My Ten Favorite Tweets – Week Ending 103009

From the home office, waiting for the Great Pumpkin in the pumpkin patch…

#1: NIH grants $12mm to create a national, Facebook-like social network for scientists http://ow.ly/xtAD Goal? Find collaborators

#2: RT @jowyang Ritz Carlton’s mktg chief says hotel mgt at each property spends 1 hour reviewing online convos each am –even tweets #forbescmo

#3: The Time I was Written Up for Blogging http://ow.ly/x3ph by @tacanderson Lesson on employees and social media

#4: Skating to where the puck will be – Apple & advertising http://ow.ly/xnXJ Apple has offered to rebuild a Chicago mass transit stop?

#5: Very cool: Los Angeles adopts Google e-mail system for 30,000 city employees http://ow.ly/x3hP Cloud makes inroads #saas

#6: 84% of firms say #innovation is important to firm success. 51% of firms do not have anyone who is steering the innovation ship. #iai09inno

#7: 10 examples of minimum viable products http://ow.ly/xbi1 Cool list of minimalist approaches to engage customers & build product

#8: Stuck trying to write that next blog post? 100 Ways to Find Ideas for Your Blog Posts http://ow.ly/wA1T from the LifeSnips blog

#9: Geek alert! RT @PaulSloane: @DougCornelius RT Awesome T-Shirts for twins: http://bit.ly/14LYeI

#10: OK, figure this one out. @gaberivera created a tweet that links to itself. See for yourself: http://bit.ly/2IIkJG

Bonus just for this week…

#11: Small change to my Twitter bio…I’m now VP of Product at Spigit. Carry on…

Would You Manage CRM with a Wiki?

Or human resources with a blog? How about project management with forums?

Funny questions to ask, no doubt. Of course it’s not possible to effectively address many of the critical business functions using basic Enterprise 2.0 tools. Yet when it comes to social software, it often seems that the only game in town is to be a provider of such tools. For instance, Gartner’s Social Software Magic Quadrant requires that vendors have wikis, blogs and forums to be considered (side note – for the record, Spigit has all three social software tools and more).

I am fully on board that there are great opportunities for new types of communication, collaboration and information discovery in these tools. For instance, see my post, Microblogging Will Marginalize Corporate Email.

But there’s an enormous opportunity for applying the ethos and value of  ‘social’, ‘transparency’ and ‘collaboration’ to a wider range of business processes. Key here is not to force specific processes into a general purpose tool, but to bring social software ethos to longstanding enterprise activities.

Hmm…sounds Dachis Group-like (“social business design”), eh?

Activity-Specific Social Applications

In the recent Gartner Social Software Hype Cycle, analyst Anthony Bradley introduced a new category, Activity-Specific Social Applications:

“As social software implementations mature, application patterns are evolving, and the software industry is responding with activity-centric social application offerings rather than with generic social software capability suites. Delivering a targeted social solution with a general purpose social tool (such as wikis and blogs) can involve significant development, configuration, and templating effort.”

Bradley has identified the next opportunity in enterprise social social software. Integrating the valuable characteristics of social software into the in-the-flow activities that make up our days. As a percentage of employees’ time, activity-specific social applications will be quite large.

Back in March 2009, Sameer Patel wrote, don’t confuse Enterprise 2.0 with social computing concepts. He was making this exact point, and included this illustrative diagram:

Credit: Sameer Patel, Span Strategies

Credit: Sameer Patel, Span Strategies

His point is that the left side are tools, whereas the right side are results-based activities. Key here is to create applications aligned with the processes for those activities. That means going deeper than a general purpose tool.

Successful Applications Will Be Designed for Results

So back to the original question. Would you manage CRM with a wiki? Could you? Perhaps there’s a geek hack to do this, but for mainstream business, the answer is ‘no’. Customer relationship management includes:

  • Case management
  • Customer revenue analytics
  • Sales pipeline
  • Individual prospect opportunity workflow
  • And lots of other stuff

It would be really hard to use generic off-the-shelf social software to deliver the above functionality. Yet, going back in time, here’s what was prescribed for CRM success in April 2002:

People [who fail] don’t integrate CRM into the other parts of their business or implement CRM as a stand-alone and don’t have it communicate with core systems. A bigger and more frequent stumbling block is forgetting to address the people issues around a CRM implementation. In almost all of the cases we described earlier, CRM is a behavior modification tool.

There is a need for the “hard” functions that CRM can provide, like case management, campaigns and analytics. But that’s not enough (e.g. see social CRM), and enabling the customer-centric firm seems to require a good bit of what makes Enterprise 2.0 tick: cross-organizational perspectives, contributions from different departments, a more collaborative orientation to an end-goal. Integrate CRM into “other parts of their business”.

Wikis, by themselves, don’t provide the necessary CRM functions that are table stakes to be useful for companies. But CRM platforms could benefit from integrating more social software tools and conventions.

And that’s the case for a lot of the current processes that define companies today. They aren’t going to be addressed by off-the-shelf generic social software tools. But they benefit by incorporation of social software tools.

“Activity-specific social applications”. A few examples:

Dachis Group talks about social business design as “the intentional creation of dynamic and socially calibrated systems, process, and culture.” Indeed, there’s a huge opportunity to apply social software to the multitude of applications and processes that make up organizations, beyond the insertion of standalone generic tools.

Watch this space.

My Ten Favorite Tweets – Week Ending 101609

From the home office in a balloon 7,000 feet above Colorado…

#1: Well, this was unexpected. The Spigit funding news has hit Techmeme http://bit.ly/3ETPFp #e20 #innovation

#2: LinkedIn: 50 million professionals worldwide http://ow.ly/uq7s “Last million took only 12 days” Wow. Tipping point?

#3: RT @mwalsh: Seth’s best post of the year – get over yourselves…you’re not that cool, interesting or smart. http://bit.ly/3HwrV6

#4: Is Social Media the New Cigarette? asks @billives http://ow.ly/u8IY Looking at social media addiction

#5: RT @nyike First Jive, now Spigit building #e20 and collaborative functionality on top of Sharepoint http://bwbx.io/hina

#6: Within firms, collaboration technologies are dictated by most powerful person involved in the collab http://ow.ly/tJgf by @amcafee

#7: Just as interesting as this WSJ piece is, Why Email No Longer Rules… http://ow.ly/tZpj are the skeptical cmts left by readers #e20

#8: If companies like $GOOG and $MMM excel and incl employee 15-20% personal time for innovation, why haven’t others adopted same?

#9: Wind farm firm makes sure its wind mills are 30 miles away from nearest Starbucks. http://ow.ly/tRQP Why? Best way to avoid NIMBY’s

#10: When a company gets funding, all sorts of interesting “opportunities” emerge. Just got a solicitation for Spigit to sponsor a NASCAR driver.

Warburg Pincus Invests $10 Million in Spigit

Warburg Pincus SpigitWell, this is pretty cool. I’m pleased to announce that Spigit has received a $10 million equity investment from Warburg Pincus. The investment will be used for the usual things a growing start-up needs: product development, sales and marketing and program management. Here’s coverage in the New York Times and TechCrunch.

I’ve been with Spigit for 6 1/2 months, during which time I’ve seen firsthand how things have progressed. Both the company and me.

If you’ve ever checked my bio, you’ll know I worked in investment banking from 1996 to 2000. If not for a banking merger that shut down my San Francisco office, I’d likely still be there as a Managing Director, doing financings for companies.

OK, wait. Considering the recent financial market collapse, let me rethink that…

Rather, I moved into technology. And let me tell you, it ain’t easy making the transition from banking to technology. You have zero geek cred (note the name of this blog). Since 2000, I’ve worked for several small technology start-ups. From each of them, I’ve learned a lot. I will say that in Spigit I’ve found a place that nicely combines my MBA company performance orientation with my social software enthusiasm. Innovation management meets Enterprise 2.0.

The team at Spigit is a hard-working one. I’m impressed with the seriousness of purpose each of them brings to the job every day. When we closed the funding this week, our CEO Paul Pluschkell got a couple bottles of champagne for a company toast. After we drank a bit of champagne (not too much, customers reading this blog…), everyone quickly went back to their desks to do work. Dorks. :-p

Which is appropriate. There’s a lot of work to do. I’m looking forward to it.

Clinton, Hamel, Krugman, Lucas…and Me: World Business Forum

WBF crowd 2008The first four names in the title – and many others – will be speaking at the World Business Forum in New York City on Oct 6-7, 2009.

And I ‘ll be listening to them. From the mezzanine level of Radio City Music Hall, where the journalists will be. I explain why below.

What is the World Business Forum? From its Wikipedia entry:

The World Business Forum is an annual global business summit held at Radio City Music Hall in New York City. A 2008 Burson-Marsteller survey ranks the World Business Forum among the world’s top five most influential venues for CEO’s and C-Suite executives.

This is my first time attending. The lineup of speakers is impressive:

  • Bill Clinton
  • Gary Hamel
  • Paul Krugman
  • George Lucas
  • T. Boone Pickens
  • David Rubenstein (co-founder, managing partner of private equity firm The Carlyle Group)
  • Irene Rosenfeld (CEO of Kraft, USA Today story)
  • Kevin Roberts (CEO of Saatchi & Saatchi)
  • and many others…

I’ll be participating in two ways: my company Spigit is a sponsor, so we’ll have a table there. And I’m a late addition to the Bloggers Hub as well. Looking forward to a great view from the mezzanine – where the journalists are apparently located – and wifi.

Look for my tweets with the #wbf09 hash tag.

Use Your Company Blog to Catch Search Term Typos

If your company or product name can be misspelled, this is for you.

At Spigit, a prospective customer related this to us recently. A few months ago, they had heard of Spigit in one of the usual ways – reading, word of mouth, etc. At some point, they decided to learn more. It probably went something like this…

“What was that innovation software company again? Oh yeah, SPIGOT.”

Notice the typo there. Or maybe Spigit is better termed the typo.

Anyway, first they tried http://www.spigot.com. But that leads to someone sitting on that domain for quite a while. Confused, they did the next logical thing. They searched on variations of SPIGOT:

  • spigot software
  • spigot idea management
  • spigot innovation management
  • spigot gumbo

Unable to find Spigit, they moved on with their life. Until last week, when the prospect was talking with one of our customers, who mentioned SPIGIT. Ding! The prospect remembered their interest, got the right spelling and we are talking, several months later.

Obviously, this presents something of a problem. How to catch those people actually searching for SPIGIT, but typing SPIGOT? We do maintain Google AdWords covering this. But what about in the search results themselves?

At first blush, two options are apparent. One, use the word SPIGOT on our website. But that would be confusing to visitors. It would look like we don’t know how to spell our own company name, or maintain a typo-infested website. Two, take advantage of those meta tag keywords, adding SPIGOT to them. But Google recently confirmed that those meta tag keywords have no effect on search results. None.

But there was one other way to do it. Why not take advantage of our search engine-indexed blog? Publish a blog post specifically designed to include the misspelled company name, along with additional relevant search terms. That way, there will at least be something in the search results for people honestly trying to find your company.

So I wrote this post, Spigot Innovation and Idea Management Software Platform

The post is intended to let searchers know why it exists, and redirect them to the website home page:

Spigot blog post

I’m no SEO expert – honest, check my Twitter bio! But I figure this may help get the attention of those using SPIGOT to find SPIGIT.

Another use for the company blog.

Management by Community

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.

Democracies Don’t Suffer Famines: Implications for Corporate Governance

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.

My Ten Favorite Tweets – Week Ending 082109

From the home office at the World Track Championships in Berlin…

#1: Spigit Innovation Summit Wrapup http://bit.ly/4zIqo1 by @innovate “It’s important to have connectors on your #innovation team”

#2: Jeff Bezos on corp #innovation: For innovative ideas to bear fruit, companies need to be willing to “wait for 5-7 years” http://bit.ly/tP9vj

#3: Like this by @paulsloane – Given unlimited resources to solve something, we’d dev something expensive & over engineered http://bit.ly/Qa3tY

#4: Zopa isn’t disruptive argues @bankervision http://bit.ly/ZYela His key points: same customers, same credit scoring, same pricing as banks

#5: Gary Hamel last week: “We have a state of creative apartheid, where some are *really* creative, some aren’t. That’s BS.” #spigit09

#6: Bookmark this: 14 Reasons Why Enterprise 2.0 Projects Fail http://bit.ly/3piYNF by @dhinchcliffe #e20

#7: Bookmark this: How To Kick Start A Community – an Ongoing List http://bit.ly/641dA by @jowyang

#8: Mashable: “14% of surveyed employers disregard candidates who use friendly smiley faces in social media” http://bit.ly/1ajvd8

#9: RT @skap5 Is IMHO a necessary descriptor? Unless of course the rest of your opinions are not humble.

#10: My son starts kindergarten in a couple weeks. Then I see this: “Tutoring tots? Some kids prep for kindergarten” http://bit.ly/3htw0 No…

Gary Hamel on Enterprise 2.0 and the Post-Establishment Age

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.”

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

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.

My Ten Favorite Tweets – Week Ending 081409

From the home office in Taiwan…

#1: Investigating this foreign land, Facebook, now that FriendFeed is to be folded into it. Already had FriendFeed features, so kinda familiar.

#2: Imaginatik CEO @mark_turrell & I (with Spigit) debate the merits of Enterprise 2.0 and innovation: http://bit.ly/Dd55d Good stuff

#3: Jeffrey Phillips: The directed, invitational external community model best for generating disruptive innovations #spigit09

#4: Jeffrey Phillips: Great exercise is to purposely build ‘failure projects’. Learn what can go wrong, pick up signals for innovation #spigit09

#5: Reading: Should you do only things that are “strategic”? http://bit.ly/HTQty by @bankervision Small stuff in aggregate much bigger

#6: Great list by Gary Hamel: 25 Stretch Goals for Management http://bit.ly/vd8om (found via @sniukas) #innovation #e20

#7: Microsoft’s SharePoint Thrives in the Recession http://bit.ly/17g5I2 Microsoft is getting stronger in the #e20 space

#8: What Works: The Web Way vs. The Wave Way http://bit.ly/ZYWPN by @anildash His take: Google Wave will inspire changes, not *be* the change

#9: Has seeing the time “11:11” on a digital clock ever freaked you out? You’re apparently not alone: http://bit.ly/XrqVB

#10: Hiccups tip: Eat a teaspoon of sugar. My Dad taught me that, and it works every time. There must be a scientific explanation.