Expert Interview: Enterprise 2.0
The Enterprise 2.0 term derives from Web 2.0. It was coined only recently – in spring 2006 – by Andrew McAfee of Harvard Business School. As defined by McAfee, Enterprise 2.0 means the introduction and implementation of social software within specific “enterprise” or business organizations, and the social and organizational changes related to its use.
Enterprise 2.0 can help organizations harness unstructured tacit knowledge as part of their knowledge management strategy. The challenge is in how to effectively distill and channel this knowledge in ways that support the organization’s success.
A group of Satama’s Enterprise 2.0 thought leaders that included Jukka Koskenkanto, Tommi Holmgren, Mika Hult and Perttu Monthan, were recently interviewed by Satama writer and media artist Mark Maher. Here are their insights and perspectives on the rapidly evolving and highly intriguing topic of Enterprise 2.0.
Mark Maher: The case for Enterprise 2.0 seems based mainly on the argument that the communication and information sharing behavior in people’s personal lives (Web 2.0) will work similarly well in the business or “enterprise” context. But aren’t there many crucial behavioral distinctions between professional and personal life?
Jukka Koskenkanto: Some behavioral distinctions surely exist, but does it make any difference? Well, yes. Just as many other behavior models are context dependent, the communication and information sharing behavior differs between a person’s work and personal life. This does not mean that tools are bad. This means that there’s different “earning logic” in free-time and work environments. In other words carrots and sticks differ between personal and professional life. The key to successful enterprise 2.0 is to adapt earning logic suitable for a company’s and employee’s objectives.
Tommi Holmgren: To take Jukka’s comment still further, I think the information exploring (not sharing) is following the same pattern dependent on the context. I’m talking about the two different motivations:
1) Pull usage - ”I know what I’m looking for, so please let me know everything related to that subject.” We are used to do this with Google: search with a keyword and get bunch of results where to proceed. Similarly, in corporate environments it’s often valuable to easily find everything and everyone relevant to certain topic.
2) Push usage - ”I want to stay up-to-date on my areas of interest by following discussions, social connections, people, projects, events etc” This concept is pretty much embodied in RSS feeds and in Facebook’s mini-feed. People have certain areas of special interest (at home, in work) which they want to follow actively to develop as a social person or professional.
Of course in the corporate environment there are additional factors, like corporate strategy and direction, to guide the actions and (desired) areas of interest, but still it won’t remove the need of these two methods to access information (or make information visible for you!)
With sharing, I completely agree with Jukka that a company needs to find suitable “carrots” to support the contribution and making it as easy as possible.
MM: While Enterprise 2.0 is a rather fresh idea, it’s clear that
Finland is a bit behind the curve in engaging and adopting it. Can you point to specific ways of Enterprise 2.0 already measurably delivering significant business value – perhaps specific examples from the U.S.A.?
TH: Pointing out the figures is always tricky in these kinds of cases where we are talking about mostly internal issues. Rather few companies are even monitoring their internal efficiency as such, and those doing the monitoring are not willing to share much. Dion Hinchcliffe has researched the subject and states that “The benefits of Enterprise 2.0 can be dramatic, but only builds steadily over time.”
Perttu Monthan: The U.S. is now starting to hit the mainstream with E2.0. Cisco Systems is a notable forerunner in this field, with very impressive and quantifiable business results. CEO John Chambers, who is a fairly outspoken guy, sums up the value in terms of ability run the company not based on command and control, but by making decisions as a group. Once this has become a practice, this means Cisco can carry out acquisitions and integrate businesses successfully using web 2.0 inspired collaboration philosophy and technologies, reduce travel via integrated video-conferencing or keep ahead of the pack with neverending hunt for additional 10 per cent in productivity each year. Keep in mind Cisco is already way ahead of their nearest competition, and still they push fast forwards. We will see other huge success stories during the next 18 months, and also in northern Europe. Other notable examples of materialized business value so far include Dresdner Kleinswort, a financial powerhouse, where the introduction and smart use of wiki already exceeds the use of intranet, and has reduced email by 75% for leading users, as well as cutting company’s internal meetings to half. That is very tangible. We are running pilots for a few of our customers on E2.0 solutions now, and so far the feedback has been very encouraging.
MM: One key point often made for a company to encourage Enterprise 2.0 methodologies and mindsets is that many of these ways of sharing knowledge are already “second skin” for 20-something professionals. But what about workers who are “just fine” with current ways of working?
JK: Many business leaders (regardless of industry) assert that development / change is the only certain thing nowadays in the business world. In that sense no information worker can be “just fine” with current ways of working. If in the future business value will be created by finding new ways of working, information workers cannot hide behind their desks for too long. Of course some change resistance exists and should always exist to rip of the ideas that do not cause positive effects. Technologies have proved their capabilities in various enterprises and in the Internet. Thus the problem is actually more like a sales or service design problem than a generation problem.
TH: Once the early adopters start to use the Enterprise 2.0 style services in the workplace, it’s very easy to justify the usage for “just fine” people as well: you can do your work better with these tools. So the key in roll outs is actually to identify the early adopters and get them to use the system first. Other will typically follow, as with almost any innovation.
PM: I can’t see anyone being “just fine” with current ways of working. We’ve seen research lately showing information workers spending, on average, 2-4 hours on email per day. And as if that’s not alarming enough, some 70-80 per cent of all email originates within the firewall. Think about it. Most of us spend 1.5-3 hours a day emailing with colleagues. Most of whom are just around the corner, or even sitting in the same room. Can anyone justify that? To gain a better view of the situation in Finland, we are conducting a survey in the next few weeks on this theme, and we are glad to share the results. Frankly, it’s quite sad that all that energy poured into pounding out internal emails is practically useless to any new employee - or anyone excluded from the individual email threads.
MM: Is there a critical mass (of adoption) required within an organization before Enterprise 2.0 has any significant positive impact – or does it already deliver benefits even when only the “super-nerds” are active?
Mika Hult: Surely, individuals may get “the occasional payback” without the critical mass, but organizations need it. The sounding board has to be capable of producing an echo that exceeds the original shout. The critical mass is required to form a focal point in the community, to attract and to motivate - to enable rich dialog leading to new innovation. Largely, this is about management - without proper management no virtual (corporation) piazza will succeed nor flourish. I believe the challenge in Enterprise 2.0 is about management, not technology.
PM: I agree that E2.0 is about management. Encouraging, setting the example, and fostering a culture of openness and dialogue. However, I do argue that suitable technology is also needed for mass adoption. It is easy to get the 10-15 per cent excited, but how about the rest? Our view is that E2.0 belongs to the productivity infrastructure of the company. With proper steering and continuing activation we can reach the many - not just the few.
MM: Is there some “killer app” that will empower mass adoption, or do you see more of slow trickle from old to new ways?
JK: Just like Web 2.0 enterprise 2.0 is also a philosophy: tacit knowledge and even more importantly tacit interactions must be published to other employees. The mass adoption is possible but risky as any other major investment. Nowadays it is not a bad idea to deploy smaller parts but much more often. We are living in the world of “betas”.
PM: In Satama’s case, we’ve seen great progress and fast adoption with internal blogosphere (”one man, one blog” principle), social networking and wikis combined with folksonomy and a powerful search capability. Instant messaging is part of our infrastructure, and this complements our own E2.0 stack. Basic principle: find what you need to find – quickly. We are not yet at the mass adoption phase across the company, but we’re getting there.
MM: Are some types of organizations much more “ripe” for adoption of Enterprise 2.0 practices than others? If so, why? Similarly, aren’t some categories of workers in a much better position to benefit from Enterprise 2.0 tools than others?
JK: “Ripeness” is dependent on the benefits that Enterprise 2.0 can offer. Information intensive organizations have already done a lot with E2.0. Computer skill levels and several other factors also affect possibilities of implementing new ways of working. Regardless of ripeness, the direction is the same for all organizations. E2.0 is mainly a tool for information workers, in the broad sense of this category. In other words, worker’s who need to interact with other employees in order to create value but who have restricted possibility to do so (due to location, efficiency requirements etc) are the most likely the ones to adopt E2.0 first.
MM: In your opinion, would mildly coercive strategies (stick instead of carrot) ever be appropriate to get a business organization to adopt Enterprise 2.0 behaviors? (I.e. limiting email inbox size, requiring that everyone create a blog, etc)
MH: As I mentioned earlier, E2.0 needs to be managed – as with any other activity within an enterprise should be. Nevertheless, in the case of E2.0 (harnessing the power of many, empowering the community) management is a delicate issue. Finding the right balance between coerciveness and discretionary power is one - if not the - key factor making or breaking E2.0. Individual’s level of contribution needs to be measured - lack of it will swing the stick and the opposite will keep the carrots coming…
MM: In fact, while structured hierarchies are increasingly considered “passé’”, they have a pretty good track record of delivering success and efficiency, especially with regard to highly complex organizations and tasks. (The Roman Legions come to mind…) Are there potentially significant risks to tacit modes of knowledge sharing, such as inefficiency, confusion of professional roles, and de-emphasis on shared goals?
TH: I think the big thing here is transparency and honesty. There have been a lot of discussions over this topic once CEO’s started blogging. What can you say, how should you say it, do you dare to be honest? And cases can be found of what happens if you are not honest… Enterprise 2.0 is bringing the same transparency to the whole organization, which means that of course it’s a threat to any organization that is managed with poorly considered practices. But after all, is that a threat? At its best, it can strengthen the whole organization by creating the internal communication so often missing from workplace. So good leaders shouldn’t be worried!
PM: Structured hierarchies are good for executing pre-thought plans in a fairly stable or slowly developing environment. But the world has changed quite a bit since the age of the Romans. Companies are, at an ever-quickening pace, facing unexpected situations and disruptive developments on the market. And their job is to adapt and outsmart these developments. With high and rigid hierarchies, this is very hard to accomplish. Shared goals should be inspirational and clear - this does not call for rigid hierarchies, but good leadership. To stay ahead of the game, companies need to reach out to customers and partners, to listen and learn.
MM: Many of the specific tools and behaviors common to Enterprise 2.0 and Web 2.0 seem to work in Web 2.0 precisely because participants do not and perhaps cannot, interact in more traditional ways. Is this where the parallel loses its validity?
JK: No. At least some triggers for using web 2.0 and enterprise 2.0 tools are the same. Just as Web 2.0 participants are seeking efficiency in their (inter)actions, knowledge workers are facing increasingly bigger problems in responding to customers’ and management’s requirements of producing more and more value. Also, if a willingness to develop awareness and skills can be seen as a motivating factor in Web 2.0, there’s another big similarity.
MM: Could you expand a bit on the idea that “We are facing a market for the employee, not the employer.”?
PM: With the current age pyramid, we are looking at a shortage of professionals of working age, i.e. a shortage of employees compared with open positions at companies. This means that the digital natives, people born to the digital era, will be the ones making the decisions on where to work and why - not the other way around. As another point, the efficiency in the way work is done needs to improve drastically. Digital natives expect ways of interacting at the workplace that are similar to how they interact at home. For them, sending an email is like sending a postcard or a letter. You just don’t do such a thing.
MM: So, a business decides that now is the time to move deeper into Enterprise 2.0 practices. How might they start? Is it more a matter of quietly dispersing a number of modest, loosely connected tools, or do you advocate more of a “big bang” approach? And in either case, how does one change the culture, and not just the technology?
JK: “Think globally act locally” might be a good advice for implementing E2.0 practices. Strong commitment and continuous efforts to develop practices must be built on understanding the big picture. Development of E2.0 is more like an iterative process that must consider both technological possibilities and an organization’s ability to change its ways of working. The cultural change will happen – but not over night. To increase the speed of developing ways of work, tools and information worker’s entry point to those tools must be developed simultaneously, step by step, with proper training for management and other users.
TH: Adopting E2.0 tools is more about change management than tools and I would certainly suggest starting with small steps. I guess the same logical steps apply here for changing the culture that Perttu recently listed for me in one of our customer projects when we were talking about customer purchase decision:
First, make people trust the service and system (and especially that the system is not threat to their position). Next, show them that it’s valuable for them. And finally, make it easy to use.
MM: Do you see Enterprise 2.0 as having a lot of potential with regard to an organization’s globalizing plans and strategies. Please explain.
TH: Well this is an interesting question. I’ve been previously working in an organization where I was ramping up the European sales and delivery activities without having offices locally in the target areas. This meant that I was travelling a lot. One of the biggest downsides of the situation was that I started to lose track of what was actually happening within the organization, since I was so rarely at the office. I can just imagine if we would have had the tools we now have here at Satama today, where I can see at once what’s hot at the organization. I would guess (as I do not have any research data), that similar problems exist when a company ramps up offices abroad. Those new sites are extremely dependent on the information and communications, and with E2.0 tools the critical information can be easily accessible at all times.
MM: Does Enterprise 2.0 ultimately have as much to do with how we work with our clients and partners as it does with how we work within our own organization?
JK: Yes. If a company creates value by selling its products / services to customers, then the company should foresee the future’s needs of its customers and potential customers. E2.0 can help in detecting weak signals in the market and in collecting other market information. As well, it may be beneficial in increasing efficiency in customer communication and customer services. E2.0 is all about “me, my groups and markets”.
PM: Exactly. In the U.S., customer and partner participation is becoming the standard rather than exception. As companies can’t gain control of what is discussed about them, they must become an active part of that dialogue with their customer and partners. Bottom line: gain important understanding of the needs and directions of the market. E2.0 technologies increase the reach and improve the richness of this interaction. For example, Dell, Microsoft and Salesforce.com are actively engaging with their customers for product feedback, feature requests and rankings. This means that R&D is happening right there in customer relationships, not in isolated labs. We are starting to see this more and more in Finland, too.
MM: It’s been written that “Enterprise 2.0 makes accessible the collective intelligence of many, translating to a huge competitive advantage in the form of increased innovation, productivity and agility.” I think my “hype-o-meter” just went off. Quite seriously, what can be realistically delivered in the near to medium term?
JK: From technological point of view the answer is: it is realistic to make all these things possible in the near to medium term. From a “process” (or “organization”, or “company culture” point of view E2.0 is a huge challenge and it cannot be done by giving a command from above. The conclusion is that it is impossible to tell without knowing the case (behavior models are context dependent). Thus I would need to learn more about an organization’s specifics.
PM: Collective intelligence, or wisdom of the crowds, has been successfully used by HP to forecast market trends and sales. In short, it is like the stock market, but instead of trading shares of a company, employees are trading concepts and views. Conceptually this is not far from user research or focus groups run inside the organization, it is just far more effective and has a significantly larger reach.
The fact is that a significant change is happening. Web 2.0 (its philosophy, technology and values) is here to stay. It is about reaching out to customers, partners, and employees to take an active role - both online and at the workplace. As Dion Hinchcliffe so aptly put it, “Enterprise 2.0 is going to happen in your organization - with you or without you”.
