What personal business model in the new economy

Summary : Beyond enterprise 2.0 and social business, there’s a major change in value creation models. Unfortunately, in  these models that are still in preparation, it’s hard to determine causal relationships between participation in value creation and getting the fruits from one’s participation. Participating in these new channels is now an option for people looking for qualitative rewards. But if, tomorrow, such activities become central in our lives and incomes there are new remuneration models to be found for people who will mainly rely in their participation in this new economy. The will to help others and participate will be replaced by personal business models logics as well as new recognition and remuneration systems in a world where value creation will involve less and less formal contributors and more and more informal ones.

People talk a lot about social business, enterprise 2.0 or similar concepts to refer to new ways to organize work, new relationships between people and between people and their work. But that’s only the smallest part of a global transformation that impacts the whole economy, a transformation that need to be taken into account if we don’t want all the efforts made at a micro level to change the way people work to be irrelevant with the economic structures that exist at a macro level.

Taking into account the deep change of the nature of economy and the relationships between players (not only economic ones) does only not mean  stating that the world is changing and urging people and organizations to change. That’s what has been done for years and we have not admit that was not enough. It’s about aligning the macro context with the new nature of economy, to make efforts that are undertaken at a micro level bear fruits.

We’re heading towards new value creation models that don’t adapt very well to manufacturing and taylorian ones that have been set up to help things in the past. I already mentioned the accounting side of the problem…and that’s only a part of the issue.

Today, value is created through information sharing, connecting people and knowledge, in a networked and decentralized way. In fact…not exactly. To be more precise, this decentralized and connected world works in the background of the economy we know, making it work faster, better, even in a more balanced and responsible way for those for make the most of its new potential. This background activity works both inside and outside enterprises, bridging both worlds. On the other hand, this background world need to make sense for people involved in to work well. They need to know in which way it could be beneficial to them. It’s very well explained in this McKinsey post, titled  “the second economy“.

If the “first” economy, the one we know and see in our everyday lives, works according to well known logics and rules for what’s about people’s contribution to value creation and and what they get from it (even if the balance of the system is more and more questioned), there’s no such thing for the second economy. It relies on the invisible, voluntary and often unsolicited work of lots of people, in either their personal or business lives. The problem is that it creates value and improves competitiveness for the visible economy while there is no remuneration model for participants who created value for others. [Read more...]

Enterprise 2.0 does not tolerate halve measures

Summary : many organizations have undertaken a transformation process. Each one is moving forward at its own rate, according to its ambitions and fears, to what seems possible and what they don’t want to tackle. But for what results ? As we may fear, a recent McKinsey study shows that such programs don’t tolerate half measures.. As a matter of fact, organizations that tackle organization issues and business processes make much more out of their projet than those who stay with the soft, community based and out of the flow of work approach. Even worse, the latter not only don’t progress but slowly regress as lack of sense, of alignment and coherence discourage even the more engaged zealots.

I’ve been observing many organizations on they journey to new forms of organization, no matter if it’s called enterprise 2.0 or social business, and the least I can say is that some of my early convictions are being reinforced day after day. Don’t worry, this is not about any outstanding disruptive concept or awesome discovery, but only common sense that can apply to any project. But, on the other hand, the only outstanding thing about this is the fact lots have believed and made others believe that so basic principles would not apply here for such a long time. A little but like if Boeing or Airbus started designing a new aircraft saying “for this one we’ll consider that gravity does not exist”.

In other words

1°) It’s easy to start with small shiny projects and end with a nice end result even it if means to make things more attractive that they actually are.

2°) Counting on passion and keen interest help doing this easily. But the further you’ll want to go, with a greater ambition and and wider scope, the more a rational approach focusing on operation efficiency will be needed.

3°) If we compare the progress curve with a hill to climb, a time comes when passion and interest aren’t enough. Even if they can conceal the lack of work on sense and alignment at the very beginning, adoption logics show their limits one day or the other. Something more is needed to climb the last mile.

3°) Talking about sense and alignment means making this new operating model logical, understood, coherent in the context of work. Making it structural. This can’t be done without rethinking management practices and making business processes evolve, what’s been a taboo for a long time even if things are slowly changing.

4°) Making a break in the middle of the journey is not possible. No one can say “I’m going to this point but not further…I don’t want to handle such or such kind of issues”. At this point the comparison with a hill is quite relevant : who stops on the middle of the way does not stay immobile but regresses. As a matter of fact, even the more engaged zealots are returning back on earth, tired of swimming against the current, adoption behaviors that go against the very nature of their organization and even against their own interest. So they end in letting things go.

In short, one can install any software, fall into the community illusion, thinking that making people participate in addition to their work in above the the flow communities will be enough. If nothing is done to proceed to the newt next, interest and motivation will decrease because of lack of coherence, direct benefits.

I’m even ready to bet that many of yesterday and today’s so-called successes will be only souvenirs in one or two years. When the community bubble, disconnected from the reality of operations will burst, when programs relying only one people’s willingness and passion will fail and, with them, window-dressing projects.

Guess what ? It’s more or less the conclusions of a recent McKinsey study. What does it say ?

[Read more...]

Engaging is not delivering

Summary : tomorrow’s enterprises will be conversational and will need engagement from employees and customers. But engagement useless if not turned into concrete actions, if customers are note made actionable as parts of new social processes. Building engagement and conversations logics out of processes allowing to make the most of what is nothing more than an intention will lead to nothing except flashes in the pan.

Engagement has become a very trendy word. Either employees or customers should be engaged. But why ? Without engagement, what makes people feeling more concerned by enterprise or brand-focused collective challenges and dynamics, beyond their own assignments and objectives, it’s hard to find the fuel sustaining value co-creation systems that are the founding of tomorrow’s organizations.

So, everything is done to engage and the social tools universe plays its part in the movement. In fact, the social world is pretty much ahead because he’s one of the reason why engagement came back on the front scene these last years. On the employees’ side, I’ve already shared what I thought about it : no one should think that the use of any social platform by employees will replace a voluntaristic HR policy. It can be a part of it but nothing more.

So, let’s talk about the customer. Today’s tools make some things much more easier than they were in the pas. It’s easy to track signals and conversations about the enterprise, become proactive, join and response. That’s true that there’s no conversation without engagement, but customers can be engaged even if the enterprise chose not to invest this field : exemplarity in behaviors and product quality make it possible…social only being a substitute.

A second myth is also around. The one according to which, once the message has ben tracked, the sentiment analyzed and the conversation engaged…the job is done. I can’t count how many offers rely on this assumption : listen to your communities, engage…and it’s done. That’s a fallacy for at least two reasons. The first is that it’s not about communities but individual cases (even if gathered in community spaces…the nature of the container does not change the nature of the content) but since I’ve already dealt with this issue in previous posts there’s no time to waste on that. The second reason relates to the belief everything can be solved this way.

First, engaging the customer in a conversation does not mean engaging the customer with the brand. Facing a lamentable level of quality, conversation can make things less painful but some situations can’t be saved. And there’s no reason to blame the community manager : “if your product sucks, social media can’t change anything about it. Second, even when engaged, what is rather about a state of mind, internauts are useless for the enterprise. I used the word internaut in purpose because :

- “community member ” seldom is the reality

-  customer ? nothing tells the people involved in the conversations are customers. Most of times they are not.

- prospect ? any internaut is a potential prospect but they can help the enterprise without becoming customers (crowdsourcing, social marketing).

The internaut has to be activated within a process of any kind (marketing, r&d, services, sales…) to make engagement drive value. Having conversation without solving a problem is useless. Having conversations without trying to guess for what purposes the internaut can be actioned is useless. Having conversations that don’t help to “score” the internaut and don’t come with social processes related to innovation, customer service, marketing et… is useless because it does not turn the social potential into tangible business value.

Some may retort that value is not all, that image and reputation matter, that it’s all about soft things. Ok. But give me only one reason to improve one’s image or reputation if not leverage it for more “concrete” purposes.

In the logic of moving from CRM to Social CRM, there’s a point that’s often overlooked : the concept of customer management that disappeared behind conversations while the latter come to complete it, not to replace it. Moreover, to do things well, it would be better to forget the concept of customer and talk about Social Stakeholder Management because in such “value chain 2.0″ approaches it’s possible to contribute to value creation without being a customer. In fact, it sounds reasonable to say that at least 50% that may jump in the wagon are not customers. What does not prevent them from being stakeholders.

So it’s essential to go back to basics and put conversations and engagement in the wider perspective of new value creation models, of value chain. If not the risk of endless chatting without value is real.

PS : I advise you to read  this post by Marc Fidelman on social CRM with similar conclusions.

 

 

From services management to enterprise 2.0

Summary : the shift from the old manufacturing model to a service one is key to the future competitiveness of lots of industries. Rather than adding a layer of service at the point of contact with customers, it’s about reinventing businesses, value propositions and the way it’s executed. It’s easy to understand that the paradigm shift needed for this revolution is very similar to the one needed for enterprise 2.0. And is surely more understandable for lots of organizations.

 

A couple of weeks ago I discovered and read with a lot of interest Du management au marketing des services : Améliorer la relation client – Développer une véritable culture de services (in english from services management to services marketing – Improving customer relationship – Developing a culture of services) by Benoit Meyronin and Charles Ditandy. You may wonder what is the link with the topics I usually discuss on this blog. In fact it’s quite about the same thing but seen from a different point of view. It’s even possible to consider that the ignorance or misunderstanding of some issues related to services management is a real barrier to enterprise transformation, to the paradigm shift that is needed to rethink old manufacturing models and turn them into a services model and prevents from drawing all the organizational consequences.

As am matter of fact, as the book says, the key question est about implementing a culture of service within organizations. Let’s start with a quick aside. There are many ways to define a culture of service. A first one applies to people in their day to day actions and behaviors, most of all when facing customers. The second one is more global. It’s about execution but, also, the way things are seen, thought and designed. The first can come without the seconde but is only to dazzle customers. It makes employees embody a system, a policy that as no structural and operational reality in organization that don’t question themselves. It prevents value creation through services. Pratically speaking, when organization add a service layer on an old industrial/manufacturing model without trying to reinvent the whole, it’s like putting some polish on the customer interface. It has no impact no the delivered value and even less on the perceived value. In such a context, services are a cost that is easy to cut instead of being a value lever.

In short, adding a service layer to a system designed with an industrial/manufacturing approch costs money while rethinking the model as a service one makes organizations make more money. Examples are numeros in our day to day lives. I’ll spare you my usual and favorite digression on the airline industry (which really need to understand this !) but the book is full of examples from many industries (hotel, transportation, car parking…).

Take a minute to think of what “selling mobility” vs “selling cars” means for a car manufacturer. If the old car selling model survives, the “mobility” option costs a lot because it’s layer added on the system. If mobility becomes core, it’s differentiating and helps to create more value. That’s the path that’s followed by lots of car manufacturers. In B2B industries, tire manufacturers have stopped selling tires to airlines for years : they now sell a number of landings and take-offs.

In the end, here are a couple of examples of what a service culture means, taken from the book. [Read more...]

Tomorrow’s enterprise as a galley ?

I won’t teach anything to anyone by saying that, to make someone understand a concept that’s very new to him, an analogy with something known is often the best way to deliver the message. Note that this means is often an easy way for the “pupil” to help a too passionate teacher to keep his feet on the ground. Of course, we need an analogy that “talks” to the person either because he or she knows the subject well or because that’s about something that’s common to everybody.

The other day I happened to have a discussion with a couple of person and a new angle appeared in the discussion on “social” and things like that. It’s only worth what it’s worth but, after all, it’s summer, holidays so we can take the liberty of giving free reins to our imagination.

Let’s take the example of a galley. You know, a boat with people rowing, other shouting at them and one who rule. Let’s try to imagine what a galley 2.0 would look like.

[Read more...]

Enterprise and business first, 2.0 and social second

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...]

The risk of an internal social bubble

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…).

[Read more...]

Community management is like cholesterol

Summary :we’re still fare from being done with discussions on enterprise community management. More complex to implement that it seemed, this kind of system did not always keep its promises and results range from the best to the worse to such an extent that some start to wonder if it’s really worth. Among poorly managed plans and doubts on the very role of community managers, many organizations are still in a state of uncertainty. In the end it’s all about the project and operational alignment. There are two kind of community management systems : those that are the consequence of a project and integrate communities into the operating modes and those who are the result of the attention paid to the existence of communities without any will to leverage them to create value (or only with words). When community management has no other reason to exist that the existence of communities it becomes useless. When it’s the result of an ambition to turn the community potential into an asset that can be leveraged, it can lead to awesome results.

There are still a lot of discussions and questionings on internal community management. After the “everything is a community” era that caused the rise of armies of community managers and the “community manager : bullshit of the year” era that logically came after when the limits of the system were reached as well as those of its implementation by, at best, idealists or, at worse, sorcerer’s apprentices, organizations seem to be lost.

Community management logics are an undisputable potential for organizations when wisely used but are not the solution to every problem and, despite of their apparent simplicity, need a lot of specific skills. This explain that after the times of overexpectations came the time of disappointment.

First, we have to distinguish between discussions related to community management and community managers. If community management approaches are necessary, lots of questions remains about community managers, their role and profile. There’s no doubt community managers will stay for long to manage external communities, things are different when talking about internal communities.

As a matter of fact it’s logical to think that, in a couple of years, community management skills will be part of everyone’s toolbox and there will be no more need for specific people. I fully subscribe to this point of view. But, unlike some people, I won’t pretend that managers will become community managers or, at least, not in an exclusive way. If it’s an unavoidable evolution of managers skills, methods and way of doing their job, it’s far from being enough. Managers have to set objectives, have also have a right to give orders and have to be able take disciplinary actions, what is not a part of a community manager role. They’ll have to combine both dimensions, what won’t be easy at all.

Then we have to keep in mind that there is no consensus on the level at which community managers should operate. A wide range of situations exists, from the senior manager in charge of managing a global system to the recently graduated person in charge of having the field and making some noise. The consequence is that there were lots of attempts to formalize different responsibility levels, with community managers, social media directors etc… Another big mistake was made in France where “management” was often translated into animation what causes that, with the same job title, lots of different profiles can be found.

That said, let’s come back to the concern that worries many organizations because of the varying results that can be observed here and there : is community management worth, are benefits worth the effort, or should organizations let communities live, die (and even not come to life) by themselves ?

The answer can be summed up in one analogy : community management is the corporate cholesterol.

[Read more...]

Enterprise social network : a famous stranger

Summary : enterprise social networks are the future of corporate IT, a tool overwhelmingly supported by employees because it will save them from email and favor the adoption of more efficient work practices. Sure ? Outside of  a circle of initiated (that is growing everyday), except for people who are in charge of such programs in their organization, the words “social network” and “enterprise” seldom come together in many employees’ mind. And, when it happens, it’s more about Facebook and brand management than work efficiency. The reason ? Few people have tried to understand what it’s all about, personal usages are hard to transcribe in a work context to articulate a clear value proposition and the ubiquitous image of Facebook is a real burden.

I had recently the opportunity of talking with a small group of people who had one thing in common : their title started with either “chief” or “director”. Suddenly, one said the magic word : “social network”. All but one had an opinion, a question, something to share about this topic. Nothing surprising since social network has become a very trendy topics in organizations over the years.

And then…crash ! The star of the conversation quickly became facebook and the focus came on information leaks, lower productivity etc., to the surprise of the person who launched the conversation and thought it was obvious that everybody around the table knew this kind of thing. Obviously they didn’t. Surprisingly I was expecting this kind of reaction.

Enterprise social networks are a paradoxical topic. Of course, you, who read this blog, are well informed about that. Of course, you, who are in charge of deploying such a thing in your organization, know what an ESN is. Now, ask the question around you, to your friends, family etc.. I’m sure you’ll get lots of ideas, opinions or concerns about “enterprise and social networks”. But nothing “enterprise social networks”.

We have to admit that, outside of a circle of initiated people, social networks are seen as an entertaining tool, sometimes as a tool for marketing and communication. This article from French newspaper speaks for itself. It says that CHROs get social networks better and better. And what do they say to illustrate their thoughts ? Recruitment, employer brand, image and general public social networks. And yet HR should have many things to say on the potential (and risks) of internal social networks….

ESNs are far from having “killed their father” (Facebook…even if many ESN solutions were already existing when FB became mainstream and open to all).

Ok, anyone who talks with “real people” out of the echo chamber already knows that. But knowing the causes to deal with the issue more efficiently can be worth.

[Read more...]

Optimizing the value of time

Summary : time measurement is a permanent concern for any organization because it’s tightly connected to productivity : the less time needed to perform a task the more productivity and, so, the less costs. That’s not sure at all in the knowledge economy where time and value are loosely tied. If time measurement is not a relevant indicator anymore, the focus has to be put on created value and not necessarily by increasing work intensity which is not key for knowledge worker but rather by working smarter.It will need, among other, to push information depending on its relevance in a given context and a better information sharing, what is the “informational” version of economies of scale.

 

How many times did we hear, while asking employees to change anything in the way they work and collaborate, comments like “we don’t have time” or, from their managers, “how much time will it take to them ? I don’t want them to waste their time”.

The reason ? Time is easy to measure and, once done, costs are easy to infer. In fact…it’s not that easy. What was true decades ago isn’t anymore. While the nature of work is evolving and people have to perform many tasks in parallel, trying to know how much time was needed for each of them is counter productive. What I often explain by “it never takes a lot of time but it takes time often”. While we’re being asked more and more to collaborate, be available to help others, all these activities are seldom taken into account. The consequence is that the role of a given person in getting a result often remains unknown but, even worse, that this person may be blamed for collaborating or helping others.

So, even if we keep up measuring time because we haven’t found another better right now, it’s now obvious that it’s not a relevant indicator to measure the performance of a person, a team or the whole organization.

Let’s also add that if time is not relevant anymore to track costs, it’s not relevant either to track value creation because it’s not proportional with time anymore. In the knowledge economy a lot of value can be created in 10 minutes by solving a problem or having an idea while days can be spent to do something that’s key in a global project but has few value per se.

Recently talking about organizations that want to move away from email to other tools, I heard :

- “they say employees are spending too much time in emails”

- “And they think they’ll spend less time in social networks ?”

That’s true. On the other hand, if the amount of time spent remains the same and, so, its cost don’t decrease, its value can be increased. Like it’s often said, an information send by email is only accessible by its receivers, if shared it becomes a part of the informational capital of the organization, can be reused and make other people save time. An information may be sent to someone who don’t need it while someone else may need it to perform a valuable task.

So, the question is not time measurement but how to optimize its value.

Some ideas ?

• Make people focus on what create value. Making a decision relying on information creates value while searching information to make a decision is a waste of time. It can be made possible by “analytics” that will suggest relevant content and people as well as robots based on “Watson-like” technologies. By the way, it’s impressive to see how many organizations say they have a sharing problem while, before all, they have a search problem.

• Multiply the value of time by making what’s been produced reusable. It will need sharing mechanisms “in the flow of work” as well as generalized capitalization practices.

• To be completed with you own ideas…