Monthly Archives: July 2009

Today, the core challenge – and primary opportunity for value creation – is the utilization of complex knowledge formed through the contributions of many individuals and discrete events.

This requires creating a collaborative enterprise – an organization that is adept at bringing ideas and information together in new and useful ways.

The Twentieth Century business challenge was the mastery of scale and scope.

Organizations that mobilized productive effort at the best volume, cost and quality were the ones that dominated the economy.

To meet this challenge, organizations optimized around strong hierarchies and the division of responsibility.

Only top leaders were expected to worry about the overall goals, freeing workers to focus on performing the defined work. Strong units or “silos” formed, allowing each component skill to be developed to high levels of competency and providing excellent control through strict accountability. Frederick Taylor explicitly worked to remove knowledge from the daily production process and to center knowledge in a few managers and engineers. Value was maximized by making organizational behavior routine.

Over time, those value creation techniques themselves became routine – and lead to commodity models.

The skills remained necessary, but were not sufficient for success. For the past three decades, we have been slowly bringing knowledge back into our work:

• Encouraging production workers to think about improvements
• Encouraging sales people to take initiative and responsibility in dealing with customers
• Learning and continually improving processes and routines

Now, the dominant challenge is one of mobilizing intelligence, harnessing the smallest units of insight, and leveraging specialists.

Organizations must encourage people to invest their discretionary effort – to use their particular knowledge and capacities in ways that continuously contribute to the success of the whole:

Achieving more flexible ways of combining different forms of knowledge and expertise to come up with something better than any single function could achieve

• Tapping multiple experts to innovate faster
• Responding to the market and environment more fluidly and effectively

These activities require collaboration.

Today’s constantly-evolving Web 2.0 technologies offer substantial advantages as we work to meet these challenges. They:

• Bring people together and let them interact, without specifying how they should do so
• Cause patterns and structure to appear over time
• Offer significant improvements in generating, capturing, and sharing knowledge, letting people find helpful colleagues, tapping into new sources of innovation and expertise, and harnessing the “wisdom of crowds.”

My colleagues, in the research for Wikinomics, identified exciting examples of these new technologies in action creating new business models, including:

• Peer-to-Peer Production – Applying open source principles to create products made of bits – from operating systems to encyclopedias
• Open Platforms – Inviting participation of external partners to build new tools, leverage databases, or invent applications
• Ideagoras – Giving companies access to a global marketplace of ideas and uniquely qualified minds to extend their problem-solving capacity, and
• Prosumer Communities – Giving customers the tools they need to participate in value creation.

The examples in Wikinomics – many of them unique and compelling examples of new companies – illustrate what the science fiction writer William Gibson has said: “The future is already here—it’s just not evenly distributed.”

But the advantages of Web 2.0 are not confined to “new economy” companies, nor to those full of Gen Y workers.

The business use and resulting benefits of the new tools of collaboration are available to any organization – even the most traditionally hierarchical and siloed. As Andy McAfee writes in his upcoming book, Enterprise 2.0: New Collaborative Tools for Your Organization’s Toughest Challenges, due out this fall, “the story of how businesses use technology is about to become a lot more interesting.”

The key for all organizations is to reframe collaboration not as something to do in addition to other priorities – but as a fundamental way to address all business priorities. There is little on any corporate agenda today that will not benefit from mobilizing people with widely diverse skills and views to work together effectively. This capability is:

• The key to successful innovation – bringing ideas together that have never before been combined
• The core opportunity for re-thinking obsolete business models
• An essential element of employee engagement – creating commitment and stimulating discretionary effort
• A powerful tool for strengthening the customer experience and your brand presence
• New possibilities for continued efficiency through shared learning and new approaches.

Granted, shifting to collaboration can be difficult. Reshaping a hierarchical organization into a collaborative enterprise goes against the grain of five centuries of Western tradition. It requires that we move yet further away from cultures based on loyalty, reciprocated with protection and care, and that we give us the notion of individual autonomy. It will mean accepting performance-based arrangements and recognizing our mutual interdependence.

Collaboration asks individuals to step up to a higher and more complicated level of contribution than was necessary in a hierarchy. It challenges us to interact with peers in new and unfamiliar ways – negotiating directly rather than running to a boss for protection or arbitration; dealing with rich content that flows through infinite links.

But the business opportunity presented by collaboration is substantial, in part, because it is difficult. Mastering collaboration presents the opportunity for significant competitive advantage. Old approaches (scope, scale, cost), although always important, add little value. As technology enables a very different level of performance, smart competition will shift the playing field. This train is leaving the station.

As recently as six months ago, the question may have been how best to “manage collaborative technologies” – how to experiment with interesting new applications inside a traditional organizational design.

Today, the bar rising.

Today is about managing the enterprise collaboratively – solving business problems through collaboration – achieving business outcomes through collaboration.

Don’t get left standing on the platform.