May 09, 2008
Enterprise 2.0: The Friendster Years?
One of the great benefits of teaching via the case method is serendipity: students often come up with better insights or teaching points than the ones I have in my notes when I walk into the classroom. This can be scary, as can all things emergent, but once you embrace it it’s great fun and the semester becomes an opportunity to learn, not just to teach.
It’s also great fun when students bring up facts, discussions, and conclusions from previous classes. Their doing so gives me some confidence that the course is cumulative, rather than just a string of class sessions. One of a professor’s nightmares is the thought that students walk out of each class and empty their minds of the previous 80 minutes, at least until it’s time to study for finals. References to previous classes keep this nightmare at bay.
Both of these happy phenomena occurred during a discussion of Enterprise 2.0 in my recently-completed MIA course. Earlier in the semester we’d discussed the Wikipedia case I wrote with Karim Lakhani. The case touches on the issue of deletionism vs. inclusionism in the Wikipedia community, using the encyclopedia’s article on Enterprise 2.0 to illustrate the tension.
I told the class how I asked Jimmy Wales at a conference whether he was an inclusionist or deletionist. Given his recent experience initiating an article only to see it nominated for speedy deletion, I thought he’d condemn the ascendancy of the deletionism, acknowledging that it had gone too far.
Instead, he gave a brilliant answer. He said that he was neither an inclusionist nor a deletionist, but an eventualist. He had faith in the Wikipedia community and its processes, values, norms, deliberative abilities, etc., and trusted that it would eventually get this issue right, even if at present the community were leaning too far in one direction. I told the MIA students this story in class, and we had a great discussion about whether Wales’s faith was well-founded.
Later in the semester I asked students to read my initial Sloan Management Review article on Enterprise 2.0 and a couple blog posts. I then asked them to rate their optimism (on a 7-point scale) about the potential benefits for companies of E2.0 ignoring all adoption challenges as well as their optimism about the actual benefits taking these challenges into account.
For most students the gap between the two numbers was large; they were optimistic (often highly so) about potential benefits, and much more guarded about actual ones. In class we started talking about why.
As this discussion progressed I felt that it was proceeding at too low a level - focusing on details and single data points ("wikis are too hard to edit," "We could blog behind the firewall at my last company, but almost no one did," etc.) rather than on the ‘big picture.’ More troubling, I didn’t quite know what the big picture was, or what I wanted it to be. Did I want my students to leave class thinking that Enterprise 2.0 was as inevitable as the tide, or that it would be throttled by weak software?
As I was turning this question over in my mind while simultaneously trying to guide class discussion, one of my students bailed me out. "We should all be like Jimmy Wales," he said. "We should all be Enterprise 2.0 eventualists. We see the benefits of adopting these new tools and approaches, and we should have faith that at least some companies will also. I feel like we’re at the Friendster stage with Enterprise 2.0, and we’ll get to the Facebook stage eventually."
I picked up on this great analogy by asking students how many of them had opened Friendster accounts. About two thirds raised a hand. I then asked how many still used them; one hand went up. I then asked how many had Facebook accounts. All hands went up, and stayed up when I asked about regular use.
My student saw that Friendster showed the latent demand for social networking software, but that for a variety of reasons it wasn’t quite ready for prime time. Facebook’s enormous growth and popularity showed the demand for social networking software that got it right. It might be hard to identify, even in retrospect, what that ‘it’ is, but there’s no denying that people want whatever it is.
His point was that we should be similarly patient and optimistic about Enterprise 2.0, and that rather than concentrating on current shortcomings we should be impressed that early efforts are succeeding at all. I think that’s a pretty sharp insight, and a great takeaway from the class. Do you agree?
May 03, 2008
Did My Students Drink the Kool-Aid?
My MBA course Managing in the Information Age ended with a module on Enterprise 2.0 technologies. Prior to the module’s wrapup class, I used an online survey tool to ask students a few questions, including:
Imagine that tomorrow you were named CEO of the organization you worked for immediately prior to coming to HBS (please name this organization in your response). What Enterprise 2.0 and/or Web 2.0 technologies, if any, would you introduce? Why?
I thought I’d share some of their answers after grouping them into a few categories. The excerpts below are organized first of all by business benefit, of which I identified four: capturing and sharing knowledge; finding information, expertise, and people; arriving at better answers; and improving efficiency and speed. These are arbitrary, of course, and the boundaries between them can be quite blurry (as you’ll see), but I did sense that students were interested in E2.0 tools and approaches for different reasons, and wanted to try to capture these differences.
Within each benefit category, I further divided responses by tie strength. In my bullseye model, Enterprise 2.0 delivers distinct benefits for groups of people who are strongly tied, weakly tied, and only potentially tied. I noticed that students in their responses sometimes focused on one of these groups. Many of the scenarios they outlined, though, cut across all types of tie, so I included an ‘across all ties’ category below.
I anonymized companies, replacing names with [Industry Descriptions].
As I looked through responses, I found the most striking pattern to be the consistency of the business problems / shortcomings addressable by Enterprise 2.0. Across many industries, company sizes, and corporate cultures a few failure modes and dysfunctions kept reappearing. I’m gratified to see that some of my students seem to share my optimism that Enterprise 2.0 tools and approaches can address them. They suggested a variety of technologies for doing so, but they seemed to be ‘aiming’ these technologies at the same set of business issues.
What patterns do you see in the responses below? What, if anything, do you find noteworthy about them? Leave a comment and let us know.
And stay tuned for more insights and thoughts from my students. I used polls to ask them a number of questions as the course was drawing to a close, and will posting about them here.
Capturing and Sharing Knowledge
Across Strong Ties
[US Consulate]: information that would be beneficial to the employees and the organization as a whole, such as how to enhance our processes, or what new fraud patterns are being found on a specific visa case [could be contained in a wiki].
[Boutique Investment Bank]: The tools we learned about in class are very helpful for small banks since they allow them to level out the playing field with some of the larger shops. My firm’s greatest asset was the knowledge we captured through networking with clients and prospective clients in the industry. I think that a Wiki would have been very helpful in optimizing all the information we gathered. For example, I had to write a memo after each meeting or phone call with a current or prospective client. It would have been much easier to centralize all the information on a company in one place.
Across Weak Ties
When working for… a non-profit organization in the field of economic development, information sharing was extremely difficult and the tools for monitoring the progress of our work were very buggy databases that were so hard to work with that we kept relying on paper-based tools. I would definitely implement wikis to facilitate knowledge sharing between various offices, as well as within a single office.
[Large High-Tech Manufacturer]: maybe internal blogs for engineers to share best practices & experiences so people don’t have to reinvent the wheel every time we build a new fab or develop a new product/process.
[Movie Studio]: As CEO, I want top and mid-level management to begin blogging. Internal communication of basic facts about what the company was doing simply didn’t happen, and different groups resented requests from others because they didn’t understand why they were needed. I’d instruct these managers that internal blogs should replace their emailed status reports.
[Large Online Company]: Speaking from my own experience in M&A, I think the organization could benefit from a corporate wiki integrated with the corporate intranet. This could help cut down on the numerous meetings spent explaining a particular transaction to various groups as part of the post-acquisition integration process.
Across Potential Ties
As CEO of [Medical Device Company] I would introduce wiki’s in an attempt to encourage employees to capture tacit knowledge, explicitly across R&D projects, where many groups work on the same problems others have already solved or have attempted to solve.
[Worldwide Consumer Products Company]: In manufacturing there was high turnover and people who would leave the company would take a significant amount of information with them making it difficult and time consuming for the new employees to gather that knowledge from scratch. With a Wiki a new employee would be able to gain easily that knowledge.
[Military Contractor]: a facility making hydraulic actuators for a new aircraft in California could be struggling with the same engineering challenging as a business unit developing hovercraft in Louisiana, but the two teams would be completely unaware. I think that the idea that Enterprise 2.0 technologies, and the communities they promote when applied successfully, increase the number of “potential ties” is an incredibly powerful one.
[Large Manufacturing Company]: I would also put social networking of some sort in place for the sales teams to better collaborate since there are usually many different… contacts for each large… customer.
[Military Contractor]: I think that the E2.0 technologies such as blogs and wikis would be extremely helpful for bridging the gap between the two generations currently in defense contracting. There is a wealth of knowledge possessed by the older generation that is not being transferred. Numerous times when I was an engineer or even manager, that if I could just read someone else’s previous experiences, it would save me a lot of time and heartache.
Across All Ties
If I am the CEO of [Huge Consulting Company], I would restructure the existing Knowledge Management system, and change it with a better E2.0 technologies, complete with all of its SLATES components. I believe the consultants would be more productive if they could search, link, author, tag, extend, and receive signals from/to the directory of projects were and are conducted by [the company] worldwide.
[Industry not specified]: Right now, the company I’m going to has little to no procedures for capturing and preserving organizational learning, and a wiki and blogging would be a great way to remedy that.
[Medium-sized Consulting Company]: Wiki: great way to collect and improve knowledge about common, repeated tasks (e.g., building an NPV model).
[Huge Tech Company]: I would introduce wikipedia and blogs to the organization because there is a problem with information sharing. [The company] is made up of several acquired companies which have different cultures. Although they encourage information sharing by publishing papers in the central webpage, few employees actually do so.
[Major Retailer]: The company’s 1500 stores had a lot of extremely bright people who had a lot of knowledge stored in their heads. It would have been really cool to see something that allowed them to share that knowledge across the enterprise. For example, I think it would be great to see a Wiki environment that helped sales associates learn about and contribute information on new products and their applications.
[Online Company]: I would simply make my Del.icio.us feed open to the public (which is the default). I think that as CEO, most employees in the company would enjoy reading what the CEO reads. This is easy for me to do, since bookmarking sites is quick. It is also non-disruptive and non-invasive, since I do not need to send annoying emails that would interrupt the productivity of my workers so that they can read about the latest articles I bookmarked. That said, I think this could be quite productive, since most users could gather a strategic perspective on "big ideas" that I would (naturally!) be reading about, which they could relate back to their tasks. Also, it would probably give better transparency into what I am reading about, thinking about and probably interested in. It could help workers align their work with the company objectives and management priorities.
[US Military]: Most military units train a great deal and perform “after action reviews” after training to identify sustaining behaviors, behaviors that can be improved, and best practices. While beneficial, there are many military units that are spread across the country and the globe. As a result, best practices across the Army, let alone all services, does not really happen. If it does, it is after someone analyzes every unit’s best practices and updates a specific manual, creating a newer version. As you can imagine, this process is slow and tedious. Enterprise 2.0 could bring together all of the military units across the globe and create an environment where best practices for movements, engagements, and maneuvers across services (Army, Navy, Air Force, and Marines) can be optimized and shared real-time.
Finding Information, Expertise, and People
Across Potential Ties
Before HBS I worked as a military contractor for intelligence agencies. I think that encouraging general blogging would be my first step. I found that there is a ton of talent in the Agency but it is often misplaced or under utilized. If there was a way to quickly and easily search out people who have interests (ie blog posts) then there would be a lot more connection of problems with the right people to solve them.
[City Government]: I would introduce Enterprise 2.0 in the form of a blog since blogs are best for converting potential ties, strong or weak, into actual ones. Although a city isn’t the most obvious choice for any tool that involves the word "enterprise", it definitely has customers - in the form of the city’s citizens - who must be served. Enterprise 2.0 would help the citizens and the city through providing increased transparency; it’s easier to serve citizens if they’ve told you what they want and need, and it’s easier to prevent civil unrest if citizens feel that they know what their elected representatives are doing on their behalf and with their money.
Across All Ties
If I was the new CEO of [Large Consulting Company] I would definitely introduce a company social network/blog system to keep people up to date on who was working on what and who to contact for help and advice.
[Major Investment Bank]: I would also put a social networking site to replace the intranet so that people will know who has worked with who and be able to access the right people in the organization.
[Worldwide Consulting Company]: I would implement a tagging system across all of the internal presentations to make it much easier to find past documents and presentations. In particular, I would tag individual slides so that it’s easy to then compile a full compilation of "market sizing slides" across industries that is automatically updated… As part of this effort, I would ensure technology allows anybody from across the system to pose and answer questions such as "how do I do this complicated function in excel." This is currently done via e-mail to small groups and would benefit from wider distribution.
[Major Online Company]: As a large organization, I found that information sharing across business units was challenging. When faced with a new project or process that was not within my expertise, I often did not know how to find the right person (who had worked on a similar project or process) to help me. I also found myself being asked the same questions from different people to share my own expertise, which required a lot of time and effort on my part. Blogs, wikis, personal webpages, would be extremely helpful in solving these problems.
[Entertainment Company]: A top priority… would be to create a social network that would provide individuals and groups with the opportunity to introduce themselves both from a professional and personal perspective. With such a vast base of employees, a proprietary social network would allow employees to creatively express their passion for the company, its characters and its content and would allow for the creation of connections between those with no current ties. More broadly it would allow for more of a ‘one-company’ feel where executives would have the opportunity to interact in some manner, for example, with legions of ride operators with whom they would never otherwise come in contact.
[Large Investment Bank]: I would immediate employ a more interactive directory. It wasn’t until the last year or so there, that the company launched a firmwide directory with photos. This became extremely helpful because it allowed employees to make introductions to one another (that were not phone-based). If I saw someone in the cafeteria with whom I just had a phone conversation, I could go up to him/her and introduce myself in person. You cannot put a value on this human interaction because it allowed us to open a dialogue we would have not otherwise had and also made each of us more comfortable in dealing with one another (which allowed us to increase our dialogue over the phone). I would extend this technology even further by giving users the ability to see what types of email distributions they are a member of. For example, if I am a member of the Harvard Business School recruiting team, I might want to know who the other members of the team are so I could discuss a particular candidate. Or if I am looking for someone who has knowledge of high yield bonds, I could look at my contacts to see who might be on the high yield listserv to get their help. This is very similar to the "Group" function on Facebook.
Arriving at Better Answers
Across Strong Ties
I worked for a private equity firm / hedge fund and I would use a wiki for creation of investment memos as they tended to be the means of communicating an idea that needed to be understood and committed to by the entire group. I think it would foster a collaborative approach to the thesis development process that would greatly streamline what was a previously back and forth process held in real time and followed up upon afterward.
The organization is a private equity firm located here in Boston.... I think a wiki could greatly enhance productivity amongst deal teams. For instance, each deal team could have a specific deal page in which they continue to refine their investment thesis over time as they complete various components of due diligence. Up until now, a deal team conducted due diligence in discrete bundles of questions. Then at the end of the process, they would gather all of the work that they completed and try to piece together a final investment thesis or document that summarized their finding to the partnership. If this work was performed and refined real-time using something like a wiki, the investment thesis would be something of a living document. Moreover, non-deal team members could access the page to get updates on how the team currently views the deal and what questions remain
Across Weak Ties
[Tech Company] is a complex organization with hundreds of groups being dependant on other groups for their components. The traditional methods of communicating project status is inefficient. I would put prediction markets to overcome that problem
Across Potential Ties
[Medium-sized Tech Company] I should not be too stringent if I want to foster collaboration, innovation, and new ideas. Someone that is not "supposed" to come up with a great new idea in one area because it is not their function might have such an idea and I would hate to see it squashed...
Across All Ties
[Online Retailer] I would introduce prediction markets. E-commerce is such a dynamic business and yet each employee, being a consumer, has a decent sense of what’s going on. I would use prediction markets to choose new product lines and predict holiday volumes
[Medical Facility]: I would include a forum to allow employees to comment on best practices, error prone processes, etc. It is estimated that 100,000 people are killed by medical errors every year so if there was a way for employees (nurses, doctors, pharmacists, etc.) to air their grievances expeditiously perhaps subsequent errors could be avoided. I would include the ability to comment anonymously for people that were afraid about blowing the whistle on something or being held accountable for a dangerous situation.
[Worldwide Food Company]: I would put in place a prediction market similar to that at Google. I think it would be a good method for mgmt to know what the workers are actually thinking.
[Consumer Electronics Company]: I would introduce many 2.0 technologies for internal (employees) and external (customers) usages. The challenge that [the company] is facing right now [is that it] has been too much engineer’s company rather than customer-oriented company. I would try to utilize those tools to bridge the company and the customers so that the company realize everything starts from the customer, not from the self-satisfaction of a few techies.
Improving Efficiency and Speed
Across Strong Ties
[Tech Company]: Instead of sharing information via documents, spreadsheets and emails, I would want employees to use Wiki. This will improve the quality of documentation and at the same time improve productivity and efficiency as well.
I previously worked for a vc fund, which had partners and associates in 5 different cities. I would introduce wikis to manage internal collaboration, share research about potential investments and track portfolio companies.
Across All Ties
[Worldwide Consulting Company]: a combination of file sharing and wiki-technology within a web-based environment. This would allow all members of the team to access articles, research reports, work-in-progress and archived documents, emerging hypotheses, key questions to resolve etc. The goal would be to have a central location for everybody to share emerging findings - what weekly meetings typically do but in more detail. The main goal of this would be to increase the productivity of individual client teams.
[Another Worldwide Consulting Company]: Another use for a wiki would be a repository for factual information across industries and markets. One of the most common exercises consultants do is to size a market. Likely, this sizing of a particular market is done multiple times over the course of a single year by various times. If this type of knowledge could incorporated into a wiki, efficiency would increase dramatically.
If I were CEO of [Tech Company], I would create a new collaboration space (wiki) for each technology. I worked as a systems engineer and found it incredibly difficult to gather technical information. While all info was "on the web" it was in a variety of different places-newsgroups, folders, product website, troubleshooting sites, etc. I usually ended up calling the company technical expert and this simply isn’t scalable for a large company.
[Worldwide Shipping Company]: I would introduce an Enterprise 2.0 solution to manage [a large current] initiative [aimed at] placing employee’s satisfaction first and empowering them to take risks by creating a safe and appreciative environment. Numerous programs are set up under this initiative and they are managed by full-time employees on a volunteer basis (even though it is acknowledged in annual performance review). Examples of these initiatives include: weekly newsletter, employer of the month, coffee chats with executives, affinity groups, etc. Often times, these programs are logistically cumbersome and drains critical resources away from important business priorities.
April 26, 2008
Taking the Show on the Road
The semester is almost over at HBS; I’ll be out of the classroom after this week. This means that I can travel much more easily and often, and I’m taking advantage of that fact by speaking about Enterprise 2.0 at a few conferences over the next couple months.
I always find speaking at conferences rewarding not primarily because I get to talk, but because I get to listen. I get to hear reactions to the materials and ideas I present, and to learn about others’ experiences. I also get to meet people who I probably wouldn’t have come across otherwise. As I’ve written before, social networking software like Facebook is a great tool for maintaining and exploiting a network of weak social ties and a healthy blogosphere can help convert potential ties into actual ones, but there is still no substitute for being in the same room with people.
So if you’re in the neighborhood, or available to attend, or just curious I’d encourage you to come to any of the conferences listed below, and to introduce yourself. I’ll be speaking about the latest developments and unfolding trends in E2.0, adoption best practices and challenges, open issues and unsettled questions, and the appropriate areas for business leaders to focus on if they want new tools and approaches to take root in their organizations. I’d love to hear your reactions.
The dates and conferences are:
Wednesday, May 7Van Web 2.0 naar Enterprise 2.0 (From Web 2.0 to Enterprise 2.0) Zeist, HollandTuesday, May 13BEA’s Participate.08 conferenceChicagoWednesday, May 14Webcom-MontrealMontrealThursday, May 15DIG 2008: Decisions, Information, and Governance
Las VegasTuesday, May 20INTERWOVEN: 2008 Legal IT Leadership Summit (LITLS)AtlantaWednesday, June 11Enterprise 2.0 conferenceBoston
Thursday, June 12Mark Logic User ConferenceSan Francisco
April 20, 2008
A Case for Prediction Markets
The case on Google’s internal corporate prediction market that I wrote with Peter Coles and Karim Lakhani is now available for wide distribution (a teaching note for this case is also available to faculty). The case’s introduction explains what prediction markets are, and why they might be interesting to business leaders:
"Prediction markets were very much like stock markets. They contained securities, each of which had a price. People used the market to trade with one another by buying and selling these securities. Because traders had differing beliefs about what the securities were worth, and because events occurred over time that altered these beliefs, the prices of securities varied over time.
In a stock market like the New York Stock Exchange the securities being traded were shares in companies, the prices of which reflected beliefs about the value of the companies. In a prediction market, in contrast, the securities being traded were related to future events such as an American presidential election. In this case, the market could be designed so that each security was linked to a candidate, and its price was the same as the estimated probability that the candidate would win, according to the market’s traders.
Prediction markets on the Internet had proved to be remarkably accurate at predicting the results of political elections and other events, and the Googlers had wanted to see if they could also be productively used within companies to forecast events of interest such as the launch date of a product or whether a competitor would take a specific action. The experiences of the previous seven quarters had shown that Google Prediction Markets (GPM) were in fact quite good at predicting such events. Googlers put none of their own money at risk when they traded within GPM; instead, they bought and sold securities within GPM using “Goobles,” an artificial currency."
I’m going to teach this case on Tuesday in my MBA course, and am really looking forward to it. It’s one of my favorite classes of the semester, and will be made even better by the fact that Bo Cowgill, the Googler who initiated prediction markets within the company, will come to Boston to share his insights with my class (and also with Tom Malone‘s at MIT).
Cowgill has written a paper with Justin Wolfers and Eric Zitzewitz analyzing data from Google’s markets, and Wolfers and Zitzewitz also wrote a more general overview of prediction markets. The Wikipedia article on the topic is another good resource. Prediction markets on the Web include the Iowa Electronic Markets, InTrade, NewsFutures, and the Hollywood Stock Exchange.
Our case concentrates on two issues: how to encourage more trades and more liquidity within a corporate prediction market like Google’s, and how business leaders can and should use the information provided by the market.
After writing the case, teaching it a few times, and spending some time understanding the mechanics and utility of prediction markets, I share the puzzlement articulated by James Surowiecki in his book The Wisdom of Crowds:
". . . the most mystifying thing about [prediction] markets is how little interest corporate America has shown in them. Corporate strategy is all about collecting information from many different sources, evaluating the probabilities of potential outcomes, and making decisions in the face of an uncertain future. These are tasks for which [prediction] markets are tailor-made. Yet companies have remained, for the most part, indifferent to this source of potentially excellent information, and have been surprisingly unwilling to improve their decision making by tapping into the collective wisdom of their employees."
Why is this? It’s not because the technology is hard to acquire: Inkling Markets, Xpree, and Consensus Point, among others, will happily provide a company with Web-based prediction market software. So what is the real stumbling block? Is it that companies don’t really want the most accurate information about future events to come out and be widely known?
Leave a comment and let us know what you think, or what your experience has been. I’ll post more on this topic after our class on Tuesday.
April 16, 2008
Homework the Teacher Learns From
Last week I used an online poll to ask my MBA students their opinions on the potential benefits of Enterprise 2.0 as well as the actual benefits most companies will be able to achieve. I also asked them to explain their answers to these questions. Below is a particularly insightful and encouraging response, lightly edited to maintain anonymity.
"I have been an eye witness of the power of enterprise 2.0 (although I didn’t know that is what it was called at the time) technology in promoting collaboration and connectedness across disparate individuals and groups within organizations.
While interning at Chemco this summer, we were briefed on the Company’s brand new intranet, which included blogging capabilities. The site was relatively new, and only a few people (mostly more senior leaders) had created blogs at that point. About a month into the internship, my supervisor (the head of coporate development and strategy) forwarded us a link to one of the comments to the CEO’s blog.
The comment had come from a low-level marketing manager located in a satellite office. In his remarks submitted to the CEO’s blog, the marketing manager openly questioned Chemco’s sacred cow - its ability to wring costs out of a process and to successfully operate an ultra-lean efficient organization. Specifically, he questioned the importance of one of the company’s favorite metrics (something they are extremely proud of); I’ll call it Metric A.
In his post (which was several pages, probably 800 plus words), he broke down basic financial information for Chemco and its 3 or 4 main competitors. Chemco was the clear leader in Metric A. He then overlayed this analysis with metrics such as market cap per employee and other metrics of value (I have forgotten what else he used), where Chemco was a distant laggard.
He went on to say that Chemco needed to essentially reverse its strategy and begin adding significant additional costs in the form of additional sales reps and R&D professionals, which are the key drivers of value in large chemical firms. His analysis was insightful, extremely thorough and bold.
I was amazed at how much buzz it created in the organization - my project team decided to use much of his material as a source reference for one of our deliverables. The office of the chief executive formed a small (informal) task for to investigate some of the marketing manager’s claims and test their potential benefit.
In short, without this new E2.0 vehicle, this manager’s voice would likely never be heard. From the look of his robust analysis, this was something he wanted to (and perhaps had tried to) share for a long time, and he now had the means of doing so. As the above example illustrates, I think that the potential benefits of E2.0 to an organization can be revolutionary - a step-function improvement in collaboration and efficient dissemination of information and resources.
However, in the near term, I think the actual benefits may fall short of the potential benefits due to company inertia and the difficult tension that managers face in actively promoting (even mandating) the technology while at the same time giving it enough room and freedom to be effective. This tension is perilously difficult to manage, and I think some managers’ inexperience will result in more than a few E2.0 rollout failures."
This sounds just about right to me. What do you think?
April 09, 2008
Evidence of the Value of a Blog
I just learned that the editors of Ziff Davis Enterprise put me as #38 in their list of the ’100 Most Influential People in IT.‘ The people putting this list together evidently considered being ’a torchbearer for the emerging Enterprise 2.0 market’ to be noteworthy. I’m honored and flattered.
I’m also pretty sure that this blog is the main reason I made the list. My original article on Enterprise 2.0 appeared just about two years ago in Sloan Management Review and has been pretty popular in reprints and downloads. But my blog has received almost 6.5 million page hits since its launch. I’m quite confident that the total number of desks that have been crossed by my articles and papers pales in comparison to the total number of desktops that have displayed my blog.
I’ve done a lot of speaking on E2.0 at conferences, universities, think tanks, and companies, and have engaged in a couple debates on the topic, and all of these activities have helped spread the word and the ideas. But nothing works as well as this blog. It’s attracted nearly 900 non-spam comments, and I’ve met plenty of people over the last two years who know me primarily as a blogger and are surprised to hear that I’m also a traditional ‘dead tree’ author.
In addition, the best a single article can do is spark thoughts for a reader -- get her to start thinking about a new topic, or to think differently about an existing one. In other words, it can initiate a conversation. I’ve found my blog to be a fantastic tool for continuing the conversation. This blog has allowed me to air ideas on E2.0 and other topics as frequently as I want, and at the length I feel is appropriate. In other words, the person determining the editorial calendar for these ideas is me, not an editor.
I’ve had nothing but positive experiences with Sloan Management Review, Harvard Business Review, and the other periodicals I’ve worked with, and I intend to keep publishing with them. But SMR and HBR have an annual ‘budget’ of IT-related articles, and only a subset of them can be about topics I’m interested in. And of course only a smaller subset of them can be authored by me. I operate under no such constraints with my blog. I put up as much as I want, and readers can consume as much as they want. And as new ideas (such as tying E2.0 to the concepts of social ties and tie strength) occur, I can use the blog to present them for consideration and discussion without having to wait for a traditional publishing opportunity.
I had the chance a little while ago to listen to Paul Levy, the CEO of Boston’s Beth Israel hospital (and my Facebook friend and fellow Red Sox fan), talk about why he blogged. He brought up the same point - that he can blog on issues he cares about as much as he wants. If the topic is of broad interest and his posts are good, they’ll continue to be read and can help shape thinking on the issue. It occurred to me that without a blog, his ability to do this is greatly reduced. Because of his position he might get to write a single opinion piece in the Boston Globe, and I guess his staff could continue to send out PR releases, but that’s about it. His blog greatly amplifies his voice.
The Berkeley economist J. Bradford DeLong got the role of academic blogging exactly right in "The Invisible College," an article he wrote for The Chronicle of Higher Education in 2006. He wrote that "[blogging] is a play in the intellectual influence game… A great university has faculty members who do a great many things — teaching undergraduates, teaching graduate students, the many things that are "research," public education, public service, and the turbocharging of the public sphere of information and debate that is a principal reason that governments finance and donors give to universities. Web logs may well be becoming an important part of that last university mission."
Hear hear, and I plan to use my blog to continue to play in the intellectual influence game. I’m gratified to see that it seems to be working so far...
April 08, 2008
Recession Tech
It seems pretty clear that the US economy is in the middle of a slowdown. Its depth, reach, and length are not yet obvious, and some folk still resist using ‘the R word,’ but leaner times are here, and might last a while.
During such times companies often throttle back their IT investments and hold off on big technology products. Some business leaders think this is the wrong thing to do— during the last recession, in 2001, Jack Welch said that "this is the moment to widen the gap" between GE and its competitors. "We are driving the hell out of IT spending… It’s the lifeblood of the company." But the fact remains that technology budgets typically get pared when times get tight.
Which make Enterprise 2.0 technologies and deployments all the more attractive, for three reasons. First, the tools themselves are ridiculously cheap compared to other enterprise-level applications. Some, like Wordpress and Mediawiki, are even free. And even the commercial E2.0 tools aren’t going to break the bank. Last week Awareness CEO John Bruce and co-founder David Carter came to my MBA class. The students looked at Bruce a bit quizzically when he revealed his company’s pricing: $4k/month, regardless of company size, # of users, etc. Bruce is not running a charity, of course, and his approach to increasing revenue with each customer is clever. Awareness charges an additional monthly fee for each neighborhood that a customer establishes. A customer will only go to the trouble of setting up a neighborhood if the Awareness platform is valuable to them, so Bruce can plausibly argue that he’s charging for value delivered. Even if a customer sets up a Manhattan’s worth of neighborhoods, though, the monthly tab from Awareness is not going to be painful. I once heard the total spending on Intellipedia and the US Intelligence Community’s other E2.0 tools described as ‘rounding error’ in any single agency’s technology budget. The tools of emergent, as opposed to imposed, collaboration are just not very expensive to purchase and install.
They also don’t need to be configured up front. The second reason that Enterprise 2.0 looks good during lean times is that its component technologies don’t need to be populated with data and business logic then extensively tested before they go live. The whole point of emergence is to start with something close to a blank slate, then see what… emerges. It makes sense, of course, to seed the platforms with initial content that will be compelling, draw in users, and encourage contribution, but this is entirely different than setting up CRM, ERP, SCM, and the other technologies that impose structure on collaborative activities. It takes a great deal of time and money to get these structuring technologies ready to go live. Here again, E2.0 looks like rounding error in comparison.
Third and finally, as business slows down workers often have more slack in their weeks. When this is the case it’s easier for them to find time and energy to participate in Enterprise 2.0. So lean economic times might be the right times to launch an effort to build an emergent social software platform.
Leave a comment and tell us what you think, and what you’re seeing. Is this the right time to proceed with Enterprise 2.0? Why or why not?
March 29, 2008
We are All Wikipedians Now
Nicholson Baker has a great article in the March 20 issue of the New York Review of Books on the "Charms of Wikipedia." He highlights that Wikipedia has flourished in large part because it’s fun to be an editor, and that part of the fun is the ongoing war between editors of good will and vandals, or people who take advantage of the site’s open and egalitarian editing policies to do things like replace the text of the article on aging with "Aging is what you get when you get freakin old old old." Baker notes that this happened on December 20, 2007, and that it was undone very quickly by vigilant Wikipedians.
Last week I discussed with my MBA students the online, freely available HBS case on Wikipedia that I co-wrote with Karim Lakhani. As part of the homework for case discussion I asked all my students to become Wikipedia editors, and to report what happened to the edits they made— did they persist unchanged, or were they further modified or rolled back?
I didn’t tell them to engage in vandalism but a couple of them did so in order, I imagine, to test the site’s vigilance. My favorite example was a student’s addition of ‘jellybeans’ to the list of foods commonly eaten by the mongoose. Within minutes, he reported, the word disappeared and he heard from a zoologist Wikipedian offering information on both the animal’s diet and the encyclopedia’s policies on citing sources.
Other students made edits that were less overtly wrong, but still inappropriate. One added to the article on Dubai an uncredited assertion that over 20% of the world’s construction cranes were in the Emirate. He also saw his edit removed, and received information about attribution and sourcing policies.
I should stress that most of the class edited in good will. Lots reported that because the articles they were interested in were so comprehensive they really couldn’t find much to add. Some, though, found omissions that seemed glaring. The article on Wade Boggs contained little or no mention of his affair with Margo Adams, its messy aftermath, and related press coverage. One of my students added this information in a nicely constructed paragraph.
Overall, our experience confirmed Baker’s conclusion that:
"The "unhelpful" or "inappropriate"—sometimes stoned, racist, violent, metalheaded—changes are quickly fixed by human stompers and algorithmicized helper bots. It’s a game. Wikipedians see vandalism as a problem, and it certainly can be, but a Diogenes-minded observer would submit that Wikipedia would never have been the prodigious success it has been without its demons."
Still, as everyone acknowledges it is not a perfect or error-free resource, and students each year find some strange content. Last spring a student pointed out that the current (at that time) page for United Technologies CEO George David was almost entirely a goof. I found it astonishing that his PR staff had allowed this to persist. This year a sharp-eyed student noticed that the entry for sex researcher Robert Kolodny at present contains some strange text in the third paragraph. So the demons persist.
As do the deletionists. The only student last week to understand the true intention behind the assignment created an entry on me. It was speedily removed.
March 16, 2008
Explaining my Fondness for Explicit Content
I was invited to participate a little while back in the Collective Intelligence FOO Camp held at the Googleplex and organized by Hal Varian, Tom Malone, Tim O’Reilly, and Gary Flake. If you’re wondering what the whole thing was about, so were we attendees. Our closing session was devoted to trying to define exactly what ‘collective intelligence’ was. The most popular explanation came from Kim Rachmeler "The network knows what the nodes do not." In a piece of brilliant showmanship she also offered the near-haiku "The nodes know nothing. The nodes know all. Both are true."
I volunteered to host a discussion on "What does corporate America think of collective intelligence." We were happily belaboring the topic when Tim O’Reilly walked in, listened for a while, then essentially stated that we were barking up the wrong tree by focusing on blogs, wikis, tags, prediction markets, and the other standard tools.
He said that we should be concentrating on implicit, not explicit, user-generated information. And he offered a bet that implicit would turn out to be the more valuable of the two types. Much subsequent discussion considered whether this was a false dichotomy, but after reflection I don’t believe that it is. To explore the issue, let me start by offering my own definitions of the two:
Explicit user-generated information is information that people knowingly and deliberately generate by contributing to online platforms. Examples of explicit information include a blog post or comment, a wiki edit, a vote or rating, a trade in a prediction market, a link, and a tag.
Implicit user-generated information is information that people unknowingly generate as they work online. It’s the digital fingerprints or traces that people leave as they follow links, look at content, consider one product then buy another, etc. This data can be aggregated to show what’s popular, what’s related, who has a good reputation, etc. My impression is that the collection and analysis of implicit online information grew out of Web analytics (clickstream data) and eCommerce recommendations (customers who bought [shopped for] this also bought [ended up buying] this). I find these recommendations tremendously valuable, and they’re entirely implicit.
Another type of implicit information is the aggregation of individuals’ explicit contributions. Two of the best-known examples of this are Google’s PageRank algorithm and tag clouds like those at del.icio.us and Flickr. As I wrote earlier, people create links and tags largely out of self-interest, but these activities have substantial group-level benefits; they reveal the overall structure of online content and so help everyone navigate and find information efficiently. Tools like PageRank and tag clouds turn online content into an emergent system— one in which structure clearly exists and changes over time, but that structure can’t be inferred from examining the work of any single actor, and the actors themselves are unaware of the overall structure (just as is the case with an ant colony, one of the classic examples of an emergent system).
The concept of emergence suggests a quick ‘sniff test’ for whether a given piece of digital information should be considered explicit or implicit. If it’s shown to the people who generated it, would they say "Oh, yeah— I knew that" or would they say "I had no idea!"? If the former, it’s explicit. If the latter, it’s implicit.
I also want to emphasize a few other distinctions related to user-generated content that might be relevant for decision makers:
- Individual-level contributions (blog posts, tags, shopping cart additions) vs. group-level ones (wiki edits, trades in a prediction market). The difference here is that others are directly affected by the latter type, and so probably more likely to make their own contribution in response.
- Above-the-flow contributions vs. in-the-flow ones. Again, the latter are more likely.
- Altruistic contributions (edits to another workgroup’s wiki) vs. self-interested ones (trades in a prediction market, which are intended to increase the value of an individuals’ portfolio). Here again, the latter seem more likely.
- Deliberate actions (rate, vote, trade, post) vs. passive ones (click, browse). Same story.
- Currently private (emails) vs. invisible (clicks) vs. public (comments). Users can’t really complain about the latter being made visible, and they probably won’t complain too much about the middle category, as long as it’s anonymized. But technologies that analyze currently private information in hopes of making or suggesting connections might be trouble. I’ve heard of a few corporate efforts to analyze employees’ email traffic in order to say something like "You seem interested in protein folding / ISO 9000 certification / declining CD sales / whatever. We know of other people in the company who are interested in the same thing. Would you like an introduction to them?" I appreciate the intent behind such efforts, but wonder how they’ll be received. Many people consider their email boxes to be private (I know I do) and might not like the thought of their employer peering into them, even with the best of intentions. At the same time, though, many of us (myself included) don’t mind the thought of Google scanning our emails in order to serve us ads, so the situaion is fluid.
So was O’Reilly right that implicit is more valuable? During our discussions at the CI FOO, John Riedl pointed out that because impicit information is typically so much more voluminous it can be more valuable in aggregate. But I think that even if Tim is right, his wager is of more academic than practical interest.
This is because no matter which side of the bet you come down on, the smart move is to encourage explicit contributions. Doing so will lead to more implicit content in two ways. First, as Riedl pointed out there will be a huge amount of implicit content generated as a byproduct of the explicit content— think of all the possible ways to look at Wikipedia article creation and editors. Second, more online content of any form means more browsing and passive consumption. This browsing yields another body of clickstream-ish implicit content— for example all of Wikipedia’s page views.
So if you’re a believer in the power of explicit user-generated content, encourage it. If on the other hand you’re a believer in power of implicit information, encourage explicit user-generated content because that’s the best way to get what you really want.
What have you and your organization learned from explicit and/or implicit information that you would not have known otherwise? Leave a comment, please, and let us know.
March 06, 2008
Sorry, Was That an Aphorism?
I met with a group of CEOs recently, and asked them in advance for their questions related to Enterprise 2.0. Many of these concerned definitions of Web 2.0 and Enterprise 2.0. There were also a number of queries around technology-facilitated communities on the Web, on companies’ public Web sites, and on Intranets— were they a good idea, should they be encouraged, can then be shaped or stopped, etc.
I got the impression that some confusion existed, and tried to think of how to tee up the points I wanted to make during our session. So one of the first slides in my presentation (yes, I still use PowerPoint) read
"You cannot greatly influence Web 2.0.
You can greatly influence Enterprise 2.0"
Is that the right message for senior executives, or did I greatly oversimplify or steamroll an important distinction?
February 22, 2008
What's Most Important for Success with Enterprise 2.0?
I spoke earlier this week at the FASTForward conference in Orlando, and used the opportunity to toss out some conjectures about the factors that differentiate successful Enterprise 2.0 deployments from unsuccessful ones. These conjectures were not developed from any rigorous or comprehensive research, but instead are the inductive result of my work over the past two years to understand the use of emergent social software platforms in pursuit of business goals. I can’t claim that they’re complete, 100% correct, or ‘better’ than anyone else’s hypotheses. I present them at this point primarily to get the ideas out there, to stimulate discussion, and perhaps to provide some guidance.
I divide these conjectures into three areas: aspects of the technologies deployed, support for the deployment initiative itself, and the culture of the deploying company. I’ll expand on each of these areas and the individual conjectures in later posts. For now I just wanted to list them so that people can react.
In the lists below bold type denotes importance — things that are especially important to get right in order to succeed with E2.0. Italics denote difficulty— aspects of technology, initiatives, and culture that seem to be particularly hard to get right.
More on all of this will come later. For now, take a look and let us know what you think. Are any of these just plain wrong, or badly off base? Are the lists missing anything critical? Do you agree with the assessments of difficulty and importance, or do you have very different views? Leave a comment, please, and let us know.
Enterprise 2.0 is more likely if...
Technologies
- Tools are intuitive and easy to use
- Tools are egalitarian and freeform
- Borders seem appropriate to users
- At least some of the tools are explicitly social
- The toolset is quickly standardized
Support for the Initiative
- Incentives exist, and are soft
- Excellent gardeners exist
- Patient and dedicated evangelists exist
- Energy and activity are primarily bottom-up
- Effort has official and unofficial support from the top
- Goals are clear and well-explained
Culture
- People are trusted
- Slack exists in the workweek
- Helpfulness has been the norm
- Top management supports lateralization
- There are lots of young people
- There is pent-up demand for better information sharing
February 11, 2008
Here Comes the Neighborhood
I wrote a while back about why corporate managers might have a hard time getting comfortable with Enterprise 2.0 tools and approaches:
"We need to keep in mind that most E2.0 tools are new, and that their acceptance depends on shifts in perspective on the part of business leaders and decision makers, shifts for which the word ‘seismic’ might not be an overstatement. Enterprise 2.0 tools have no inherent respect for organizational boundaries, hierarchies, or job titles..."
I met a little while back with the leaders of a startup E2.0 company who showed me that those words were a little hasty and naive, and that vendors are coming up with tools that have some respect for existing organization structures, yet still foster freeform and emergent collaboration.
Awareness Networks builds, hosts, and deploys integrated E2.0 suites for an impressive roster of customers (I have no financial interest in Awareness, and have received no compensation from the company). These suites include a variety of tools for both user-generated content and social networking, and are hosted by Awareness and integrated into a customer’s existing infrastructure for security and permissions.
As CEO John Bruce, CTO and co-founder David Carter, and VP of Marketing Eric Schurr walked me through their company and its offerings I found myself nodding along and saying to myself "Yep. Yep. Good idea. Good idea..." When they described how neighborhoods work within Awareness, I think I said "Great idea!" out loud.
Each Awareness installation is called a ‘community,’ and each community can contain multiple neighborhoods. Neighborhoods are simply ways to categorize the content that gets contributed over time, and are defined in advance by the people who commissioned the site. Since these people are usually the bosses of the company (or are at least acting on their behalf) neighborhoods tend to reflect the formal organizational structure or goals of the company, or some combination of the two.
For example, a purely internal community (one that doesn’t include customers or suppliers) might have neighborhoods devoted to Sales, Marketing, R&D, ‘Suggestions,’ and ‘Our Values.’ An internal + external community might include neighborhoods like ‘Next Generation Products’ and ‘User Conference 2008.’ Bosses can control who has the ability to view, comment, edit, post, and vote by neighborhood. People can blog, contribute to wikis, participate in polls, votes, and discussions, upload photos and videos, etc. within any of these neighborhoods. Search, tagging, and linking work across all the content that a user can access, regardless of neighborhood.
An Awareness community therefore has both imposed and emergent structure, in what feels to me like the right proportions. Neighborhoods are tools for bosses to impose, up front, how they want content to be categorized. Users, however, probably don’t feel like this is too much of an imposition. They can still author, edit, link, and tag to their heart’s content; they’re just doing so underneath headings that have been specified in advance. So for example the VP of Marketing will probably blog within her neighborhood, but in a well-designed community anyone can find it, read it, link to it, or add a comment.
By categorizing content, neighborhoods make communities easier to navigate and digest, and so make them appear friendlier to their users. I think the bigger benefit, though, might well be that neighborhoods make Enterprise 2.0 environments appear friendlier to bosses. Neighborhoods let bosses impose a bit of structure on what can otherwise seem like a formless and lawless environment, the online equivalent of an untamed frontier. Neighborhoods provide bosses with assurance that things will be orderly rather than chaotic.
It seems like this would be a good thing. What do you think? Leave a comment and tell us what you think of the concept of neighborhoods - would it help to spur E2.0 adoption within your company?
February 05, 2008
What I Learned About Fidelity
A little while back I spoke at a conference sponsored by Fidelity Equity Partners, a private equity firm that’s part of Fidelity. FEP has an interesting investment strategy: they "focus on investing in established high-growth midsized companies that have gained meaningful competitive advantage through the innovative use of information and systems."
This is music to my ears, of course, and I was excited to be part of the event. It gave me an opportunity to present the work my colleagues and I have been conducting on IT’s competitive impact (discussed here, here, and here ), and also to learn about the types of companies FEP is interested in. Five companies presented at the event: AllConnect, Bazaarvoice, HighRoads, iSqFt, and TopCoder (the companies’ descriptions of themselves are included at the end of this post).
The presenting companies were in dissimilar industries and had wildly different business models. What struck me, though, were their similarities, which went beyond an affinity for or reliance on information technology.
As I listened to their presentations, two themes emerged:
The power of novel IT-embedded business processes. The entrepreneurial insight behind each of these firms, I found, could be (very) loosely summarized as "Wait a minute -- here’s a process that isn’t working very well. It takes too long, costs too much, and/or delivers unsatisfactory results. We can make it work a LOT better by applying some technology to it." The processes ranged from getting utilities purchased and turned on after a move (AllConnect) to obtaining construction drawings and bidding on a job (iSqFt) to managing a large corporation’s HR programs and suppliers (HighRoads).
One of the things I find fascinating about process innovations like these is that they’re often only obvious in retrospect. This is also the case with many product innovations. Most of us didn’t realize that our gear for listening to music was sorely lacking until the iPod showed up, and I once heard the history of the pharmaceutical industry summarized as "giving us drugs for medical conditions we didn’t know we had." The compaines presenting at the FEP conference highlighted for me that the same is probably true for many, or even most, of our current processes. How many of them have been looked at with a fresh, critical eye, a holistic perspective, and a technology-friendly mind? Relatively few, I’d guess, which explains why I’m optimistic that the IT-fueled productivity boost has not yet run its course.
These companies and many other examples have also showed me the difference between simply re-engineering a business process on a whiteboard and embedding the new way of working with IT. A process embedded in technology is more standardized, repeatable, and amenable to monitoring than one that’s deployed only with memos, manuals, and training and enforced via audits and checkups. Technology can improve many things. Of these, one of the most important yet least appreciated might be the the ability of process innovators to deploy their new designs, and to have great confidence that they’ll be executed as designed.
An addiction to data. Standardized, IT-enabled business processes throw off a lot of data, and all five companies talked about how powerful these data were, and how many ways there were to make use of them. BazaarVoice could measure how much the addition of user reviews improved conversion rates and order sizes on eCommerce sites, and TopCoder seemed to quantify every aspect of software development, going so far as to give each contributor a numeric rating that was taken quite seriously by all involved. The presentations at the FEP conference reinforced Lord Kelvin‘s belief that "when you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the state of Science, whatever the matter may be."
I walked away from the event thinking that FEP’s investment hypothesis is a sound one, but then again I walked into the event thinking that. I also came away more convinced than ever that that IT-based process redesign is nowhere near complete, and that huge entrepreneurial and intrapreneurial opportunities remain. Most of these opportunities depend not on novel technologies, but instead on novel perspectives on how work should get done.
Company descriptions (provided by the companies themselves)
ALLCONNECT (Atlanta, GA): Allconnect (http://www.allconnect.com) is the leading provider of essential home services and connections during residential relocations. Founded in 1998 to help people during their move, the company establishes a number of residential services for consumers including power, telephone, sewer, cable television, Internet, newspaper, and lawn care all at no cost to consumers. The company partners with more than 30 power companies and hundreds of service providers across the U.S. and employs more than 500 associates.
BAZAARVOICE (Austin, TX): Bazaarvoice (http://www.bazaarvoice.com) offers outsourced technology, services, analytics, and expertise to help companies enhance the online shopping experience with social commerce applications that drive sales. Bazaarvoice Ratings & Reviews™ and Ask & Answer™ deliver immediate success by minimizing implementation risk and maximizing the strategic impact of user-generated review content through complete customization, deep integration, community management, advanced analytics, search engine optimization, and syndication across the Web and to offline channels.
HIGHROADS (Woburn, MA): HighRoads, Inc. (http://www.highroads.com), the new way of managing HR programs and suppliers, improves the employee experience while dramatically reducing costs for large, complex organizations. HighRoads has automated HR processes for more than 100 Fortune 500 employers along with 700 of their suppliers, consultants and outsourced administrators.
ISqFt (Cincinnati, OH): iSqFt (http://www.isqft.com) provides online bid solicitation and preconstruction management services to the construction industry in the United States. The company’s products include The Private Construction Office, which gives general contractors the ability to distribute project plans, specs, addenda, and other documents to subcontractors and suppliers; and The Internet Plan Room, which provides subcontractors, suppliers, and professional estimators with access to project information, plans, specs, and addenda for publicly bidding construction projects. It serves general contractors, subcontractors, building material suppliers, and manufacturers.
TOPCODER (Glastonbury, CT): TopCoder (http://www.topcoder.com) is a marketplace of freelance software developers. The company uses its own platform for documentation, process, ranking, review, and submission of outsourced development projects as well as sponsored coder competitions. Sponsors use the competitions to recruit and rank developers from around the globe. The TopCoder ranking scores are recognized within the development/hacking community and by the IT hiring community as the best way to quantify the capabilities of a developer. Pulling from competition winners and a component library of winning projects the company provides outsourced development services at a higher quality, lower price, and faster than other major outsourcers.
January 27, 2008
Signs In the Times
Two recent articles in the New York Times caught my eye. The first, by Lisa Belkin in the January 24 ThursdayStyles section, was titled "Who’s Cuddly Now? Law Firms." This article builds on an earlier one by Alex Williams in the Times chronicling the declining prestige of law as a career. Belkin’s article describes a number of radical (by the profession’s historical standards, anyway) steps taken by many law firms in order to make them better places to work, especially for bright young people.
These steps include a move away from the traditional laserlike focus on billable hours as the desideratum for a lawyer who wants to rise within the firm. Some law firms, according to the article, have done away the concept of billable hours altogether.
My ignorance of law as a culture and profession is almost complete, and I have no idea what the overall impact of these moves will be. They’re still very interesting to me from my perspective as a researcher on IT’s impact on work, though, because they might be able to address one of the challenges around Enterprise 2.0.
As I wrote in an earlier post titled "The Pursuit of Busyness," many organizations emphasize (in ways both formal and informal, overt and subtle) that their people should engage in activities that are directly, obviously, and immediately ‘productive.’ Within law and consulting firms, working billable hours is the clearest example of such an activity.
So downplaying or doing away with billable hours provides leaders at these firms with an interesting and perhaps unique opportunity to communicate to the workforce what kinds of activities should take the place of billing the client upward of 2,000 hours per year. If these leaders are serious about improving collaboration, knowledge capture and sharing, innovation, and information flow, they can take advantage of both the novel tools of E2.0 and the novel work environment they’ve just created as they de-emphasized billability.
As I wrote earlier this month, building on a very sharp post by Michael Idinopulos, they could do this by putting the use of their company’s emergent social software platforms ‘in the flow’ of work for their people. A major change in corporate culture like the decline and fall of billable hours presents a major opportunity to reshape what the culture measures, values, and esteems. This will in turn, of course, affect what people do during a workweek.
Would a law firm or consulting company be better off if it went from having a standard of 40 hours of billable work each week to a standard of spending half a day (or a day, or whatever) each week helping colleagues and the enterprise as a whole via the modern social digital toolkit of blogs, wikis, mashups, prediction markets, comments, ratings, votes, RSS feeds, etc.? In some law firms at least, it sounds like there’s an opportunity now to answer that question.
The second article, in yesterday’s business section, was by Steve Lohr and titled "Belt-Tightening, but No Collapse, Is Forecast in Technology Spending." It relates how corporations are not slashing their IT spending at present despite fears of a recession and other unsettling economic news. Lohr relates that while US corporate tech spending fell 11% in the two years after the dot-com bubble burst, IDC forecasts that IT spending will continue to grow this year, but at 4% rather than last year’s 7%.
Belief in the power of technology is nicely summed up in the article by a quote from Monte Ford, the CIO of American Airlines. He states his company’s three biggest costs are people, planes, and fuel and maintains that "Technology remains the best lever for getting more value from all those, making your employees more productive, making better use of your fleet, and increasing your fuel efficiency."
The article corresponds well with what I’ve been hearing at conferences, within companies, and in executive education classrooms. The deep skepticism about IT that was part and parcel of the dot-com hangover has largely passed, and has been replaced by a cautious optimism and sincere curiosity about IT’s power. My MBA course "Managing in the Information Age" has attracted almost 120 students this semester, a growth rate of over 50% from last year. I’d like to attribute this to my "To Sir, With Love"-level classroom abilities, but I think that like so many other things, this is not about me. It’s about an awareness on the part of some smart young people starting their business careers that they’d better add some tech to their managerial toolkits.
