Enterprise 2.0 & The Flywheel

We seem to have come full circle in our debate around the impact of culture on Enterprise 2.0. Couple of years back, Tom Davenport stirred up a hornet's nest with his "Why Enterprise 2.0 won't transform organizations" post. In that he said:

"The absence of participative technologies in the past is not the only reason that organizations and expertise are hierarchical. Enterprise 2.0 software and the Internet won't make organizational hierarchy and politics go away. They won't make the ideas of the front-line worker in corporations as influential as those of the CEO. Most of the barriers that prevent knowledge from flowing freely in organizations - power differentials, lack of trust, missing incentives, unsupportive cultures, and the general busyness of employees today - won't be addressed or substantially changed by technology alone. For a set of technologies to bring about such changes, they would have to be truly magical, and Enterprise 2.0 tools fall short of magic." [ Emphasis mine ]

More recently, Steve Radick wrote a meticulous post on how Enterprise 2.0 reflects the culture in an organization. He had a bunch of snippets from conversations in their Yammer network. He goes on to make a few recommendations : " Consider incentivizing employees to share information and collaborate with each other.  Make information sharing part of their annual review (my team reviews the employee’s contributions to our internal network during their annual assessment debrief).  Reward staff for taking risks."

And couple of days back, Gil Yehuda in his post on his experiences in the E2.0 conference in Boston says he is frustrated the "motherhood and apple-pie" lessons about E2.0 . He agrees that culture does play a key role and that the Enterprise 2.0 community needs to start working on this.

My triggering point for this post was a post by Peter Bergman in the Harvard Business blogs on the best way to change corporate culture. It is in many ways a recapitulation of fundamental issues organizations face on the cultural side. He says:  "Performance reviews and training programs define the firm's expectations. Financial reward systems reinforce them. Memos and communications highlight what's important. And senior leadership actions — promotions for people who toe the line and a dead end career for those who don't — emphasize the firm's priorities. In most organizations these elements develop unconsciously and organically to create a system that, while not always ideal, works."

What all of this really boils down is two things - human and social capital. Toyota in my view could be one such company - the robust and high performance knowledge sharing network they have built across their supply chain is a case in point. See research paper here .

Quoting from the paper:

"Toyota’s network has solved three fundamental dilemmas with regard to knowledge sharing by devising methods to (1) motivate members to participate and openly share valuable knowledge (while preventing undesirable spillovers to competitors), (2) prevent free riders, and (3) reduce the costs associated with finding and accessing different types of valuable knowledge. Toyota has done this by creating a strong network identity with rules for participation and entry into the network. Most importantly, production knowledge is viewed as the property of the network. Toyota’s highly interconnected, strong tie network has established a variety of institutionalized routines that facilitate multidirectional knowledge flows among suppliers."

Remember this was years before we even started speaking about Web 2.0. Inevitably, organizations that have invested in building human/social capital and a collaborative culture will stand to benefit the most from E2.0. Anecdote's whitepaper on "Building a Collaborative Workplace" neatly summarizes the essence of this :

"Of course technology plays an important role in effective collaboration. We are not anti-technology. Rather we want to help redress the balance and shift the emphasis from merely thinking about collaboration technology to thinking about collaboration skills, practices, technology and supporting culture. Technology makes things possible; people collaborating makes it happen."

And remember, this is hard work!! Building this work culture and ensuring that there is value alignment [ everyone believing in the lean philosophy in Toyota is an example] across multiple stakeholders are not easy. In Toyota's case, one of the challenges was to optimize the entire supply chain using lean principles and the supplier network in particular and the larger Toyota Production System in general played a key role in that. It seems to have taken a lot of hard work to build out these networks, evolve norms, align values and ensure that all of these rolled up to specific business objectives like the rapid diffusion of lean production techniques across the supply chain. Could Toyota have done this better with E2.0 technologies? Looks like it would have helped them accelerate this journey but then it would have been possible only because they had a strong cultural and business foundation.

The interesting inference I can make is this-At a more fundamental level organizations need to realize that Enterprise 2.0 is possibly a new lever to set the flywheel in motion and make it go faster - The principle of the flywheel is one of the analogies Jim Collins uses in his book "Good To Great". He speaks about a host of things that add up to set the flywheel in motion - Level 5 leadership, getting the right people on board, confronting brutal facts, the "Hedgehog" concept, a culture of discipline & technology as an accelerator.  Jim did not think of technology as a change agent but this could be changing - E2.0 and a Gen Y/X workforce could fundamentally challenge this notion IF organizations focus on the other levers as well.

Here is the bottom line as I see it : If yours is a great organization, E2.0 can help your flywheel go faster in the direction you want. If yours is a good organization, E2.0 can be one of the levers to help you set the flywheel in motion and eventually make it go faster. And this time around, technology holds a real good chance of being a change agent by enabling socio-technical ecosystems.

Comments

[Paula Thornton]

Here's why I disagree to some extent (never mind that anything from Davenport already carries a red flag for me). Clearly, I do not disagree with the relevance of culture. I have several pieces I'm working on now based on that topic. I'm even one who tries to downplay the significance of 2.0 technologies, but if designed and implemented in a critical 'sweet spot', E2.0 technologies are the means by which bad cultures (almost ALWAYS the result of poor leadership), can be threatened. Facilitating the means by which to make cultural 'bad behaviors' more transparent, is the great hope of E2.0.

Aligning the potential to generational attributes is tremendously flawed. Generational research has repeatedly been 'isolated' in it's assumptions -- too many people blindly buy into these distinctions. Have you seen one of them compare the various generations at the same age and do so on equal footing (e.g. just focus on the basics of their behaviors, not the artifacts by which the behaviors are expressed)? While there are some interesting things to consider in all of the research, the radical distinctions noted have to do with phase of life more than true generational distinctions. Why no one has challenged these researchers on such obvious biases is surprising to me.

[dinesh tantri]

Paula - I think the larger challenge is to ensure that E2.0 interventions [even if done in a cultural sweetspot] align with business strategy.Challenging hierarchy by itself is not an end. Poor leadership can still choose not to act on cultural bad behavior made transparent using E2.0 or social network analysis. Assume that SNA reveals that two business units that need to be speaking to each other more are not. This could be a symptom of a larger problem - the absence of a "T"shaped management could be one of them. And that I believe has nothing to do with technology per se. It is more than getting employees in the two business divisions to speak to each other.I believe the fundamentals have to be in place for E2.0 to really work - conscious investment in human/social capital - that could include interventions like getting rid of bonuses if it leads to territorialism in the sales force for example and alignment to business strategy.

[Rajendra Raja]

very very interesting piece. Admiration for extracting quotes and your own takes. Will keep on tracking us closely -rajendra raja