June 27, 2007
We'll be Back after a Short Break
The HBS data center is going through a major upgrade next week, so most of the school's Web presence including this blog will be unavailable from Friday June 29 at 5 pm through at least Wednesday, July 4.
I'll have some good content, including an exciting announcement, when the site is back up next week.
Happy Fourth of July!
June 24, 2007
Never Email Anyone Over 30
A while back I wrote a post speculating about the collaboration technologies today’s college students will expect to use when they enter the workforce. I guessed that today’s collegians will want to continue their use of social networking tools on the job—that they won’t consider these tools to be only suitable for ‘play time,’ but rather as important (integral?) parts of their day. More recently, I wrote a couple posts about Facebook, the social networking site that’s become wildly popular on many college campuses and is now penetrating the rest of society.
Frank Gilbane recently used Facebook itself to gather data about young people’s expectations for collaborationware. He made use of Facebook’s polling feature, which lets a member ask a single question, then specify the desired number of respondents and their demographics (gender, age, location, etc.). Facebook advertises the poll only to members who match these demographics, then summarizes responses as they come in and presents them to the asker. It looks like a nifty feature, and I might well use it myself.
Gilbane asked "Which collaboration technologies will you use most in your job in two years?" He first asked 25-34 year olds, then 18-24 year olds (500 of each). The answers he received are reproduced (with permission) below:
The largest difference, and a statistically significant one, is that the younger crowd has less faith that email will continue to dominate. As a group, the 18-24 year olds plan to make more use of text messaging (a channel technology) and social networking sites (primarily a platform technology, although Facebook does allow communication over private channels). Interestingly, they seem less enthusiastic about instant messaging than does the older set.
Gilbane’s findings don’t result from a rigorously constructed and administered survey, but I still think they have validity. They correspond tightly with stories and anecdotes I’ve been hearing, from many quarters, about the generational shift in technology use. Evidence is mounting that younger people don’t think of the Internet as a collection of content that other people produce for them to consume. Instead, they think about it as a dynamic, emergent, and peer-produced repository to which they’re eager to contribute.
Will corporate Intranets be ready for them? Should they be?
June 20, 2007
Speaking From the Heart, and off the Top of My Head
I found myself in an uncomfortable position at the end of my short keynote speech during the Enterprise 2.0 conference yesterday. I got through my prepared material and still had about five minutes left in the allotted time. So I had to ad lib.
The idea that occurred to me (from no identifiable source) was to make Enterprise 2.0 personal. I compared where my thinking was a year ago to where it was today, and tried to convey how big a shift had taken place.
I used to believe pretty firmly that groups dumbed down people, and sometimes used the old line that the King James Bible was the only great work ever produced by a committee. I now believe that groups are often much smarter than individuals, and that collective intelligence can be further increased with a smattering of technology and a few good rules and norms.
I used to believe that blogs were primarily vehicles for blaring opinions, and that bloggers generally proved Kierkegaard's great quote that "People demand freedom of speech as a compensation for the freedom of thought which they seldom use." I now get a large percentage of my daily food for thought from blogs, and write one myself. It's proved to be an unparalled vehicle for getting ideas out into the world, getting useful feedback on them, and meeting people who are interested in the same things I am.
I used to believe that people who met and interacted with each other digitally did so because they found reality unpleasant, and vice versa. I have now met several people who I consider friends and colleagues via the Internet. By now I've met most of them face-to-face, and every time I do it feels like I'm catching up with a long-lost friend.
I used to believe that the landscape of corporate IT was starting to resemble my native Midwest -- no huge changes visible from here to the horizon. I now believe that this is the most interesting time for business use of information technology since the start of the previous really interesting period in about 1994.
Finally, I used to think that short talks at conferences were low-pressure events, since they'd be heard by relatively few people and remembered by even fewer. A quick Google blog search, however, brings up about 30 blog posts commenting on my keynote. These will persist unless their posters take them down, and will add to the Internet's record of my work. This is more than a bit scary for me as a speaker, but for me as a conference attendee this is great news; it means that the overall quality of talks will go up. No one wants to be examined from that many angles and found lacking.
If I remember to acknowledge some of the great people at the conference I know I'll forget others, so let me just say a blanket "Thank you." It was a great event, and it reminded me that it's been a momentous year. I hope that came across as I was desperately extemporizing.
June 18, 2007
Watching the Film of the Fight
I've just been looking over the (very high quality) video archive of the debate this morning between Tom Davenport and me over Enterprise 2.0, and I have to say it's pretty good! Most of the credit for this goes to our moderator Dan Farber, who asked exactly the right questions at the right times and kept the event flowing, and to Tom himself. He stepped into a room full of E2.0 partisans and engaged with us instead of retreating to talking points or blanket dismissals. This is far from easy to do, and we all owe Tom a debt of thanks for encouraging us, at the high water mark of our enthusiasm, to stop and think carefully about why we're enthusiastic, and to make sure that we're not just enamored of a new set of cool technologies. To the surprise of no one who knows him at all, he was a gentleman and a scholar, and a pleasure both to agree and disagree with. Thanks, Tom.
And thanks also to event sponsors BSG Alliance and Veodia.
After one review of the video, it seems to me that our main point of disagreement concerned the extent to which the E2.0 toolkit really is something new, or whether it's just an incremental extension to the longstanding set of technologies for collaboration, interaction, and information sharing. Tom stressed repeatedly that companies have been deploying such tools for decades, and he kept explicitly and implicitly asking the important question: what, if anything, is new now?
In my opening remarks and a few times subsequently, I tried to articulate my answer to this question: that digital platforms that initially impose little or no structure on interactions, but that contain mechanisms to let patterns and structure emerge over time, are actually quite new. I've written about this a few times before, and for me it's the key to understand what's going on currently, and why so many of us are hopeful that the new toolkit will take off within companies. The idea of using group-level technologies not to impose structure (roles, identities, hierarchy, workflow, data formats, taxonomies, etc.) but instead to try hard to get out of the way and let structure emerge is, I maintain, a pretty novel one. And, I further maintain, a pretty important one.
What do you think? As you watched the debate, what struck you? Where else did Tom and I truly seem to be disagreeing, and what side do you come down on? Leave a comment and let us know.
June 12, 2007
It Looks Like IT Isn't Helping Productivity Any More. Yeah, But...
Last December I posted about the recent slowdown in US productivity growth, and whether the party of IT-fueled growth really was over. I hypothesized that it wasn't, but concluded that:
"Of course, if the data continue to show productivity declines I'll have to revisit my optimistic hypotheses and opinions.... Let's all stay tuned -- I can't think of a more important number for us to watch and discuss."
Well, the most recent data have not been kind to us optimists. Annual nonfarm productivity growth (seasonally adjusted) in the first quarter of 2007, was only 1.0%, according to recently revised estimates, which is less than half the corresponding figure from Q4 2006. This is quite far below the annual average growth rate of 3.87% the US economy experienced from Q3 2001 to Q2 2004.
So even though many expect productivity growth to pick up somewhat in the second half of the year, the trend is clearly down from its peak.
Does this indicate that the era in which information technology was having a deep impact on the US economy has passed? Evidence in support of this view comes not only from the productivity statistics, but also from the slowdown in IT investment growth rates themselves. Taken together, they tell a straightforward and intuitively appealing story: companies are making rational decisions to stop spending willy-nilly on IT because they realize that IT is doing less for them now than was the case in the past.
A logical conclusion of this story is that absent any radical tech innovations, this gradual cooling will continue. We'll continue to spend less and less on IT if IT does less and less for us.
For the reasons I outlined in my December post, though, I'm still optimistic that many, many opportunities remain for IT to increase corporate productivity. Last week, for example, I visited Rearden Commerce, where I saw a demo that made my mouth water. Rearden wants to take the hassles, busywork, and inefficiencies out of processes like making travel and dining reservations, setting up Webex sessions and conference calls, and shipping packages. These are far from core processes, but Rearden's demo showed me how much opportunity there is to do them better and faster, and so to put hours back in the weeks of many of us knowledge workers. We'll use at least some of those hours to generate more output, thereby increasing productivity.
Rather than continuing to scrutinize the productivity figures, I'd like to shift topics. Everyone agrees that productivity growth is a critical measure, but it's not the only one managers care about, and it's not the only one that could be influenced by IT. Productivity growth measures whether the economic pie is getting bigger, but it's also important to understand how that pie is being divided up.
Productivity growth, in other words, doesn't tell us anything about competitive balances or competitive dynamics. And it's perfectly possible for IT to have no impact on aggregate productivity at the same time that it's having a substantial impact on competition. To see how, consider a stripped-down industry with only two firms, both of which have 50% market share. One of them invests successfully in IT and uses its new technology-based capabilities to take customers from the other company. After a couple years one firm has 75% market share, the other 25%, but the industry remains the same size during this period because total customer demand doesn't increase. At the industry level, IT has had no impact on productivity in this example (since total output doesn't increase) but it's had a major impact on relative competitive position.
In the real world, of course, IT typically impacts both productivity and competition. The point of the example is simply to show that the two don't have to move in lockstep. So far, large-scale research has concentrated on IT's link to productivity. This scholarship has been very valuable, giving decision makers confidence that their IT investments are boosting output.
My colleagues and I think it's now time to apply similar research methods to investigating IT's links with competition. MIT's Erik Brynjolfsson, HBS's Michael Sorell and Feng Zhu, and I wrote a paper examining the association between IT investment and two industry-level measures of competition: concentration growth (is the industry increasingly subject to winner-take-all dynamics?) and turbulence (do companies maintain the same rank order year after year, or do rankings jump around a lot?). We found strong and positive relationship between IT and both of these outcomes. Erik and I discussed these results in a recent article that appeared in the Wall Street Journal and Sloan Management Review.
More recently the four of us have been examining whether companies in IT-intensive industries tend to cluster tightly around a single average level of performance (an ROA of x%, say, or an EBITDA margin of y%, or z dollars of market capitalization for every dollar of revenue), or whether there's a wide variation around this average. Our results are very clear, and I find them fascinating. I'll discuss them later; for now, let me just say that they have convinced me more firmly than ever that IT matters.
So even if the IT-fueled productivity boom is over, IT-fueled competition isn't necessarily winding down. Our results, in fact, indicate that it's not. When I wrote in December that I couldn't think of a more important number to watch than the quarterly productivity growth figure, I wasn't thinking hard enough. We should also be keeping a weather eye on measures of competition, and the strength of the links between them and IT.
One final point: IT-fueled competition could continue long after IT investment growth rates slow down. All the 'building blocks' of an IT infrastructure are continuing to get cheaper over time, so it would be remarkable if total IT spending didn't slow down at some point. It would be very dangerous, however, to assume that when this slowdown occurs it means that corporate strategists can go back to their 'regular' jobs and stop thinking about how IT can help them get ahead of their rivals.
June 08, 2007
There's Only One Way to Settle This
The Enterprise 2.0 Conference is coming up next week in my adopted hometown of Boston. I’ll be giving a keynote speech on Tuesday, June 19 at 9:05, after which I plan to stop talking and start learning. Registration is still open, so please attend if you’re interested in the tools and approaches of Enterprise 2.0.
Before my keynote, however, there’s one other important piece of business to take care of. Tom Davenport and I are going to figure out whether we actually do disagree about the importance and likely progression of Enterprise 2.0. And we’re going to do so in an open forum.
Tom and I have gone back and forth on this a couple times (Tom then me last fall, then Tom then me this spring), but these point-counterpoints were written, sequential, and uncoordinated. Susan Scrupski and her employer BSG had the bright idea to stage an actual debate, and to hold it in Boston during the conference when interest will naturally be high. Conference organizers Steve Wylie and CMP graciously agreed to let us hold the event at the actual conference site (The Westin Boston Waterfront), and to open it to anyone who’s interested, whether or not they’ve registered for the conference.
So on Monday the 19th at 10 am in the Westin, Tom and I are going to go podium-to-podium for 45 minutes. The debate will be moderated by ZDNET’s Dan Farber, who’s fantastic at this kind of thing. My understanding is that Dan’s going to ask us questions for the first 20-25 minutes, then open it up to the audience. I also understand that the debate will be webcast and recorded. Watch Susan’s blog for details. I know very little about the debate beyond what I’ve written here, and Tom and I have not spoken about it at all, which seems exactly right to me. This will be a lot more fun, and more informative, if it’s as freeform and emergent as Enterprise 2.0 itself.
Those expecting a bare-knuckle brawl, or even an event full of thinly disguised scorn and Truman Capote-style barbs, are going to be disappointed. As I’ve said before (and I wasn’t just trying to be polite), I actually agree with what most of what Tom has written on the topic, particularly his points about how hard it’ll be to introduce egalitarian and boundaryless technologies in hierarchical and siloed companies. I’m eager to hear more from him, and to see if where our real disagreements, if any, lie.
Tom is a great colleague and a gentleman, so if and when I lob an insult at him it’ll all be in jest (okay, Tom?). To butcher one of Muhammed Ali’s great lines, "We gonna get it on, even though we get along!"
