Synergise IT

The Pareto principle (also known as the 80-20 rule) states that, for many events, 80% of the effects come from 20% of the causes. My academic friend asked me this earlier this week, if Pareto rule holds, therefore an Enterprise 2.0 investment (might cost hundreds of thousands to implement) might not be a good idea at all. If 80% of the content on an Enterprise 2.0 platform is contribute by only 20% of the employees then it defeats the purpose of enterprise wide collaboration and the benefits of Enterprise 2.0 would not be achieved. Theoretically he is right.

However, from my experience of implementing Enteprise 2.0, if the organisation creates a purpose for people to use the Enterprise 2.0 platform for their daily work and team collaboration across geographic boundaries then the uptake would be extremely different. Lets face it, most people do not like to work and they are at work to make money. So for people to adopt something new and move out of their comfort zone to use Enterprise 2.0 technologies, it must first be directly beneficial to their work and make their life easier on an individual basis.

Whenever I speak to newbies about Enterprise 2.0, alot of questions arises. Some are genuine concerns and some are Norman-ish questions. However, when a real life example is provided and I illustrate how Enterprise 2.0 can help them and make their life easier, they become converts straight away. Within hours, they get onto the platform and never looked back and so far I can see that contribution volume is based on the amount of work they were assigned to complete and not the 80-20 rule.

From the above, I can safely say that The Pareto Principle doesn’t apply. I will continue to look more into this and monitor the long term results. There might be chance that Pareto principle might hold in the long run.

Previously, I conducted an experiment and it didn’t work out very well. I have since started another experiment at the request of a close friend.

Let me tell you abit more about this. I wanted to increase collaboration among two different teams across two geographical locations. It is not possible for these teams to have regular face to face meetings and they are both working on the same thing.

So I encouraged everyone on the team to get onto a Wiki, pre-populated the Wiki with some important information and structure. When the team first logon, they commented they wanted this and that and I accomodated the requests accordingly. As 90% of the team has never contributed to the Wiki before, I spent 10 mins explaining to concept of the Wiki and “best practices” to them. I did not enforce any rules on the wiki and let them do whatever they wanted.

The outcome was the total opposite of what happened previously. Everyone started playing with it first and one senior staff said “its easier than I thought”. Within a day, everyone on the team was contributing their part of the puzzle to the Wiki. What I found was that different people used it differently. Some was commenting alot, some were uploading their completed Word files to the wiki and using it as a document repository, some were afraid of commenting on the wiki and sent comments via email. I must say these are not best practices for sure. However, I am not too bothered - at these they are using it.

I was invited to re-educated them again. I reiterated the same story I told them on the first meeting and more questions arose (mainly conceptual and technical questions). Most of them were much more attentive and the meeting was more interactive as well. They were hooked for sure. Its been a while now and EVERYONE loves it. I get emails of satisfaction for implementing this for them.

Just for everyone’s curiosity, 1/2 the team were baby boomers! This time round, I got the technology right as well!

Competitive advantage was coined by Michael Porter where he proposed that businesses are exposed to five competitive forces – threat of new entrants, rivalry between existing firms, pressures from substitute products, bargaining power of buyers and bargaining power of suppliers. Porter also devised three strategies that can combat the forces from the environment and they are – differentiation of products and services, cost reduction and focus on a particular market segment.

While there are many ways in which organisations can pursue to achieve competitive advantage, it would be futile if other organisations can replicate the same method used quickly. However, with technological advancement, competitive advantage can be replicated quickly and the first mover advantage gap is being decreased greatly. Therefore in order for an organisation to enjoy sustainable competitive advantage, it needs to continually be the first mover over a period of time. Let’s take Google as a case study.

Google has been a very innovative company with their main line of business developing search technology. Over the past few years, Google has expanded their business to many parts of the internet which ranges from desktop search engine, email services, satellite imaging, online translation, blogs, online shopping, e-books, scholarly search and many more. While many of these applications doesn’t bring in much revenue, the collection of innovative and useful products and services has attracted many more people to use it search services thus providing excellent advertising revenue.

So how can Enterprise 2.0 provide sustainable competitive advantage for organisations? If an organisation is highly adaptive to the environment and is capable of exploiting opportunities on a continuous basis then it would be able to achieve some level of sustainable competitive advantage . This can be achieved through continuous learning, experimenting and effective communication and Enterprise 2.0 provides a platform to do this. However, it doesn’t mean an organisation has the platform they would achieve sustainable competitive advantage. There must be a conducive culture, social strategy and eager employees within an organisation to effectively identify any opportunities.

Enterprise 2.0 can help to capture, store and manage the implicit and explicit knowledge within an organisation and this is highly important for larger organisations. Enterprise 2.0 can help to retain the vast amount of knowledge within the organisation. The advantage of Enterprise 2.0 over Knowledge management systems is its ability to connect people from around the organisation and effectively use employees brain power.

I would like to conclude by saying that Enterprise 2.0 does not provide an organisation sustainable competitive advantage but is an excellent enabler for organisations to identify any potential opportunities to gain competitive advantage - constantly.

Co-creation, peer production or open innovation, whatever you call it, its pretty much the same thing - Getting your customers and community to provide feedback and spend time exploring and innovating new/existing products/services for your benefit.

McKinsey & Company released a new paper on The next step in open innovation and it talks about co-creation, how organisations can win from it, what are the hurdles and discussed about many case studies like Lego, Boeing, Threadless and Peugeot.

There are three ways to win with co-creation according to McKinsey
1) Capturing value from the co-create product - Well, Lego reap much benefits by talking to and understanding their die-hard fans. Watch this video.

2) Capture value by providing complementary product or service - Red Hat sells technology services to uses of Linux. IBM also invested a substantial amount of money and time in the open source community (Linux) and installs its software on their servers and sell it as a package.

3) Benefit indirectly from the co-creation process, for example, through an enhanced brand or strategic position. McKinsey did not give any example on this but I believe this is more from the marketing perspective where people start playing around with your product and learn more about it, the brand image becomes better(??) Do I make sense here?

There are hurdles as well according to McKinsey.
1) Attracting and motivating co-creators. This is simple - you need to squeeze time out of the right people to contribute to your organisation for free or for a small price/incentive.

2) Structuring the problems for participation. I totally believe that for co-creation to happen, a big problem must be broken down into bite size portions and people can take one portion each and explore/innovate on it.

3) Governance mechanisms to facilitate co-creation - well we have rules and guidelines in almost all aspects of life. Co-creation shall be the same.

4) Maintaining quality - There are two ways to look at quality within an open environment. a) the team is only as strong as its weakest link or b) look at the quality of Linux and Wikipedia when the critical mass is achieved. I believe for the success of an open innovation program, critical mass is absolutely important. Look at Marketocracy its almost a open source mutual fund and its Marketocracy Masters 100 Fund Received 5-Star rating from Morningstar in May 2008. That’s achievable by the 55,000 strong community they have.

Jay at e2oh wrote an excellent post on the need to engage Gen Y within the corporation. A good read.

I would like to extend his post and talk more about how to connect and attract the best Gen Y talents external to your organisation. Gen Y are people born in 1980 and onwards - this means that the oldest Gen Y employee is only 28 this year and heaps of younger Gen Y’s are entering the job market every year. So how can you connect the top talent in this pool? They approximately have less than 6 years work experience and many have none or just a couple of years.

So what does this pool of people need other than job satisfaction? I would say money. This pool of people are generally younger and with entry level corporate salary, it would be hard to maintain their alcohol, boyfriend/girlfriends, travel, shopping and everything else they want to buy. This pool of people also have something organisations want - their revolutionary ideas. So why not connect with the Gen Y’s through competition with cash rewards at specific professional societies, universities or clubs targeting the right pool of talents?

This has many advantages.
1) Helps an organisation identify the top talent through the deliverables they provide.
2) gain new ideas and solutions to your problems.
3) Through connection to your organisation, even if they are not interested in changing jobs, they would be able to promote your organisation through the word of mouth to their massive network of friends.
4) Offer them cash in return for them to follow your organisation on Twitter, Facebook and keep them updated with the latest development and build your organisation’s own little empire of talents without the salary and benefits package.

All these comes at a super small cost. For example, cash prize of $5000. What’s that sum of money to a large organisation? The benefits of doing this greatly outweighs the cost.

IBM recently conducted interviews with 1,130 business and public sector leaders worldwide in 45 countries and the end result was the IBM Global CEO Study. Assuming that IBM has conducted this research with the same level of academic rigor as universities, this study would be a world changing piece of finding.

The main outcome of this research is as following:

1) Hungry for change: The Enterprise of the Future is capable of changing quickly and successfully. Instead of merely responding to trends, it shapes and leads them. Market and industry shifts are a chance to move ahead of the competitions

2) Innovate Beyond Customer Imagination: The Enterprise of the Future surpasses the expectations of increasingly demanding customers. Deep collaborative relationships allow it to surprise customers with innovations that make both its customers and its own business more successful.

3) Globally Integrated: The Enterprise of the Future is integrating to take advantage of today’s global economy. Its business is strategically designed to access the best capabilities, knowledge and assets from wherever they reside in the world and apply them wherever required in the world.

4) Disruptive by Nature: The Enterprise of the Future radically challenges its business model, disrupting the basis of competition. It shifts the value proposition, overturns traditional delivery approaches and, as soon as opportunities arise, reinvents itself and its entire industry.

5) Genuine, Not Just Generous: The Enterprise of the Future goes beyond philanthropy and compliance and reflects genuine concern for society in all actions and decisions

Enterprise 2.0 concepts fits right in the middle of the results of this report. Disruptive by Nature, Globally Integrated and Innovate Beyond Customer Imagination is the outcome of extensive collaboration, communication, sharing and collective intelligence executed internally and externally of the organisation.

Clearly this is a idealistic outcome of collaboration and enterprise social networking. To get to this point, there is alot to be changed.

1) Perception of organisation within organisations.
2) Flattening of organisation hierarchy
3) Increase organisational transparency
4) Release of control from senior management
5) Adoption of collaborative and social networking tools
6) Move away from emails to collaborative tools
7) Trusting a stranger over the internet
8 ) and many many more…

Personally, I do not think this will happen too quickly as such changes involves the entire organisation and many organisations have their own political walls and wars to get through before such ideas can even be approved to be implemented. However, I can say that things are looking good. =)

With globalisation of companies and more employees traveling around more often, Enterprise 2.0 and its social collaborative applications surely help keep everyone connect and up-to-date with latest news, team members, documents and almost everything that matters (corporate applications) and thats online. All that is required is a laptop and internet connection. Nothing quite wrong with this in some industries like consulting or IT where computing power is important (alot of generalisation here!).

However, for some sales people in various industries, they use alot of hand held devices like Palm or BlackBerry and do need to access corporate applications to get their daily work done faster, more accurate and more responsive to growing customer demands. Gone where days where an insurance agent can say, “let me work out the sums and get back to you in three days”. Customers want in now and want it right.

We are living in a world where we want information on demand. Corporate applications must be able to deliver all the desktop applications to your little phone and conduct transactions securely, quickly and accurately. I do foresee the future of enterprise 2.0 to move towards mobile computing. Maybe in future, there might be a new term called social mobile computing? Or should it be called Mobile social computing??

I have been thinking about this question for a long time and I have somewhat came out with an answer.

Critical mass is important for enterprise 2.0 as it can help pool in ideas/information from around the company (across departments, locations and cross hierarchy). Ultimately, collaboration techniques and social media is probably the best way to connect everyone up and provide a platform for employees to input information that is related to them. So to answer the question if critical mass is important for the success of Enterprise 2.0, let me give you a small scenario. A company of roughly 20 employees sitting in the same office. Simple enough.

Let’s assume if the company has something like Jive’s Clearspace. Its a Enterprise collaboration software and social media platform. It features some of the most exciting tools organisations are looking for like rich profiles, document management, Wikis, discussions and project management. I feel that Clearspace is a good tool to use to analyse this question that I am discussing here.

Lets look at each of the feature with regards to the short scenario above.

1) If everyone is sitting in the same office, rich profiles would not really matter as everyone would know everyone and they would probably have small talks and catchups over coffee or something like that. Human interaction is normally preferred over internet communication - at least its more personal. Online discussions is an additional channel for the 20 employees to discuss work. How that would work out would really depend on the culture and environment of the company.

2) Document management, project management tools and wikis - these tools are important for any organisation. It helps you locate, manage and store information.

From the above, it seems apparent to me that a software like ClearSpace would help a small organisation to manage their operations better through a single collaborative platform. However, the social aspects of enterprise 2.0 would probably not work so well due to the close proximity of the employees.

I can then conclude saying this. A single collaborative software would be helpful whether the company is big or small , but social media/networking would require critical mass to achieve its benefits. (edited Monday morning) Critical mass is important no matter how you look at it. Everyone should be using it or contributing to it for Enterprise2.0 to be successful. If no one uses the collaborative software, it becomes just a pile of code doing nothing. If people do not contribute to the Wiki or upload files to the document manager, it becomes useless. The more people who are actively using it, the more successful Enterprise 2.0 would be for the organisation.

Please leave your comments if you have any. I would love to discuss more about this.

Blue Ocean Strategy talks about creating brand new markets and making your competitors irrelevant. I think its a great concept and surely doable. However, doesn’t mean that you buy the book, read it and process it, you would be able to come out with a great strategy that will make competitors irrelevant and make heaps of money. Its just not that simple.

While your organisation is working on that, Enterprise 2.0 can help pool together all the tacit knowledge held within your organisation and get people together to collaboratively work on a strategy. Many strategies were created within boardrooms with senior executives using their perceived perception of the company’s operations to formulate a strategy. However, with senior executives being far from the actual front line, they might be out of touch with the reality of the company.

Enterprise 2.0 can capture this tacit knowledge through wikis, blogs and funky tools - the best part of it all, you can search for it. It can also provide a platform that allows a bi-directional communication that allows some employees to provide feedback on the strategy thus ironing out any loose ends.

Having said all these, the culture of the company plays a key role in the success of this and Enterprise 2.0 experts must be hired to provide the implementation strategy, change management advisory, provide education to employees and evangelise the power of Enterprise 2.0.

A collaborative, supportive and transparent organisation can help provide that competitive advantage many organisations have seek for.

While the world is talking about how to implement Enterprise 2.0 and how to get there, there are many organisations have relatively stable Enterprise 2.0 systems in place. However, alot of these applications have been created on an ad-hoc basis and generally via a bottom up approach. Tech savvy employees have the capability to introduce such systems within a relatively short amount of time and its sprouting all across the organisation.

I have seen in one organisation, there are multiple wikis and blog platforms running and the worst thing is that the technologies used are all different. It ranges from MediaWiki, WordPress MU, Confluence and Mindtouch. With such disparate knowledge repositories around, the organisation is not achieving the expected benefits outside of the teams using it. With the walls of the organisation coming down with Enterprise 2.0, having multiple repositories is not a good thing. In one extreme case, there was multiple document managers running and some employees are asked to upload/update their work in at least three different of such systems! That is an absolute waste of time, money and effort.

Enterprise 2.0 applications like wiki, document managers, social networking platform and document collaboration platforms are only good in an organisation if everyone is accessing one place for all their transactions. What an organisation wants is for everyone to contribute to one knowledge marketplace and transact on one platform. After all, one of the aims of Enterprise 2.0 is to get employees out of their only little team silos and work as an organisation towards a common goal.

With much of Enterprise 2.0 coming from the bottom up approach, the senior management must now recognise that Enterprise 2.0 is a upcoming suite of applications entering via their backdoor. Its either they let it be and in future spend hundreds of thousands to consolidate and migrate all these knowledge into one place and suffer some levels of mutiny from employees who are passionate about their own individual platform or get it right early and once and for all and save the hassle in future.