August 15, 2008
The Twit's Progress
Twitter is a Web 2.0 entity -- a combination of a website, background technical infrastructure, and human community -- founded in late 2006 and already extremely popular. There are over 1.24 million known Twitterers as of today, according to the TwitDir directory service.
Twitter is a free service that lets members broadcast short text updates, known as ‘tweets.’ Tweets may be no longer than 140 characters, and can include links (free services like TinyURL and Snipurl are available to take very long URLs and shorten them so that they can be included within tweets).
Members can broadcast as many tweets as they like using any mixture of mobile phone text messaging, mobile phone client software like Twitterberry, desktop client software like twhirl, or the Twitter website.
And what happens to these tweets? Where do they go? Who reads them? Members use Twitter to sign up and receive the tweets of any and all other members who are of interest to them, a process known as ‘following.’ Extremely popular members such as Robert Scoble can have tens of thousands of followers, all of whom will see all of his public tweets. Newcomers to the service might have none, in which case their tweets will vanish into the ether, unconsumed by anyone. So Twitter communities are self-organizing.
And the tweets themselves are entirely freeform. The only restriction is the 140 character maximum; within that limit members are free to tweet away.
The service’s last major wrinkle is its interesting conflation of channels and platforms with person to person and group-level messaging. As I wrote earlier,
"Twitter currently lets users differentiate between standard public tweets, publicly-visible tweets that are replies to another user, and private replies (ones that are not visible to anyone except the recipient). They do so by prefacing their tweets with special characters: ‘@username‘ for public replies, and ‘d username’ for private ones (standard tweets have no prefacing characters). This is an elegant and lightweight way to differentiate among the three types of tweet; it lets users easily and quickly self-select which kind of message they’re sending."
In short, Twitter lets me send a message to another member in a way that’s visible to
all of my followers. Why would I want to do this? At first I had no idea, and thought this was a bizarre and silly feature. But then I remembered
learning about Facebook from some Harvard undergrads, and in particular their explanation of a similarly bizarre (to my eyes) feature: the
Facebook wall , which is a portion of every member’s profile page where one of their friends can leave them a publicly visible message. The publicly visible part made no sense to me until the undergrads explained that it was the online equivalent of the whiteboards that lots of college students affix to their dorm room doors. As friends walk by they use the whiteboard to give love or give grief, leave updates, communicate meetup times and places, show off how clever they are, and do lots of other things that are person-to-person, but
not private.
In my old-school way of looking at things
channel technologies like email and SMS were for person-to-person communications, and platforms like blogs were for broadcasts to a group. But the Facebook wall showed me the limitations of that viewpoint, and showed me the benefits of moving non-private person-to-person communications from the channel to the platform, and thereby broadcasting them. These benefits include broadcasting who you know, what kinds of things you talk about with them (and so what kinds of things you’re interested in), what your interests and opinions are, where you’ll be and when (when you don’t mind the world knowing this information) and, in general, what kind of person you are. Private channels aren’t bad, and both Facebook and Twitter allow private communication via person-to-person channels, but both technologies encourage their users to do more publicly. Because of these two Web 2.0 entities, I’ve started to warm up to the idea of doing more (not yet most, but more) of my person-to-person communicating via public technology platforms. I feel that doing so opens up options—possibilities for further connections and interactions with interesting people—in a way that channel communications simply can’t. So while I sincerely doubt I’m ever going to live my whole digital life out in the open, I have come to see the value in living a bit more of it that way. So, evidently, has Scoble; as I look at his Tweetstream I see
lots of public person-to-person messages.
As I
wrote earlier, I think Twitter is a fantastic technology for enterprise purposes, especially if it lets users categorize their tweets so that they’re not just a single undifferentiated stream (as a number of people pointed out, hashtags are a current means of accomplishing this). An enterprise version of Twitter would let communities of practice, interest groups, and other collaborations quickly and easily self-organize, swap thoughts, and keep each other up to date. I’d expect that these collaborations would be based primarily around topics as opposed to around people, which makes the ability to categorize all the more important.
Imagine active and dynamic environments dedicated to ‘newproducts,’ ‘Q4sales,’ ‘HRpolicies,’ ‘ERPimplementation,’ ‘thecompetition,’ etc. in which employees were zipping their thoughts around to each other in way that was easy to monitor, consult, join, and participate in. Would this be a valuable complement to the other activities and conversations taking place within the enterprise? Your answer to this question, I think, reveals a lot about whether you think people should just keep their heads down and do the job that was assigned to them or lift their heads up once in a while and participate in the broader work of the organization. Do you believe that there’s a substantial ’
cognitive surplus‘ (to use
Clay Shirky’ s great phrase) in your enterprise? If so, let the twitting begin.
I appreciate that this discussion might seem a bit abstract, and that twitting can be a hard thing to get your mind around. It certainly was for me, and for my MBA students. We had a Web 2.0 / Enterprise 2.0 show and tell day this past semester, and one of my geekier (that’s a compliment) students tried to explain and demo Twitter. He was met with a lot of blank stares, even from my technophile class, and a lot of questions of the form "Uh.... why?" His best response was essentially "Look, you just have to try it yourself."
Look, you just have to try it yourself. I’m
amcafee on Twitter, please feel free to follow. I’m not terribly active, but I do try to practice what I preach and learn about this technology by using it. If you’d like to join in, welcome!
One last reason why you should: it’s a dirt cheap and easy way to get feedback, and to get questions answered. As I was starting to think about this post, I broadcast the following tweet:
"What should I be sure to include in a blog post explaining Twitter & its biz applications to newbies?"
Among the responses I received were the following:
- davidvivero @AMcAfee Boils down to press release whispers: "psst, check this new feature out, or we just hired John D, or go read this review (URL)."
- a32b @AMcAfee ...maybe mention in your Twitter post the business use of a public congratulation or dressing down.
- tuttlebn @amcafee Open ended questions to the cloud and expert seeking
- tuttlebn @amcafee Also good for informal conversations between executives that everyone can hear and respond to, as well as announcing breaking news
- pennyedwards @amcafee try explaining the value of informal snippets of information which quickly update people and don’t demand a response…
- smc90 @amcafee [re Twitter 4 newbies] some1 prob already rec’d this, but this my fave: http://snipurl.com/3c4cw [loove these Common Craft videos!]
- barrettjf @amcafee the importance of presence information to the enterprise. phys loc, proj status, time availability, means of contact, etc
- cb2206 @amcafee the best and easiest explanation of twitter is this one: http://tinyurl.com/5g7yml
- sradick @amcafee (retweet) - does an incredible job of connecting you to people you wouldn’t typically contact directly
- trib @amcafee my Twitter value story - have direct work and physically met >100 new people in US (I’m in Australia) thanks only to Twitter
- trib @amcafee seminal posts on Twitter from @pistachio http://is.gd/kp6 http://is.gd/AQv
- sunilnagaraj @amcafee allows visibility into organization’s stream of consciousness, ask Twuestion to org to find info/experts
- ITSinsider @amcafee Twitter unites communities. Teams succeed on collegiality. Collaboration hinges on trust and relevance-- Twitter provides both.
- dshlac @amcafee Describe it as "micro-blogging" or "public IMing" that allows employees to easily tap into the collective wisdom of the enterprise.
- JoeSchueller @amcafee speed of request/response cycles
Not a bad return for 20 seconds work on my part...
What questions or comments do you have about enterprise use of Twitter? Leave a comment, please, and let us know.
August 06, 2008
Research You Don't Even Have to Read
Software giant SAP kindly invited me to a CEO conference earlier this year in Frankfurt (I have done paid speaking engagements and consulting work for SAP in the past, but this conference was purely for purely for intellectual interest). During the event I recorded an extemporaneous 15 minute talk on our research examing the links between IT investment and recent changes in competition in the US.
The video is now available on SAP TV. Here’s the link (click on the text saying "White-board session about the impact of information technology on companies - on how they perform and how they compete." ). I apologize for all the ‘ums’ and ‘ahs’ and frantic miming when I couldn’t think of what to say next, but it’s a decent and short introduction to the work. Check it out if you have 15 minutes, and let us know what you think, please.
July 31, 2008
Freedom is Still Overrated, but Technology Can Fix It
My last post about Twitter for the enterprise (or ‘EnTwitter’ as I called it) generated some rather pointed responses. I highlighted the fact that Twitter users currently have to accept all tweets from all people that are of interest to them. I said that a problem arises when you decide to follow someone on Twitter because you’re interested in their thoughts / views on social software (for example), but 90% of their tweets are about little Timmy’s soccer practice, the new Mexican place that just opened up in their part of Cincinnati, the sort of weird day they’re having, whatever new celebrity baby was just born, and other things that are of no real interest to this crabby single northeasterner.
I proposed norms and policies as a feasible solution within the enterprise to this (as I saw it) problem, and was accused with varying levels of politeness of being an oppressive fascist. As I read through the comments on my blog and other responses, I was reminded of the peasant Dennis’s assertion in Monty Python and the Holy Grail that King Arthur was "hanging on to outdated imperialist dogma which perpetuates the economic and social differences in our society" and his cry to passers-by: "Did you see him repressing me? You saw him, Didn’t you?" (I’m a little astonished that after writing this blog for over two years this is only my second Monty Python quote. I assure you that it won’t be the last).
I exaggerate. Here are some of the sharp comments responding to my previous post (I apologize for the formatting; can’t figure out what’s going on):
Harrumph.
...with Twitter, I think it’s necessary to include the noise.
Twitter gives us a 360-degree view of our social community. A (Twitter) friend said it best, “I was interviewed about my use of Twitter by our company recently. Someone asked me if my posts were a little too personal. I said, why? I’m a person.” (Abbie Lundberg, editor, CIO magazine.)
Through the connectedness of micro-blogging, we really get to know each other. It dramatically condenses the time it takes to build a trust relationship. The weak tie theory is predicated on trust and reliability.
To enforce a strictly business policy on an “enTwitter” would handicap the tool’s most beneficial advantage: our ability to create real relationships vs. interfacing with business contacts.
Posted by Susan Scrupski on 07/26 at 06:51 PM
While there is much social chatter we also trade ideas, articles, posts and make arrangements to connect elsewhere. I find twitter to be highly useful in that regard ( when it’s working, that is)
Again, I want to be clear. I LIKE the ’ambient intimacy‘ that the new social software affords, and I LIKE the concepts of tweets and microblogs. Twitter is definitely an innovation that scratches an itch we didn’t know we had.
But I don’t think norms and policies are as bad as all that. I don’t think they necessarily kill self-expression, individuality, serendipity, or trust-building. Norms and policies are not equivalent to a corporate mandate like "no one may use our social software to reveal that they have a life or a personality."
But after more reflection it seems to me that norms and policies might not be the only ways to make a tool like Twitter work well for enterprise purposes. A relatively simple technical fix can also help here. If we just tweak the tweets, in other words, we can make a powerful and useful EnTwitter that overcomes the clutter problem while still letting people be as voluble as they’d like on all topics of interest to them. It’s closely related to sengseng’s idea of levels and spheres (see her comment above).
Twitter currently lets users differentiate between standard public tweets, publicly-visible tweets that are replies to another user, and private replies (ones that are not visible to anyone except the recipient). They do so by prefacing their tweets with special characters: ‘@username‘ for public replies, and ‘d username’ for private ones (standard tweets have no prefacing characters). This is an elegant and lightweight way to differentiate among the three types of tweet; it lets users easily and quickly self-select which kind of message they’re sending.
However, users have no way at present to signal what their tweet is about—all tweets are assumed to be part of a user’s single, undifferentiated ‘lifestream.’ But as discussed above, one person’s lifestream is another’s clutter. If I’m not interested in most of what you’re twitting about, I quickly start to perceive your whole lifestream as clutter. At present there’s nothing you or I can do to affect that, short of you following my ideas, norms, or policies, and (as many commenters and the peasant Dennis wondered aloud) why should you have to do that?
Another solution is to extend the idea of preface characters to include tags or categories of tweet. An ad agency could say, for example, that category ‘bj’ is for tweets related to the Belle Jolie account, ‘mk’ for Menken’s department store, and ‘aw’ for where the gang is meeting after work. Uncategorized tweets would wind up in one general stream. People using this organization’s EnTwitter would preface their tweets with something like ‘c bj’ or ‘c mk’ to categorize them, and users’ tweet-reading software would respect these categorizations.
Under this scheme people could still tweet as often as they wanted about whatever they wanted. If they wanted to be noticed and to be helpful to their colleagues they’d categorize their tweets. So the ‘bj’ tweetstream would only contain thoughts about the Belle Jolie account, the ‘aw’ stream would be exclusively concerned with happy hour, etc. This would, I think, solve the clutter problem while not constraining people to limit their twittering in any way. If they habitually miscategorized their thoughts, they could be corrected, but short of this they’d be left alone and not burdened with excessive formal policies.
This scheme would require some changes to the software used to receive and display tweets, but nothing too significant. And I think it would go a long way toward preserving the scarce resources in today’s knowledge work environments, which are time and and attention, and reducing clutter. It also preserves two of the great virtues of 2.0 tools and approaches, namely freedom of expression and self-organization. And it would probably calm down stodgy bosses, who would look at the ‘bj’ and ‘mk’ tweetstreams and see only work-related content there. I imagine they’d be a lot less likely to object to the presence of the ‘aw’ stream if the account-related ones were healthy and active.
Within organizations, technologies are always engaged in an interesting dance with social structures like norms and policies. What’s often underappreciated, though, is how that dance can be altered by features of the technology. EnTwitter with categories, for example, will play out very differently within most enterprises than EnTwitter without categories. Do you think it will play out better? Would adding lightweight categories keep users and their bosses happy? Leave a comment, please, and let us know what you think...
July 26, 2008
Freedom is Overrated
I’ve written a few times before about Facebook, and have recently started using Twitter (about which more later). I think these are fascinating, novel, and powerful technologies, but they’re also both vexing me a bit these days.
Facebook presents me with lots of ads, and even more applications. My FB friends have installed lots of apps and used them to reach out to me. I now have 3 (lil) green patch requests, 2 buy your friends requests, and one valentine kiss request. I have no idea what any of these are. I also have invitations for status competitions, speed racing, mob wars, zombies AND zombie, starcraft, wikimoto, and "i’m a masher!," among many others. Again, I have no clue what most of these are invitations to, and I haven’t bothered to find out. They just sit on the right side of my Facebook home page, taking up valuable screen real estate that I’d prefer to use to build, maintain, and exploit my network of weak ties.
I’ve really enjoyed learning what Twitter is and how to use it, and so becoming part of the Twitterverse. It is an interesting and valuable place. But at the risk of sounding like the neighborhood grouch, I have to say that I’m not that interested in what people just had for lunch, are contemplating having for lunch, or wish they could have for lunch. I also don’t much care what’s on their car radios at any point, or how bad traffic is in their part of the world. And I find it a little creepy to be wished good morning via tweets by many people first thing each day (I guess I should just not check Twitter until I’ve had my coffee...).
I want to be clear: I’m not saying that people who have Facebook and Twitter preferences different than mine are wrong or weird or bad. And I know that I can exercise some level of control over both environments. But with these technologies at present, users must to some extent take the rough with the smooth. If I want to use Facebook I have to put up with ads and silly viral apps. And if I want to follow someone on Twitter I’ve got to accept all of their tweets, even if most of them strike me as clutter.
Within an enterprise, however, the situation is very different. Ads can be eliminated, and application deployment can be controlled. And formal policies and informal norms can shape, if not dictate, what constitutes an acceptable contribution by a community member. I can easily imagine a boss saying "Gang, let’s not use EnTwitter (or whatever the enterprise version is called) to talk about how we felt about lunch. Let’s just use it to swap ideas on the Belle Jolie account." Because Twitter is largely a platform, compliance with this type of policy can easily be monitored.
Intranet versions of social networking software will clearly be different from their Internet ancestors. In some ways, I think, they’ll actually be better, because they’ll be less full of superfluous stuff that annoys many people, but that can’t easily be turned off or filtered out. Enterprise equivalents of today’s Facebook and Twitter will probably be more bland, but they might also be more addictive. Knowledge workers might visit them more often throughout the day if they know that when they do they’ll find content, rather than clutter.
Everyone agrees, I believe, that much of the value of the new social networking tools comes from the fact that they create and sustain large communities. Do they also have to let community members do whatever they want? I don’t think so. Social tools that are overlaid with norms and policies, in other words enterprise social tools, can still be highly freeform and foster emergence. They can still be fun to use and highly useful for individuals, and also generate value for the group or the organization as a whole.
Do you agree? Or do you think that norms and policies will by their very nature suck the joy out of using these tools? Leave a comment, please, and let us know.
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;
