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Enterprise 2.0: we need to stop preaching in the language of the converted

I have a hard time keeping up with my twitter stream, so I do not open every bit.ly link. However, this one caught my eye: a tweet from two people I highly enjoy following, Venessa Miemis (@venessamiemis) and Jon Husband (@wirearchy) caught my eye: "brilliant post by @tdebaillon" - so I opened it and read this very well argued case for what is increasingly being referred to as Social Business Design (which I prefer to the more technology-skewed term Enterprise 2.0, which essentially means the same):

2.0 technologies are already changing the way we are using the Web, the way we are connecting, conversing and interacting with each other. We discovered that these conversations are a totally new way to learn, to collaborate and to exchange knowledge, but most of our initiatives are still about harnessing these technologies into existing models. To go further, really unleash their potential and embrace the systemic changes they are allowing, we all need a shift.

One of the current trends in Enterprise 2.0 frameworks is the use of social tools to optimize business processes, to fit them into the existing, or to replace them when (and only when) they fall short. This, of course, will minimize failure cases, will speed up business efficiency and facilitate adoption in organizations. But…. where is the shift? Our process driven businesses are no more than thirty years old, and were born from a misunderstanding of Japanese heterarchic and consensual social culture. A process-oriented approach to Enterprise 2.0 won’t allow place for the most powerful aspects of what the Social Web emphasizes: self-organization, non deterministic outcome, unconstrained trust, informal knowledge capture, borderless ecosystems, etc.

We have no tangible, rational proof that the process driven organization is the best model for today businesses, apart from “it works better than before” statements. One of the main reasons why companies are not ready to shift to another, networked, model is risk avoidance. While sustainability, and the gain of new competitive advantages, are crucial for any business, risk avoidance is a management and delivery model which literally turns its back to the non-linear complex world we are living in, and are in fine unsustainable. The very nature of CAS makes them unsuitable for complicated rules and determinist mechanisms, and complexity must instead be embraced with simple, quickly reconfigurable rules.

via www.debaillon.com

The author really makes my day by very coherently arguing that social media have a big and positive impact on business, not just through the possibilities offered by social media or 2.0 technologies, but also by the shift in mindset and values that come with the adoption of these tools. This leads to an opportunity to innovate business processes and design new, more networked, less hierarchal organizational structures (as Jon Husband would say: Wirearchies).

Image via Wikipedia

Gary Hamel has been arguing the case for what he calls Management Innovation in his new book The Future of Management. I would argue that Management Innovation per Hamel and Social Business Design are two overlapping circles in a Venn diagram. Hamel provides inspiring examples of businesses that are have embraced these (new) ways of connecting, conversing and interacting with each other: W.L. Gore has been doing this now for decades - almost turning self-organization to an art-form; Whole Foods Markets have adopted Trust, Transparency, Community and a few other values as leading principles for a radically different organization design. W.L. Gore has been at it way before the arrival of 2.0/social media or even the internet, Whole Foods is a leader in utilizing Social Media in very effective ways: they have a Twitter following of over 1.7 million (a good interview with Marla Erwin, Interactive Art Director for Whole Foods Market on their success in this recent Social Media Examiner piece).

So a little reality check here: the first example - no relationship between 2.0 and a networked model, in the second one I would suspect a strong correlation. No big reason for concern, I still buy (and even strongly advocate myself) Thierry's assertion that social media/2.0 is providing an accelerator to organizational (and business model) rethinking along the lines of less "command-and-control" and more "connect-and-collaborate".

So far so good. But.... if this is all true, then why aren't we seeing companies applying these brilliant insights on a large scale? Is Thierry preaching to the converted? Does it matter that I agree so much with him, or Jon Husband, or Venessa Miemis, or the folks at Dachis Group (who came up with the Social Business Design moniker)? Well.... no! Because we are just a bunch of Monday morning quarterbacks! We are consultants, experts, students, whatever you want to call it of this field - yet we do not seem to be very successful in convincing more than a handful the business executives of going in this direction. Ok, there are some well known cases of companies old (Dell, IBM, Lego), and new (Zappos, Threadless), but that is a relatively small group if we consider the whole market.

As Thierry observes, risk avoidance prevents (most) companies to go there. So what are we missing?, what could we do better? Why is this perceived as a risk  to be avoided (in a time when other risks were not picked up suffiently) by most corner offices? The answer may possibly be found in:

1. different wave-length: today's leaders were educated in "command-and-control" operating models at business schools (is it a coincidence that John Mackey, CEO of Whole Foods does not have an MBA?). They were taught to use their left brain, focus on metrics, use deductive reasoning, apply fact-based decision making. Connect-and-collaborate leadership styles were not part of the curriculum, and feel alien to them. And when we try to convince them, we come at them with "right brain"-type arguments, full of holistic, connect the dots, see the big picture, feel the passion and trust, understand the empathy that underlies the relationships kind-of arguments. I don't blame them for not buying in - given their perspective, and given that this has worked well for so many years.

2. rock solid proof is lacking: We can argue all day over the pro's and cons of organizations designed by applying networked vs. hierarchal, open vs. closed, info sharing vs. info hoarding and other related values and principles, but we will never win this discussion if approached through this lens. I feel it in my bones, I sense it by looking at so many unrelated, yet coherent patterns, but that's me again, applying my right brain - not connecting with the left brain thinkers that I am trying to get to the same insight. The lens we do need to apply is the lens of business benefits - hard and cold facts and figures that prove the case in an analytical, deductive way beyond any doubt. I wrote about this in a recent post, citing McKinsey and Dartmouth/Inc.500 research. We will be successful in making our case, in showing the value of the 'socially designed business', if we can can help business leaders do these important jobs:

• How do I create better employee engagement?
• How do I remain an attractive employer for future talent and reduce turnover?
• How do I build customer advocacy?
• How do I lower my communication costs and increase effectiveness at the same time?
• How do I increase the number of successful innovations?
• How do I increase the speed and access to knowlegde and to internal experts?

3. de-risking: ... and even then, it will still feel risky for business leaders. So how can we help them 'de-risk' the decision to start adopting all this in their organization and start promoting a culture that is more "connect-and-collaborate" and less "command-and-control"? We can design experiments, pilots, small scale probes to show the impact and effectiveness in limited, relatively secure settings. Pick one department, one business unit, one functional area and start there and learn from the mistakes. Let's not go for the whole enterprise at once. There will be a ripple effect, with success, there will be ambassadors, and over time, leaders will become more confident that the success can be replicated in other parts of the business.

So here you have it: my Rx for getting some real traction beyond the celebrated few: speak the language of today's business leaders; help them do their important jobs better and back it up with hard, cold facts (God Bless McKinsey); take a measured approach and lower the perceived risk through small scale pilotting.

I wonder what your experience is with applying these suggested approaches? Did it work? Why not? What else could we do to help more companies on this road?

Postscript:

Cecil posted a comment and introduced me to his great post on the same subjcet: 5 elevator pitches for  Enterprise 2.0 adoption on his Heavy Mental blog. Check it out, really useful!

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Connections create more value than Transactions in a Complex World

Image via Wikipedia

I just love conceptual art. Can't help it.

It must be the way my brain is wired, the abstract, spatial perception, holistic, and imaginative attributes of my brain that are relatively overrepresented (and some would argue settle in the right hemiphere of my brain).

So you can imagine how smitten I was when I read a brief article on dutch newssite nu.nl about the artist Caleb Larsen and his work:

A Tool to Deceive and Slaughter

Perpetual online auction, internet connection, custom programming and hardware, acrylic cube.

Combining Robert Morris' Box With the Sound of Its Own Making with Baudrillard's writing on the art auction this sculpture exists in eternal transactional flux. It is a physical sculpture that is perptually attempting to auction itself on eBay.

Every ten minutes the black box pings a server on the internet via the ethernet connection to check if it is for sale on the eBay. If its auction has ended or it has sold, it automatically creates a new auction of itself.

If a person buys it on eBay, the current owner is required to send it to the new owner. The new owner must then plug it into ethernet, and the cycle repeats itself.

This work is discussed in the catalogue for The Value of Nothing, a 2009 exhibition.
Buy or download it.

Follow the current auction here: http://atooltodeceiveandslaughter.com

via www.caleblarsen.com

What Caleb has done wonderfully well (beyond the obvious references to black box trading as a dig at the Wall Street models that got us in the current economic mess), is showing in his artistic way that connections are more important than transactions. Every time the 'sculpture' is sold - a transaction, the result becomes undone by the the piece itself which pings - a connection - the Ebay site and automatically sells itself again, forcing the owner of the piece to establish a connection to plug in the ethernet card. All (previous) owners of the piece are connected through having had the pleasure of a moment in time at which they owned the sculpture, and the sense of loss from the failed transaction. Wow!! How metaphysical is that?

When musing about this great artwork, I remembered the very good post by John Hagel III that I had read earlier today on his excellent HBR blog. It was about the challenge he issued to (certain forms of) open innovation, particularly the ones that were driven by transactions (e.g. InnoCentive). He argues convincingly that connections (he says relationships, but I am taking the liberty here to use the synonym) are more important when confronting the difficult and complex task of innovation. In a previous post, I argued the point that innovation belongs in the complex domain of the cynevin framework. Here is what Hagel writes (bold emphasis by me)

If you look at most of the widely cited examples of successful open innovation, the model in use poses a question to a group of "solvers" who then provide an answer. You might call this the transactional model of open innovation — involving only narrowly defined, short-term transactions. Problem posted, solution offered, payment made, transaction completed, all parties move on.

This approach has two limitations. First, it misses the opportunity to build long-term trust-based relationships among participants. Second, it does not encourage participants to build cumulatively upon the contributions of others.

Why do relationships matter more than mere transactions? Transactions work when explicit knowledge is involved — problems must be precisely framed and solutions must be equally precisely articulated. Of course, this works for a certain class of problems but some of the most challenging problems cannot be precisely framed — that is part of the problem. On the other side, really challenging problems require tapping into the tacit knowledge possessed by more than one individual in order to create new knowledge and generate a workable solution.

Tacit knowledge is the "know-how" that is hard to express or transfer and therefore much more sticky than explicit knowledge. Sharing this kind of knowledge typically requires long-term, trust-based relationships that can support the inevitable fumbling that occurs as we try to express and share tacit knowledge. Effective sharing of tacit knowledge also requires shared practices — the participants need to engage in real work to address challenging performance needs, rather than simply engaging in casual conversations.

We're moving from a world where value is created and captured in transactions to one where value resides in large networks of long-term relationships that provide the rails for much richer "knowledge flows."

via blogs.hbr.org

Hagel uses different words, but essentially he argues that the task of open innovation is so challenging that it can be only solved by placing it in the complex domain and applying the sense-making tecniques that work really well in this domain: leveraging the collective intelligence through conversations amongst agents, from which patterns emerge that can be built on or surpressed. One of the essential characteristics of a complex problem is that cause and effect relations are not present or at least not stable. When playing back the video tape, you would find a different effect from the same cause every time, since the interactions amongst the agenst are in perpetual flux and have large impact on the outcome.

The networks that Hagel favors have a "join up" quality - many agents, no central coordinating mechanism. The transaction model that he rejects have a "join us" character - central coordinating mechanism (the InnoCentive hub), relatively few connections and interactions amongst the agents. See this visualization that I found today on the social media wiki on wikispaces through @venessamiemis:

The transaction model is in essence a model that is borrowed from another domain, the 'simple' domain in cynefin terms, where cause and effect relationships are present and easily perceived. These transactional models work really well for problems with a 'simple' character (e.g. translating an english text in dutch), but applying tools from this domain to the complex domain is a big mistake and will yield sub-optimal outcomes at best. 

Another blogpost I came across today (from Esko Kilpi) argues the point about complex systems and the importance of connections much more eloquently than I just did:

A complex system consists of a large number of agents/nodes behaving according to own principles of local, self-organizing interaction. No one agent, or a group of agents determine how the system as a whole behaves. Self-organization here means the agents interacting locally, following their own principles, rules and intentions, without steering from outside that interaction. All influence takes place in the local interaction. No one agent in the brain or on the Internet, or in an organization, can be in control of the whole system and how it develops, as it develops.  But there is control and there is development, all the time. Both control and development are emergent phenomena of interaction. The interaction itself constrains and enables the people in interaction. People cannot just do whatever they want in a relation. Relations create stability just because relations always constrain. Relations that are based on diversity and difference may enable development without a plan for development.

via eskokilpi.blogging.fi

So here are my questions:

Do you relate to what I write here or are you sold :-)

When do you favor transactions over connections or vice versa

What (online) tools work best to create connections and leverage the collective intelligence to build out and amplify patterns (especially in an open innovation context?)

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Understanding the Cynefin framework (and similar thinking) in an Innovation context

At a workshop I facilitated last week - the challenge was helping a team to generate new ideas for innovating their business - I used Dave Snowden's Cynefin framework to great effect. This was a smart crowd, who were willing to go along with our approach on helping them see new directions through a process of emergent discovery - but they wanted to understand why we were following this approach. For the many cerebral folks in this crowd, I explained the Cynefin framework - and they got it! We could have studied 'best practices for establishing an innovation culture', or we could have thoroughly analysed successful innovations of the past for 'good practices' and for discovering cause-effect relationships between new ideas and successful outcomes. But we didn't. And they were ok with it once I explained to them why innovation and 'best practices' or 'analytics' don't go well together, using the Cynefin framework. In short, I argued that innovation - the activity they wanted to engage in - has many characteristics of a complex adaptive system: cause and effect are not linked in a linear way, many agents are interconnected and interacting, etc.

Innovation in this particular client setting (and probably in most cases) takes place for a large part in the 'complex domain' of the Cynefin framework, rather than in the ordered domains the group was more familiar with from their professional training or exposure to big 4 consulting: the  'simple' domain (where best practices might have worked) or the 'complicated' domain (where 'left brain' analysis and experts would have been a good approach). So this time, for the idea generation and elaboration phase, we used a bunch of methods that are really well-suited for the complex domain, and that relied heavily on conversations in smaller sub-groups, creation of many different ideas (or mini-narative fragments), 'right brain' activities such as pattern recognition for clustering the various idea fragments, synthesis, visualization (the wonders a stack of old magazines can do!), and storytelling to bring it all to life. For the workshop, we created a design that featured a mix of Design Thinking concepts (including 'diverging before converging'   from Tim Brown's book Change by Design), a few adapted concepts that were pioneered by Gary Hamel (and the firm he founded: Strategos), including Orthodoxies and Discontinuities (in his classic Competing for the Future) to create stimuli for the idea generation phase and a "Ritual Dissent" exercise out of the Cognitive Edge toolkit to 'pressure test' some of the elaborated ideas in a short time period.

While running the latter simple but effective exercise - they loved it by the way, even those that were being subjected to the critical questions from the other groups - I realized that the exercise emulates on a very small scale what the suggested best way is for surfacing solutions to complex problems: Probing - Sensing - Responding. The idea was quickly probed by the presenter (using a visual 'storyboard'), he/she then sensed the feedback and reaction of the team that listened, and he/she then went back to his/her own team to respond.

The team had great fun while doing this workshop, the outcome of the session had much more depth and variety in terms of the directions they will now start testing and experimenting with (probe-sense-respond on a bigger scale) than earlier, more traditional approaches had yielded.

The interesting thing to me was that I realized how much some of the methods and approaches from Design Thinking, Cynefin/Complexity Theory and the "Hamel/Strategos"-school of strategy actually have in common. One example:

• Design Thinking stresses the importance of prototyping - aimed at making ideas tangible through quick and dirty prototypes in order to learn from it and improve upon it.
• Cynefin advocates 'safe fail probes' as a way of making sense in the complex domain: testing ideas/solution, sensing the impact and responding to this by either amplifying the probe or surpressing it.
• And my friends at Strategos taught me the value of rapid, cost-effective de-risking by doing experiments in an early stage of the process to test critical assumptions or components of the new idea/concept and using the insights to adapt the design.

Sounds very similar, doesn't it? I wonder why - is this just so plain obvious that everyone follows this approach  (but if so, why don't we see more businesses prototyping/probing/experimenting rather than analysing/paralysing new ideas to death?) or is it a case of great minds think alike and is there a confluence of thinking that follows similar principles?

Anyway, in the workshop, the team liked the approach, it was new to them, and they got very intrigued by the Cynefin framework. I shared with them the above visualization of the framework (courtesy of Shawn Callahan of Anecdote, a fellow Cognitive Edge Accredited Practitioner). Shawn Callahan also made this very useful short clip explaining the Cynefin framework.

I think the clip really explains Dave Snowden's thinking on the Cynefin framework well. Hope you will find it useful. And I am eager to learn how you have successfully used or combined concepts, methods or principles from Design Thinking, Complexity Theory/Cynefin and the Hamel/Strategos school to Innovation matters and/or how you interpret the similarities in these approaches?

 

Watch this intersection

Over the next few days, I will start blogging my thoughts on what I see as the emerging space at the intersection of Social Media in a Business Context, Complexity Theory and Right Brain Strategic Thinking.

I have been researching, studying, brainstorming, theorizing and evangelizing on these topics over the past couple of years to various degrees, but until now, never felt the need to share my thoughts other than in small groups or in private conversations. Starting 2010, that has changed! I am now ready to share my thoughts and enter into conversations on a wider basis and extended form. Twitter's 140 characters (see my twitter stream) were a great start, but I have more to say.

Here is what you can expect in this space:

1. Social Media is disrupting what we know about scarcity and abundance. Today, attention is scarce, information is abundant, and ideas spread like wildfire. New game, new rules of interaction!. Not 10 years ago this was unthinkable for business leaders who have learned and are still playing by the old rules. Now they have to adapt and figure out how to find the right balance between the old and new rules in order to survive. A new field has started to emerge that applies the new rules of interaction that are following from the wide adoption of Social Media to a Business Context - Social Business Design. Superhero's I have been inspired by in this field are Clay Shirky, Charles Leadbeater, Seth Godin and of course the authors of the Cluetrain Manifesto.

2. Most leaders were educated and are approaching problems and challenges by seeking answers in the 'ordered' domain. However, most issues today have at least a few elements that are complex. Tackling these complex issues with methods suited for 'ordered' domains is a mistake that can lead to bad outcomes. The Cynefin framework is a tremendous approach that helps leaders understand the difference between chaotic, complex, complicated and simple problems and the respective methods that are well suited (or should be avoided!). My superhero in this field is Dave Snowden of Cognitive Edge, who has cleared the way in this emerging field.

3. Left brain thinking has run its course and outlasted its purpose. The purely rational, logic driven way of reasoning, deductive and linear thinking and number crunching fact-based advice has been successfully applied by strategy advisors and MBA graduates alike over the past decades. We all know where this has gotten us: a financial meltdown, destroyed business models in many an industry (media to name one close to my heart) and an unsustainable way of dealing with our people, our planet and our principles. The next decade will belong to people who bring a different mindset to these problems - the Right Brain Thinkers, who can recognize patterns, foster creativity, make sense and give meaning and create compelling stories. Leading thinkers in this field that I admire are Daniel H. Pink (author of A Whole New Mind) and Tim Brown of IDEO and author of Change By Design.

This is the intersection. This is where I see a need arising for business leaders to find a new way forward:

a)  figuring out how to deal with or leverage Social Media (especially how it is shifting the power balance from company to customers & employees).

b)  starting to realize that many challenges are unordered and complex in nature (rather than ordered) and thus require different approaches than the true and tested expert analysis and advice and best practices that work so well in the ordered domain.

c)  recognizing the different skill sets that Right Brain Thinkers bring to today's problems, recognizing patterns, creating synthesis, the bigger picture and give meaning to it through compelling narratives in stead of breaking down problems into smaller and smaller linear chunks for meaningless analysis and number crunching.

Social Media for Business and Decision Making in Complex Situations both revolve around this: groups of people entering into co-creative, participative conversations. People that are closest to the task at hand, not experts from the outside. People who are not necessarily skilled at this, but with the right help can be guided to new insights and ways forward. Right Brain Thinkers come in handy - they can help recognize the emerging patterns, make sense, create story lines and facilitate the process.

How would you compose groups of complex problem solvers? What social media tools would you leverage to accelerate and empower the process? What skills and traits would you be looking for in a facilitator of this process? What methods would you apply to make sense of challenges in the complex domain? Leave a comment or drop me a note if you want to be part of this conversation.