Whatever the way we consider the problem, there is no example of an enterprise dramatically changing the way it operates without a strong leader deeply attached to a vision of business. Nothing new there since this has been proven right for decades even before words like enterprise 2.0 or social business became trendy.

Successful projects have a couple of things in common : a visionary CEO who is deeply involved, a goal at is not about social business and the courage to challenge the corporate culture. And those who fail ? Top executives that are not concerned and not very involved, projects aiming at implementing a social network and a moto looking like “don’t be rough with people, we’re not ready for that”.

Let’s have a look at a couple of cases.

Alcatel-Lucent. Whoever knew this enterprise 5 or 6 years ago should have been surprised when their project came under the highlights. If there were a place where such a thing could not have worked this should have been Alcatel-Lucent. Yes but…one day came Ben Verwayyen. We all know the story. First an email adress so employees could directly interact with him. Then an internal blog. Then, as his own approach was beginning to influence people in the organization, the need for a social network. All of this because his vision of business is made of words like transparency, accountability and that’s the way that he things a business should be run.

Danone. When a CEO (Antoine Riboud) states, in the early 80s, that “The most successful companies are those that think jointly technological change, work design and the changes in internal social relationships.” much is said. The rest is about sustaining a strong corporate culture. In th 2000s they started a program called “Networking attitude” to favor interactions, ideas exchange and problem solving. A program that was only about behaviors, management and the human side of the organization at a moment when web 2.0 and social networks did not exist. Technology will come years after and won’t be a break but a way to reinforce the corporate project.

Then IBM. Looking at the success of IBM, not as a vendor selling social business solutions but as a social business itself, is very instructive. But a large part of the lesson is missed if we don’t step back in time to learn from the Louis Gerstner era (1993-2002). I just reread the book he wrote about the time he spent at IBM (he also worked for American Express and Nabisco before), Who said elephants can’t dance. This book is very instructive for the very reason that, at this time, internet was not what it is today…and concepts like social networks or “anything 2.0″  where not even a dream. But, in some ways, Gerstner perfectly set the cornerstones that made social business possible ten years later.

This is a very important lesson for all those who think that “it’s not possible in our company”, “we’re too big to change” or “we don’t have to change…we’re the biggest, we’re the best”.

Let’s start with a couple of words about the context, when Gerstner was appointed to save IBM. The 400.000 employees company, after having been a forerunner and dominated the technlogy industry for decades (it was founded in 1911), was dying. For analysts the question was not to know what IBM was going to do but when it was going to die. A couple of weeks ? A year ? Not more.

At this time IBM was pilling up all dysfunctions we can see in large businesses today. A gigantic organization without responsiveness. An organization able to make major innovations but unable to bring new products to the market. An overgrown bureaucracy (the number of assistants and people reporting to assistants was impressive, as well as the number of people dedicated to support…tens of thousands in europe for example).

Hundreds, if not thousands, of IBM middle- and senior-level executives had assistants assigned to them, drawn from the ranks of the best and brightest of the up-and-coming managers. The tasks were varied, but from what I could understand, AAs had primarily administrative duties and even, at times, secretarial chores. For the most part, AAs organized things, took notes, watched, and, hopefully, learned.

Inability to roll out a global strategy  : since respect for people was a core corporate value, people had the right to refuse to do something they did not found relevant. This even became an official process, the “non-concur process” that organized the way for employees not comply with decision that were made ! The organization was so self-confident that it was focused on itself, on its internal stuff, forgetting its customers and making their interactions with IBM look like hell. To end, an organization made of fiefdoms, with their own agendas, sometimes competing with each other and even against the corporate strategy. To some extent that, when Gerstner stepped in, the only possible was to split IBM into smaller units…and sell them.

Of course, Gerstner made a lot of courageous and clever decisions in terms of strategy, going agains many things that were decided by the previous leadership team. But he could not have been successful without a deep change in the way people worked. Without deep cultural changes, IBM would not have been able to execute his strategy (or even any strategy by the way..)

So Gerstner came with a couple of principles, clearly stated, that were the contrary of how IBM was doing things at this time :

a) I manage by principle, not procedure.
b) The marketplace dictates everything we should do.
c) I’m a big believer in quality, strong competitive strategies and plans, teamwork, payoff for performance, and ethical responsibility.
d) I look for people who work to solve problems and help colleagues. I sack politicians.
e) I am heavily involved in strategy; the rest is yours to implement. Just keep me informed in an informal way. Don’t hide bad information – I hate surprises. Don’t try to blow things by me. Solve problems laterally; don’t keep bringing them up the line.
f) Move fast. If we make mistakes, let them be because we are too fast rather than too slow.
g) Hierarchy means very little to me. Let’s put together in meetings the people who can help solve a problem, regardless of position. Reduce committees and meetings to a minimum. No committee decision making. Let’s have lots of candid, straightforward communications.
h) I don’t completely understand the technology. I’ll need to learn it, but don’t expect me to master it. The unit leaders must be the translators into business terms for me.

A large part of the book is about business decisions, sometimes contrary to what “normalcy” would have suggested, but most of it is about how he made things work, how he put his principles at work. A whole part is dedicated to corporate culture, a sacred cow no one dares challenging…what he did because it was leading the enteprise to the grave. Same for HR with a dramatic change in the compensation and benefits system, rewards, career management etc…

The book also reveals some crunchy details. For example :

• Gerstner decided to keep employees informed of what was going on as often as possible. Some answers to his messages, positive or even very negative, are quoted in the book. He used email to do so, what was a disruptive way to inform employees in 1992. Some managers did not want things to change. What did they do ? They blocked email coming from the CEO so employees will not receive them…

• About his notes taken during his first meetings with top managers

What’s striking from my notes is the absence of any mention of culture, teamwork, customers, or leadership—the elements that turned out to be the toughest challenges at IBM.

In the end, we can understand how IBM eventually became a global and coherent organization, that turns its internal wealth (people, knowledge) a shared asset and not a burden like it was before. For those who are scared of loosing control, here’s what he said :

Let’s decentralize decision making wherever possible, but this is not always the right approach; we must balance decentralized decision making with central strategy and common customer focus.

If IBM has become what we know today, we need other explanation that the tools they use (and sell). We have to get back to Gerstner to understand how things become possible. That’s also why, years before customers show interest for such products, they built their own enterprise social network : because it was a way to sustain their organization, to enable the way work supposed to be done at IBM.

So let’s come back to the original topic of this post. At a time when enterprises are questioning their social business approach, the benefits, this examples are more than meaningful. Leaders started with a vision of business, embodied by a deeply involved CEO and eventually ended by implementing tools (there are also examples of businesses being successful without technology…we’ll talk about it in future post). It took time, years, to move from the organizational stuff to using technology.

Gerstner shows us that nothing is impossible, that arguments relying on history, size, culture are irrelevant when one has the courage to make things happen. I only hope that today’s leaders won’t wait until they are in the same situation as IBM as (change or die) to find this courage.

Now…last not but least. What would Alcatel-Lucent look like today without Verwayyen, Danone without Riboud, IBM without Gerster. At least one would have disappeared and the other would be very different…

A new year is starting…with the usual prediction challenge. It does not matter if these predictions become true or not, that anticipation is confused with taking one’s dreams for granted : predictions are a part of the landscape and even those who don’t take them seriously expect them. So I’m trying to play the game one more time.

First, let’s be clear on what prediction means. Even if I’m happy with what I “predicted” these last years (understand “I was right”), don’t expect to find anything revolutionary in the next lines. What we usually call predictions is nothing more than common sense (or lack of). Predicting the iPhone en 1990 would have been a prediction. Prediction the need from bringing social into the flow of work in 2009 was only common sense. Rather stating the obvious.

What leads us to a very important point. As long as one is lucid and clearly understands that, even social or 2.0, the real point is enterprise and business, with all the constraints and context that comes with, it’s not that hard to identify where things will block and what concerns will arise. Finding how organizations will decide to respond is much harder. Anyway each one will respond in its own way depending on its culture, its culture, the courage of its executives when it will come to make strategic decisions. Because of all that, we’ll surely see much more diversity than before in social business approaches…

So, here are the trends I seen for 2012.

1°) Budget : from technology to organizational transformation

Before being about people or technology, that’s a matter of money. Technology, accompaniment, internal efforts… And we all know that in 2012 money will fall from the sky and anyone will be able to spend it on any shiny initiative. Or not. So it all depends of a strategic choice for enterprises facing crises : getting ready for the crash or finding the winning way out.

Finding the winning way out may mean many different things. One of them could be keeping the investments and even making more efforts because it’s “now or never”. Another could be of not changing the amount but the allocation. I recently mentioned a survey saying that HR seem to refocus on organizational transformation to the detriment of some other points. I read another one, about services budgets, saying something like “less software and integration, more on building new business and organizational models”.

The most meaningful choice will on whether to favor technology or its usages. It seems that the second may win or at least not being the least considered part of the job anymore. Such arbitrations will be key facts to understand 2012.

2°) A more operations-driven approach to social dynamics

Some of us have been discussing this point for years but it seems that things are becoming more mature now. In 2009, anyone talking about a social approach to business processes was considered as an heretic. Today things seem to be converging and enterprises are more ready to listen and understand to such discourses that make more sense for them. Or maybe the disciples of the “Care Bears Social Church” have given up and admit that the word process was not a blasphemy anymore.

So, the job is not about keeping the old organizational structure and adding a community layer on its top, out of the flow of work, but :

1°) Bringing  social into the flow of work even it means fixing the flow to make it agile and adaptable

2°) Jointing flows of work and out-of-the-flow community approaches to ensure all the efforts will contribute to value creation. If not, the final conclusion will come quickly : communities = unproductive silos…and once again we’ll have missed a great opportunity to improve things.

But being aware does not mean acting accordingly. Even if a consensus forms on such an approach, it will take time to implement it because it needs organizations to put their hands in the organizational mess and out of age processes. That’s what the “E20 = E1.0+communities” was designed to avoid. Unsuccessfully.

Depending on the choices made in each organizations, we’ll see forks forming in the the social business world. And, in my opinion, one of them is a dead end.

Behind this point lies something deeper…that’s my third point.

3°) Adopting one’s future instead of adopting social

We’ve been talking about “adoption” for ages. Even if I can understand it, it did not take much time to see the limits of such an approach. It’s like saying “that’s new, you may not see the interest but you have to love it and get used to live with it”. It sounds like having to deal with something exogenous. Adoption being about how not to reject a transplant.

There’s another approach, much about a wide and deep corporate project. What challenges for the next year ? How to create more value, more efficiently ? How to make resilience a part of the corporate DNA ? One thing leading to another, if enterprises start to design their organization accordingly, in terms of management models, processus, HR models etc… social won’t need to be adopted but it will grow and spread naturally. Do you want to design an enterprise adapted to its challenge and tool it accordingly or try to make new practices and tool fit in a mould that’s not designed for them and in which they make no sense ? Overlay or structural integration ?

In short, do you want to adopt the social approach or adopt your future, social being only a consequence. What I also mean is that there is not one social model that fits any organizations. It has to be designed to fit specific cultures, needs etc… Organizations that understand they’ll have to design a whole global model for their own purpose instead of copying what they can see elsewhere will be more likely to succeed in their transformation.

The answer to this question will take you on one or the other of the ways that will follow the fork I mentioned above. Enterprise projet or social project in the enterprise ?

4°) Integrating instead of adding

That’s a three dimensions challenge : on technology, organization and people.

These last years, many enterprises have ran many projects, most of time without much coherence, what lead to building stacks. Stacks of technology with no connection between them or with the previously existing ones. Stacks of rules and processes, often contradictory, while making things more simple was the best way to efficiently handle exceptions. Stacks of constraints, exhortation to adopt new behaviors depending on the context.

This lack of coherence weights on projects and does not help to make sense of anything. The consequence is known : less engagement and motivation over time, even unproductivity. Maybe cuts in budgets will have positive impacts. Rather than rushing ahead without properly addressing the problem, organizations will have to learn to make the most out of what thet have and is often wasted or under-utilized.

We’ve seen above, that instead of adding a social part to people’s work, organizations should invent a model that joints in a logical way both the structured and unstructured parts of work, formal and informal ones. It will be the same for technology since, as Bill Ives noticed, it seems that, instead of adding new technology layers, organizations seems to start investing on integrating the existing ones better.

Integration will take place on many fields :

• the organizational one, by replacing adoption by redefining and redesigning roles, tasks, activities and flow of work.

• the human one, by making HR policies more coherent (evaluation, reviews, goals, incentives, competencies location and management…)

• the technological one, by integration the business and social layer, with the help of new standards as we can see in the “social business framework”.

5°) Customer first ! But for how long ?

I hear more and more voices complaining on how social media budgets are allocated. There’s a lot of money available to look nice on Facebook but almost nothing in comparison to transform the organization in order to deliver as promised. Unfortunately we can see few signs that improving the organization through the human and organization will get more funds than social soliciting projects on Facebook or elsewhere. Looking nicer will still more important than executing better…but for how long ?

More time is needed to replace make-up programs with a comprehensive approach that will joint internal and external activities and consider that execution is at least as important as branding. But 2012 may be the turning point. Things may change as budgets shift and social business projects not considered as a part of the social media stuff anymore but as organizational projects that deserve their own (and well sized) funding.

Anyway, some organizations already get it well and will increase their advantage.

6°) The year of culture !

This will be discussed in some future posts but something is sure : no transformation happens without strong leadership and culture. When one lacks and the second is weak, we often see projects that aim  at changing without taking the risk of changing and the golden rule is “ohhhh, we can’t to this is our company”. 2012 will be the year of judgement since organizations will need to arbitrate under the constraint of smaller budgets. Only the projects relying on a strong leadership and culture will survive and move forward. Expect lots of breakage.  These projects will certainly come back later with a new approach but, unfortunately, their project won’t be about anticipation anymore but survival.

Conclusion

No one knows what choices will be made but organizations will have to make meaningful ones in 2012. I mentioned some possible logics here. Between the brave choices deserved by a real enterprise project and “no-choices ” caused by a poor understanding of what’s at stake, social business projects will diverge more and more. Last step before the final collapse of window-dressing ones and the generalization of the rational/pragmatic/business driven approach.

I also think that we’ll discuss a lot the “adopt social vs adopt your future” as it will become more and more obvious that social business is more about transforming the DNA than transplanting a new body.

When we talk about new organization or management approach, about the tools that support new ways to communicate or collaborate we often use the knowledge economy as a justification. Moving from an industrial to a knowledge economy means a deep change of context and responses of a new kind from businesses. That’s an obvious fact and none of the current social business or enterprise 2.0 expert has coined anything new : there already was an abundant literacy on these new forms of organization while most of os where still learning writing and counting at school. If we take the technology side apart, any old book from Peter Drucker could be a best seller if published today with the same texts and a socially fashionable title.

So knowledge economy is there and both organizations and people have to deal with it. But what do they do it so slow, with so much reluctance, fears and doubts ? Why can’t we see this draught, this collective march that happened when the world faced its last similar evolution ? The answer is easy : because the knowledge economy does not exist. Not because it’s a dream kept alive buy a few passionate and lunatic people but because it’s not a concrete reality, foundations on which we’ll be able to craft the future.

A field was not enough to craft the agrarian economy. A factory and some steam or electricity did not found the industrial economy. There were organization models designed for the factory. Labor laws evolved to lead the change. Financial mechanisms were set up to make the requires investment possible, what made industrial economy grow. A factory did not made the industrial economy but a set of rules, practices, mechanisms did. They turned a need and an opportunity into reality.

So, what’s about knowledge economy ?

One swallow doesn’t make a summer and a knowledge worker does not make a knowledge economy. Knowledge work exists. Knowledge workers too and they represent each day a bigger part of the working population. They are the resources that may help to build a sustainable growth for the future. But that won’t happen unless some requirements are met.

As a matter of fact, even if the potential exists it’s poorly exploited. First because businesses don’t do everything possible to make the most of it…but that’s an easy pretext. Businesses  also are  looking for sense, for reasons to do things. They don’t find these reasons because they are operating in an environment that did not change that much during the last 50 years. Consequence : they struggle to reinvent their model, to reinvent themselves. Evidence  is those that success, that find the way of a new durable growth, are those who made choices that were both “obvious” regarding to where the world is heading and crazy according to the current environment in which they operate.

What’s missing to craft the appropriate environment ?

- innovation : programs that encourage innovation and sustain creation of innovating businesses.

- an appropriate legal and accounting environment. It will be quite impossible to move further In an economy that relies on people when everything that’s about them is seen as costs and never as investments. Globally speaking, we need to rethink everything that’s about time. The knowledge economy needs time to create knowledge, trust, learn. Time is an investment when wisely used. Short term approaches leads to resource wasting and shifts adaptation costs to others without removing them.

- means to link incomes not with jobs but with participation. Both inside and outside businesses. Many systems relying on people and communities from which businesses draw benefits rely on the voluntary participation of as many people as possible. That’s not a problem as long as it’s a secondary activity that comes in addition to a “real one” from which people get money. When principal activities are becoming scarcer every day, this model that many think is the model of the future, needs to be sustained differently. Even inside organizations this is a major barrier to new approaches to emerging collaboration, where people can’t find what’s in for them and managers find themselves at risk because of the use made of the resources they are accountable for. Let’s remind that cost allocation is a collaboration killer.

- an appropriate legal environment. Don’t forget that, in many countries, the new way of working we’d like to encourage and the use of tools that sustain them are close to the legal border line, because of regulations dating from decades. Yes, law is lagging far behind…so much that some will advise you “not to care about it”. But the risk is actual and huge. The point is not to break all what exists down but to find a new balance that fits today’s context. In the meanwhile, this is one more reason not to go even if it would make sense.

- the future of businesses will depend on the people that will make it. Provided they have the right mindset and toolkit for the upcoming years, not for the past ones. The education system needs a fix too.

- infrastructure that will sustain both local and global growth. A wide scale fiber program is as essential today as railroads were one century ago.

- since it’s all about global challenges that are quite beyond what businesses can do, we need a long term vision at the countries level. And we’re still far from that. For instance, a couple of months ago the French government installed a “Digital National Council”. Quite a praiseworthy decision in a country where “digital” is a strange, poorly known and even scary thing fior elites still stuck between the 60s and the 80s are are more focused on bringing the past back to life that dealing with the future. Praiseworthy initiative I said….until I had a look at who will make it up. Not to criticize those who’re in (they are recognized and legitimate professionals) but to think about those who are not. Except what I call “pipe sellers” and those who sell things through the pipes…nearly nothing. An education system expert ? A tax system expert ? An HR professional ? A labor law professional ? The lack of vision is obvious. “Digital” is only seen as a new channel to deliver contents and goods. Can it be leveraged to transform our organizations, the way work is done to drive future growth and competitiveness ? Is this question worth ? Of course it is. is it a part of the national ambition ? Not at all because this ambition does not exist and none of our leaders gets a thing about “digital”. If they do there would not be a state secretary dedicated to the “digital economy” but the minister of economy would be in charge of all that.

I’d also like to remind that, because they were not good at knowledge work, businesses had to find their profitability elsewhere in the last decades. On financial markets. If you’re looking for some of the causes of the financialization of economy that lead to the extremes we know you have a part if the answer here : their inability to turn themselves into knowledge organizations because of the constraints of an economy that’s still designed for industrial work and only for that.

If we also take into account how much the knowledge economy shares with the service economy, we can understand how big the challenge is.

Knowledge work exist. Knowledge workers too. The potential in terms of growth and jobs is obvious. But knowledge economy is still a dream while, beyond what businesses can do, it’s a new society model to be implemented if we want to build foundations for tomorrow’s growth.

Without such an approach, many will find that enterprise 2.0 or social business initiatives have too little impact, are too soft or not enough something. Don’t try to find the reasons anywhere else. As well as we’ll overlook the real problems, everything we’ll do at the enterprise scale will look very futile.

One can’t manage what one can’t measure and once one has invested anything in something it’s logical to try to know what came in return. Considering these wise words, organization add KPIs to all projects. Social and 2.0 ones are not exceptions. I know that many people says that, in this field, believing is enough but if faith can be helpful to start things it seldom helps to find one’s way along the path.

At first sight there’s nothing easier than setting indicators, most of all when organizations have the habit of measuring everything that’s measurable and build dashboards that look like we can be found in a plane cockpit. The result is  known ; no one understands them. Setting relevant indicators in a new field, where experience often lacks is a real challenge.

So let’s consider each point of the question, the one after the other.

• Indicator : everybody knows what an indicator. Anything that can be measured, evaluated, assessed is an indicator.

• Performance indicator : knowing that measuring everything causes nothing but confusion, it’s logical to select indicators that focus on performance. Should it be about the overall performance of the performance of the project ? I think the right choice is the second one, because of what follows.

• Key Performance Indicator : there’s a lot to say here. There’s few consensus and understanding on what ky means, what can lead to horrendous mistakes.First, there are people for whom “KPI” is so a part of the common language that they don’t see any difference between I, PI, and KPI. So they often end up with 25 KPIs that mean nothing.

The same result can also be obtained by another way : when people think any indicator is key. The previous case is caused by a vocabulary mistake, this one by misunderstanding. Measuring anything because it’s measurable should not pull the wool over our eyes. That’s because something is key that it should become an indicator, indicators not being key for the only reason they exist.

Before going deeper into this point, let’s mention the third situation : linking the “key” nature to the person (even if it’s not the most common situation). I happened to ear “what I do is always key because I’m the boss. My projects and their indicators are key too because it comes from me and is more important than anything else”.

In fact the “key” nature est the consequence of the direct link with the corporate strategic plan. It shows the contribution of the project being measured to something bigger that is supposed to make sense for anybody. There should not be any need for explaining why a Key indicator is key : it should be obvious. If not, it means either the indicator is not key, the project does not contribute to the corporate plan or the plan in not understood by employees. In some ways a key indicator does not measure the project but its contribution to the corporate plan.

So, it’s logical to have lots of I, some PIs and only a few KPIs.

Now, let’s figure what it means in a common and concrete situation.

Imagine a classical “2.0″ project, let’s say an innovation community. Let’s find out what KPIs, PIs and Is could be.

• KPI : the number of ideas provided by the community and being executed, number of ideas actually implemented, the money made or saved because of these ideas could be KPI. I say “could” because if innovation is not a part of the corporate plan, if its contribution to business is not clear or if it’s project launched under the radar, we’ll need to find other KPIs…if they exist. It may also make people realize that the lack of link between the project and the corporate plan will make it hard to find anything key.

• PI : the number of ideas could be a good indicator. It shows that the system works without saying it contributes to anything. It’s an intermediate indicator that tells how effective the project is.

• I : the number of discussions, members, comments, votes…are basic internal indicators that shows the system is alive without promising anything more.

Of course, the three kinds of indicators matter, but each one at a given level, for given people. If Is show poor results, few chances KPIs will make one smile.

It reminds me of a person telling me how uncomfortable he was with the KPIs of internal projects that were submitted to him. In fact, these projects having nothing to do with the corporate plan he was only given PIs, not KPIs.

Last point. That’s not because a project has no KPI that it should be shut down. For instance, pilots projects, experimentations. The ambition can be limited for the time being necessary to show “things can work”, and the mechanisms that make business make the most of the social activity could be postponed. In this situation, having good PIs is great. Once the promise verified, it will be time to add the K. The only risk is that the lack of link with the bigger corporate picture, of sense, limits motivation and the ability to reach a critical mass. In this case, the project will only rely on conviced and passionate people. That’s not a problem if these elements of context are taken into account when it will be time to debrief and draw conclusions, positive or not.

You may also be interested by reading what I once wrote on measuring social networking platforms.

Businesses are facing a paradoxical and challenging equation for 2012. On the one hand the crisis make them wonder about the future and how to have as little exposure as possible to what looks like a major threat. This usually make them freeze their projects and get rid of anything that may load them down when the shock will happen. But, in the other hand, there’s the feeling that this time things will be different. That the old formulas won’t work anymore. That if they content themselves with absorbing the shock, saying to themselves they’ll restart and recover after…they may not restart at all. That, beyond the economic crisis, there’s a crisis of management and organization models that caused the eratic behaviors that lead us to the point we’re now.

So there’s at the same time the reflex of keeping quiet, still and the feeling that a new way to recovery has to be found. Even the idea that there may be other ways to anticipate the shock. So the question is to know how businesses in general and HR in particular will manage this apparent contradiction. I found some pieces of answer in a survey made by TNS-Sofres for CSC in 8 countries.

Four main points

• Attracting and retaining talents is less important than one year ago (76% vs 80%)

• Training and education budgets will be downsized by 34% respondents

• Organization transformation is the new priority (80%)

• Less hirings and more downsizing.

In addition, 78% of CHROs think that CEOs expect them to focus on management effectiveness, 59% on the role of middle managers. The importance of a good social context and strengthening connections between people is mentioned by 64% of respondents.

So, what does it mean ?

The trio made of organization transformation, management effectiveness and role of middle managers is coherent and suggest that businesses have chosen to adapt instead of passively wait to absorb the impact. But to adapt to chat ? Beyond these nice sentences there are two options : adopting a “safety posture” like for an emergency landing or re-learning to fly.

If the second option is chosen, it’s worrying to see less budget for training and education. Not all change management programs need it but it matters for all people what will see their job evolve, change. Do the word “transformation” mean that more resources will be allocated to change management ? Possible but not sure at all. A big mistake would be to focus on the structure and overlook people, to tackle process related issues without transforming them. Thinking that human change follows organization one is a mistake. People and organizations change together, one another. People may even lead organization change, but organization change alone won’t change people.

On the other hand, if the purpose is to adopt a model based on agility, resilience, a more organic form of organization, the future may look more promising. With what’s expected for 2012, faster market transitions and shorter cycles, crisis or not, it’s essential to adopt agile and resilient models. As a matter offer that’s the lack of agility and resilience that will turn any end of cycle into a crisis rather than into a new cycle because of the time needed to accept the end of a well-known and mastered situation and imagine the future under the angle of new opportunities instead of loss.

The structural inability to keep up with the pace of the knowledge economy then of the digital economy made businesses look for their growth on financial market rather than operational excellence and innovative business models. We all know the result.

As Jack Welsh said : “When the rate of change outside exceeds the rate of change inside, the end is in sight”

So what ? Toward more rigid organizations with less living matter to face the shock or more agile or resilient ones to go beyond it ?

Future will tell

An increasing number of people are working through the world on transforming their organization into a social business or enterprise 2.0. In fact, this is partly wrong. In most cases it’s about making organizations adopt enterprise 2.0 or implement it where it’s possible (even in competition with the current organization), what is not the same thing. I’ve often said what the concept of adoption means to me, easy but fragile replacement for a real reflexion on sense and alignment, so I’ll change and mention this brilliant post from Oliver Marks where Oliver reminds us that “adoption is for kittens”.

Things happen this way for many reasons. Sometimes the people in charge are so passionate that 2.0 and social have become their one and only goal. The rest does not matter as long as many people use the wonderful tool that come with and form communities, regardless to the real business value of these communities. Sometimes the project is managed at a too low level of responsibility, sometimes with a poor sponsorship, so the person in charge does what he/she can with the available means, the provided support and the existing risk of doing too much. We all know what happens in such situations. If, in the first case, it’s only an excess of passion (and passion makes people blind), what causes the second (and may also apply to the first) is that there is no consciousness of the context in which people are operating. Enterprises are enterprises before being 2.0, business is business before being social. If organizations take no benefit from change in the context of reaching their goals, they have no reason to change.

If social and 2.0 forget the reason why enterprise exist, they become their own goal and are, at best, useless. The two above-mentioned cases are perfect evidences : when confined in a stooge role or added to the existing organization without being integrated in real business operations, social/2.0, even adopted, brings nothing. If the enterprise plan is not coherent, aligned with what social can bring, few progress will be made. Of course, many enterprise plans and discourse mention these points but it seldom means that the core of the organization is changing. Instead it’s often a nice making-up on things what don’t fundamentally change.

Don’t you find exasperating that too many discussions and event on the future of business are focused on how such or such technology spreads ? It seems that more and more people do. This revolution is presented as the remedy to all the things businesses suffer from in this early XXIth century. If I compare to this excellent post by Umair Haque, the problem is bigger and the cure needs a deep change of DNA. As a matter of fact most of the businesses that are mentioned in the most aren’t “2.0″ in the traditional meaning. They integrated this paradigm in their corporate plan, their value creation model instead of just trying to make people change the way they work. In this context, social and 2.0 are an important part of tomorrow’s enterprises, but not the only one. But, when applied to good old plans without taking into account new realities at a higher level, they won’t help to avoid the placebo effect.

So…what’s the goal of an enterprise ?I wonder how many people think about this question before rolling out such a plan. Let’s go straight to the point : the goal of any enterprise is to make money. Knowing how this money will be used belongs to another discussion, knowing how is about ethics and value from a qualitative standpoint and the understanding of the world we live in from an organizational standpoint.

We may also argue that money is a means to something bigger. This bigger thing is the mission, not the goal. But, on a day to day basis, enterprises want and need to make money. If they don’t, they die. Period. Let me add that when one want to bring anything, service or product, to the people without paying attention to profitability, that’s an association or a fundation. And the question of funding still exists. In fact that’s the difference between the goal and the mission..

We have to admit that, among the means used to meet this goal, the better and the worse have been tried. The price for the ecosystem (people, partners, suppliers and even customers) has been high. As a matter of fact, organizations used to adopt an operatinf model that relies on profusion of resources (whatever their nature), specialization of tasks, repeatability of work and the substitutable nature of human capital (x can replace y and be as efficient without any adaptation). Consequence : the system optimize the exploitation of the resource until exhaustion. If the resource is natural if will regenerate by itself (at least…that what the assumption), when it was human it was replaced. Reaching (even surpassing) the objective was done though two levers : more resource and more intensity (when applied to human, it meant more pressure).

Today it’s obvious that some of these assumptions were wrong from the start and others became wrong over time. Work in the knowledge economy is about complex tasks, people are poorly substitutable because of the knowledge capital that is proper to each individual (what causes latency periods when someone has to be replaced) etc.. Intensity becomes obsolete (working better instead of working harder) and adding resources does not help to perform tasks that are about innovation and solving problems. Addition does not matter. Combination does.

First conclusion : “making money” is still the goal but the way to meet it has to change. Even if it means making some people mad, that I fully subscribe to Mintzberg’s point of view when he says that the last crisis was rather a management crisi. Let’s add a value creation models one.

But that’s not all. The need for creating an enterprise memory, to capitalize on the knowledge of those who are here to transmit it to those who will come is a vital constraint the “old” system used to overlook. Not only it takes time but it also implies to invest on human capital before getting any return. On the other hand, losing a resource before it become able to do its best while some money has been spent to learn and ramp-up costs a lot. In the lines bove I wrote that not only natural resources but also human ones were becoming rare. Don’t mistake ourselves : businesses are already facing a talent shortage. And the societal evolution that was on track for decades is speeding up : people are looking for trustful relationships at work (that are necessary for network collaboration too), for specific values…what leads to rethinking the relationship between enterprises and their resource, to think in terms of values, of reputation.

Knowledge organization relies on accumulation. They need to invest today on what will make them successful tomorrow, on what will make the resources productive. Contrary to a system where adding arms to produce instantaneously produce more…. As knowledge and its owners are becoming central into value creation processes and as human are the essential but slow factor of the system, immediate performance becomes a relative notion because depending on a long process of intangible capital accumulation : knowledge, relationship capital, values, reputation etc.. In this context, social and 2.0 speed this accumulation process up.

That leads to the following conclusion : my definition of the goal of an enterprise is wrong. Or partly wrong. The goal is to make money today and tomorrow. The “tomorrow”, the need for sustainability into the exploitation of resources,  management and value creation processes is key. It justifies the move from an old model to new organizational models where social and 2.0 will make sense. Corporate plans make these new kind of organization relevant. Not the reverse.

Any social or 2.0 project must take profitability into account. But instead of squaring circles, rather than setting social as a goal by itself, that’s the value creation model that has to be revamped. The rest will follow. But maybe it implies efforts organizations are not ready to make, questioning sacred cows no one dares to.

What justifies change is “tomorrow” and the need for improving the intangible capital accumulation process.

So I wrote “Enterprise and business first, 2.0 and social second”. This is not a matter of priority, only of reminding what serves what.

As usual, when economy takes a turn, in a way or another, organizations change their strategic plans and explain what are their priorities for the next years. So a plan is replacing another that’s not been completed but that’s the way our world is : things change so fast that organizations need to change their direction as fast and often.

Now that’s the economy is slowly recovering, organizations have to change their pose, project and discourse to send signals to the market and re-mobilize their employees. These last months, I had a look at some of these strategic plans that’s been recently published. Most of them share three main points, usually worded like this :

1°) Put customers at the heart of the corporate strategy and concerns

2°) Improve employee’s well-being and development.

3°) Become a leader in social media.

More than being common places, points 1 and 2 are quite clumsy. They will cause comments like “Ah ? Because you didn’t use to care about our customers and employees before ?”. As for the third point, worded as such, it looks rather like a mandatory and opportunistic statement, because organizations can’t afford not paying attention to the last fashionable thing? What does “become a leader in social media” means ? Increase one’s presence ? Create one’s own services for customers and employees ? And what for ?

That’s typically what I call a social media strategy : any organization has to be there, and use these tools without knowing what for. What makes me say that they don’t understand why ? If it was the case, the articulation of the points 1 and 2 with point 3 would be more elaborated. To some extent, the point 3 would have nothing to do there because it’s only a means to serve a strategy and not a goal per se.

Then I guess we’ll soon be witnessing the coming of window-dressing projects, without any connection with reality and which impact will be hard to demonstrate. Have a “social media strategy is mandatory” so let’s have one to look modern. What would you think of a restaurant that would want to become a leader in mustard or pepper ?

What would a more reassuring wording would look like, a wording showing more coherence in the message ? It would not explain the attention paid to clients and employees but the project that exists for them, with them, and what new things are going to be implemented in this purpose. Tools would become a way to support this strategy, nothing more.

1°) Treat clients and employees as enterprise stakeholders.

2°) Involve them in a shared value project.

3°) Implement what is needed to make such a project successful, what may imply the use of new tools. It would almost be preferable not to mention this in the plan because it’s rather a part of the tactical dimension. Considering that tools are as important as the goal, making them a goal per se is not reassuring at all, and skeptics will have no problem to demonstrate that the understanding their role and value in the system is non-existent.

Please leave software vendors and online services providers and even to medias the goal of becoming social media leaders and, instead of that, focus on being leaders in you own field. Having 50 000 fans on Facebook, an iPhone app that’s been downloaded a million times and a few thousands customers registered on the social network you build for the glory of your brand makes you leaders of nothing. Except if all these things are used to build a new kind or relationship with an ecosystem of stakeholders, with the goal of doing much more than marketing and improving the buyer/seller relationship. Same for employees : the value of social tools depends on their articulation with the value chain.

In fact it means that the organization wants to do social CRM or become a social business but is not conscious of that. Or that it’s only words without purpose..

When any enterprise wonders about its evolution, about what it should become to stay or become competitive again, it builds a vision of its future in order to reach it. It’s often the transcription, according to what the organization is, its culture, past, constraints, of the theoric concept of enterprise 2.0 or social business. Objectivity makes us admit that many of these projects fail or, at least, are very relative successes.

Why ?

- because the “social” or “2.0′” things went with a tool approach and that the goal became to make people use the tools instead of making people serve the project with the tools. A good example of useless changes in behaviors when the system is in question.

- because the project was launched without any idea of what the goal was. Who does not know his destination often goes nowhere and fears trying new roads.

Deploying the tool that will support the new ways of operating and serve as a catalyst is the easiest part of the project, to such an extent that’s it’s often what’s done firs. In the other hand its integration in the existing IT and its choice depending on key criteria that can only emerge after a deep work on operational needs may suggest that it should be the last part of the project. An essential part, but not the first : who does not find logical to align tools with needs instead of forcing needs to meet what the tools can do ?

That said, an enterprise 2.0 project is not different from any kind of project from a reasoning perspective. There is goal. To reach it, some things are needed what are as many requirements. Each of these requirements has its own ones. All this breakdown can be sumed-up in a tree that shows what has to be done. I’d rather say should be because this step seems to be often overlooked.

Let’s have a look on one of the most famous cases : CISCO. John Chambers radically transformed his organization. He had a strategic goal and aligned anything with it : the way employees were evaluated, the leadership model, the recruitment criteria etc.. When he became CEO at Alcatel-Lucent, Ben Verwaeeyen had a plan in his mind and it needed more exchange, collaboration, a flattened organization. His first initiative was to set up an email address so any employee could email him, being sure he would read the message personally. Years ago I remember of one of the first enterprise 2.0 project in the sales department at Dassault Systems in France. The sales director made anything to make social networking the way people did their work by changing the content of work and adopting a new management style. In fact, the role of the tool was to support the form of management he wanted to use (and not the reverse).

But situations like the following ones still happen too often :

• The leadership teams things this move is highly strategic. “But we won’t bother them with that, will we ? Change is not for them.”

• People don’t collaborate because all the measurement and reward system tells them to fight one against the other. “Be serious. We won’t change the performance measurement system. No way !”.

• We need people who have the right behaviors at work…but hire the opposite. “He’s a brilliant applicant…we can’t let him go. Even if his state of mind is not aligned with the values we want to promote and he’s so selfish that he does not care about his colleague or the rest of the company”.

• We hire brilliant, creative, curious and open-minded people, we like their ability to behave like “intrapreneurs”. Once they’re hired it’s rather like “shut up, low profile and follow the party line”. “It’s essential to hire such potentials…but if we let them express themselves it may harm the internal order”.

• Nothing will change unless the content of work changes. “Change anything in people’s day-to-day work ? Don’t even think about it !”.

• Value is created when social meets business applications. “Don’t touch to business apps. Social is communication, not work. Right ?”.

Anyone can have his own opinion on the concession-less line adopted by Chambers toward his executives (in short : either you change and we help you or you don’t want…and you leave !) but behind this, there was something obvious : that’s the corporate strategy, it’s vital for our future so it’s not optional. SEMCO and his CEO, Ricardo Semler, are often mentioned as a model for HR and culture 2.0. Don’t forget that he did not leave any choice to the leadership team in place when he took over his father as the company CEO. Why ? The Corporate Project is not optional : it has to be rolled out and any consequence that has to be drawn from it should be. What takes us back to Chambers who admits that this “new” Cisco is not the management model he’s comfortable with. But he forces himself because the future of the company is at stake.

What I wanted to point at here, even if it’s common to any project, is that if an initiative serves the Corporate Project, everything has to be aligned with it. If the necessary adjustments are thought being optional it means that the initiative won’t support the strategic project…so that doing nothing may be a better solution. Why investing and doing efforts for something that won’t improve or change anything ?

When driving on a road and a junction’s ahead, there are not many options. Either you stay on your current road or you move to the other. If you slowly change your direction while staying on the same road, you’ll end in a tree or the verge.

Staying on the middle of the ford means loosing the security of a known and comfortable situation (even if it’s at risk on a long term) without getting the benefits of the promised land. That’s the place where one starts to loose a lot without winning getting anything in return. That’s not a median way but the place where the danger is higher.

An idea came to me when watching a sport talk show a few weeks ago. A well known coach was saying : “let’s stop saying that a team that  plays in an offensive way is taking risks : it’s only trying to create opportunities”. It’s the same in soccer, tennis, basket, poker : teams and players are always split in two categories : those who go forward and are said having risky strategies and those who curl up, play hard on defense and wait for the storm to stop, hoping to make the difference on a counterattack.

Experience shows us that both can be winning strategies.

I find the analogy with enterprises relevant. Chosing a defensive strategy means being able to take blows, having to put up with competitor’s strategy, hoping better times will come. And sometimes that works. But the comparison does not fully apply. Sometimes, the walls crack and a the player or team in question is swept away. In the sport context it’s only a lost game, and a new competition will start a few days or weeks later, and everything will restart from scratch. In the word of business, the consequences of being swept away may last a very long time,

We can draw the following conclusion : chosing a defensive strategy, refusing the fight, let competitors take the initiative in a world where the score is not regularly set to zero, when everything does not restart from scratch every new week or year does not pay. Businesses are on an endless run where they can’t say “tomorrow will be another day”, if a competitor takes any advantage and is ahead today, both businesses won’t be on the same starting line tomorrow.

The recent Nestlé Case is meaningful. Now, wait to see if Nestlé, as Dell did in a similar situation years ago, will take advantage from the situation to change its approach, its strategy and adopt a more open one. As a matter of fact I’m sure than they’ve learned that the risk was not where they thought it was.

Playing in an offensive and open way is not a risk but an opportunity after all. Having to resist and put up with what others decide is, in the other hand, a real risk.

Months ago, the idea came to me that productivity has to be rethought in order to shift from a mechanical concept to a human one, an from something that could be improved at the individual scale to something that has to be improved at a collective, systemic scale.

I’ve been neglecting this issue untill I came across this article that remembered me of it. Please have a look at this meaninful chart stolen from it :

Despite an ongoing improvement in productivity, ROA collapsed on the same period. Why dit it happen ?

According to the article, it’s due to a total disconnect between enterprises et their current environment. Till now, businesses used to increase their size to create more value. Today, in an interconnected economy, value is not created anymore by increasing size but by multiplying information flows. The difference between the most and the less performant companies can be found in their participation to knowledge flows, both internally and externally, dynamics relying on social software. Focusing on “traditional” productivity only benefits to clients, not to the enterprise that doesn’t create more value.

In brief, the good old scalable efficiency is not enough anymore and companies should now focus on scalable learning.

The gap between the potential of any company and the benefit drawn from it is doomed to increase unless companies decide to take the most of their digital infrastructure supporting  knowledge flows and actively participate to these flows, both internally and externally with other businesses, and implement a voluntarist innovation policy.

Performance improvement will require the adoption of a logic of exchanges and innovation within ecosystems which is the only way to significantly improve things. It will make possible for anyone to improve one’s own performance through a creative problem solving process which implies the ability to connect among peers inside and outisde the organization. Contrary to the previous century when things used to come from the top, these new dynamics will be driven by people.

All that takes us back to a well known topic. The only way to bring a real and perenial improvement is to take the most of both knowledge capital and digital infrastructure. If not, the gap between investment and results will become wider every day.