July 16, 2008
Technology Beats a Full House
How big a deal is IT? Is it really a ‘game changer’ for business? And if it is, does it change the game in a way that leaves the players looking more similar, or more differentiated from each other?
Our recent Harvard Business Review article makes the case that IT has in fact changed the game of business in a way that increases the gaps between winners and losers. As I wrote here earlier, though, it’s very important to keep testing this hypothesis. I’ve believed for a while that IT is a game changer for competition, which makes it particularly important for me to find good objective tests— ones that help keep me from falling in love with my own arguments and theories. Such tests help me avoid what a sharp person called "the triumph of ideology over evidence" (whose phrase is this, does anyone know?).
So let me tell the story about my favorite of the tests we did as we were conducting the research that led to the article.
Of the four of us on the team, Erik Brynjolfsson, Michael Sorell, and I are pretty big baseball fans. Our fourth, Feng Zhu, used to listen politely as we’d start off most of our meetings talking about recent games and giving each other grief. Erik and I are Red Sox fans, while Michael roots for the Yankees. We forgive him this because he’s a great colleague.
Early on, we were gathered around the white board thinking through the question "How would we test if IT mattered for competition or not?" Erik mentioned Steven Jay Gould‘s Full House as a possible source of ideas, and I got my copy from my office bookshelf.
Full House is a true geek’s book. It combines paleontology, evolution, and baseball statistics to advance an elegant argument: that we humans have a counterproductive tendency to focus on averages and trends over time, rather than on variation around the average. For Gould, variation is where the action is.
He brings this argument to life by resolving (to my satisfaction, anyway) the eternal debate in baseball about why there aren’t any more .400 hitters. Ted Williams of the Boston Red Sox hit .406 in 1941, and no one has been over .400 for an entire season since (take that, DiMaggio worshippers). This is odd, because .400 hitters, while never common, were not unheard of prior to that time. There were seven of them in the 1920s, for example.
Explanations for the extinction of the .400 hitter include the advent of night baseball, the ‘invention’ of the specialist late-inning relief pitcher, the dilution of talent brought on by expansion, greater emphasis on hitting for power over hitting for average, etc. etc. The search for the true explanation has taken up countless column inches in print and hours in bars.
Gould cut through all these arguments by constructing a couple graphs and explaining their implications. First, he graphed the average batting average across all major league players every year since the late 19th century. It’s an apples-to-apples comparison over this long period because baseball has been played by an almost completely consistent set of rules for the whole time. Games have always been nine innings long, each half inning has always consisted of three outs, bunting foul with two strikes has always been an out, etc. etc.
Here’s a reproduction of Gould’s graph of average batting average:
Gould wrote in Full House that this graph has all the messy variation we’d expect to see in real-world data. It’s also the graph most of us would draw to understand why there are no more .400 hitters. But it doesn’t shed much light on the question. Looking at it, it’s hard to say that hitters have been getting much better or worse, on average, since 1941, or indeed over the entire history of baseball.
Gould’s great insight was to construct another graph that charted not the average batting average, but instead the amount of variation or spread around this average. He calculated one common measure of spread, called the ’standard deviation,’ in batting average for all players for all years, graphed the result, and was astonished at what he saw. In sharp contrast to the erratic pattern in the graph of averages shown above, the graph of standard deviations revealed a single stately trend: a decline over time in variation around the average (whatever the average happened to be):
He wrote:
"… I never dreamed that the decline of variation would be so regular… the decline of standard deviations for batting averages is so regular that the pattern [in the graph] looks like a law of nature… I can assure you that this pattern represents regularity with a vengeance."
He seized on the two facts of baseball’s constant rules and the constantly shrinking spread in performance to generate a lovely hypothesis:
“Complex systems improve when the best performers play by the same rules over extended periods of time. As systems improve, they equilibrate and variation decreases.”
This variation decrease explains why .400 hitters haven’t appeared recently. Early in baseball history a .400 hitter wasn’t that far away from the average performance, when ‘far away’ is measured in terms of the standard deviation of that time. Over time, though, that standard deviation shrank— in other words, players’ batting averages tended to cluster more tightly around the average. And so hitting .400 meant being even farther away from average, again when ‘far away’ is expressed in terms of the number of standard deviations (which is the smart way to do such measurements).
If this theory is correct, then we should be pessimistic about seeing another .400 hitter any time soon. The standard deviation will only continue to shrink as baseball continues to be played by consistent rules, which means that a player will have to be even more of a freak of nature than Ted Williams was (in other words, even more standard deviations away from the mean than he was) in order to reach this benchmark.
What on Earth does all this have to do with IT’s impact on competition? After talking and drawing on the white board for a while we realized that Gould’s hypothesis above, which we came to call the "Full House hypothesis", yielded a great test of our beliefs about the importance of IT.
If the combination of the Web and commercial enterprise IT really was a ‘game changer’ for the competitive game of business, then the introduction of these technologies should be accompanied not by a decrease in variation in performance, but instead by the opposite—an increase in performance spread among competitors. It would be as if the rules of baseball suddenly changed hugely: if players had to hop on one leg the whole time, or play with a frisbee instead of a ball, or have a hot dog eating contest before each inning. Rule changes this big would upset the game’s equilibrium, and increase the variation in performance among hitters.
If the Web and enterprise IT similarly upset the existing equilibrium of the game of business, they would also lead to greater spread in performance. This widening of the spread would start in the mid 1990s, when both technologies became available to companies. And the widening would be biggest in industries that spent the most on IT, since they’d be the ones that had their games changed most profoundly.
It’s not too hard to determine if this has in fact been going on. Publicly traded companies publish ratios that indicate how well they’re performing. These ratios can be thought of as batting averages for the company, and so work well for testing the Full House hypothesis. They include profit margin and gross profit margin, EBITDA margin, return on assets, market capitalization per dollar of revenue and per dollar of profit, and Tobin’s Q (the ratio of a firm’s market value to the value of its assets).
We calculated these and other company ‘batting averages’ for all publicly traded companies going as far back as we could, and used data from the Bureau of Economic Analysis to divide all companies into 61 industries based on how much they spent on IT, expressed as a percentage of all the fixed assets they spent money on (details of this work are given in the academic version of our article, which is available here.).
We programmed our statistical software (OK, Michael and Feng did) to test the two hypotheses that 1) spread in company ratios within industries started to increase in the mid 1990s and that 2) this increase was bigger in industries that spent more on IT. We felt that this was a pretty stern test, inspired by Gould’s work, of IT’s impact on the game of business.
Variation in baseball batting averages did nothing but decline over time even in the face of changes like the start of the live ball era in 1920, the lowering of the pitcher’s mound in 1969, and the introduction of the designated hitter in the American League in 1973. None of these game changes was big enough to reverse the decrease in variation in the complex system of baseball. Were the novel corporate technologies of the mid 1990s a big enough deal to increase variation in the complex game of business?
It looks like they were. For virtually all the ratios we considered, variation in high-IT industries started to increase in the mid 1990s and stayed high after that, with some exceptions during the post-2000 economic slump. The less IT an industry had, the less pronounced this trend was. A couple graphs show these patterns clearly (in these graphs we use the more conservative intraquartile range, rather than standard deviation, as the measure of variation / spread). Here are graphs showing how the spread changed over time in high-IT industries vs. low-IT industries:
We were all surprised by the strength and clarity of these patterns, which showed up not only in the graphs we drew but also in all the statistical models we created. None of us were expecting to see such striking changes after the mid 1990s in the industries where IT spending was high. Performance spread increased significantly and substantially in these industries; in other words, winners were increasingly separated from losers. It’s analogous to a hypothetical mid-1990s rules change in baseball that took all the hitters, who were then tightly clustered around a .275 batting average, and drove them either upward into Ted Williams territory or downward below the Mendoza line of a .200 batting average.
Such a rule change, it is safe to say, would be a big deal in the game of baseball, and everyone involved would want to know how to get their hitters on the high side of the spread. Are the players of the game of business interested in finding out how the rules they’re accustomed to have changed, and how to put themselves on the high side of the large spread that’s resulted?
If so, I advocate that they start paying serious attention to information technology.
July 14, 2008
Serena is Serene about Enterprise Facebook
I’ve written before about Serena Software’s use of Facebook as their Intranet, as has Bill Ives. Recently, I asked Serena’s Kyle Arteaga and Rene Bonvanie a few more questions about this effort, and was so impressed by their answers that I wanted to share them here. I hope you find them as useful and insightful as I did. Leave a comment, please, and let us know what you think of Serena’s idea, and their execution of it.
Background on Serena
I remember you saying that even though you’re a high-tech company, you’re pretty traditional in a lot of ways -- older workforce that’s been with the company a long time, roots in the mainframe world, etc. Could you elaborate on this a bit? For example, I know you’re doing mashups now, but this has not been your historic business -- what was?
Serena prior to 2007 could best be described as a company who provided Enterprise Software to manage your Enterprise Software, some call it Application Lifecycle Management (IBM, Computer Associates, HP all play here). For this reason, our customers tended to be the largest around (97 out of Fortune 100). We have a strong heritage in the mainframe as well as Software Change and Configuration Management (SCCM). More recently we purchased an adjacent business in Project and Portfolio Management (PPM) prior to our launch into mashups. We believe they are all related as our mainframe, SCCM and PPM products help you run applications, and our mashup products help you build applications.
Last year we did around $270 million in licensed revenue. We went public in 1999, however, three years ago Silver Lake Partners (private equity firm) took us private to give us the time and investment chops to reemerge as a faster growing enterprise.
The average age of our workforce is mid-40s, and average tenure with the company is over 8 years.
When were you founded? How did you grow (often by acquisition, right?)? How big are you now, and in how many offices?
We are a 27 year old company, and grew out of multiple acquisitions. We now have approx. 850 employees located in 18 countries, with more than 35% working from home.
Impetus for Facebook as the Intranet
What was your previous Intranet like? What information did it contain? How popular was it? How expensive was it?
Our previous Intranet was paltry at best. Though I’d imagine most companies of a similar size have the same problem. It had org charts, a place to post items and pages for each department where they could link to applications or documents we might need.
I suppose it served a purpose, but there was nothing interactive about it. Nor was it something that brought people together. Cost wasn’t really a factor, but since we managed it using our own content management system (Collage) we weren’t paying much (if anything) to maintain it. We certainly didn’t have a budget to rebuild an Intranet.
How did you decide to make the apparently radical switch over to Facebook as the Intranet? Do you remember the genesis and history of this decision? I recall reading somewhere that part of the reason you made the switch was to ‘force’ your workforce to become accustomed to Web 2.0 technologies and approaches to getting work done - is this accurate?
First and foremost, we realized that due to the distributed nature of the company and the growth through acquisition there was little sense of a Serena community. People often worked together for more than a decade, yet knew nothing about each other. And if you think about it, why would they? There was no easy way to learn more about your colleagues. So here we had all these home workers, or employees in satellite offices like Melbourne who we only knew by name. We wanted everyone to feel like they were a part of Serena, we wanted our employees to help us mold what Serena should stand for in a very public way. And we wanted to create a persona for Serena made up of the company’s collective personalities.
At the same time we had just moved into business mashups. And as we looked at ways to train our employees on the value of Web 2.0 and show them how the workforce of the future will interact with software it occurred to us that the best way to learn is first hand. Our CEO and CMO were already avid Facebook users, and had both been into social networking for years so we thought, "what do we have to lose?"
A third, and what we believe is a radical thought, is that most Intranets are built on a wrong assumption. They’re fundamentally built to make content available to employees and trickle only a tiny bit to customers. We believe that the vast majority of content an organization produces is customer facing, with only a trickle back behind the firewall for truly proprietary materials. This belief achieves two major goals: customers are better served and receive better and more frequent communication in their language, and rather than companies pushing it through email (the "most evil" application of modern times) customers can pull it at any time.
To be clear, we never mandated usage. Though we strongly encouraged people to participate, this is when we came up with the idea for Facebook Fridays. We thought rather than say "you must do this", we would be more constructive and give employees set times to update their Facebook profiles and learn more about Web 2.0 in the process. We went so far as to bring in teenagers to show us how to used some of the advanced functionality (e.g. privacy settings) into our larger offices. We gave in person seminars about Facebook and how social networking is changing the way people work. We spent a lot of time answering questions, and giving people a forum to try things out both individually and collectively.
Also we didn’t rely solely on Facebook, we also encouraged employees to explore Linkedin (at least 60% of the company is on here), YouTube, Xing (big social networking site in Europe) and other Web 2.0 platforms. We simply didn’t put a strong corporate emphasis on them as we felt we needed one unifying platform that all employees could converge on.
Though we do use YouTube quite liberally both internally and externally. Many of our marketing campaigns have strong YouTube components
Here is our most successful to date: http://www.youtube.com/watch?v=qLTs6jlbkjE&feature=related
Here is the second installment of the same campaign, now residing on Facebook: http://apps.facebook.com/supermasher/watch
What we really like about the second Facebook campaign is that our employees can easily get involved in pushing it out to their Facebook friends, if they want to. And you’ll note the standings (far right) are littered with Serena employees choosing to help us get our message out.We believe this is the future of marketing. Our top promoters are in Support, Sales Operations, IT and even includes one of our developers in the Ukraine. Everyone can get involved, that’s the type of culture we are building. And it’s the type of culture that we think the Enterprise of the future needs to survive.
History of the effort
What were the major milestones? When did Facebook ‘become’ Serena’s Intranet? When was the old Intranet decommissioned?
We came up with the idea in October and moved to Facebook by November 2007. Within a month we exceeded 90% penetration of Serena employees with Facebook profiles.
We didn’t completely decommission the old Intranet, but we certainly aren’t spending any cycles to update it and I know few if any employees that have it set as a default in their browser. Many of us (myself included) have Facebook as my browser default.
How much training did you have to do, and how and when did you do it? I recall hearing or reading that you actually brounght in young people (teenagers?) to educate people about how to use Facebook - is this right?
What we realized early on was that while Facebook is a pretty simple application in itself, the social elements are much less understood. In fact, we noticed that the etiquette of 16-year olds seemed very well aligned with how we envisioned our employees to use Facebook. This of course starts with the profile visibility settings and understanding what the implications are, to a deep understanding of the social impact of posting content, commenting on articles, inviting people in certain ways, etc. 16-year olds are much more concerned about that than 40+ year olds, and hence much better informed. So we chose to invite teenagers to come and give our folks a crash-course - from helping them to set up their profile to making them aware of all the social implications. You can imagine how proud I (Rene) was to see my son Sander, who was one of the teenagers, work with our Chief Legal Council...
How is it working so far? What are your favorite stats / stories / anecdotes about Facebook as your Intranet? For instance, I recall hearing that you’ve learned that it’s important for people to add a picture to their profile - that this lets their colleagues feel like they ‘know’ them better - am I remembering this right?
It’s working really well. I would say at least 25% are very active users (daily or pervasive use) of the platform, and another 50% are passive users (meaning they visit the site at least three times a week). The rest have profiles and will check them from time to time. But I have to say it’s quite addictive for those of us who use it often. Pictures were the first thing people glommed on to. Everyone wanted to know more about the people they were working with. Especially the large contingent of home workers who often feel isolated from "water cooler" chat at the office. Ironically, our employees were particularly keen on pictures that were not corporate. They really liked when colleagues posted pictures that gave them a better sense of the person. For example, our general counsel for Europe, Erik Daems (http://www.facebook.com/profile.php?id=570541515&hiq=daems%2Cerik) regularly posts random pictures and while we have only met once, every time we work together now we have something new to talk about.
Since pictures were the first things people wanted we started our foray into the Facebook Intranet via a worldwide event we called Facebook Fridays. The concept was simple, take an hour off of your day on Friday to update your profile. The first event we held in November and we asked everyone to dress us in a way that shows a bit about them personally. For example, our CEO races cars so he came dressed in his racing outfit. Our CFO is a big golfer so he came dressed in golf attire. We also asked everyone to bring in their digital cameras, so we had people uploading their pictures in real time to Facebook. Within 24 hours we had more than half of the company worldwide with full profiles and pictures on Facebook. It was a lot of fun to see the pictures from the Ukraine, Australia, Japan, UK and perhaps most importantly it gave our home workers a way to contribute. They were able to dress up at home, post their picture and virtually join in the event.
While pictures were the most requested feature of an Intranet at first, status updates quickly took precedence. At any given time I know as much about my colleagues as they want to share via Facebook (e.g. John B. from IT "is sucking on a Starbucks, yummy", Scott O. from Sales "says don’t mind the smoke, its just my fingers dialing, Peter S. from Support "is gesturing evilly at the rain clouds).
So I now have context when I next speak to each of them. I actually need to call John about a project we are working on later today and I will bring up his Starbucks comment. Peter and I work together quite a bit and he is based in London, so having lived there recently I can commiserate with him about the weather.
At the time we thought having an event to kick things off was essential to get people to feel like they owned the initiative. In fact, it was so successful that we decided we needed to have at least one quarterly event where everyone in the company did something to a common goal. So we shortly thereafter created a new Corporate and Social Responsibility program using Facebook as the rallying point.
Serena Gives Back is our new CSR program and basically its tenets are that we pick a quarterly theme (we started with Green Day on St Patrick’s Day) and ask that everyone go out and volunteer for a local charity for a day. We recruit local coordinators in our larger offices (bigger than 15) and ask them to poll their colleagues and find a charity that both needs help and wants to work with us on that day. For home workers we ask them to do the same individually.
For recruiting of local coordinators and to post the results and start rallying the troops we use Facebook, the best examples of which you can see here:
Facebook Fridays—Nov 9, 2007 (http://www.facebook.com/home.php?ref=home#/event.php?eid=18752686312)
Serena Gives Back, Green Day—Q1 08 (http://www.facebook.com/home.php?ref=home#/event.php?eid=6986299980)
YouTube video we did to promote Green Day to our employees: http://www.youtube.com/watch?v=TRHNqrie55I
Serena Gives Back, Children In Need—Q2 08 (http://www.facebook.com/home.php?ref=home#/group.php?gid=15137852327)
You’ll notice that we do all of this completely out in the open. Why? Because we believe Serena Software is a living entity, that companies should be personified as much as possible. We want customers, vendors, partners, prospective employees and anyone else who is interested to be able to easily find out more about our company. We want to be approachable.
We were also very aware and interested in the personal involvement from each of our employees in social networking. One person just told me yesterday how excited he was to have found a childhood friend on Facebook who now lives in Turkey. He is planning to visit his friend on his next vacation. Other employees have been pleasantly surprised at how it helps them interact with their children better. Our Head of HR in Europe uses Facebook to communicate with her daughter. It’s certainly shown our employees how the future workforce interacts with Web 2.0 platforms.
Have their been any downsides / horror stories?
We weren’t thrilled that Facebook took down their network pages recently. And while we understand their rationale (it was leading to spam on larger network sites like university pages), it was terribly inconvenient for Serena. It was a great central location for employees to post, see who else was on the network and communicate. Since we already had enlisted most of the employee base, we can still use Facebook quite effectively for our means. However, had we not had a network page it would have grown much more slowly.
Otherwise, the only other thing that has cropped up is a concern about questionable postings on people’s profile and/or related Facebook blogs. While we can certainly see why people might take offense to certain topics and/or opinions we have not changed our communications policy despite our social networking initiatives. At the end of the day, we trust our employees to use common sense. We consistently tell them "be smart, do what you think is right". Of course, everyone’s parameters are different. But we see no reason why we should put out specific Facebook guidelines on what you can and can’t post, it’s not as if we put out guidelines on what people say on the weekend at their neighbor’s barbecue or at their child’s piano recital.
We share the common belief that work and home lives are starting to become intertwined. The separation that used to be prevalent is becoming less and less so with the ubiquity of Blackberries, mobile phones and social networking sites. This is why we encourage employees to determine for themselves what their level of comfort is with this increasing transparency (e.g. learn how to create slices of your profile so that you share the right information with the right people). We also realize that many (particularly millennials) only know complete transparency, and that with complete transparency the traditional buttoned down corporate culture that has thrived for so long may well be dismantled.
What else do people need to understand about this effort?
You have to let go to be successful. Be willing to take some hits along the way. Everything we did was unchartered territory, and yes, we realized there were risks involved. But why wait? You learn as you go when you’re acting as a lead adopter and frankly we wouldn’t have it any other way.
People often misconstrue social networking as the latest technological fad. And while yes technology might be responsible for the features that exist, at its core it is much more a sociological phenomenon. Simply put, people want to interact with other people. Most companies forget that having fun is a basic human desire. If you can find a way to incorporate a platform that enables people to interact, to have fun and still get their work done then everyone wins.
Should everyone follow in your footsteps, or would this be a bad idea for some kinds of companies?
I don’t see why everyone shouldn’t be following in our footsteps. We’re amused when we hear about companies banning sites like Facebook at work. You hear things like "it is a distraction to workers", so are you banning cell phones because Facebook has a great app that resides on mobile devices, what’s stopping them from accessing it there? Often we hear, "aren’t you concerned about confidential information being put on Facebook (or the internet in general)?", our response is "if someone wants to release confidential information about your company maliciously they will find a way to release it". Ironically, since people tend to use their real names on Facebook posting confidential information is the least of our worries, it doesn’t take much to track who posted what and when. We also hear "aren’t you afraid that if all your employees are on Facebook that recruiters will start poaching your best talent?", our response is "if you create a corporate culture that embraces the fact that your employees are people and gives them numerous ways to not only contribute but help shape both the direction and the image of the community they are part of then we trust that we will always have an engaged workforce." We started this off by saying every employee in our company is a PR person, a marketer, a developer, etc.., We want everyone that wants the opportunity to get involved.
So if you are in a company that is willing to tread in new waters, then you should take the plunge. We’ve only seen benefits so far, and feel that our employees are all gaining immeasurably because of it. The first question companies should consider is "what is the corporate culture we are looking to create?" The answer to that question will dictate how you move forward.
July 05, 2008
Curb My Enthusiasm
A researcher can easily fall into the trap of losing the ability to look at his own work critically. He spends a lot of time looking at data and trying to figure out what’s going on, and eventually comes up a story that explains what he’s seeing. When he’s feeling pedantic (which is often) he calls this story a theory. He then tries to see if this story holds up— in other words he tests the theory—by gathering more data and looking at it in different ways.
An intellectually honest researcher tries hard to prove his own story wrong by looking for data that do not support the story he’s come up with, and by seeing if another story explains things better. This part of the work is critically important, as it helps to ensure that the researcher doesn’t look silly later on when someone else comes up with the ‘right’ story. It also strengthens and refines the theory itself. My colleague Clay Christensen, in his description of theory building, talks about the important role played by anomalies, or observations that don’t fit the current story and so spur the quest for a better one. In short, a conscientious researcher tries hard to find other explanations and anomalies.
You’ve figured out by now that I’m not talking about faceless researchers for abstract reasons. I’m selfishly talking about me and my work, and asking for help in the search for other explanations and anomalies related to a story I’ve helped come up with.
Erik Brynjolfsson, Michael Sorell, Feng Zhu, and I developed a story about the relationship between IT and competition. Over the past couple years we’ve built the story and tried to test it in as many different ways as we could. We couldn’t do all the tests we wanted because of data limitations, but this is almost always the case with empirical research— the data are never perfect or complete.
So we did the best we could. In a later post I’ll describe what I think is the best piece of story-testing that we did, one that yielded results I still find fascinating and powerful. It’s a test inspired by baseball and a very smart researcher in a totally unrelated field. I hope you find the story as interesting as I do—stay tuned.
We eventually came up with a pretty bold story; bold because it makes some strong claims about how the world of business is changing, what’s behind these changes (spoiler alert: it’s IT), and why. I’ll inelegantly summarize the story in a few bullet points:
- In the middle of the 1990s, there appeared two major additions to the ‘toolkit’ of information technologies available to companies: The Web (which introduced the business world to the Internet), and commercial enterprise information systems like ERP. Both of these were novel, and were much more than incremental improvements; they were quantum leaps forward in corporate IT.
- These technology innovations increase the impact of managerial innovations. They let a company take good ideas— improved business processes, sets of workflows, plans about who should get to make which decisions, etc.— and propagate them widely and with very high fidelity throughout the company or value chain. Prior to the mid 90s these types of good ideas often had only local and temporary impact. Thanks to the new technologies, from the mid 1990s on these ideas had broader, deeper, and longer-lasting impact.
- Good ideas are competitively valuable.
- Good ideas with broad and deep impact are even more competitively valuable. They increase the gap between winners (the companies with good ideas) and losers (the rest) in an industry.
- So after the new technologies appeared and increased the power of good ideas, the gaps between winners and losers in technology-consuming industries started to get bigger.
- These gaps were biggest in industries that spend the most on IT. IT spending, in other words, is a substitute (or ‘proxy’ ) for the volume of technology-enabled good ideas in an industry.
- Because people within companies keep having good ideas, the winners and losers in any particular industry don’t stay stable over time. IT, in other words, doesn’t just increase the gaps between winners and losers. It also makes it less likely that the winners at any point in time will stay on top. This churn or turbulence is greater in industries that spend more on IT.
- This new, nastier competition does not depend on continued IT innovation. It only depends on continued managerial innovation. If all the technology vendors were to close up shop tomorrow competition in all industries would not eventually revert to where it was prior to the mid-1990s. The current IT toolkit lets companies propagate business ideas faster, more broadly, and with higher fidelity. That’s all that’s necessary to increase the pace of competition, and to keep it high. Of course, the tech vendors are not about to shut themselves down and we’ll see a lot more innovation from them; this will only serve to further increase competitive nastiness. But technology innovation is the icing on the cake of managerial innovation.
Erik and I present a full version of the above story in the current (July/August 2008) issue of Harvard Business Review, and show the different kinds of data we gathered to assemble and test the story. We also discuss other possible explanations for the patterns we observe and talk about how we tried to test these alternative stories.
After finishing all this work I have a problem: I believe my own story. Like my colleagues, I’ve tried hard to listen to objections, constructive criticism, and other possible explanations for the patterns we’ve documented. And I don’t buy them. We’ve tested some of the alternative explanations and found them lacking, and the others just don’t seem that plausible to me.
Faith in one’s own work and results is a fine thing, but blind faith is a bad thing. And I’m worried that I’ve been so close to this work for so long, and so excited by our findings and conclusions, that I might be missing something.
So I’d love your help. Please read our HBR article (it’s freely available online for at least a month) and, if you’re so inclined, the academic paper that presents the work more formally. Take a look at our story and the data that support it. And see if you can think of any other plausible explanation for the patterns we observe and document.
If you can, please let me know about it. Leave a comment or, if you prefer, contact me directly. I’m sincerely interested in hearing other stories. Of course, if you think our story is spot on and needs no amendments or elaborations, that would be great to hear, too. But I’m most keen to hear what else you think could be going on. If IT isn’t changing competition in the way we describe, what is?
June 30, 2008
Some Questions You Might Get Asked
As I’ve talked with many different audiences over the past two years about Enterprise 2.0, I’ve noticed that the same questions keep coming up, and I wanted to capture them. I’ll talk about the best answers to these questions later, and also about which of them seem to be most legitimate—to reflect the real risks a company takes on when it deploys emergent social software platforms (which from now on I’m just going to abbreviate as ESSPs). For now I just wanted to list them, and to make sure that I’m not missing any common ones.
For internal ESSPs, here’s the FAQ:
- What if employees use the their internal blogs to post hate speech or pornography, or to harass a co-worker?
- What if blogs are used to denigrate the company itself, air dirty laundry, or talk about how misguided its leadership and strategy are?
- What if nasty arguments break out in a discussion forum and the whole thing descends into name-calling and flame wars?
- Won’t people be tempted to use forums to talk about current events, review movies, ask for advice about camcorder purchases, and have other non work-related conversations?
- What if people waste time filling up their employee profile pages with pictures of their kittens and vacations?
- Will people just use social networking software to plan happy hour, rather than to get work done?
- Don’t Enterprise 2.0 platforms just yield another source of discoverable content -- material that must be turned over as part of a lawsuit or other legal action?
- If the information on these platforms really is valuable, won’t it be harvested by spies and sold to the highest bidder?
- Won’t hackers break in to our Enterprise 2.0 platforms and steal their content?
- Don’t these technologies make it easier to deliberately or inadvertently leak secrets to the outside world?
- Don’t they make it too easy for confidential information to leap over our internal Chinese Walls?
- If we give up tight control over our Intranet’s content, how can we possibly avoid running afoul of all potentially relevant regulations and laws around information sharing in all the places we do business?
The list of concerns grows when an organization also considers extending Enterprise 2.0 tools and approaches to external groups like prospective customers, actual customers, suppliers, and other community members:
- What if an unhappy customer uses uses our community site to air their grievances, and to talk loudly and often about our lousy products or Kafkaesque customer service? Or a supplier uses them to complain about how we never pay on time?
- Are we responsible and liable if people give incorrect information or bad advice on question and answer forums we host on our Web site?
- If we try to take advantage of lead-user innovation and ask people to submit their ideas to us, who owns the resulting intellectual property -- do we have to share resulting revenues and/or profits with the submitter?
What am I missing? Are there frequently-asked questions that aren’t on this list? If so, what are they? Leave a comment, please, and let us know.
And if you’d like to share your favorite answers to any of these, we’re all ears.
June 27, 2008
At Newsstands Now: IT and Competition
Harvard Business Review has recently updated its Web site to reflect the contents of the July-August issue, which is the second of two issues celebrating the Centennial of Harvard Business School. This one is devoted to "Honing Your Competitive Edge" and contains an article written by myself and MIT‘s Erik Brynjolfsson called "Investing in the IT That Makes a Competitive Difference." This is a descriptive title, but not a terribly interesting or provocative one. Erik and I tried to get the editorial staff brainstorming around titles like "Deploy, Innovate, and Propagate: How to Harness IT for Competitive Advantage." or "How, and How Much, IT Matters," but no dice.
The title aside, we’re excited to see the article in print. It builds on and expands ideas we wrote about last year in Sloan Management Review and the Wall Street Journal, and that I’ve blogged about a couple times.
We present data showing that competition in the US has become significantly nastier, or more ’Schumpeterian,’ since the mid 1990s, and that the increase in competitive intensity is biggest in the industries that spend the most on IT. To put it a bit more precisely, we found a positive correlation between nastier competitive dynamics and IT investment at the industry level since the mid 90s; the article includes graphs that show this relationship.
To put it a bit more loosely, we found that competition started to heat up in the middle of the last decade, and that it heated up most in industries that installed a lot of IT.
We use analogies, case studies, logic, and previous theoretical and empirical work to argue that this is not just an interesting correlation, but a story of cause-and-effect. We believe that IT is a primary engine of the observed changes in the landscape of competition. The article lays out why we believe this, and what the implications for technology-fueled competition are for companies and their leaders.
I won’t try to summarize our arguments, conclusions, or recommendations here. Instead, please read the article if you’re interested in the topic; It’s available for free for the next month on HBR’s site.
And please let me and the rest of this blog’s community know what you think. Are you persuaded by our evidence and arguments? If not, why not? What did we overlook or get wrong? What do you think of the paper’s recommendations to executives? Are they the right ones, or recipes for disaster? What questions did the article leave you with? Leave a comment and share your thoughts; I’ll take up feedback in later posts. There’s a lot more to be said on this topic, so let’s start the conversation.
June 19, 2008
Is Management the Problem?
Last week at the Enterprise 2.0 conference I moderated a panel of early adopters. The conference organizers assembled a true group of all-stars: Pete Fields, SVP in Wachovia’s eCommerce division; Simon Revell, Manager of Enterprise 2.0 technology development at Pfizer; Ned Lerner, Director of tools and technology at Sony Computer Entertainment, and my friends Don Burke and Sean Dennehy, Intellipedia Doyen and Evangelist, respectively, at the CIA.
The first question I asked them, and the one on which we spent most of our time, was essentially "If Enterprise 2.0 tools and approaches really are so beneficial and powerful, why haven’t they spread like wildfire?" I suggested three categories of impediment: managers, technologies, and users, and asked the panelists to hold forth.
In their initial responses all of them identified users, not bad managers or inadequate technologies, as the biggest barriers to faster and deeper adoption of Enterprise 2.0. Entrenched practices and mindsets, some degree of technophobia, busyness, and the 9X Problem of email as an incumbent technology combine, they said, to limit the pace of adoption. These factors slow the migration from channels to platforms and necessitate continued patience, evangelism, and training and coaching.
I didn’t expect the panelists to say that the Enterprise 2.0 tooklit is so incomplete as to hinder adoption, but I was a bit surprised that none of them identified management as a real impediment in their first round of comments. So I pressed the point by saying something like "I didn’t hear any of you point the finger at the managers in your organizations. Were you just being polite, or are they really not getting in the way of Enterprise 2.0? The new social software platforms are a bureaucrat’s worst nightmare because they remove his ability to filter information, or control its flow. I’d expect, then, that each of you would have some examples of managers overtly or covertly trying to stop the spread and use of these tools. Are you telling me this hasn’t happened?"
That is in fact what they were telling me, and I didn’t get the impression that they were just being diplomatic. They said that managers were just another category of users that needed to migrate over to new ways of working, and not anything more. In other words, the panelists hadn’t seen managers in their organizations actively trying to impede Enterprise 2.0.
This surprised me. I’ve thought that since E2.0 tools and approaches have no inherent respect for existing organizational hierarchies and boundaries the people who have ascended the hierarchy within the boundaries might be actively hostile to them. For the organizations represented on the panel, this does not appear to be the case. The most counterproductive behaviors mentioned were the reflexive desire to work in private, and the temptation to build a large number of mutually inaccessible walled gardens of user-generated content.
The panelists represented large organizations, most of which had been around for a long time and had large numbers of managers who were used to, and probably comfortable with, the status quo. Yet no examples surfaced of these managers trying to thwart or sabotage E2.0 efforts, and no panelist told a story about a managers darkly hinting to their groups that participating in the new social software platforms might not be the best thing for a career.
I can think of three possibilities why not. First, managers in these organizations could be unaware of E2.0’s profound indifference to hierarchy and facilitation of transparency. Second, managers could be aware of these trends and displeased about them, but see themselves as powerless to stem the tide of freeflowing social information. Or third, managers could be aware and in favor of (or at least unbothered by) these developments.
This final possibility, of course, is the most optimistic. It suggests that even in large, well-established, and conservative organizations the hierarchy is not full of bureaucrats, in the narrow and negative sense of the term.
In your experience and opinion, is this accurate? Or is one of the first two scenarios above what’s actually going on? Or is something else entirely taking place? Leave a comment, please, and let us know your thoughts and stories about management’s reaction to Enterprise 2.0...
June 16, 2008
Harbors in the Ocean of E-mail
As I’m writing this, the fourth most-blogged article from the New York Times website is "Lost in E-Mail, Tech Firms Face Self-Made Beast," which appeared on June 14. It describes how knowledge workers at many high-tech firms feel as if they’re drowning in e-mail, and how bad habits and etiquette (like reflexively using the ‘reply to all’ option) contribute to the situation. The flood of e-mail has become such a concern that a working group called the Information Overload Research Group has been formed; members include Microsoft, Google, IBM, and Intel.
E-mail is clearly ’in the flow‘ for most modern knowledge workers. For many of them, it seems, it in fact is the flow. But so what? Why is a lot of e-mail bad? If consequential things happen frequently and a knowledge worker needs to be aware of them in order to do her job, isn’t e-mail as good a vehicle as any to communicate these important developments?
According to the Times article, the problem with that argument is that a lot of e-mails actually aren’t very important. Research by Basex, a company that works at "the intersection of content, knowledge sharing, and collaboration within the enterprise," indicates that 28% of an info-workers day is spent on "interruptions by things that aren’t urgent or important, like unnecessary e-mail messages" and on recovering from these interruptions.
The problem with using e-mail for all communications is that it gets used for, well, all communications, even those that aren’t time-critical, personal, private, or salient. It also gets used to coordinate the multi-person creation of documents, presentations, and spreadsheets, a task at which it’s abysmal. I often ask audiences how many people execute multi-person collaborations by attaching the (hopefully) most recent version of a file to a group e-mail again and again. Most hands go up. I then ask how many people are happy with this mode of collaboration; very few hands remain in the air.
The principal solutions proposed by the Times article are to shut off or otherwise walk away from email for some portion of the workday, and to rely more on face-to-face interactions. These are surely both good and perhaps even necessary ideas. Many of the writers I know go offline when they have to get serious work done (one of my colleagues goes so far as to unplug his wireless router when he needs to concentrate). Short email sabbaticals and more actual human contact are probably valuable for today’s deluged knowledge workers.
And so are Enterprise 2.0 technologies like wikis, blogs, and social networking software, for several reasons. First, wikis and other group-level editing tools like Zoho, Google Docs and Spreadsheets, and SocialCalc can be used to collaboratively build something without having to email attachments around to everyone. As this diagram popularized by Chris Rasmussen shows, working this way can save iterations, streamline work, and leave people happier in addition to reducing email volume.
Second, E2.0 tools are good ones for project management; they can be used to track status and progress on action items, highlight new developments, and generally keep everyone on the same page. This only works, though, if everyone on the project agrees to use the 2.0 project management tools; if the boss still wants everything emailed to her and continues to use email for her updates, Enterprise 2.0 becomes above the flow rather than in it, and so likely increases interruptions rather than decreasing them.
Finally, social networking tools like Facebook and Twitter let people tell their far-flung friends and colleagues what they’re up to without sending a single email, and also let them keep on top of their networks without opening the Inbox. These tools have a very interesting property; they let us dip into the stream of friends’ updates when it’s convenient for us, not when it’s convenient for the updater (as would be the case with email). These updates tend to be less time-critical and less private, and so don’t really belong in our personal Inboxes. Instead, they float by in an ether that we can jump into whenever we like. Leisa Reichelt calls this ability to dip at will into the lives of our friends and/or the workstreams of our colleagues ’ambient intimacy,’ which I think is a lovely phrase.
The active blogger and social media user Luis Suarez recently launched an interesting experiment: he gave up on work e-mail. As he describes it, he "created a post in my internal blog where I was mentioning that from that day onwards I would not be answering any e-mails, nor write any e-mails myself either, but instead I would make the most out of social software tools and social computing, in general, to get in touch with other knowledge workers and collaborate further sharing and exchanging our knowledge over there." Suarez still uses e-mail for private communications where sensitive information is exchanged, but is trying hard to avoid e-mail otherwise. Initial results, he says, are that his emails have dropped off by as much as a factor of five (his blog posts to date on this experiment are here and here.).
I’d love to hear others’ experiences in this area. Are you drowning in e-mail? Or have you found ways to staunch the flow? Are Enterprise 2.0 technologies helping at all? Leave a comment, please, and let us know.
June 09, 2008
Detente
The most recent issue of EMC‘s ON Magazine includes an interview with me and Tom Davenport. As the article’s subhead states, "One year after debating whether Enterprise 2.0 is truly a transformative technology or just an incremental evolution of collaborative tools, Andrew McAfee and Tom Davenport resume the conversation."
Conversation is exactly the right word. Previous debates between me and Tom have featured a fair amount of disagreement, and perhaps a bit of talking past each other. This one felt different, even though he and I continue to view the ‘toolkit’ of Enterprise 2.0 in dissimiar ways. I see the constituent technologies as someting new under the sun, and Tom sees them more as incremental improvements to the digital collaboration tools that have available to companies for a long time.
That difference in viewpoint, however, didn’t matter much. Tom and I agreed pretty violently on a few important points: the need to be circumspect about the power of these technologies to transform organizations and render obsolete traditional notions of ‘management’ and ‘hierarchy,’ the benefits of emergent over imposed approaches to communicating knowledge and expertise, and the need for ‘gardeners’ or ‘curators’ who keep the digital environments tidy and usable over time.
I’m not exactly sure why we’re agreeing so much more now than in the past, but it’s a welcome development. As I wrote in my first blog post about Tom’s views, he is one of the most insightful and experienced thinkers about technology’s impact. It’s been a little uncomfortable finding myself on the opposite side from him on an issue I find important. So I was glad to find myself nodding my head a lot as he spoke during the interview.
After the notebooks were put away and the tape recorder turned off, Tom said to me "This was a lot more fun than disagreeing." I couldn’t agree more.
The same issue of ON magazine also has some interesting stats on E2.0 viewpoints and penetration rates collected by AIIM International and summarized by Carl Frappaolo. Check them out and tell us what you think of them. And/or leave a comment telling us what you think of the state of the debate between on Enterprise 2.0.
June 03, 2008
Eric Schmidt Reveals Google's Secret
The organizers of last week’s Management Lab conference on "Inventing the Future of Managment" amplified the value of the event for us attendees by persuading Google CEO Eric Schmidt to speak with us over dinner on Thursday night. I’d not had the chance to hear him before, and was blown away; he was funny, direct, engaged, and razor sharp. I was particularly impressed that instead of sticking to talking points (a common tendency among senior executives, especially those leading large, heavily-scrutinized companies) he took questions, and actually answered them.
In his initial remarks I heard him stress two elements of Google’s success: hiring the smartest people they can find, and making decisions as a group after deliberation, rather than by individual fiat. Schmidt told the story of how shortly after he was hired he had a meeting with his senior colleagues about bringing on an executive he thought would be a good fit. His co-workers disagreed, and as a result the CEO of the company was not able to hire someone he favored.
As I listened to him speak I felt one of my frustrations as a teacher surface, and decided to ask him about it. I asked something like:
"Eric, like many people here I teach at a business school, and I’ve always been disappointed with the results whenever I use Google as a case study. My executive education students always say that there’s nothing for them to learn from your company because it’s just too different from theirs— you’re very young, you’re in this strange online industry, and you’re full of people with 145 IQs.
I’ve been trying to push back against these arguments in the classroom, but as I listen to you here tonight I’m starting to think that my students might be right! As you’ve described it, Google seems to be a completely unique organization. So what can other companies and managers really learn from you?"
His response was unequivocal, and fantastic. As best I can recall, he said:
"They can learn to listen. Listening to each other is core to our culture, and we don’t listen to each other just because we’re all so smart. We listen because everyone has good ideas, and because it’s a great way to show respect. And any company, at any point in its history, can start listening more."
Many participants in the conference voiced the belief that a move away from authoritarian and imperial corporate leadership would be a smart move, and that we need to retire the belief that intelligence, omniscience, and infallibility rise in lockstep with height on the org. chart. It was fascinating, and encouraging, for me to hear Schmidt agree so closely with that viewpoint even though he hadn’t been present during the day; he was just the man who came to dinner.
He gave a powerful and actionable piece of advice, and one for which the technologies of Enterprise 2.0 are tailor-made. Let’s see how many businesses and business leaders have what it takes to follow it.
And if you want to learn more of Google’s secrets, check out the article "Reverse Engineering Google’s Innovation Machine" by Bala Iyer and my friend Tom Davenport in the April Harvard Business Review.
May 30, 2008
My Provocation, and Others
I’ve spent the last two days at the Management Lab‘s conference on "Inventing the Future of Management," at which Gary Hamel has done an amazing job of framing issues and herding a large number of cats. He and his colleagues had the clever idea to ask each of us attendees, when introducing ourselves, to toss out a ‘provocation’ related to our work.
I outsourced the phrasing of my provocation to F. Scott Fitzgerald. I googled a few words from a quote I vaguely remembered and found that it came from a confessional about his own depletion. The 1945 book The Crack-Up contained one of his most famous aphorisms:
"The test of a first rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function."
When it was my turn I read the above sentence, which I love not because I’m convinced that it’s generally true, but because it perfectly captures a business leader’s two roles with respect to information technology (at least as I see them). I explained to my colleagues my view that the newly-available toolkit of corporate IT gives managers two diametrically opposed abilities.
The first is an ability to impose new work structures—business processes, work flows, interdependencies, decision right allocations, data formats, operating models, etc.— on their organizations, and to have great confidence that these work structures will be followed with great fidelity, both across locations and over time.
The second thing IT does is give business leaders the ability to let new work structures emerge without forcing them. Web 2.0 and Enterprise 2.0 technologies are wonderful new tools for letting processes, interdependencies, decision right regimes, operating models, etc. appear over time without central direction, and without much (if any) up-front guessing about how these structures will or should look.
What I was trying to have Fitzgerald help me say was that leaders need to become accustomed to the double-edged sword that is today’s IT. Technology can be used to strike two very different kinds of blow within and across organizations, and to strike them simultaneously. I believe that the companies and managers that accept this duality, and so pass Fitzgerald’s test when applied to IT, are going to stand out over time. Do you agree?
I also want to jot down a few of provocations that other attendees tossed out, just because I got a kick out of a lot of them. Here’s a partial list, arranged in no order and doubtless full of transcription errors:
Tim Brown, IDEO: Creative people aren’t interested in management.
Hal Varian, Google: ‘Statistician’ is the sexy job of the 21st century.
Henry Mitzberg, McGill: We are not living in time of great change. Companies will not save the world.
Eric Abrahamson, Columbia: Organizations are over-organized.
Yves Doz, INSEAD: The danger is to think that what’s new is exciting and good, while what’s old is bad and tired.
Keith Sawyer, Washington University: People are deeply uncomfortable with uncertainty.
James Surowiecki, The New Yorker: The centralization of decision-making is a conceptual error. Individuals are not better than the collective. Jeffrey Pfeffer, Stanford: The language of economics is toxic to the practice of management.
Kevin Kelly, Wired: Productivity is for machines. If you can measure it, robots should do it.
I’ll be posting more about the conference...
May 27, 2008
What I Said About the Revolution
Later this week, the Management Lab is convening a group of academics and practitioners to "to define the “Grand Challenges” for 21st century management, and imagine possible solutions to them." The list of attendees is very impressive; I’m flattered to have been asked to participate and anticipate learning a lot.
As part of the preparation for the conference we were asked to "Briefly describe a “design flaw” or “impediment” that undermines the capacity of organizations to adapt, innovate, or fully engage the talents of their members." We were then asked to "Briefly describe a “radical remedy” that might help to counter or avoid the impediment or design flaw described above."
I wanted to share my two responses here (they probably won’t surprise regular readers of this blog.). I’d love to hear your thoughts; does what’s below capture a real problem? If so, does the solution address it? Do you agree that "it is striking how few opportunities people have to generate, modify, and share information freely and widely on the Intranet?" Did I leave anything really important out? What other comments or thoughts do you have? Leave a comment, please, and let us know.
Impediment or design flaw: People and Information are Deeply Mismatched in Most Organizations
Within most organizations at present, the great majority of consultable digital information is either highly structured (customer order records stored in a database), a reflection of the viewpoints and priorities of the formal hierarchy (newsletters), and/or static (document repositories). As a result, this consultable information does not show the current state of the organization as perceived by its members, nor does it accurately represent their views, skills, judgments, experiences, activities, etc.
In fact, it is striking how few opportunities people have to generate, modify, and share information freely and widely on the Intranet, especially when compared with their abilities to do the same on the Internet. Since so many organizations describe people as their most important assets, it is puzzling why these opportunities are so constrained.
These constraints have an important consequence: while most organizations are drowning in many kinds of data they are simultaneously starved for vitally important information—information that comes over time from ‘wetware,’ or the minds of involved people. Lack of access to this information leads to sluggishness, redundancy, inferior decisions, and missed opportunities.
Radical Remedy: Create an Emergent, Social Enterprise Information Environment
An organization should deploy a universal digital environment that lets members contribute and modify content in a ‘freeform’ manner—with a minimum of imposed structure in the form of workflows, decision right allocations, interdependencies, and data formats specified ex ante. This environment should contain mechanisms to let structure emerge over time; such mechanisms include linking, tagging, voting, rating, and trading, as well as algorithms that generate recommendations, assess relative popularity, etc.
Managers’ roles in this environment are to set expectations, guide the development of healthy norms, indicate appropriate uses, and lead by example. A managers most fundamental role here, however, is to ‘get out of the way’—to stop using technology to impose constraints and culture on people and their work, and to instead encourage the appearance of an emergent structure.
This remedy does not necessarily include the transfer of any decision rights beyond those related to content creation. In other words, this remedy does not advocate that decisions related to the running of the organization be turned over to any emergent collective. It simply entails the creation of a novel information environment. Decision makers will hopefully consult this environment, but the environment does not become the decision maker.
May 21, 2008
Something New Under the Sun?
In the Enterprise 2.0 presentation I’ve given a few times recently I present my bullseye model of E2.0’s benefits and stress that emergent social software platforms are valuable in different ways at each of the four rings of the bullseye— strongly-tied groups of coworkers, weakly-tied ones, potential ties, and no ties.
These days, after drawing the inner 3 rings of the bullseye but before discussing tools like social networking software (SNS) and a corporate blogosphere, I make two points. First, that weak ties are highly valuable, as is the process of converting a potential tie (either strong or weak) into an actual one. So anything that helps a person stay on top of their network of weak ties or convert potential ties should also be quite valuable.
Second, that prior to the 2.0 era (yes, that’s a silly phrase, but not a meaningless one) there were really no good technologies to help at the 2nd and 3rd rings of the bullseye. In other words, there were no effective digital tools for helping a knowledge worker stay on top of and/or exploit her networks of weak ties, or to indicate potentially valuable ties to her. I then go on to discuss the value of SNS for weak ties, and of a blogosphere for potential ones.
At some point this past week, though, I wondered if I was overstating the case. I wondered if in fact there were effective older technologies for weak and potential ties, ones that I had overlooked or forgotten about.
My students didn’t come up with many. I presented the bullseye model to my MBA students this past semester and asked them what technologies, if any, were available at the second and third rings at the companies where they worked before heading off to business school.
More than a few of them had worked as analysts at large consultancies and banks; they said that they used blast emails, listservs, and group instant messaging to ping their networks of loose ties with questions like"Has anyone sized the Eastern European 3G market?" or "how many public medical device manufacturers are there, and which of them are outperforming the market?"
They reported varying levels of success and satisfaction with this method, and also pointed out a few of its shortcomings. Emails are often perceived as intrusions and ignored, and instant messages are typically fleeting. More fundamentally, though, these are both only technologies for broadcasting what you don’t know, rather than what you do. Ideal tools for weak and potential ties would do both; they’d let people display their knowledge, experience, and expertise in a searchable form, and they’d allow people to ask questions of each other.
Beyond email and IM, my students weren’t able to come up with other technologies for weak and potential ties (And is it worth even mentioning corporate newsletters, whether digital or paper? These ‘official’ publications have been part of most organizations I’ve worked in, and have been heartily ignored by most people.). They certainly brought up face-to-face methods like conferences, but we were largely left scratching our heads in class about pre-2.0 digital tools at the 2nd and 3rd rings of the bullseye.
So I’m honestly wondering if I’m missing something, and I’d like to use this blog post to broadcast a question:
Prior to the advent of 2.0 tools like SNS, blogs, and wikis, did effective technologies exist for keeping up to date with a wide network of weak ties, or for finding potentially valuable ties? If so, what were they? How did they work? Were they home-grown or commercial? How heavily were they used, and by whom?
Please leave a comment and let us know. I’d love some reassurance that I’m not kidding myself about the novelty of the Enterprise 2.0 toolkit for weak and potential ties.
