Lego’s Innovation Won’t Stop Children’s Creativity

September 6, 2009 by 4 Comments

LEGO logoThe New York Times has a great story about Lego’s resurgence as a profitable, growing toymaker. In Beyond the Blocks, the newspaper asks: “Lego has rebuilt itself, but does it risk losing a sense of wonder?”

Lego is a universal toy for all of us, across generations. As kids, we played with canisters of those multicolored bricks. As parents, we pass along the tradition to our kids. The free form nature of Legos is part of their attraction. Build whatever you want, exercise the creativity muscles and wonder that’s so prevalent in young children.

The company, however, was running into challenges of slow market growth and poor internal operational discipline. To combat the malaise that was setting in, a new CEO came in and made two big changes. He instilled a key performance indicator (KPI) mentality and greatly expanded the product line beyond the free form blocks. It is a story of success and innovating to become a stronger company, as the New York Times notes:

But the story of Lego’s renaissance — and its current expansion into new segments like virtual reality and video games — isn’t just a toy story. It’s also a reminder of how even the best brands can lose their luster but bounce back with a change in strategy and occasionally painful adaptation.

A key point made in the story is that the theme-based Lego toys have a downside. Toy sets based on Indiana Jones, Star Wars and Toy Story rob children of the creative aspects that the traditional plain bricks. With a plain set of Legos, there are no instructions, no pre-set pictures of what the end result will be. It requires that the child think about new possibilities and dream up their own structures. The themed toys, on the other had, are more about following someone else’s directions and creativity. Indeed, here’s what psychiatrist Dr. Jonathan Sinowitz says in the New York Times article:

What Lego loses is what makes it so special. When you have a less structured, less themed set, kids have the ability to start from scratch. When you have kids playing out Indiana Jones, they’re playing out Hollywood’s imagination, not their own.

I think it’s a point well-made. But I want to offer a counterpoint. It’s not from any deep research background on childhood creativity. Rather, it’s as a father of a 5 year old boy. Here is my son’s current favorite Lego creation:

Lego flying machine contraption

Lego flying machine contraption

What’s that? Ask my son, and he’ll tell you, “It’s a secret.” What did it used to be? A helicopter. A Lego helicopter that came with specific instructions for how to build it. Which we did together. But soon thereafter, he decided to make it his own thing. He can tell you all about the different parts of his magnificent flying machine. What they do, and where the people climb in and how they operate it.

What this tells me is that creativity is an intrinsic part of all of us. Sure, my son made a helicopter into a variation of something that flies, instead of turning it into a castle or bridge or something. So certainly, the theme of the toy influenced the direction of his creativity. But I actually think that’s a good thing. Give him some direction for his creativity.

Can’t wait to see what he does with the Grand Carousel.

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Management by Community

September 3, 2009 by 6 Comments

At the Spigit Customer Summit, Gary Hamel described an innovative management approach that has stuck with me. W.L. Gore management has a hands-off approach to managing employees. Each employee is free to say ‘no’ to any request by a colleague. That’s right. Refuse to do something a colleague asks.

Damn, that sounds pretty good, doesn’t it? No more of those annoying requests that drive you insane.

But doesn’t it also sound like a recipe for anarchy? I mean, companies need employees to get specific things done, on a timely basis. It’s what make companies “go”. You get people refusing to do work, things will grind to a standstill.

All true, if the story stopped there.

Say ‘No’ But Watch the Repercussions

The figure below demonstrates the power of community in regulating excessive refusals to do work, or in providing work that is of inferior quality just to get someone off your back:

Mgt by Community

Employees learn community expectations about what constitutes quality work, responsiveness and collaboration. As you see in the graphic, each employee is requested to work on different projects over the course of a year. And true to the W.L. Gore way, an employee can say ‘no’ or ‘yes’ to each request.

The kicker is that at year-end, peers will rate the employee’s performance. A normal, conscientious worker will do fine in this scenario. But one who is an underperformer will have trouble hiding from the judgment of peers.

Consider how this maps to current processes:

  • Executives and other employees set direction and launch new initiatives, just like today
  • Employees are expected to contribute to multiple projects during the year, just like today
  • Employees need to work in a collaborative team environment, just like today
  • Peers provide a 360 review of employees, just like today

The biggest difference is the primacy given to the peer feedback. It is the crucial input on performance reviews.

It is the crucial input on performance reviews. This is how individuals internalize expectations that might normally come from a single boss. In the usual work setting, your boss is the final arbiter of your performance. Which means you really need to focus on winning the opinion of just one person.

In management by community, you need to think larger than that. The work everyone does plugs into a larger objective of growth and profitability. By tying one’s performance to the interactions with multiple colleagues versus one, companies like W.L Gore alter the influences on employees’ work. And it has paid off for Gore. As noted in FastCompany recently:

In its 50th-anniversary year, the $2 billion-plus private company is on pace for record revenues and profits, thanks to a number of clever new products with a lot of potential.

Visibility Becomes More Important

One outcome of management by community is that the visibility of one’s work becomes more important than ever. Two reasons for this:

  • You want a record of the work you have done, so others will see it  and be able to find it
  • You need evidence of the work you are doing when you inevitably have to say ‘no’ to someone

Others will know that you are accomplishing things as you deliver your work for projects. But the visibility will be limited to only those involved at that time on that task. You’ll likely email your work to others for use in a project. That includes your boss, which is all you really need usually.

Creating public spaces for the sharing of work allows you to deliver on a specific task to a group of people in the same way. But it also lets others know what you’re doing. Someone who may be rating you down the road may not have been on that specific task. But they are now aware of your work. Think that might help influence their opinion come peer review time? I’d say it will. It also makes you more valuable to others for future work, which is an important aspect of management by community.

The other thing is that you will have to say ‘no’ to people. They will be disappointed, even a bit angry. This is a reality, as there is only so much of you to go around. But what can help mitigate those feelings of rejected “work suitors” is a demonstration that:

It’s not you. It’s me.

You didn’t say ‘no’ to someone because you don’t like them, or the work they need. It’s because you’re just so tied up currently on other things.

Final thought on visibility. One could take this to an extreme of tracking the tasks you’re asked to work on. You then signal whether you are in or out on some sort of online site. Considering that many task requests come in the form of email, perhaps not so farfetched to imagine them being made online.

Better Match between Employees Interests and Their Work

Another aspect of management by community is that employees will tend to associate to projects with work that matches your skills and interests. As you make decisions about what to say ‘yes’ and ‘no’ to, there will inevitably be a pattern to them. Generally, I’d expect a bias toward ‘yes’ on projects requiring talents matching yours.

This has two upsides and one downside. One upside is that projects get a better mix of diverse skills from people with above average talents for a given task. This is great, as it improves the output of a team.

A second upside is that employee satisfaction rises. Imagine a world in which you got to employ your skills in something bigger than yourself, and that was your primary work. Not everyone gets to do this. Having more control over your career destiny and work that you personally enjoy is a recipe for happier employees.

The downside is that there are always going to be those grunt tasks that need to get done. Having liberated workers who determine that their time is better spent on meatier projects can risk a failure to get the grunt work done. We all know what employees who exhibit these traits are called: prima donnas.

An interesting question is how much the community dings employees who refuse the more menial tasks that make up everyone’s day. If you truly are world-class talented for something and applying those skills for bigger picture work makes everyone’s projects better, I suspect you can get away with it. But suppose your chosen work is of decent quality, but not earth-shattering. Or what you’re good at is in low demand by peers. I think you risk serious prima donna backlash in the community reviews by saying ‘no’ too many times to grunt work.

Employees will have to do a serious self-assessment in such an environment. Which may be one of the best outcomes of management by community.

There is a lot to commend this concept of management by community. It plugs employees much more into the hive mind of the organization than do traditional management models. And it seems to work. Aside from W.L. Gore’s record financials in its 50th year of business, note that the company is consistently ranked as One of the Best Companies to Work For by Fortune Magazine.

Management by community: worth a closer inspection.

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Democracies Don’t Suffer Famines: Implications for Corporate Governance

August 24, 2009 by 5 Comments

In his keynote at the Spigit Customer Summit, Gary Hamel said that something that caught my attention: democracies don’t suffer famines. Hearing this, I was intrigued and did some research.

Amartya Sen, winner of the 1998 Nobel Prize in Economics, made this empirical observation:

One of the remarkable facts in the terrible history of famine is that no substantial famine has ever occurred in a country with a democratic form of government and a relatively free press.

Why? In a paper from the John F. Kennedy School of Government at Harvard University, Sean M. Lynn-Jones puts forth two reasons:

First, in democracies governments are accountable to their populations and their leaders have electoral incentives to prevent mass starvation. The need to be reelected impels politicians to ensure that their people do not starve.

Second, the existence of a free press and the free flow of information in democracies prevents famine by serving as an early warning system on the effects of natural catastrophes such as floods and droughts that may cause food scarcities.

Isn’t that powerful? Simplifying things, I distill those two reasons into these: (i) organizational responsiveness, and (ii) distributed trend detection.

Both of which describe the realm of what Enterprise 2.0 is about, albeit without the life-and-death issue of starvation. That in itself is interesting enough. But when you try to apply those findings to companies, you realize they don’t quite mesh with today’s corporate governance models.

Corporations Aren’t Democracies

You, the reader, probably say “duh” to the observation that corporations aren’t democracies. But to consider the benefits of organizational responsiveness and distributed trend detection, it’s important to understand a crucial difference between democracies and corporations. The diagram below shows the corporate governance model:

Corporate Governance Model

In the context of making organizations more responsive, and distributing trend detection, where does that happen? It’s the employees. They’re the ones on the front line. They’re getting creative to solve issues everyday. They hear things from the market before most do. They want to make a difference and see their companies progress.

This is the equivalent of the voters in a democracy. The ones who are experiencing issues firsthand. But employees aren’t empowered to change their organizations. That’s the C-Level suite: CEO, COO, CFO, etc.

The C-Level suite lives a life of leading employees, and listening to the Board of Directors. Well listening, and leading, the Board. And the Board serves at the pleasure of shareholders.

In this model, shareholders look at company results and estimate future overall growth in revenue and profits. Fail to hit the numbers, and they put pressure on the Board. Board feels the pressure, and begin to question the C-Level suite. C-Level suite makes changes, and/or is replaced.

Notice that train of actions – it’s not the feedback from employees that drives changes. It’s a look-back at the results by shareholders. This isn’t to say that C-Level executives do not listen to employees. But the structural governance model sets the pecking order for who and what gets attention.

Bringing the Voice of the ‘Governed’ into the Enterprise Conversation

As someone who went to business school, I’m a firm believer in the accountability to shareholders governance model. Capital is scarce, and its efficient allocation across the economy is valuable for ensuring generally sufficient supplies of products and services needed by the population.

But that doesn’t mean the C-Level executives can’t change the way they manage to improve the prospects of their companies and returns for their shareholders. As has been pointed out before, companies are experiencing unprecedented levels of volatility in markets today. Sources of industry change come from multiple directions, and their speed of invasion is much faster.

Maintaining a model of listening only to their senior executives, their Board and their shareholders is becoming a risky strategy for CEOs. It means listening to people whose interests are certainly in seeing a strong, healthy company, but whose capacity to provide early trend detection and problem-solving creativity is limited. Shareholders aren’t in the trenches of your company’s operations. The Board of Directors is made up of C-Level executives from other companies, who need to worry about their own operations.

Gary Hamel discussed W.L Gore as a model of a company where employees are much more a part of the corporate governance model. From Fast Company in February this year, here’s a quick update on W.L. Gore:

Gore has spun a fortune from constantly reinventing the polymer polytetrafluoroethylene. In its 50th-anniversary year, the $2 billion-plus private company is on pace for record revenues and profits, thanks to a number of clever new products with a lot of potential.

An article in Sales and Marketing Management noted that employee teams help to hire new staff members, assist in determining each other’s pay, and pick their own leaders. Crazy eh? But note the same article says this:

An almost eerie optimism radiates through the hallways at Gore, which is best known for its Gore-Tex lining for weatherproof jackets, and which remains a private company despite its size, in order to protect its culture from outside interests.

Ouch! Here’s a company that exemplifies a governance model of innovation, encourages employee innovation and distributed market intelligence. And it has to stay private to protect this culture?

My sense is that the Enterprise 2.0 movement in general is a vanguard toward improving the way companies are managed. Being a public company, used to a top-down order of things and paying a lot of money to outside consultants to understand the market, is hard to change overnight. But companies can begin to improve the way they engage their employees and leverage their vast, distributed know-how and creativity. There is a wide spectrum of how far companies can take this. The key is to begin understanding how new approaches can work in your organization.

Enterprise 2.0 as a movement, not a technology, is quite promising for enabling companies to improve their overall strategies and operations.

Alternatively, we can continue to do things the way we always have, with a limited set of decision-makers and market intelligence gatherers. As seen with the increased rate of companies gaining and losing positions in industries, this model is becoming less reliable.

Remember, there’s a reason democracies don’t suffer famines.

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Gary Hamel on Enterprise 2.0 and the Post-Establishment Age

August 18, 2009 by 21 Comments

Gary Hamel photoLast week at the first-ever Spigit Customer Summit, I had a chance to listen to Gary Hamel live. He delivered the keynote for the event, “Inventing Management 2.0.” If you’re a reader of Gary’s blog or his books, you know he’s a big proponent of empowering employees and changing management paradigms. See his 25 Stretch Goals for Management in the Harvard Business Review from last February for a great overview of his thinking.

In his speech last week, he did not disappoint. In fact, he provided a distinct rationale and call to action for companies to embrace the Enterprise 2.0 movement.

Driving the Autobahn in a Model T

In his presentation, there were two distinct graphs that really drove home the point that it’s time for new ways of managing companies. I’ve put them together below:

Gary Hamel - Why Innovation in Mgt Is Needed

On the left, a conceptual chart outlines something many of us instinctively feel. The pace of change in our world is increasing. As Gary Hamel noted, year-to-year volatility in company earnings have been increasing exponentially the last 40 years. Those changes are manifestations of what we all experience. I thought he put it well when he said:

What a company did in the past is now less predictive of its future.

Business Week in 2004 ran an article that nicely demonstrated the acceleration of change. It included these points:

  • The number of Fortune 300 CEOs with six years’ tenure in that role has decreased from 57 percent in 1980 to 38 percent in 2001.
  • In 1991, the number of new household, health, beauty, food, and beverage products totaled 15,400. In 2001, that number had more than doubled to a record 32,025.
  • From 1972 to 1987, the U.S. government deleted 50 industries from its standard industrial classification. From 1987 to 1997, it deleted 500. At the same time, the government added or redefined 200 industries from 1972 to 1987, and almost 1,000 from 1987 to 1997.
  • In 1978, about 10,000 firms were failing annually, and this number had been stable since 1950. By 1986, 60,000 firms were failing annually, and by 1998 that number had risen to roughly 73,000.
  • From 1950 to 2000, variability in S&P 500 stock prices increased more than tenfold. Through the decades of the 1950s, 1960s, and 1970s, days on which the market fluctuated by three percent or more were rare — it happened less than twice a year. For the past two years it happened almost twice a month.

On the right, the chart provides the major innovations in company management over the past 150 years. Current management systems reflect philosophies that were developed in an earlier era of greater stability. A quick primer on the different management ideas (note – cannot find information on McCollum):

Taylor: Frederick Winslow Taylor advocated: “It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with management alone.”

Sloan: Former GM CEO Alfred P. Sloan revolutionized the management of corporations through numbers: “Sloan oversaw the use of rigorous financial and statistical tools to profitably manage GM’s far-flung empire.”

McGregor: MIT professor Douglas McGregor developed Theory X and Theory Y: “In Theory X, management assumes employees are inherently lazy and will avoid work if they can. In Theory Y, management assumes employees may be ambitious and self-motivated and exercise self-control.”

Deming: W. Edwards Deming was a professor and statistician credited with revolutionizing post-war Japan’s manufacturing: “Dr. W. Edwards Deming taught that by adopting appropriate principles of management, organizations can increase quality and simultaneously reduce costs (by reducing waste, rework, staff attrition and litigation while increasing customer loyalty). The key is to practice continual improvement and think of manufacturing as a system, not as bits and pieces.”

The point Gary Hamel drives home is that our business and economic environment has irrevocably shifted toward higher volatility and accelerated change. The sundering of companies from healthy industry positions to crisis mode in relatively short order demonstrates the need for updating management philosophies.

Need for Better Adaptability in the Post-Establishment Age

My own term for this is the “post-establishment age”.  In prior decades, change was slower, and companies could count on inherent advantages that helped them maintain their established positions. As Gary Hamel noted, protections came in the form of regulatory frameworks, monopolies (e.g distribution), capital access and other ways.

These protections continue to erode in our modern, WTO-governed society. The web and digitalization of content and processes are making it easier than ever for new ideas to be tested. Consumers have access to more information than ever. Social media ensures more people know about new companies and products more rapidly then ever.

Old protections are falling, while change and industry disruption is accelerating. What can modern companies do to manage in this new environment?

Gary Hamel prescribes two strategies for companies in the post-establishment age:

  • Increased organizational adaptability
  • Pushing innovation and decision-making out to employees

Adaptability is a critical strategy. It means that companies pivot as they learn new information about their markets, competitors and changes in customer behaviors. As noted in a recent Wall Street Journal article noted, companies can try more ideas faster and less expensively than ever:

Technology is transforming innovation at its core, allowing companies to test new ideas at speeds—and prices—that were unimaginable even a decade ago. They can stick features on Web sites and tell within hours how customers respond. They can see results from in-store promotions, or efforts to boost process productivity, almost as quickly.

Gary Hamel then notes that senior executives continue to have a monopoly on strategy. This essentially makes companies dependent on a handful of executives’ ability to adapt to change.

Yet employees are probably the earliest to know when something is changing. They also are faced with situations where they must come up with solutions. It is in this environment where companies will find their sources of adaptation. In an article for the Harvard Business Review, 25 Stretch Goals for Management, Gary Hamel included these two goals:

12. Share the work of setting direction. To engender commitment, the responsibility for goal setting must be distributed through a process where share of voice is a function of insight, not power.

17. Expand the scope of employee autonomy. Management systems must be redesigned to facilitate grassroots initiatives and local experimentation.

In the post-establishment age, these strategies are what distinguish leaders from those that will go through another disruption.

This Is Enterprise 2.0 Evolved

The cornerstones of Enterprise 2.0 include greater information visibility, tapping the emergent knowledge of employees and increased collaboration. Those are the foundational elements. Use them to create a company of higher adaptability and distributed innovation and decision-making.

As Gary Hamel concluded in his keynote:

“You can’t build a company that’s fit for the future unless it’s one that’s fit for human beings.”

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Gary Hamel’s Hierarchy of Employee Traits for the Creative Economy

August 17, 2009 by Leave a comment

Over on the Spigit blog, I published Gary Hamel: Hierarchy of Employee Traits for the Creative Economy. It’s notes from his talk last week at the Spigit Customer Summit. The post has the full details, but I wanted to share this graphic from it:

Gary Hamel - Hierarchy of Employee Traits for the Creative Economy

The key point is this: the traits that will determine success in the Creative Economy are different than those that govern the Information Economy. They are much closer to the Enterprise 2.0 ethos than that anything we’ve seen previously. The top three traits are something that employees themselves bring to the job. As Gary Hamel says, they cannot be commanded.

Check out the post for a full description of what Gary Hamel talked about.

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Tide Basic Detergent. Is this Innovation?

August 8, 2009 by 8 Comments

Photo credit: Wall Street Journal

Photo credit: Wall Street Journal

Adam Hartung, Managing Partner of Spark Partners, a strategy and transformation consultancy, asked this question on LinkedIn:

Do you think “Tide Basic,” a less-good formulation, is an innovation? Isn’t innovation about making things better and cheaper, not just cheaper?

The genesis of the question is a story in the Wall Street Journal describing why P&G recently rolled out Tide Basic. Tide Basic “lacks some of the cleaning capabilities of the iconic brand — and costs about 20% less.” As the article notes, Tide’s historic posture is to improve the laundry detergent continuously. It gets better every year. And the price does go up as well. The decision to go down-market didn’t come easily.

Much of this is reminiscent of Clayton Christensen’s analysis of the steel industry. In that story, low-cost mini mills ultimately led to the demise of the big, integrated steel mills.

Reflecting on that, here’s how I answered Adam’s question on LinkedIn:

Conceptually, going simpler on something *could* be an innovation. Clayton Christensen’s mini steel mills were the catalyst for disrupting the steel industry in the 1970s and 80s. The innovation was decoupling the low cost, simple steel from the integrated high end. It enabled quality customers wanted at much lower prices.

A lower cost, less featured Tide sounds similar, doesn’t it? A difference here is that there’s nothing new in the manufacturing process for Tide Basic. Remove the more expensive ingredients, change packaging, sell for less. Nothing wrong with that either. It addresses the needs of a segment of the market. I consider it smart business.

A key difference between Tide Basic and the mini steel mills is that the mini mills recast the economics of the industry. At the low-end initially, then upmarket as well. Tide Basic doesn’t recast the economics of the industry. There’s still a linear relationship between the ingredients put in the detergent, and the price and performance of the detergent. The mini mills caused a fundamental shift in the pricing of steel.

That was their innovation.

How about you? What do you think?

Conceptually, going simpler on something *could* be an innovation. Clayton Christensen’s mini steel mills were the catalyst for disrupting the steel industry in the 1970s and 80s. The innovation was decoupling the low cost, simple steel from the integrated high end. It enabled quality customers wanted at much lower prices.

A lower cost, less featured Tide sounds similar, doesn’t it? A difference here is that there’s nothing new in the manufacturing process for Tide Basic. Remove the more expensive ingredients, change packaging, sell for less. Nothing wrong with that either. It addresses the needs of a segment of the market. I consider it smart business.

A key difference between Tide Basic and the mini steel mills is that the mini mills recast the economics of the industry. At the low-end initially, then upmarket as well. Tide Basic doesn’t recast the economics of the industry. There’s still a linear relationship between the ingredients put in the detergent, and the price and performance of the detergent. The mini mills caused a fundamental shift in the pricing of steel.

That was their innovation.

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Gartner Hype Cycle for Emerging Technologies 2009: What’s Peaking, What’s Troughing?

July 27, 2009 by 24 Comments

Gartner maintains something called hype cycles for various technologies. What’s a hype cycle? The hype cycle provides a cross-industry perspective on the technologies and trends IT managers should consider in developing emerging-technology portfolios.

UPDATE: Link to Gartner’s 2010 Emerging Technologies Hype Cycle

Here are the five stages of the hype cycle:

1. Technology Trigger
The first phase of a Hype Cycle is the “technology trigger” or breakthrough, product launch or other event that generates significant press and interest. A “technology trigger” is breakthrough, public demonstration, product launch or other event generates significant press and industry interest.

2. Peak of Inflated Expectations
In the next phase, a frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. There may be some successful applications of a technology, but there are typically more failures.

3. Trough of Disillusionment
Technologies enter the “trough of disillusionment” because they fail to meet expectations and quickly become unfashionable. Consequently, the press usually abandons the topic and the technology.

4. Slope of Enlightenment
Although the press may have stopped covering the technology, some businesses continue through the “slope of enlightenment” and experiment to understand the benefits and practical application of the technology.

5. Plateau of Productivity
A technology reaches the “plateau of productivity” as the benefits of it become widely demonstrated and accepted. The technology becomes increasingly stable and evolves in second and third generations.

On July 21, Gartner released its omnibus Hype Cycle for Emerging Technologies, 2009. This report covers a wide range of industries, from flat panel displays to home health providers to cloud computing.

Honestly, it’s fascinating to see how Gartner positions the various industries along the cycle. Here is 2009’s hype cycle for emerging technologies:

Gartner Emerging Technologies Hype Cycle 2009

Boy, that’s a full hype cycle isn’t it? The report itself is chock full of analysis and forecasts for the various technologies. Here are a few notes of mine from reading it.

Social Software Suites: It’s clear that the market is moving toward more applications bundled into Enterprise 2.0 offerings. As Nikos Drakos and Anthony Bradley write, “we expect that successful products will continue to assimilate new functionality.” The report notes that Social Software Suites have tipped past the peak of inflated expectations.

One observation made by Drakos and Bradley resonates with me:

In the longer term, many companies will have social software technology supplied by their strategic workplace vendor, perhaps augmented with additional third-party products. Accordingly, industry is starting to move from general-purpose suites to more targeted products, concentrating on “horizontal” social business challenges, such as idea engines, prediction markets and answer marketplaces.

Putting Enterprise 2.0 to work on specific problems was something I wrote about as well recently in Enterprise 2.0: Culture Is as Culture Does. If you’re not addressing specific problems as a social software vendor, you’re basically angling to replace the company intranet or portal.

Finally, note that standalone wikis and corporate blogging are in the Slope of Enlightenment. Those apps are also part of social software suites.

You can see the Gartner Social Software Hype Cycle 2009 graph on the Spigit blog.

Idea Management: Idea management is further along the curve, knocking on the door of the Slope of enlightenment. What’s interesting to me is how much the idea management space is really overlapping the social software space. Indeed, read the quote above. According to my interpretation, this means that social software is moving more toward tackling horizontal challenges, “such as idea engines.”

Speaking from my own Spigit experience, this quote rings true:

Industries that emphasize new product development were early adopters of idea management tools. In 2009, service industries and government are increasingly adopting innovation and idea management practices.

Microblogging: With Twitter’s rapid ascension in the public consciousness, it’s no surprise that the Enterprise 2.0 vendors are rapidly adding microblogging to their suites. Analyst Jeffrey Mann predicts that “by 2011, enterprise microblogging will be a standard feature in 80% of the social software platforms on the market.”

I like Mann’s advice to corporate clients reading this report:

Adopt social media sooner rather than later, because the greatest risk lies in failure to engage and being left mute in a debate in which your voice must be heard.

Cloud Computing: Cloud computing is at the top of the Peak of Inflated Expectations. It’s hot. I’ve seen bloggers debate what constitutes “cloud computing”. This definition by David Mitchell Smith seems as good as any:

Gartner defines “cloud computing” as a style of computing where scalable and elastic IT-enabled capabilities are delivered as a service to external customers using Internet technologies.

Smith notes that cloud computing is actually quite varied, and “that one dot on a Hype Cycle cannot adequately represent all that is cloud computing.” The report does say that cloud computing will be transformational. Yup.

E-Book Readers: So, have ya heard of e-book readers? When they debuted, I personally didn’t think much of them. I mean, what’s wrong with books? Turns out, there’s a great market for them. I still haven’t bought one, but that doesn’t mean much.

And this report is illustrative of the unexpected success of e-book readers. Here’s what the Gartner analysts said for the appearance of e-book readers at the top of the Peak of Inflated Expectations:

This positioning has been reassessed from the prior year’s Hype Cycle. E-book readers saw serious hype in the early days. These largely failed to capture the attention of the consumer and fell into the trough never to emerge.

Those are a few notes from the report. It’s 55 pages, and there are technology-specific versions of them as well. Gartner always has an interesting take.

I’m @bhc3 on Twitter.

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Corporate Innovation Is Both Emergent and Managed

July 18, 2009 by 2 Comments

Photo credit: SweetGirl©

Photo credit: SweetGirl©

Item #1, The Crowd Is Wise (When It’s Focused), New York Times:

Successful projects are typically hybrids of ideas flowing from a decentralized crowd and a hierarchy winnowing and making decisions.

Item #2, Innovation Management an Oxymoron, Paul Golding:

When I get requests for “sync up” and “co-ordination” and ” alignment” and all those other management “control” phrases, I know that the plot has wandered far from where it needs to be, far away from innovation as a force of creation, dragging it back towards the stronger force, tendency and habit of “management.” BIG MISTAKE.

In recent post here, What Is Innovation Management?, I wrote about common perceptions about the term “innovation management”. The second quote above is yet another example of that. Paul Golding expresses his suspicion for what is meant by innovation management. As he uses the term, I get it. It sounds like ham-handed management failing to understand ideas with intrinsic value, that go against the grain of what its parochial interests are. Taking honest, organic enthusiasm and killing it.

But that’s not the case. Having been at Spigit, I’ve seen these corporate folks firsthand. They’re much more dynamic and enlightened than that.

The first quote above, from a New York Times piece by Steve Lohr, represents the types of implementations I’m seeing. Companies want the ideas from their employees. They’re looking for the incremental ideas, and the ones that will disrupt an industry (theirs or a new one). But of course they apply their judgment as to which ideas ultimately get taken up.

In the NYT article, Linux is provided as an example. Around the world, developers submit their ideas for the next release of the operating system. It’s a great example of harnessing the enthusiasm of innovators. But guess what? Final cuts about what actually makes it into the release are based on what Linus Torvalds and a few others decide. Yup, top-down management of innovation. Why? Torvalds is the steward of Linux.

It’s no different inside companies. Managers are the stewards of their businesses. Executives are stewards of the enterprise. What is changing is the general awareness inside companies that innovation does need to be managed better than it historically has been. Innovation management isn’t a clumsy effort at turf protection. From that earlier blog post What Is Innovation Management?, this is what is emerging today:

  1. Innovation benefits from a range of perspectives
  2. Four of the most damaging words an employee can say: “Aww, forget about it”
  3. Create a culture of constant choices
  4. Looking at innovation as a discipline
  5. Focus employees’ innovation priorities
  6. Recognizing innovation as a funnel with valuable leaks
  7. Establishing a common platform for innovation is a revolutionary step forward
  8. Innovation must be more than purely emergent, disorganized and viral

Much of innovation management is the recognition that internal processes and companies’ execution focus has limited the pace of innovation. Companies are undertaking serious efforts to improve their employee-driven innovation.

Finally, I like this observation from the New York Times article from the University of California – Berkeley’s Henry Chesbrough:

To succeed, Mr. Chesbrough said, a company must have a culture open to outside ideas and a system for vetting and acting on them.

The first part of the sentence is in line with Paul Golding’s post about ideas emerging from throughout an organization, and building employee enthusiasm for innovation. The second part of the sentence – vetting and acting on them – is the stuff of modern innovation management.

The two parts of innovation really can work together.

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Google and Microsoft now driving SaaS’s disruptive innovation

July 13, 2009 by 2 Comments

Google Chrome OS and Microsoft Office 2010As incumbent companies go through their own versions of Clayton Christensen’s disruptive innovation, I imagine early observations about the changes-to-come are similar to these seen last week with Google’s Chrome OS announcement…

Item #1:

But while I’m sure Chrome OS will pick up some fans, I have a hard time seeing this as the way of the future for computing.

Nick Mediati, PC World, Is Chrome OS The Future Of Computing? I Hope Not.

Item #2:

It’s certainly interesting and ambitious to state that the entire application platform will consist of web apps. If anyone was going to build such an OS, it’d be Google. Much of the initial commentary regarding Chrome OS has been wholly positive, but one common note of skepticism has been with regard to the “web apps are the only apps” aspect, with the frequent point of comparison being to the 1.0 release of the iPhone OS.

John Gruber, Daring Fireball, Putting What Little We Actually Know About Chrome OS Into Context

Item #3:

Netbooks may be important, but they remain a tiny part of the world’s PC sales. Google’s bet is predicated on strong demand for weak computers.

Google is counting on users of small computers not being tied to specific applications and being willing to accept low cost and, perhaps, ease of use over a more familiar and more powerful environment.

Nick Coursey, PC World, Five Reasons Google Chrome OS Will Fail

The quotes above reflect a rationale perspective on the fate of netbooks and an-all SaaS computing experience. After all, no one does that today. Most people haven’t even looked at the web-only alternatives out there. Microsoft Office is a client app. Adobe is a client app. File directories are client apps for files on your hard drive.

Why does anyone need a web-app only experience? Well, note Microsoft’s announcement of its web-based Office 2010. Something is afoot. Both Google and Microsoft are pushing forward significant initiatives that will increase the percentage of computing done via SaaS. What does Clayton Christensen’s theory say about this?

Disruptive Innovation

A disruptive innovation is one that upends the existing structure of an industry, often sending incumbents into niche positions, and niche players into incumbent positions. Three qualities define it:

  • New technologies start out less functional than existing technology
  • New technologies find their niche markets
  • At the outset, it’s really hard to believe the new technology will ever displace the incumbents

Pretty much sums up the idea of all web-based computing.

Check out the chart below, which diagrams sustaining and innovation over time and performance:

Disruptive Innovation Graph

Probably the single most important thing to note about this graph is that the incumbent companies (blue line)  continually add features to their products. This effort expands their addressable markets, as more and more niche segments are covered. It’s a rationale, smart way to grow.

But at some point, the incumbents’ innovations overshoot what mainstream users need. As Christensen notes, performance exceeds what customers can utilize. This is what happens as companies expand into niche markets.

Which brings us to the PCs of today. They are marvels, providing a slick experience for users and able to accommodate a host of new applications. But if I were a betting man, I’d say the most common activities people do with their computers are:

  • Surf the web, engage in social media
  • Email
  • Write documents
  • Build spreadsheets
  • Create presentations
  • Consume and work with media (video, music, graphics)
  • Use web-based business apps

Among those activities, what’s the magic of client-based computing? The media-related activities perhaps require the horsepower of a client app. But even those are getting better with web apps.

Web-based apps fulfill the first bullet of early disruptive innovation above – they’re not as full-featured.

Second bullet is the initial niche that wants to use the less powerful alternative to incumbents. For web-based computing, I can see two markets:

  1. Small businesses – lower cost, less hassle than installed apps
  2. Students – more comfortable with third parties holding data, low cost, activities are mostly writing and web access

Those are the initial toeholds into the operating system market. Getting significant share in a couple segments is critical to getting the attention of application developers.

The Web Apps Are Coming Along

Let’s start with the apps most commonly used in work contexts: documents, spreadsheets and presentations. Zoho has been at it for a while now, and provides a very functional set of apps. Google Docs continue to evolve toward better functionality. And of course Microsoft has joined the SaaS movement. The TechCrunch article about Microsoft Office 2010 notes:

Most certainly a direct challenge to Google Apps, Microsoft is rolling out lightweight, FREE, Web browser versions of Word, PowerPoint, Excel and OneNote. All based in the cloud, the web-based versions of these products have less features than their desktop cousins but still let users that users basic tools to edit and change documents.

Already inside the enterprise, wikis are quite functional. As alternatives to writing up documents and emailing them around, they are quite powerful. Atlassian Confluence, Socialtext, JSPwiki and others are highly functional. They offer a formatting experience similar to the most commonly used functions of document applications.

And for graphics, a new company Aviary got a great review in NetworkWorld:

It’s true that there are a number of graphics editors online, but most fail to come anywhere close to the functionality of Adobe’s iconic software. Until now.

The ecosystem to provide online apps with functionality comparable to client apps is growing.

My Personal Evolution to SaaS

I’m a former banker, then I did product management at eFinance and Pay By Touch. In those jobs, I never bothered with hosted apps. I certainly never thought about wikis. I did my writing in Microsoft Word. At Pay By Touch, I was introduced to the Confluence wiki. I used it because engineering wanted me to, but only as a centralized document repository. I’d rather have emailed the documents around.

It was at Connectbeam that I started to really *get* wikis. The ease of writing on them. The value of a common place to find and share documents. I found the core rich text editing functions of a wiki to be quite sufficient for what I need.

Now you can’t get me off the wiki.

When I was noodling on a business idea 18 months ago, I wrote everything up on Google Docs. It was an easy way to share the documents while updating them as often as I needed to.

More recently, the client applications TweetDeck and Seesmic have been getting a lot of attention. I’ve resisted them, because I just can’t see downloading and running these apps. They take their toll on your PC, as Louis Gray wrote:

For those Web-addicted souls who spend a good deal of their day buried in Twitter, seeing their friends updates and exchanging conversations, most software options have required the installation of Adobe AIR software, which to date has whirred your CPU to life, turning on laptop fans, and chewing through memory. The work to throttle down load on RAM and CPU is a constant battle, which both Loic’s team and Iain Dodsworth of TweetDeck have been working on since their products debuted.

In contrast, logging into the new Web version of Seesmic doesn’t feel like you’ve sacrificed your computer power to get your Twitter fix, and you don’t give up features either.

In short, whenever I can make a move to web-based apps, I’m doing it. I’ve come a long way from my Bank of America days.

Google Chrome OS and Microsoft Office 2010 – Forever Changing the Game

Certainly the idea of PCs as basic on-ramps for doing work via the web has been around for a long time. In 1996, Larry Ellison believed that network computers would outsell conventional PCs by 2000. Well, we see how that turned out.

In 2009, things have changed remarkably. First, usage of SaaS for applications has grown significantly, although it’s still small as a percentage overall. Second, people’s comfort with web-based computing has grown tremendously. Most enterprise software is now delivered as a web application. Salesforce has been a tremendous trailblazer here. And Facebook is fostering a greater comfort with sensitive data held by a third party.

Finally, Google is a titan. Oracle was (and still is), but in 1996 it was the database company. No one knew what to make of its network computers. Google is an entirely different animal. It has established credibility with its Google Apps. And presumably, any web app will work well on the Google Chrome OS. Including Microsoft’s new cloud Office offering.

This doesn’t stop Microsoft from coming out with its own web-based OS. Expect that if the Chrome OS seriously threatens. A lower cost OS for low-cost PCs to use low-cost web apps.

Microsoft’s announcement is huge because the Office suite is a brand used and trusted by millions of people. With their marketing heft, this is a significant boost in the credibility of SaaS computing. Microsoft also is a student of history, and clearly doesn’t want to risk the marginalization seen in Clayton Christensen’s studies of disruptive innovation.

The past two weeks have seen two significant milestones on the SaaS front.

This brings me to my final point. Market transitions don’t happen that quickly. The Google and Microsoft offerings won’t be ready for a while. And existing hardware, software and habits are going to change overnight. We will still have client-based applications for quite a while.

But let’s see how the small business and student markets take to these efforts.

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Enterprise 2.0: Culture Is as Culture Does

July 10, 2009 by 12 Comments

We get frustrated when we hear “motherhood and apple-pie” lessons about E2.0. I would have screamed had I heard one more speaker or seen one more tweet telling me “it’s not about the tools, you know. It’s about culture.” Yes, we heard. We agree. But we are past this. Let’s now talk about the nature of effective culture change. Let’s get some Org-behaviorists in the community to help us. Not the ones who just tell us “it’s about culture” – the geeky ones with real data, real insight, and specific advice we can take to understand what culture change really means.

Gil Yehuda, Post #e2conf thoughts – installment 1

If only I had a nickel for every time an Enterprise 2.0 stakeholder used the word “culture”. The industry uses the word “culture” constantly in terms of describing when an organization is ready to implement social software. It has become something of a shibboleth, as Gil wryly notes above.

At a high level, it is indeed about culture. As in, if management has an attitude of “when I want your opinion, I’ll give it to you”, they’re culturally not ready for social software. But the vast majority of companies are beyond that attitude, with nearly all embracing the concept of employees as their most important asset.

So in that context, what exactly does “culture” mean? There are degrees of readiness, to be sure. Do employees horde information to maintain a career advantage? Is the workplace style competitive, not collaborative?

The question of what exactly is meant by “Culture” got me to thinking about my own experiences thus far in the Enterprise 2.0 field. I’m by no means an organizational behaviorist, and I somewhat question what they can really overcome in terms of entrenched company cultures.

I put together the graphic below as a framework for thinking about things like culture and adoption. It’s a process flow for pilot deployments of social software, based on some of my experiences. There are actually several different points included in it.

E20 pilot deployment flow

I’ll start with this observation: unlike societies, culture inside companies can be changed in a relatively quick way. Senior executive mandates, the need for a paycheck and the fact that employees’ work, where they put their personal skills on the line, is rated, provide powerful levers to alter practices in the workplace.

I won’t say that it’s right to consistently rely on these measures. But I don’t think relying exclusively on emergent, viral adoption is right either. Employees’ activities can be re-directed for the right reasons.

The use case

In the process flow, notice the opening decision: “Defined use case?” Answering this question is a vital part of determining the impact of culture on the uptake of Enterprise 2.0. If the software has a place in helping specific tactical tasks, the cultural issue is less of a hurdle.

Take wikis for example. If a wiki has to compete against a portal, SharePoint, a shared drive, and/or email, and no one has defined a use case, it will likely fail. For a pilot deployment, a use case might be a specific project involving multiple people that will be executed exclusively through the wiki. It gets people using the wiki, and they know why. Then they can start to understand the benefits.

The goal is for a use case that’s “real”, not some made-up activity for the sake of testing the software.

Company cultures are going to be more open to social software when there are defined use cases. Of course, that’s not always the case. I’ve had experience with experimental deployments. They are harder, and are much more likely to run into “cultural issues”.

Who inside the companies cares about this deployment?

The answer to this question varies by the use case scenario. Where there is a well-defined use case, someone inside the company has signed off on using the software. Generally a manager at a more senior level. This means the deployment gets attention, and benefits from a greater range of resources. Its visibility is higher. The boss is tracking this.

In the experimental deployment, it takes a cadre of evangelists to push things forward. These are the early adopters, who see the opportunities of the social software. They are enthusiastic, and are the ambassadors for the pilot inside the company. What they lack in management attention they make up for in words and actions.

How does word spread?

When a deployment has senior management attention, the internal communications infrastructure becomes available. This is incredibly valuable. Announcements come through via email, and on the intranet. Posters go up, videos get made. Managers hold meetings. Contests are set up. It’s a thing of beauty when the organizational infrastructure roars to life.

In the experimental deployments, without specific in-the-flow use cases, awareness is a bit tougher to come by. Often, there is a pilot group of employees that are designated to participate. The project lead and her fellow evangelists hold meetings, and send around their own emails announcing it. They may leverage tricks from the consumer web, such as exclusive invitations to drive up demand for participation. There is precedent for viral adoption strategies to work. Here’s a case noted by Rachel Happe:

I heard two interesting use cases – one was that a company I spoke with introduced Yammer under the radar and had seen significant adoption (thousands of people)

Is culture a barrier?

So word is spreading, employees are trying out the new software. Are they sticking with it? Are they using it to help them with their jobs?

If they are, move on the evaluation tasks.

But culture as an impediment is too high level a reason. I wonder how much of “culture” is really a case of people continuing to use the same software and processes they always have. Why would they change? I like the way Microsoft’s John Westworth put it in a LinkedIn discussion:

I have to ask where the motivation is. People use things like Facebook because there’s an intrinsic motivation to do so. People go to work because there’s an extrinsic motivation. Altruism doesn’t pay the mortgage.

John puts his finger on it. Employees need a compelling reason to switch from their current habits.

Tactics for overcoming culture

When culture is proving to be an impediment, there are various tactics one can use to try to overcome it. The tactics vary for experimental deployments versus those with defined use cases. Their effectiveness is also quite different.

If the deployment has a defined use case and senior management sponsorship, the tactics available are quite wide and diverse. I’ve included a few of them in the process flow:

Remove alternatives: This is a heavy-handed, quite effective way to approach the culture issue. Banish the old applications and processes that employees have been using. Force them to work with the social software. Sameer Patel wrote about just such a case. A chip company forced its workers to use the company wiki by setting a policy of deleting all emails after 45 days. Want to keep that information? Put it on the wiki.

Storytelling: Senior executives outline their vision for what the workplace of tomorrow will be. They talk of efficiencies, growth, and new opportunities for career paths. In a recent Wharton knowledge article, BP’s Fiona MacLeod said:

“Develop your killer slide to make your business case whenever you give a presentation. It’s not only why you’re changing, but what it’s going to look like when you’re done. People need to have a sense of what the future looks like, so be very clear on that.”

Incentives: Drive usage of the social software by directing employee motivations with recognition and rewards. Maintain a leaderboard of top contributors. Celebrate breakthroughs that were expected to occur via the social software. Braden Kelley’s review of The Carrot Principle includes explains the value of incentives in effecting change. Or companies could take it even further, following Andrew McAfee’s suggestion that social software participation be baked into performance reviews.

Executive reminders: Timely, forceful reminders from managers are also effective. They are the mechanisms by which culture does indeed change. If employee usage is not at the desired level, executives make sure it’s known what is expected. Anyone who has worked in large companies knows about these missives. Sometimes you’ve got to crack some skulls.

For the experimental deployments, employee inertia is harder to overcome. The internal levers to drive changes in behavior are not available. I’ve been in this situation with a previous job. Here are some tactics for overcoming culture in experimental deployments:

Model behavior: Project leaders and evangelists model the behavior they want to see. Need to send information to others? Write it in the wiki, and email the wiki page link. People want to reach you via IM? Turn your IM off and communicate via Yammer. In some ways, this is the bottom-up version of “Remove alternatives” described above. But it’s a persuasion approach, because that’s all that’s available.

New use cases: The experimental deployments don’t start with a crisp, in-the-flow “real” business case. That doesn’t mean there aren’t use cases. It just may take some hustle to figure out some, and they are likely tangential to the needs of employees. For one experimental deployment at a previous company, I came up with 10 separate ways to use the platform. At the launch of the deployment, a software vendor and the internal advocates will come up with these use cases. Reminding people of these and creating new ones are tactics for overcoming culture.

Senior sponsor: After the launch, the pilot team attracts the interest of a senior manager. Someone who did not push actively for adoption initially. This person sees something “there”, and decides to promote it. This does not open up the panoply of all organizational levers. But it does provide a boost in awareness and increase motivations for adoption.

Get the results

After the employees have (or have not) used the social software, it’s time to look at the results. Again, there is a fork in the road for this activity.

The great thing about a defined use case is that you have a framework for evaluating the results. There was a specific job the software was hired to do. How’d it perform? Even better, the defined use case likely replaced some other process and (maybe) applications. So there will be results from the regular process against which to benchmark the deployment.

For the experimental deployments, collecting the wins is how results are measured. These are the stories of how the software helped someone. The information someone found that helped get a task completed. The turnaround time that was much faster than expected. The connections made with someone previously unknown in the organization. These anecdotes are the building blocks of an ROI.

What do employees think?

If the results are positive – either compared against the use case or via anecdotes – then getting employee perceptions of the software is next. If the results are negative, this is a step that’s relay not needed.

Employees are asked their opinions of:

  • The user experience
  • What they liked about the software
  • The software’s general usefulness
  • Their interest in using the software in the future
  • The vendor
  • What could be improved?

This feedback is valuable from a cultural perspective. What’s the main opinion of employees?

From all of this, the decision about whether to go with the software is made.

Culture is self-selecting

At a high level, culture is a self-selecting determinant of whether a company even pilots social software. If a company has a heavy command-and-control, execution-oriented culture, they aren’t trialing social software. In that sense, it is all about culture.

But if a company feels it’s ready to give social software a try, the culture-as-impediment argument loses steam. More likely, failure is a case of no defined use cases for the software. Stop laying the blame on culture.

Or as Yoda said in Star Wars: “Do. Or do not. There is no try.”

Tactics for overcoming culture

When culture is proving to be an impediment, there are various tactics one can use to try to overcome it. The tactics vary for experimental deployments versus those with defined use cases. Their effectiveness is also quite different.

If the deployment has a defined use case and senior management sponsorship, the tactics available are quite wide and diverse. I’ve included a few of them in the process flow:

Remove alternatives: This is a heavy-handed, quite effective way to approach the culture issue. Banish the old applications and processes that employees have been using. Force them to work with the social software. Sameer Patel wrote about just such a case. A chip company forced its workers to use the company wiki by setting a policy of deleting all emails after 45 days. Want to keep that information? Put it on the wiki.

Storytelling: Senior executives outline their vision for what the workplace of tomorrow will be. They talk of efficiencies, growth, and new opportunities for career paths. In a recent Harvard Business Publishing blog, […]

Incentives: Drive usage of the social software by directing employee motivations with recognition and rewards. Maintain a leaderboard of top contributors. Celebrate breakthroughs that were expected to occur via the social software. Braden Kelly talked with […]. Or companies could take it even further, following Andrew McAfee’s suggestion that social software participation be baked into performance reviews.

Executive reminders: Timely, forceful reminders from managers are also effective. They are the mechanisms by which culture does indeed change. If employee usage is not at the desired level, executives make sure it’s known what is expected. Anyone who has worked in large companies knows about these missives. Sometimes you’ve got to crack some skulls.

For the experimental deployments, employee inertia is harder to overcome. The internal levers to drive changes in behavior are not available. I’ve been in this situation with a previous job. Here are some tactics for overcoming culture in experimental deployments:

Model behavior: Project leaders and evangelists model the behavior they want to see. Need to send information to others? Write it in the wiki, and email the wiki page link. People want to reach you via IM? Turn your IM off and communicate via Yammer. In some ways, this is the bottom-up version of “Remove alternatives” described above. But it’s a persuasion approach, because that’s all that’s available.

New use cases: The experimental deployments don’t start with a crisp, in-the-flow “real” business case. That doesn’t mean there aren’t use cases. It just may take some hustle to figure out some, and they are likely tangential to the needs of employees. For one experimental deployment at a previous company, I came up with 10 separate ways to use the platform. At the launch of the deployment, a software vendor and the internal advocates will come up with these use cases. Reminding people of these and creating new ones are tactics for overcoming culture.

Senior sponsor: After the launch, the pilot team attracts the interest of a senior manager. Someone who did not push actively for adoption initially. This person sees something “there”, and decides to promote it. This does not open up the panoply of all organizational levers. But it does provide a boost in awareness and increase motivations for adoption.

Get the results

After the employees have (or have not) used the social software, it’s time to look at the results. Again, there is a fork in the road for this activity.

The great thing about a defined use case is that you have a framework for evaluating the results. There was a specific job the software was hired to do. How’d it perform? Even better, the defined use case likely replaced some other process and (maybe) applications. So there will be results from the regular process against which to benchmark the deployment.

For the experimental deployments, collecting the wins is how results are measured. These are the stories of how the software helped someone. The information someone found that helped get a task completed. The turnaround time that was much faster than expected. The connections made with someone previously unknown in the organization. These anecdotes are the building blocks of an ROI.

What do employees think?

If the results are positive – either compared against the use case or via anecdotes – then getting employee perceptions of the software is next. If the results are negative, this is a step that’s relay not needed.

Employees are asked their opinions of:

· The user experience

· What they liked about the software

· The software’s general usefulness

· Their interest in using the software in the future

· The vendor

· What could be improved?

This feedback is valuable from a cultural perspective. What’s the main opinion of employees?

From all of this, the decision about whether to go with the software is made.

Culture is self-selecting

At a high level, culture is a self-selecting determinant of whether a company even pilots social software. If a company has a heavy command-and-control, execution-oriented culture, they aren’t trialing social software. In that sense, it is all about culture.

But if a company feels it’s ready to give social software a try, the culture-as-impediment argument loses steam. More likely, failure is a case of no defined use cases for the software. Stop laying the blame on culture.

Or as Yoda said in Star Wars: “Do. Or do not. There is no try.”

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Google Gets Serious about Innovation

June 24, 2009 by 4 Comments

Yeah, that’s funny to say, isn’t it? Google is getting serious about innovating. “Serious” as in determined not to miss out out good opportunities. From the Wall Street Journal last week:

Google has recently started internal “innovation reviews,” formal meetings where executives present product ideas bubbling up through their divisions to Eric Schmidt, Larry Page, Sergey Brin and other top executives.

“We were concerned that some of the biggest ideas were getting squashed,” said Schmidt.

Google Searches for Ways to Keep Big Ideas at Home, Wall Street Journal, June 18, 2009

BW 2009 Top 3 innovative companiesGoogle is renowned for its innovation chops. The company consistently ranks among the Top 2 most innovative companies in Business Week’s annual survey. It’s not surprising. The ability of engineers to devote 20% of their work time to any side project of their choosing is one of the strongest statements about the importance of innovation in the world (the new United States CTO recently praised it). Google has instilled innovation into its corporate DNA.

So when the company says it’s missing out on good ideas, this is both surprising, and perhaps somewhat expected. Surprising, because how does a company consistently ranked at the top of innovation surveys miss good ideas? Expected, because Google now employs 20,000. With that many people, how does a company stay on top of all those ideas?

What I’m seeing is a company that is is progressively systematizing its innovation practice. Google is following the path of its large enterprise brethren, adapting its internal processes to account for its size and its need to grow across multiple fronts. It really has to. It’s no longer the small company where ideas get tossed around on a white board, and everyone knows what’s going on. I mean, there are 20,000 people employed there.

Google is getting serious about innovation.

A Google’s Innovation Management Scorecard

The scorecard below is a simple one, which I’ll freely confess is based on what I’ve read about Google’s innovation. I don’t work there, but the assessment feels about right. See if you agree:

Google innovation scorecard

These are five elements of an innovation program, highly focused on the front end of innovation.

Strategic innovation focus areas: I rated the “strategic innovation focus areas” as average, because it’s not clear exactly what Google’s focus areas are. Google employees might dispute that assertion. But it’s also true that Googlers treasure the ability to work on off-topic, seemingly stupid ideas.

Employee ideas encouraged: Well, yeah! 20% time.

Visibility into ideas generated: I also rated “visibility into ideas generated” as average. Really, this rating is based on the Wall Street Journal article. It sounds like executives weren’t able to see all the good ideas they wanted to. I will note, that this Googler said:

In order for 20% time to work, anyone must be able to see what is out there

I’ll characterize “must be able to see it” as a wiki-like philosophy of easy accessibility. It also may have a local orientation, where you tell your colleagues to go look at your code. Making it easy to see the ideas and let the best one surface is a different issue. This becomes harder as companies get bigger. Eric Schmidt and Hal Varian wrote about the challenges growth brings:

A final issue is making sure that as Google grows, communication procedures keep pace with our increasing scale. The Friday meetings are great for the Mountain View team, but Google is now a global organization.

Select the best ideas: Go back to Eric Schmidt’s statement in the WSJ article. The biggest ideas were getting “squashed”. It may also be hard to define what exactly “the best” means. With a broad mandate to organize the world’s information, presumingly any idea could be considered among the best.

Google’s challenge of coming up with big ideas is something Om Malik wrote about a few months ago. Personally, I’m not insistent that innovation is only for game-changing ideas. But perhaps Om’s post can be an angle on the ability to identify the best ideas.

Operationalize ideas: Google is quite good at operationalizing its ideas. Search, AdWords, Gmail, Google Reader, Android, etc. It’s got the resources, market presence and experience to turn an idea into an innovation.

Prediction: Google Starts to Focus Employees’ Innovation Efforts

Google’s innovation strength draws from its employees’  willingness to spend 20% of time of new ideas. It is distinct among global companies with this regard. 20% time as a method of producing an immense number of ideas.

Which means these innovation reviews by top executives will be interesting. Already, Google Wave is the result of these. And a nice answer to whether Google can come up with big ideas.

It wouldn’t surprise me if these innovation reviews, and the projects that are selected, become a signaling effect to the troops. When they see what the top brass green-light and give resource priority to, it will likely have an impact on what they put their 20% time toward. Sure, some entrepreneurial types will do their own thing. And if they don’t get priority treatment, they’ll start their own companies. But I’d wager the majority would likely orient their research and creativity in the preferred areas.

Google’s growth is slowing, although much of that is due to the general economic climate. Still, expect for Eric Schmidt and team to look at areas where they want to see growth. And to let the troops know what those areas are.

Imagine that. All those 3.9 GPA-toting, know-why-a-manhole-cover-is-round brains putting their focus on specific growth areas. As Scott Anthony wrote about Google’s new discipline around innovation:

It doesn’t seem like Google is walking away from its ideals. Rather, it’s trying to couple its world-class approach to the “front end” of the innovation process with the world-class discipline exhibited by companies like Procter & Gamble. It might yet struggle to bring these two approaches together. But success could allow the company to create an innovation capability that actually lives up to the hype.

And hopefully the “stupid ideas” still get attention.

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My Take on Crowdsourcing Published on Business Week’s Website

June 16, 2009 by 1 Comment

Business Week’s Editor for Innovation and Design, Helen Walters, recently asked the crowd for their opinions on crowdsourcing, via Twitter:

thoughts on crowdsourcing? @jtwinsor has written a bw op-ed but we want to publish the crowd’s take, too. (pls RT!)

I replied with a couple tweets, which I then coalesced into a single thought via email. Business Week recently published ten of these opinions. Here’s mine:

BusinessWeek quote on crowdsourcingYou can see all of the opinions, and the a link to John Winsor’s op-ed here. Another contributor, Braden Kelley, also wrote up his Business Week crowdsourcing comment on his blog Blogging Innovation.

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