Lessons on the hard job of designing communities in the organization

Summary : If communities have a real value for organizations, there are still few certainties about their positioning and management. Out of the work flow by definition, communities only create an indirect value for organizations, hence the fact there’s been a lot of efforts to bring them as close to the flow as possible in order to make them a produce a concrete and tangible value. Whether it lead to turn work groups into communities or give communities so much structure that they lose their agility and become a burden for the organization, many tactics reached their limits as it happened recently at CISCO that dismantled a system that what considered exemplary until then. The key question is to ascertain the maximum organizational acceptable effort to make the community work and setting up mechanisms that make the reuse of the intangible capital almost automatic into dy to day business activities.

 

Most people now consider as an established fact that communities fill a gap in terms of knowledge exchange and capitalization and collaboration. On the other hand, things as still very unclear when it comes to determine their positioning.

If we rely on the most basic and shared definition of a community, it’s a group of people willing to share and discuss a topic outside of any hierarchical or structured process. A community may have, of course, a global and permanent objective (ex : capitalizing and sharing best practices on a given topic) but no specific deadline (ex : deliver such or such thing, solve such problem before a given date). Even if the community may be encouraged to behave this way, members won’t have to comply with what can’t be more than a suggestion that has nothing to do with their job definition and appointments.

A fundamentalist approach to communities inside the organization would be to say “let those who make sense and really exist live, remove what prevent them from being active” and, most of all, “don’t think you’ll generate on-demand communities even if the topic looks legitimate to you”. The topic of a community can only be suggested and, in the end, it belongs to employees. communities can be facilitated, lightly managed but never imposed.

Most organizations are not comfortable with this approach. If followed, it will concern at best 10% of employees who want to participate and contribute in addition to their assigned work. As a matter of fact, since participation can’t be imposed, organization can’t rely on the community as they use to do with formal teams that must deliver what’s requested on time. They will produce, at their own pace, ideas, knowledge the organization will be able to use once available. The community has the control of its agenda or, rather, the organization can’t impose any agenda. There’s nothing bad here if we rely on the “fundamentalist” definition : the community creates intangible assets that have to be reused in day to day activities to create value, at its own pace. (Remember  strategy maps…)

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Cost reduction : a false good idea for organizations in tough times ?

Summary : In tough times, businesses have one major concern : reduce costs. A saving attitude provided it’s not mixed up with its far relative : the reduction of spending and investment. Spending reduction may be the logical consequence of a cost reduction program but does not replace it. Reducing costs means pondering one’s operational efficiency and the organization of work. Spending less does not always mean producing better and when this issue is overlooked the only result of cost reduction is that the enterprise is thrown in a negative spiral

It’s been the motto of nearly since the economy collapsed : costs have to be reduced. Any possible solution is leveraged : people are laid-off, projects prozen, the smallest expense questioned… Nothing but logic (except for the concerned people).

At the beginning it inspired me some very basic thoughts : after all, if these people and spending were useless why having keep them for so long ? Then I tried to digg a little further : for what I can remember, costs and spending have never been synonymous, either in the common or financial vocabulary.

So I reminded of a years old anecdote, that dates from the time when I was a student. We had to work on the case of a company that was loosing money again and again. Basic reflex : I started to examine all items of expenditure and start to cut all unnecessary ones before having a deeper look. By luck, the company started to make money again. The miracle happened and I did not need to go further. All the other students, of course, did the same.

Then came the debriefing session with the professor. It can be summed-up in one sentence. “Sirs, while you had to focus on costs you cut many expenditure items to make the bottom line become “green” again. Let me tell you that you could have followed you logic till the end : sell machines, stocks, all the assets and then close the business. You would have achieved what seemed to be you goal : a zero expenditure company. Let me tell you that this kind of organization won’t create any kind of value but, at least, won’t lose any money !”.

In fact the production tool, the organization and the business model well so irrelevant that the enterprise could not make money. So short-term cheating was possible by cutting expenditure but the situation could not last and cuts had to happen again and again until there was nothing left. Not even mentioning the fact that at each expenditure reduction phase, the potential that would have helped the organization to recover in the future was destroyed.

“Of course, rethinking organization, strategy and production takes a long time and it’s a tough work so you did what was the simplest. In the “real life” you would even have been rewarded for that and got a bonus. But if such a situation happens in your future, take the bonus and run because it would mean that you have put your organization on a path that will lead it to its end.”

Reduce costs does not mean expenditure reduction. It’s reducing the cost of obtention of the product of service that’s sold to the customer. It means organizing resources differently to get the same with a lower cost. In the case in question, it would have meant investing in more modern machines, increase the budget of R&D and rethink work organization to increase collective efficiency.

But I have to admit that this reasoning has limits : it only works in a growing economy. In a stable or collapsing market, producing “smarter” means than less resources are needed what leads to expenditure reduction.

Hence my first conclusion : reducing expenditures is relevant if it’s the consequence of a more efficient organization of work. If reducing expenditures means “avoid a global approach to the way we work”, that’s the beginning of the end because it starts a trend that leads to the “zero spending company” that has no resource to reinvent itself or create any value.

But it’s also possible to reduce costs without impacting expenditure. It implies that new markets are found. Impossible in times of crisis ? No, if the interactions between the organization and its ecosystem are more dynamic, if there’s a focus on value co-creation, on internal agility that allow ongoing business models design and refinement. Have a look at Cisco’s numbers these last years ? Isn’t it the result of Chamber’s obsession that turned Cisco into a “market transition focused organization ?”. In a different style, could we think that the success of Apple at the same period is the consequence of its capacity to create new markets ? Anyway none of these companies reduced anything during these hard times while some others were becoming fossilized, waiting for better days to come. Operational efficiency + ability to understand the market and anticipate are key for success…provided all the people that make it people have not been laid-off (in fact they are often those who are forced to leave first because they’re impact is more on middle/long term than short term).

By the way…what about cost reduction ? It’s relevant and even essential when it’s not confused with spending reduction. The solution is not in a local approach to production factors but in a systemic understanding of value creation. Kind of “work smarter”…

Some collaboration lessons by John Chambers (Cisco)

I already mentioned CISCO’s collaborative experience a long time ago. I’m taking advantage of a recent article to share a few things about the “Chambers method” for collaboration.

I’m tempted to say that there’s no miracle and that what the article says is only common sense. Anyway, it’s helps to identify the main lines of any successful change project :

• Start with the “human matter”. A leadership change is not something one can improvise. It needs explainations, people need to be reassured and to be able to imagine themselves in the future situation, to make the change theirs.

• Align systems and remuneration. I often say “tell me how you’re evaluated and I’ll be able to tell you how your work”. Trying to make people collaborate while they’re given bonuses to ignore or even fightt againts each other is useless. In other words, in many cases it will be hard to avoid thinking about evaluation models.

• Think about “articulation”. Chambers talks about structure change, but what I can see beyond that is the necessity not to eliminate the hierarchical structure but implement systems that will help hierarchy to articulate with more horizontal and adhoc work models.

• Frame and explain : explain the future and make it clear. Autonomy and flexibility don’t mean absence of rules. On the contrary, employees who are often mistrustful by nature (and sometimes for good reasons…) need that the rules of the game and the frontiers between what’s allowed and what’s forbidden are clearly set.That’s what will make them focus on their rethought work instead of continuously wondering about “how to work” and “how to implement change”.

• Use social media. I don’t know if it’s done in purpose but even if it’s an essential part of the approach, it comes in last position in the list. Maybe because it’s of no use if nothing is done about the above mentioned points.

Is Netflix the right example of enterprise 2.0 ?

Netflix recently issued a 128 slides document explaining their culture, their organizational model, their management and the way they work. It attracted a lot of attention and  advise you to read it before carrying on.

View more presentations from reed2001.

According to many people, Netflix issued the reference enterprise 2.0 manifesto, or rather the management 2.0 manifesto.  What may we think of it ?

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Socializing your decision making process

A good example of process socialization is about decision making. A few weeks ago I read this interesting paper from Olivier Sibony (Associate Director at McKinsey). Since the article is in French I hope Google Translator will provide you with a good english translation.

What is it about ?

Making the right decisions is key to be a successful business. Nothing new here. But Olivier Sibony provides us with interesting numbers.

. Between those who have used the analysis tools the most advanced and recognize those who were far away, the performance gap is important: 2.7 points in return on investment between them. But those who have followed a process of rigorous and objective decision showed a much higher performance: the gain is 7.3 points ROI ! In other words, there are three times more to gain by using a method of decision-making!

The impact of a good decision is obvious and its ROI clear enough to justify enteprises invest in what makes it possible. It would seem obvious that the solution is to be brought by analysis tools and the definition of relevant indicators. Nothings social here. At first sight…

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Enterprise 2.0 : the CISCO case

You must have noticed how many posts have been published about Cisco these late days. The US giant seems to be the first example of global enterprise 2.0 or, at least, to be the first to meet such a recognition for its success. Many things have been writen about that and it will be easy for you to find informations.

In order to understand more globally what happended at Cisco I found an interesting speech Cisco’s CEO, John Chambers, made on the 15th of october at the MIT.

What can we draw from thay ?

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With I-Prize Cisco Hammer It into Crowdsourcing for Innovation

A little time ago I wrote about Cisco’s Human Network. One of the point I raised was to know is Cisco was about to only play a facilitator’s game or try to exploit its network’s fruits when relevant. The answer was obvious,  but now it gets materialized and is called  I-Prize.

It’s nothing less that a context in which people submit business ideas and concepts. Contestants will be able to refine their ideas relying on Human Network.

What can they expect  ?

Being hired by cisco to run the business they invented with a $250 000 signing bonus. Not that bad. Cisco is investing $10M in this program, which proves the profitability of externalized, distributed innovation, that’s to say crowdsourcing.

It’s been a while I don’t watch American Idol’s french clones anymore. But in this case the finalist’s presentation maybe worth.

I also see another point : CISCO shows it’s an open minded, agile and innovative company. Very important to seduce Gen Yers.. A great work on employer’s brand.

cisco, crowdsourcing, human network, Innovation, innovation collaborative, innovation participative, innovation-distribuée, marque-employeur

With Human-Network Cisco steps into societal innovation

When we talk about enterprise 2.0 it’s often about organization or marketing. But it can also be about activities that are not directly business related but ma be important considering the societal role enterpises now have to play in a protean ecosystem.

That’s the purpose in which Cisco launched Human-Network in France. I know there’s an US equivalent but I don’t know if both are simultaneous or if the US one is much older;

It aims at gathering people aroung a commun project : sharing a good idea, a suggestion on how making our society more united, educated, tolerant, socially aware, respectful of environment, enterprising…

On www.human-network.fr, internauts may submit projects to share them with the largest audience, look for support, partners, and, of course, discuss with all the community members about employement, environment, economy, eduction, health care, community life…

It’s too early to give a definitive opinion but here’s what it inspires to me : [Read more...]