many of today’s corporate competitors.

He with the best and most effective learning network, designed to purpose, will prove a very hard animal to beat.

Effective knowledge management may not be new to certain organisations in the professional services, but its value will come to the fore in all businesses that need to compete at speed. Few will find themselves doing this against competitors who are themselves not already equipped with similarly sophisticated weapons.

The arrival of Australia’s national broadband network will play a defining role in the shape of future organisations and fast knowledge transmission; it won’t all be about downloading movies or transmitting high-resolution medical imagery.

The power of social knowledge creation lies in creating organisations whose collective cognitive processes are unique and inimitable because of their inseparability from the capacities of the minds on which they are built.

As the barriers come down on the rapid transmission and development of human capital, we may at last be moving into the great age of human resource management.

Management academics have long realised that, "Knowledge creation occurs in the context of a community, one that is fluid and evolving rather than rightly bound or static. The canonical formal organization with its bureaucratic rigidities is a poor vehicle for learning.” (Powell, Koput, and Smith-Doerr, 1996)

Rather than in companies, Powell et al suggested that innovation’s sources are more likely to be found in “the interstices between firms, universities, research laboratories, suppliers and customers".

Their research pre-dated social media by a decade or so, but essentially they were suggesting that networks learn faster than inflexible, hierarchies. We’ve probably all worked in at least one of these; I know I have.

A company’s propensity for learning will be based on many diverging dimensions, giving each a different capacity and potential.

Clearly, on this list will feature the will and capacities of leadership and management, and their fear or fearlessness when confronted with the fact that they may not have all the answers that the tacit knowledge of their people could bring, were their insights solicited.

Among others may be prior preparation, connected to such things as the quality of the organisation’s employees themselves and that of its management information systems, organisational culture, and the presence of learning incentives.

Those with a greater absorptive capacity are better positioned to learn from their people.

Think of such implications for networking real-time learning in your organisation when the well-being and wealth-creating potential of the network takes on new properties with every new arrival and every departure.

But here’s the challenge for many organisations.

If it is hard enough for individuals to change their own behaviours in the face of clear, if ill-determined threats down the path (say, giving up smoking or changing diet), so far it has proven much harder for organisations to change.

Each has its collective “mental model” of which it may be largely unaware, and which in many cases may simply reinforce rigidity.

In an organisation, this may manifest as an entrenched culture that is unconducive to learning, and therefore to change. Likewise, not all employees are committed to the health of the enterprise in which they work.

Yet mental models are crucial cornerstones for building knowledge and understanding the cognitive processes that support development and learning.

They have been described as the lenses through which we see the world, and they incorporate our biases, values, experiences and beliefs about how the world works.

Peter Senge, author of The Fifth Discipline (a must-read for anyone interested in organisational learning and systems thinking) defined mental models as ‘‘deeply ingrained assumptions, generalizations, or even pictures or images that influence how we understand the world and how we take action. Very often, we are not consciously aware of our mental models or the effects they have on our behavior’’.

As such, mental models guide, shape, and provide the basis on which individuals interpret and make sense of organisational life, and therefore they are an important element guiding corporate destiny.

So, what if recognising truth in this, you set out to transform your organisation’s mental model to create a more agile organisation, better adapted to learning and to change?

Google, until recently the fastest-growing organisation in history, is clearly now slouch in this. In creating its regime of “20 per cent time”, in which it gives employees 20 per cent of their employable hours to work on their own projects, Google created an order in which innovation has become the enduring core of its business. This has spawned the most disruptive advertising innovation in history in the combination of its search, Adwords and Analytics offerings. It has given birth to its Gmail email service, to the Android mobile platform and the development of YouTube into a parallel force which will ultimately compete against network television itself as internet connectivity becomes the norm in every television set.

So, what if social media, or, more accurately, social technologies, became something other than a distraction in your workplace, and something viewed as a tool of development, and as a key constituent of growth, learning and a platform for future profitability? What if you encouraged your people to share what they know, and put in programs to shape it and to build their engagement and capacities for productive social knowledge creation?

Is it possible you could find you learn something new about the value of engaging and nurturing staff that even the Alice Springs baker did not know?

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Social technology in the workplace: Ten principles guiding the value of social knowledge creation in building organisational capacity

Business models have a life cycle: they age, become redundant and die. It just happens faster these days.

Indeed, as Harvard Business School professor Gary Hamel says in The Future of Management (2007), sometime over the next decade your company and its model will be challenged to change in a way for which it has no precedent.

The change is coming everyone’s way, so you might like to contemplate the following.

1. The only truly sustainable business is one that is always competitive, always learning and agile, no matter what changes around it; those with the best social internal feedback loops for what is happening around them are likely to be the most responsive to the factors demanding change in the way they do business.

2. Insight borne of the tacit knowledge of workers is the source of all business breakthroughs. The capacity to harness it and employees’ inventiveness repeatedly in building a stronger business will be tomorrow’s critical differentiator between competitors.

3. Tomorrow’s most successful organisations will build human capital by ensuring that the sum of their people’s intellectual capacity is engaged and geared for continual knowledge development and business improvement in the face of inevitable market disruption. The internet is dangerous, it’s never wise to bet against it.

4. Social technologies provide channels through which an organisation’s internal conversation can be cultivated to build learning and unleash new thinking and inventiveness across the enterprise.

5. Effective social knowledge creation strategies will drive the value of these channels in building organisations’ resilience and responsiveness to change: the most important thing is to have a strategy.

6. Social knowledge management can invoke new learning when and where it matters most and has the greatest impact, and that is where the work is being done and change is experienced first-hand. Much of this may presently be invisible to leaders.

7. Knowledge can be triggered and new learning built by seeding the conversation at these interfaces to stimulate discussion and capture insight. Because it is real-time and direct, this may be the most potent workplace learning opportunity we’ve yet seen.

8. When the conversation that guides social knowledge management becomes a driving creative business force, it will reshape the organisation itself and inform decisions about who gets hired and for what they are rewarded.

9. In companies that outperform the change that confronts them, the conversation that drives effective social knowledge creation will become an increasingly important, differentiating resource and a target for more focused management attention and investment.

10. The evaluation of companies’ effectiveness in harnessing social knowledge management’s forces for change will become an important barometer of organisational well-being and of future prospects for investors and analysts alike.

So far, we’ve seen the tools of the social media revolution manifest most publicly as Facebook pages and Twitter feeds. Tomorrow, their forces will be transforming the way knowledge is shared throughout the organisations in which we work.

This change will be fast and thorough. How prepared is your organisation? Are your business models robust? How effectively will your strategy unfold in the face of fundamental, discontinuous market change? Let me show you a strategy to strengthen your business against what is coming.

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Social re-engineering: what is your strategy?

Over many years, companies have made major investments in technology to give their businesses a distinctive edge, a new competency that competitors find it hard to match.

Now, rather than the implements themselves, it may be the way which in certain instances cheap, generic tools of shared, social creativity, paid for by subscription, are used that provides the competitive advantage. As Michael Dell claimed for his Dell Computer back in 1998, some may be able to substitute intellect for inventory.

The tools place emphasis back on the inventiveness of human beings working together and their combinations of unique competencies that are valuable, rare, and difficult to imitate, and can not be substituted by other resources.

The social technologies and the flow of human capital that is their currency will unleash a wave of change within organisations and the way work is done, the like of which we have not seen since, as Harvard Business school professor Gary Hamel put it in mid-2011, the pyramids were built.

Hamel suggests one of the next major waves of innovation will be in management itself. His The Future of Management remains essential reading on this subject, despite having first been published in 2007.

It looks as if we will see the age of social re-engineering and the evaluation of a new ROI, the return on intellect, or on innovation or imagination, take your pick.

It is clear that not everyone will benefit from this.

The 2009 movie, Transcendent Man, about technologist and inventor Ray Kurzweil, suggests that as we build the next technologies with the ever-improving tools of the present, progress is exponential and may lead to humans encountering the “singularity”, an age in which humans and machines find integration and humans may be able to live forever. He puts this date at 2045.

Clearly, better enabled and more effectively enabled teams of human beings will contribute to this acceleration, which will influence the ways in which companies select and reward their teams. Effective knowledge contributors are likely to be high on their pick lists.

Nevertheless, how your workers are engaged, what they know and how that information is brought together in the creation of sustainable businesses which have the potential for creating competitive advantage is likely to become a defining differentiator.

Achieving the organisational agility future competition will demand is in large part about removing factors that impede it and reinforcing those that enable it.

The future differential is likely to be found in how distinctively a company can fashion its human response to keep it ahead. Currently, however, rigid hierarchy, in a world that favours networks, geography and 20th century management models are the major obstacles in many mature organisations wrestling the challenge of nimbleness.

Social technologies enable people to come together to dream up ways of doing a better job. How this is done itself creates a new kind of competency.

They make a team of committed people better attuned to spotting opportunity and they can help to facilitate a state of permanent and ready inventiveness.

Within any business, there are many layers of intelligence that remain unused and much game-shaping tacit knowledge to be drawn on which has to date has been underexploited.

When many organisations continue to retrench those with long-established workplace knowledge, this may come to be valued more highly when socially constructed knowledge itself is valued at premium.

This blog and the conversation it aims to become part of focus on organisational activities that can lead to new future states for businesses that wish to stay abreast of the change.

It looks at innovation as enabled by a collaborative "Enterprise 2.0" approach to its management. Enterprise 2.0 presupposes that an organisation’s forces for innovation can be more effectively harnessed, even across distance, by stimulating the creative collisions of tacit knowledge and insights of those who work within an organisation.

It looks at agility, and the future being about networks of competencies coming together in endless new and unprecedented reconfigurations to create and capitalise new learning and knowledge.

It talks about the need for purposeful organisational learning that ensures opportunities to share and learn are built steadily through networking the insights of those who do the work, where it happens.

One purpose of such learning will be to identify both ways in which work can be done better, where businesses are weak or vulnerable and to focus insights at the interface of change itself.

This has some profound learning for management, but once organisations find this is good for business, it will drive further exploration in every field of commercial endeavour.

And because all business models are vulnerable to the forces of time, it will expose those whose duration is up, just as part of the natural cycle of creation and destruction always has done.

Hierarchies are out, learning networks are in, so it’s time to get with the new ways of doing things. For some, it may prove easier said than done.

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Conversation as organisational capital

Six key points to summarise what follows:

• All business models will ultimately collapse if they are not managed to adapt to change
• Effective social knowledge management will be the key to continued business agility and competitiveness
• Companies are vulnerable when they don’t know what their employees know and can contribute to improving a business
• Employees are typically engaged less than effectively in strengthening the businesses of their employers
• The health of the conversation that underpins the sharing and building of organisational knowledge must be managed well
• That conversation should be steered and injected with timely materials to stimulate productive and focused new learning

The social conversation is key
Absurd as it may seem right now, in the immediate years to come, decisions of how to invest in the quality of the conversation taking place in an organisation may become among the most important a company’s management will make.

Riding on the back of technological progress, the application of social tools and enabled networks of individuals will focus the sharing of ideas at great speed.

This will build new organisational learning, which will itself in turn accelerate the pace of discontinuous, disruptive, competitive change.

In the face of such change, all business models are ultimately vulnerable. The question is not whether your own will collapse, but when, how and by whom it will ultimately be proved to be fallible. So, how you manage your organisation’s conversation and the human capital it builds and embodies will shape what your business becomes.

It will inform your understanding of what is changing around you, the risks you take and how you respond. And it will determine the nature and extent of the organisational learning and knowledge you either cultivate or forfeit.

How you manage the conversation will also influence who you hire – or who else you engage in it which will then feed back directly into the quality of the organisation’s conversation as a whole because the health, vitality and effectiveness of every node on the network will affect its dynamics and overall learning potential.

Knowledge may be the only resource not depleted but grown through use and sharing.
That knowledge is built by sharing means that social knowledge management will become a primary force used in engineering smarter companies, and the platform on which the most agile and responsive businesses will be sustained. It is a new form of internal communication.

So, here are some principles for thinking on the value of the social knowledge management strategies to be applied in any workplace.

Imagination and tacit workplace knowledge are the source of all business breakthroughs but also under-utilised forces in a majority of organisations. All companies contain much more knowledge than they ever put to use.

The problem is that the dots are rarely joined up well between the decision makers who need the knowledge and those who hold it, especially when they are separated by hierarchy or distance, or by not knowing who is who.

If a strategy fails, it will typically be a result of this gap.

But because it is tacit, not explicit, without exploration, no one knows what knowledge is not being used or what is available.

The relentlessness and unpredictability of change means no business can afford to waste a jot of intelligence because the rate at which companies learn and their employees share and build unique knowledge may be their only way to carve out a sustainable advantage.

In organisations distributed by location, potential innovation creators who once could not identify each other or communicate now can because social technologies can break down the barriers to such collaboration and innovation.

Innovation most commonly results and is built through learning from collisions with others from diverging disciplines and with different worldviews. But beyond the knowledge that their hires can fill a given slot on the organisation chart, most employers don’t know what their people know, who they know, or what else they can bring to their work.

They don’t know who can or will collaborate, and how, or of the full range of ways in which an enhanced contribution can be harnessed.

For their part, employees can’t contribute fully if they are never exposed to better information about the company they work for, or are never engaged effectively in building the strength of the critical success factors on which its prosperity depends.

Contribution and opportunity are stunted when information and knowledge is neither forthcoming nor sought. But the opportunities lie in this critical gap because it is the key to success in confronting change.

No one can predict where important learning will come from, until they get busy on building it. So, how you engage your people and what you ask them to think about will shape what you get back.

This means that what is injected into steering the conversation to provoke new thinking matters too, as nothing is more effective than triggers for learning pulled at the right time and in the right place.

And there is a critical right place: it is where the work is being done and where the face of relentless change is being encountered.

This is a great opportunity for creating an altogether improved, more effective workplace.

As Harvard Business School professor Gary Hamel says in The Future of Management (2007), sometime over the next decade your company will be challenged to change in a way for which it has no precedent.

Only more minds more sharply focused on the critical issues facing a company will deliver an organisation better equipped to respond to such tumultuous change.

The agile business you want can be built out of the conversation you run, and how that conversation is built for effective social knowledge management will be critical.

But how do you execute? What you need is a plan and a strategy, and that is what I offer.

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McKinsey and Web 2.0's payday

In a piece published in December 2010, entitled, The rise of the networked enterprise: Web 2.0 finds its payday (registration required), management consultancy McKinsey concluded a report on its survey of top United States companies on the subject of Web 2.0 in workplace integration with these words.

"Overall, we found that respondents at 27 percent of the companies in our survey reported having both market share gains against their competitors and higher profit margins. That kind of performance clearly makes these companies profit consolidators in their industries, with earnings growing faster than the rest. Highly networked enterprises were 50 percent more likely to fall in this high-performance group than other organizations were. This finding suggests that the fully networked enterprise could become the benchmark for more vigorous competition in many industries.

Moreover, the benefits from the use of collaborative technologies at fully networked organizations appear to be multiplicative in nature: these enterprises seem to be “learning organizations” in which lessons from interacting with one set of stakeholders in turn improve the ability to realize value in interactions with others. If this hypothesis is correct, competitive advantage at these companies will accelerate as network effects kick in, network connections become richer, and learning cycles speed up.

Going forward

The imperative for business leaders is clear: falling behind in creating internal and external networks could be a critical mistake. Executives need to push their organizations toward becoming fully networked enterprises. Our research suggests some specific steps:

• Integrate the use of Web 2.0 into employees’ day-to-day work activities. This practice is the key success factor in all of our analyses, as well as other research we have done. What’s in the work flow is what gets used by employees and what leads to benefits.
• Continue to drive adoption and usage. Benefits appear to be limited without a base level of adoption and usage. Respondents who reported the lowest levels of both also reported the lowest levels of benefits.
• Break down the barriers to organizational change. Fully networked organizations appear to have more fluid information flows, deploy talent more flexibly to deal with problems, and allow employees lower in the corporate hierarchy to make decisions. Organizational collaboration is correlated with self-reported market share gains; distributed decision making and work, with increased self-reported profitability.
• Apply Web 2.0 technologies to interactions with customers, business partners, and employees. External interactions are correlated with self-reported market share gains. So are internal organizational collaboration and flexibility, and the benefits appear to be multiplicative. Fully networked organizations can achieve the highest levels of self-reported benefits in all types of interactions."

 

McKinsey may be be right about everything all the time, but this is pretty good evidence that it's time to get busy on knitting the tools of social technology into every business's organisational learning and innovation processes.

 

Can you help with research for my book?

The social media business story of the time is much less how Australia’s companies use Facebook and so on in promotions aimed at consumers than it is of how we are on the lip of great change as a consequence of the tools’ application within those same organisations' workplaces.

That social technologies are going to turn inside out the way we work is hardly in dispute. The more important question is how quickly they will do it, how fast management teams get it - and which ones never will.

I’m a business journalist and postgraduate management researcher and I’m calling out for help with a book I am writing describing how social tools are being applied in the pursuit of management “agility” in the workplaces of Australia. Provisionally, it is entitled Australia's Inventive Organisations.

I am going to be networking the effort and I want good stories, tips, leaks and provocative interviews. I want to know the ways in which companies are struggling with their responses to the pressures social media exert on their organisations. I am seeking examples of the best and the worst.

I am happy to conduct interviews on or off the record. I will guarantee confidentiality if you have a good story to tell or lead to offer but seek to preserve your anonymity.

If we are to propel the story, it must engage, provoke and be social – and shared and discussed.

So, who’s interested?

Investors should be, for one, because this is about the future agility of the management teams and workforces they’ve put their money into. Big, listed companies with their resources and potential collective intellectual horsepower may also be those with the most rigid and inflexible cultures and least able to adapt. But there will be surprises.

Future leaders, likewise, will find opportunity in what they discover about competitors’ inability to cope with this wave of change.

Please email me if you have material that can help to build this narrative. Thank you.

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What is sustainography?

Against a backdrop of climate change, rapidly growing global population, increasing wealth and consumption, steady environmental degradation and depletion and intensifying competition for ever scarcer resources, few companies’ reputations will survive with their reputations intact if they fail to act on their impacts on climate and environment.

For many, increasingly vigilant social-media scrutiny of their management actions wrought by the presence of a pervasive internet will make this an especially arduous and challenging journey.

Sustainography is the mapping of an organisation within the context of the sustainability of its supply chain. It is the open, shared, public, crowdsourced and comparative investigation of competitive sustainability journeys between rivals. It mines management teams’ undertakings on climate and environment and integrates public perceptions into that data set.

Sustainography’s inputs are “reverse sustainability reporting”, social, or citizen, journalism, whistleblowing and even competitively mounted “sustainability teardowns”. It shines cleansing light on management decisions and responsibilities and where necessary, identifies those responsible. It discusses decisions that are avoided and the reasons. It documents the externalities that all companies impose, mostly without remediation, on the shared environment.

Guided by a journalistic and academic enquiry that depicts as much of the shape and direction of a company’s environmental footprint as is possible to map, sustainography will deliver easily understood visualisations that communicate a management team’s quality, courage and preparedness for a world where there are limits and in which it is possible now to evaluate complex inputs and detail the energy usage, carbon, toxicity, the propensity to deplete non-renewable resources and other impacts that concern society.

It may prove a useful guide for investors because it offers the possibility of drawing on collective, often hidden intelligence about a business, its potential reputational shortcomings, its internal dynamics and its relationships to others.

Just as human biography is shaped by the characters one meets, sustainography is the wrapper for a business’s encounters with third parties. Thus, one company’s badly authored or ineptly narrated sustainography map may affect another in the ecosystem. No business is an island, independent and untouched by the taint of association in its trading relationships, commitments and partnerships. And no sustainography exists in a vacuum.

In a socially mediated world, the most important win that any well-known organisation can achieve is continuing trust. Perceived integrity is the lifeblood of successful branding.

But, as it is not a sustainability report, nor a series of reports, but more a dynamic engagement with noisy, vocal and sometimes downright cranky stakeholders, effective sustainography will prove much more complex to manage than the common purposeful deceits of public or investor relations.

We anticipate some very short and disrupted sustainographies.

Initially, the obvious targets for such overt sustainographical scrutiny would appear to be high-profile, household brand-name companies serving consumers. Among these, the spotlight logically falls first and fastest on the most visible retailers and their best-known brand suppliers.

But, any successful enterprise coming to public awareness will find its own sustainability profile quickly becoming public and shared as enterprising students and academics bring the study of new organisations to light.

Whether a company wishes to become the persuasive narrator of its own effectively crafted sustainability life story, or to put its fate in the hands of others is its own decision.

Our understanding of sustainography will undoubtedly evolve from this early description, but this is an attempt at a first definition in January 2011.

Why social media-driven organisational learning could pose new risks for investors

I am researching a first piece for the financial press on this subject and its premise is that investors really need to know much better how well their investments will compete in a world populated by social media-driven workplaces.

I am not talking about Facebook, of course, but the influence the new technologies will have on the way work is conducted, innovations are conceived, new products are delivered and organisational learning is captured for reuse.

When we attempt to anticipate and describe the impact of social technologies on the workplace, we find ourselves quickly encountering an altogether new world of implications for knowledge management and transfer.

For investors, this might be a world in which it proves really hard at this point to back a winner. There is simply no way of telling which companies will have the ability to adapt at speed to such revolutionary competitive pressures. And by the time we even get fast broadband in Australia, it might all be over for some.

When those in the ecosystem in which your investment does battle are getting busy on embracing social technologies, it’s a time for investors to ask better questions. Most companies aren’t yet prepared for what is around a very near corner. “Organisational learning” remains an abstraction for many without a developed human resource capability, but it and “human capital” are the currencies of the near future.

So, this post is a quick blast, and me thinking aloud. And it depends on what you read, what you study and what you believe, but the risks for investors would appear to be that the management teams they are backing:

• Are not learning quickly enough about how to use the social technologies for their own organisational learning
• Are underestimating the impact the social technologies will have on the workplace in anything other than a marketing capacity
• Are still considering the tools only as a nuisance factor when younger employees use them in the workplace
• Prove themselves to be led Canute-like, incapable of learning and wilfully disbelieving in the face of the tsunami of discontinuous change rushing toward them
• Don’t have a strategy for fast, collaborative, reflective workplace engagement
• Being out-innovated by smarter, nimbler competitors
• Missing out on being invited to participate in the best networks and alliances
• Losing people attracted by more forward-looking working environments
• Their people not being engaged in the jobs they already have
• Ultimately, facing critical knowledge loss through the departure of experienced hands and becoming employers of a less than optimised workforce

Much is omitted from this list, but more research should yield some interesting findings.

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Facing up to the learning challenges of social technology

So far we’ve seen companies sit up and take notice of social technologies largely because they are curious to understand how they can exploit them as new paths to customers.

This is a scrum they’ve heard about and they are being advised that they can’t be left out. Expertise is being built to capitalise on the opportunity.

What’s been less documented is how companies are going to use the tools of the social media to build capability and agility within. When we’re all increasingly connected via a growing array of devices for a much greater proportion of our time, organisations will look like very different places. When the environment changes, companies have to go with it.

What has possibly been lacking, or shared at least unevenly, is the understanding of the potential the social technologies, coupled with appropriate strategies for securing attention and engagement, represent as internal tools for learning and advance within those same organisations.

If you fish around this site, you may find several references to Harvard professor Gary Hamel, author of The Future of Management, in which he postulates that the next key wave of innovation will be in management itself.

Academics such as Hamel and fellow former Harvard professor Andrew McAfee believe social technologies will transform work in the most profound ways we have never seen. (Hamel was even quoted recently as saying this is the first opportunity to reconfigure work since the pyramids were built.)

But with the tools will emerge a need for organisations of unprecedented responsiveness and agility. To that demand, the use of those tools themselves will be the only appropriate response. They will become the primary mechanisms for organisational adaptation and learning.

I’ve been working on a model that delivers this, and I’ve been surprised to find what new terrain it is for many organisations. But at least these days, even if they are not active participants, most people now understand what the social media are.

The 20th century saw the development and success of the modern industrial corporation through the scientific management and measurement models of theorists such as Frederick Taylor. Taylor is attributed with suggesting that the output of workers could best be managed by measurement and setting targets for their physical labour. But he advocated that those same workers should leave their brains at the door.

The 21st century, however, sees the arrival of the opposite: a whole new industrial order in which agile, service-oriented organisations become the centrepiece of the economy.

Leading management theorists have been anticipating the need to understand what it might take to manage the necessarily agile organisations of the coming age.

In this world, change will be rapid, discontinuous and unpredictable and the effective engagement of workers’ brains and inventiveness will be the only thing that keeps companies in business. And it will be up to businesses to manage them wisely, to keep their learning appropriate as new challenges emerge.

This, and to some degree, its impacts for investors, is where this site will focus, because it’s here that the respective qualities of competing management teams will reveal their fitness for a faster-changing world with an appetite for much flatter, leaner organisations.

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Two top management academics on the importance of tacit knowledge to organisational learning

The social technologies provide the best possible of opportunities for constant, rapid organisational learning we have yet seen. A company that isn’t getting busy on how to use them in learning as fast as its environment is changing, if not actually itself setting the pace of that change, might be looking at a short, disrupted future.

The two following excerpts from leading management academics support the need for organisations to get busy on creating the circumstances under which fast learning and breakthrough thinking can be fostered by exploiting a company’s reserves of tacit knowledge.

Although these pieces are both only a little over 10 years old, neither writer foresaw the potential of the social technologies to accelerate so dramatically the speed at which such work could, or needed to be, undertaken between individuals making up even highly geographically distributed workplaces.


Ronald Mascitelli, 2000

Tacit knowledge lies below the surface of conscious thought and is accumulated through a lifetime of experience, experimentation, perception, and learning by doing.

Managers who can tap into this vast pool of creative energy can elevate the innovative capabilities of their teams well beyond the incremental and mundane.

The ultimate goal is to establish a generative atmosphere for breakthrough innovation, in which divergent thinking, improvisation, and artistic creativity merge with the practical demands of the product development process.

Far less is known about the process of breakthrough product innovation, in which connections are made between technologies and markets that cannot be traced to a seamless lineage of existing knowledge.

In a sense, breakthrough innovations have "missing links" in their evolution; a sudden non sequitur that brings together disparate technologies and unanticipated needs.

Evidently, there is some capacity within highly innovative minds that enables the bridging of intellectual chasms and the merging of seemingly unrelated pools of knowledge.

These leaps of creativity are perhaps the least understood aspect of product innovation, yet they provide the greatest potential for sustainable competitive advantage.

Innovations that are unique, original, and unexpected are far more valuable from a competitive standpoint than innovations that are predictable, incremental, or mundane

The ability to create new and valuable breakthroughs offers firms an unambiguous competitive advantage.

Although such original thinking may manifest itself in a variety of ways, its source is always the same: the creative power of the human mind.

Evidently, it is not the quantity of intelligence, but rather the type of intelligence, that determines a propensity for breakthrough innovation.

From experience: Harnessing tacit knowledge to achieve breakthrough innovation, Journal of Innovation Management, 2000


Chris Argyris, 1999

Learning is defined as occurring under two conditions. First, learning occurs when an organization achieves what it intended; that is, there is a match between its design for action and the actuality or outcome. Second, learning occurs when a mismatch between intentions and outcomes is identified and it is corrected; that is, a mismatch is turned into a match.

Organizations do not perform the actions that produce the learning. It is individuals acting as agents of organizations who produce the behavior that leads to learning. Organizations can create conditions that may significantly influence what individuals frame as the problem, design as a solution, and produce as action to solve a problem.

On Organizational Learning, Wiley-Blackwell, 1999