Enterprise and business first, 2.0 and social second

August 16, 2011 By 1 Comment

Summary : Enterprise 2.0 and social business when they become, as it often happens, their own goal, struggle to convince businesses of their significance. The reason is simple : beyond soft and qualitative benefits, the quantitative aspect is often overlook while, in the end, the enterprise has no other purpose than producing tangible wealth. This being the very basis of the concept of enterprise, there’s a need of reconsidering the social phenomenon regarding to this goal. Benefits of these new approaches are obvious in terms of value creation provided the changing nature of our economy that relies more and on people, knowledge and accumulation processes is taken into account. In this context, social and 2.0 speed up the processes that allow the accumulation of knowledge, relationship capital, trust and even reputation. This leads to a conclusion : pushing change in organizations which plan and value creation model does not take this factor into account won’t be more than a pleasant distraction. Organizations need the courage to bring the matter back to its real level where it has to be tackled : the value creation and business model one.

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 ? [Read more...]

Filed Under: Economy & New Models, Enterprise 2.0 & Social Business, Management & HR, strategy Tagged With: , , , , , , , , , , , , , , ,

The risk of an internal social bubble

August 9, 2011 By Leave a Comment

Summary: Is there a risk of an internal bubble caused by the 2.0 and social trend ? Not a vendor bubble, but a bubble that related to the value of internal projects. Why ? : After years of efforts, of investments, the benefices drawn from the projects, even when tangibles and real, are to small regarding to the investments that were made. The reason is simple : new practices are often seen as surface behaviors while they actually contribute to improve the intangible capital of the organization. This has a direct consequence : the organization did not change the way it operates to make the most of this capital, to make this improvement scalable and, consequently, a global investment often produces local results only. The risk of  seeing internal financiers or even employees that didn’t get much from the investment loosing their motivation and retiring from the social thing is actual.

With the coming wave of IPOs that will concern lots of web 2.0 businesses and, most of all, social networking services, many wonder if a bubble is forming. A legitimate concern when looking at some numbers and business models, but it will be rather like a necessary clean-up than the crisis we saw a decade ago. Businesses learned, investors too and, contrary to this time, there are users on the web who are either real customers or products, depending on the business model.

But what about enterprise social players ? Except one remarkable exception, IPOs are far for enterprise social networks players (at least for pure players…the older ones having been public for a long time already). But this is not the matter here. Or only a part of the matter. As a matter of fact, the valuation of these businesses highly depends on the value they generate at their client’s. That’s where things get tougher because they’re not fully responsible for the use that’s made of their product.

That’s where the real question lies : after years of investments in software, in time, in energy to deploy projects that have a great impact on how employees use their time, the time will come when those who paid will ask for account. What was the money used for ? Can tangible improvements be seen ? Even if we forget the tradition ROI model, there will be lots of cases where, beyond activity indicators (provided 50% of the activity don’t come from community managers and advocates), it will be hard to show anything tangible, measurable or even assessable. Or, at least, nothing that will be worthy of the cost (don’t forget there a lots of hidden costs in this kind of projects due to the  uncomfort of the ones, the time wasted by others, frustration, loss of motivation, internal conflicts etc…).

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Filed Under: Enterprise 2.0 & Social Business, Management & HR Tagged With: , , , , , , ,

Nothing is lost, nothing is created, everything is transformed…but not luckily

October 12, 2010 By Leave a Comment

Summary : there’s a missing link in the enterprise 2.0 discourse that does not reassure organizations. They’re being asked an impressive effort to generate information, connect people, they’re being told all the benefits they can draw from that but are not explaine the mechanism that will turn this information potential into tangible results. The fact this link misses is certainly one of the reasons that explain why we still lack some matter in the ROI discussion. This transformation, that’s too often overlooked, will certainly be made possible by the implementation of organizational and management mechanisms as well as a redesign of some process.

If a chemist observes an organization through Lavoisier’s words, he would say that it’s impossible to get anything from such a system :

• Nothings is lost : wrong, organizations lose everything. They lose their non capitalized knowledge as people retire of resign. The NASA and Boeing have already painfully learned it, but not everyone has begun to prepare the future. Worse, they can’t even find what’s within their walls. A former CEO of HP used to say “if HP knew what HP knows we’d be three times more productive”. The problem still remains.

• Nothing is created : that’s the difference between business and chemistry : businesses creates, and innovates. In fact that’s theory. Practically talking they don’t create enough. Not enough innovation, not enough solutions to new problems (or not fast enough) : it’s hard to find how to solve a problem, without even mentioning how hard it is to implement any new solution.

• Everything is transformed : of course…provided organizations want it. Not only a reaction does not happen by luck, most of all in organizations where silos are built to prevent elements to mix together and where any reaction has to be kept under control. The taylorian legacy dies hard and the “silos and control” approach still rules, what causes few transformation except by luck or when a manager builds a clandestine laboratory.

Many organizations understands this is a critical stake and know they should favor transformation if they don’t want to be at risk in a near future. Favoring information capitalization and sharing, breaking down silos to create and innovate more and faster…that’s a current (or scheluded) program in many organizations and initiates call it “enterprise 2.0″.

But, to be honnest, most of them are still afraid of embracing this new paradigm, wonder if it’s really worth. They’re still waiting for an answer to this questions, some in terms of ROI calculation some others looking for the certainty that things will improve. Said in other words, they want to be sure the new potential they’ll built will be turned into tangible results. That’s a double edged issue because it both brings an answer to a strategic questions and force organizations to think about reinventing the way their employees actually work, their managers manage. But that’s the difference between an actual improvement and a façade change. [Read more...]

Filed Under: Enterprise 2.0 & Social Business, Management & HR Tagged With: , , , , , , , , , , , ,

Enterprise 2.0 and ROI : forget the “whether” and focus on the “how”.

September 14, 2010 By 2 Comments

Summary : even if the concep of ROI, in its traditional sense, hardly hardly works for enterprise 2.0, overlooking the question of tangible benefits tha should be expected is impossible. But the reasonnings on this issue suffer from a noticeable bias : technology is assessed in the current context while it needs organizational and management changes to deliver its effects. So there are few chances to have a solid demonstration if the focus is kept on the existence of ROI without a joint reflexion on how to make it happen.

The ROI of Enterprise 2.0 is interesting because it’s at the same time unavoidable and a problem that’s impossible to solve without rethinking the whole paradigm of value creation.

First, I’d like state something. I’m using the word ROI because it’s the one we all use to discuss this point while I think that “measurable improvement” would be more relevant.

Then, I’ll start with a metaphor. If a logical and rational thinking makes us deduct that an engine is the best solution to make a car move and that, despite your car has one that works, your car don’t move when you accelerate, it may mean two things. The first is that ou forgot to shift the gear box on the right position, the second is that it’s not connected to the transmission. Instead to trying to fix the engine or throwing it away, what needs a fix is the transmission.

Then let’s talk about ROA (return on assets). The number is well known but John Hagel recently reminded it to us : it has dropped to 25% of what it was in 1965 while people’s productivity has been skyrocketting in the meanwhile. Conclusion : that’s not employees that don’t pedal fast enough but the organization that struggles at turning their effort into value. So the solution is not to blame employees and put even more pressure on them but to rethink the way work is organized and people are managed.

Now, have a look at new ways of doing things and the tools that support them. Anyone with few objectivity understands that the easier it is for employees to access resources and expertises in a fluid way that helps to save time, the quicker problem solving and the better made decisions made will be. But since this system is hardly systematizable, organizations keep their old way of doying things. What means telling the cyclist to pedal harder and harder while the chain is broken.

So the true question about ROI is not to know if it exists but how to turn a potential into actual benefits. This is not about social media or behaviors (even if it will play a part) but about “plumbing”.

That’s exactly what I wrote a couple of years ago about strategy maps and intangible assets :

• Value creation is indirect : intangible assets don’t create value by themselves, but through their use in business process.

• Value is contextual : the value of intangible assets depends on their alignment with strategy

• Value is potential : if business process don’t use those assets, their value remain potential and can’t be fully realized.

• Assets are bundled : intangible assets have to be use in conjuction with tangible assets.

So it’s logacally difficult if not impossible to demonstrate any kind of benefit and, most all all, to measure them, if the question of alignment has not been tackled and if processes have not been designed or fixed to actually rely more on intangible assets.

Organizations have to forget the old principle according to which tools ahave an endogenous value : the value of social tools is exogenous and can’t be delivered if tools are not used in the context of adapted processes.

So there are chances we keep on discussing the ROI of Enterprise 2.0 again and again for years if the focus is kept on “whether” it exists instead of “how to deliver it”. Even people who are convinced and don’t care about the “if” shoud care of the ‘how” that ensures that processes will be able to turn the potential into tangible benefits.

As my good friend Luis Suarez rencently wrote, we should learn to work smarter, not harder. Lett me add : provided we avoid to pedal better but in emptiness.

Filed Under: Enterprise 2.0 & Social Business, Management & HR Tagged With: , , , , , , , , , ,

Behind enterprise 2.0 there’s coherence

June 3, 2010 By Leave a Comment

I’d like to go further into a point I mentioned in a previous post and that deserves some more explainations.

According to what we can often hear or read (and that I sometimes wrote here too), organizations lack many things to perform in today’s context. What has to be understood like “they need to acquire and implement many things they don’t have” like ideas, competences, employee’s passion about their job and many other things. Finally I wonder if it’s that true.

• Ideas and innovative potential ? It exists both inside and outside the organization. Just have to bend down to pick it up.

• Talents ? I see many brilliant people, from any generation in every organization I know.

• The will to engage and do one’s best ? It exists, in proportions that may vary depending on local culture and the relationship between people and business world. I agree it can fade away if not sustained.

• ….

I don’t think the issue is the acquisition or the development (even if this last point can be discussed) of all these things but the way they are used.

• Talented and creative people at the marketing department, talented sales people…but no alignment and the impression that both don’t go in the same direction.

• plenty of ideas, sometimes heard and acknowledged. But seldom implemented.

• Rare expertises but hardly accessible and shared.

• People able to face the challenges of the organization…with incentive to do the opposite.

• Brilliant young qualified people, hired because they can bring something new in the workplace and who are asked to fit the mould once they join the company.

• ….

As we can see, organizations have an impressive energy tank, a huge potential, that fits today’s need. But the corporate engine is plugged on an old tank full of aldultered fuel. Or maybe the carburation is not set for today’s fuel.

Would it be with a management toolbox or new technologies, the question behind what we call enterprise 2.0 is plug the right tank on the engine.

That’s also the reason why ROI is very hard to get when talkin about intangibles : it’s hard to deliver any value when the engine does not use the fuel the company invests in.

The challenge is to bring some coherence, that’s to say aligning business practices with the fuel the organization is putting a lot of money in (human, intangible…). And if tools are needed to be used as catalysts to boost the reaction…

That will also imply to redefine some roles or have a more systemic vision of investments : those who invest in intangibles seldom are those who design the way it will be used. Yet, when businesses invest in the bottom layer they need to design the “plumbing” that will ensure it will impact the upper layer, what has many incidences on the structured and formal part of the organization. Remember this old diagram I published years ago :

Food for thought…

Filed Under: Enterprise 2.0 & Social Business, Management & HR Tagged With: , , ,

Enterprise 2.0 and ROI : beyond numbers it’s about meaningful arbitrations

April 7, 2010 By Leave a Comment

The debate on the ROI of Enterprise 2.0 is far from its end even if I often have the impression that avoiding the question is a common easy answer. Either the “we don’t care” or the ‘it’s different, you can’t understand” answers don’t satisfy me.

When an enterprise is asked to invest energy, time, money, it’s legitimate to want to know what it will get in return. More precisely :

- if their will be any return

The answer is obvious : yes

- if this return will be a vague “better something”, nebulous and unseizable or if it will be measurable in a way or another, in a un unit that would not be too eccentric (money for instance…)

Here, my answer would be double. There are things that have a direct impact on opeations and thant can be measured and quantified. For instance the lenght of the innovation or sales cycle, the time saved by avoiding micro-coordination…

There are things that are not measurable by themselves but impact things that are. This is clearly demonstrated by Strategy Maps.The idea is to implement the mechanisms that will ensure that what’s invested to improve intangible will actually impact value creation. In brief, make sure that everything is conherent with the investments and that the way work is done is aligned with that in order investments are made profitable (it’s seldom said but businesses usually don’t suffer from a lack of talent or innovation…only a lack of coherence that impacts the whole value creation process, preventing processes to harness talents and innovation potential).

3°) If this return can be foreseeable in a mechanical and linear way.

Here, the answer is : no. In the other hand, between the exact prediction and the “we can’t predict so let’s five give up” I think there’s a long work to be done by searchers and specialists to be done. Without this work that will help to implement relevant measurement and predicition means, the risk is high to see managers piloting businesses with indicators that have nothing to do with the current reality, the way operations are done and the matter that is processed.

That said, there’s another side of the issue that should also be tackled. Basically, being sure that the investment will bring some benefits should be enough to start a project, regardless of the quantifiable predictability of the benefit. The latter matter when the point is not to choose between doing and not doing but arbitrate the choice between two possible investments. In this case it’s obvious that the chosen one will be the one with the highest return so both possibilities have to be comparable what implies being predictable.

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Filed Under: Enterprise 2.0 & Social Business, Society Tagged With: , , , , , , , ,

When does the value of a “social object” have to be measured ?

June 2, 2009 By 1 Comment

Let’s be clear, I’m talking about value, not about ROI (although the one is a part of the other) and about “social objects” in the large sense of the word : everything that can exist on a social platform, when using social software. It may be a content, an information specially generated, an information shared from elsewhere, a mark given to any contribution, the contribution to a collaborative work…but also the time taken to do so, the attention mobilized while the person may have had something else to do at this time etc…

Behind the everlasting discussions about ROI stands, before all, the question of the value. Does what is done have value, and what value ? In which ways an information and the time needed to publish it can have any value ? You’ll notice that it turns the ROI question not into something about tools and contents but into something wider made of tools, contents, resources and …the context in which the information is used.

That is a point that is often forgotten : it’s the context that determines values, it’s its limiting factor, more than the intrinsic value of the information itself. An insignificant information may be very valuable at a given moment for a given person even though thousands people will have nothing to do with it. On the other hand, a capital information have no value if nobody uses it. It takes us back to a reflection I’ve had a long time ago about strategy maps : intangibles have no intrinsic value but their value depends on how it’s used.

Talking about an enterprise context, let’s make it clear that “value” means the ability to turn information into money.

So the point, not that trivial, is to know when value has to be measured.

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Filed Under: Enterprise 2.0 & Social Business, Knowledge & Information management, Management & HR, Web & Usages Tagged With: , , , , , , , , , , , ,

Considering the gap between management 2.0 and enterprise 2.0

February 24, 2009 By 1 Comment

I’ve been neglecting the management 2.0 topic for a long time although it was what this blog was about since 2005. Last years I slowely slipped from management 2.0 to enterprise 2.0, even if I find it sad that there were so many people to discuss about of make companies use 2.0 tools than people wanting to focus on building a new management framework in which these tools would make sense. But this question is coming back like a boomerang while companies are slowly realizing that small side adjustments won’t be enough to make tools useful and that a systemic overhaul is needed to make tools serve as catalyssts in a new organization model.

In february’s issue of the Harvard Business Review, Gary Hamel put this issue back to the headlines with an article called “Moon shots for management” which clearly defines management issues for the upcoming years.

Namely :

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Filed Under: Enterprise 2.0 & Social Business, Management & HR Tagged With: , , , , , , , , , , , , , , , , , , , , ,

Taking the most of intangible assets creates strong competitive advantage

December 21, 2008 By 1 Comment

A glance at McKinsey’s to read one of their latest production : “Using Power Curves to assess industries dynamics“.

A survey based on  150 companies revenue shows that performance doesn’t follow a bell curve but a “power curve” that shows that most companies in a given indistry are above the average. What, said differently, means that few leaders take the biggest part of he revenue and only leave crumbs to the others. Said my way it means that many companies are failing to keep up, what is not an issue in a context of growth when it’s always easy to make feasts with lots of crumbles but is worrying in the current times.

One interesting point of the survey, even if thinking it explains everything would be naive, is about the exploitation of intangible assets in a given industy. In this case the curve is more pronounced than for industries using more conventional assets.

Power curves are also promoted by intangible assets—talent, networks, brands, and intellectual property—because they can drive increasing returns to scale, generate economies of scope, and help differentiate value propositions.

This survey is sectional. I would have liked to know what makes the diffrenece inside a given industry, that’s to say if the impact of intangible assets was likely to be as imporant in “tangible assets” oriented industry  where immaterial capital would have (or not) a major role if it was more taken into account.

Filed Under: Economy & New Models Tagged With: , , , ,

Enterprise 2.0 : my predictions for 2009

December 18, 2008 By 3 Comments

Honestly I was not sure I would conform to the annual predictions tradition. Finally, since my 2008 edition was not that bad (shift from “social tools at people’s disposal” to the acknowledgement it needed inclusion in business process) and Susan kindly asks for it, I’ll try to do something interesing this year.

That said, I will divide my note in two parts. As any good “thoughtleader” sometimes mistake predictions for his own wishes, I’ll try to be lucid enough to clearly separate both and end my note with a few pious hopes.

Let’s start !

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Filed Under: Economy & New Models, Enterprise 2.0 & Social Business, Management & HR, Web & Usages Tagged With: , , , , , , , , , , , , , , , , , , , , , ,
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