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my reflection on the latest McK Global Institute Report on #socialeconomy #socialbusiness #socbiz #enterprise20 #e20

Preamble: The McKinsey Global Institute has just recently published “The social economy: Unlocking value and productivity through social technologies” [1]. This is my personal interpretation of some of their reported results. All exhibits are taken from the report without changes and with reference to the original source within the report. All other excerpts of the report are marked accordingly with a reference to the original source.

Summary: Enterprise 2.0 has become a pretty serious subject. More and and more substantial reports are published on the subject. The software market is starting to slowly consolidate (sometimes even with a bang) but additional ( not necessarily mind boggling) software solutions are still being launched. Looking at the latest McKinsey Global Institute report there are some interesting tendencies and evolutions in the subject. What still strikes me is the fact that most of the benefit is still expected to happen in more “classic” information work roles (sales, marketing, r&d). Even though the fact that social is a feature, not a product, is recognized (MGI, p.17) I am still missing reports how in particular process and workflow related work was successfully flavoured and boosted with the use of social components. Connecting people with the same (quantitative) goal still seems to me the most promising approach towards applying the social business mechanics. Here’s my interpretation…and I haven’t cut a long story short.

A little dent to the hype.

“What’s in for the business?” is probably the most discussed question in social business initiatives and it’s one of the most frequent question I get asked as well. I believe that the biggest business case will lie in the individual benefit for the users of “socialized” business IT (see also Thesis #1 in http://goo.gl/ExwBH (in German)). That the overall business contribution is important to justify substantial investments that will be able to compete with e.g. ERP budgets is however not disputable.

Looking at the following exhibit of the MGI report there is an interesting interpretation possible…

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(Source: MGI 2012, p. 28, Exhibit 11)

All except one categories show a decline from 2010 to 2011. My personal take on this is that since 2009 companies have been experimenting with social software and over time adapting solutions such as Yammer and Tibbr – rolling out the internal Facebook. In 2010 involvement and activity in social tools as well as the amount of captured knowledge surely counted as “measurable gains”. Simply because no company has measured the baseline on which actual performance contribution could be evaluated. In 2011 there seems to be some kind of realization that just capturing the stuff doesn’t cut it. That’s why the intensity of serious ROI is seriously increasing. We will be seeing much more serious evaluation of business KPI based gains, that’s for sure. For that in particular it would be valuable to look at industry work tasks that could be improved with a better glue between people and process.

If you ask me relevant KPI for measuring social business inspired operational performance could be

● Run time of collaborative work (e.g. project overruns)

● Resource cost (time/people)

● Documentation efforts

● Efficiency of subsequent process steps that are heavily reliant on the preceding steps

With regards to that the MGI report even elaborates on the current state most corporations are at with the use of social technology: "(…) Most companies have begun to use social technologies, but the vast majority use them in limited ways and thus derive limited value. According to a McKinsey survey, almost 80 percent of corporations that use social technologies are still "developing", meaning they are reporting a low level of benefits from their use of social technologies to interact with employees, customers, and business partners. (…)" [2]

That would actually add even more reasoning to the interpretation of Exhibit 11 (above).

Contribution of social features.

I really like the way MGI has set out the areas where ‘social’ can add value in corporations.

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(Source: MGI 2012, p. 8, Exhibit 3)

A lot of it has to do with “surfacing” and “matching” stuff (meant in a positive way). For my taste operations and distribution is the area where most of the quantitatively measurable gains would occur in the short term. This doesn’t mean that the other areas wouldn’t deliver measurable results. I simply believe that a substantial impact in cross-organizational and effectiveness oriented areas requires more time and in some parts even the so often emphasized organizational change. In operations and distribution particularly #3 could be even improved by replacing “distribute” by “connect” and “make transparent/trackable” and “easy to navigate”. I truly believe that a lot of work that is done with the help of ERP in the backend could be substantially improved by providing social glue between the formal elements of process based work and its protagonists.

Based on my experience one of the characteristics of social technologies would definitely be a huge leap forward: "(…) Social technologies enable new forms of content creation, distribution and consumption (…)" [3]. This isn’t just relevant and beneficial in knowledge work. Especially within processes as well as from the perspective of subsequent processes quality, transparency and completeness of documentation (and not just documents) is essential for the joint success.

Just to avoid confusion: I am not saying that in sales, product management, marketing etc. quantitative value wouldn’t be created. From an industrial perspective however, the real impact will lie within extending the concept of Kaizen [4] to the work that is attached to the actual production process (eg. the entire phase from selling to handing over complex industrial product specifications).

All three characteristics would contribute immense value in that context:

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(Source: MGI 2012, p. 16, Box 1)

Therefore I actually believe that the sector of industrial manufacturing should range higher in the following chart:

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(Source: MGI 2012, p. 10, Exhibit 4)

A new category: interaction work

It’s the first time that I explicitly read about interaction work categorized as “(…) employees whose work requires complex interactions with other people and independent judgment (…)[5]. With regards to quantitative benefits and measurable results this actually is a real good description of the area of information work in which socialized software could add substantial value.

The following illustration sets out the areas in which social technologies could raise productivity of information workers:

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(Source: MGI 2012, p. 47, Exhibit 20)

At the end of the day the illustration is describing information logistics and communications – probably the most challenging parts of e-mail and network folder based information work. The only thing I dare to doubt is the improvement in role specific tasks that do not qualify as communication, collaboration, information handling or e-mail management. Depending on the level of dependency of others (not collaboration in the sense of “co-creation”) this could be substantially higher.

RETRIEVAL is the magic word

(…) It is so early in the learning cycle about social technologies that there is not
yet a reliable instruction manual to tell large organizations how to use social technologies most effectively. However, we have seen enough evidence to
believe that the long-run potential does exist. Organizations that are moving
along this path have begun to experiment with new organizational processes, forms, and practices. We can point in the direction of some factors that can guide organizations’ experiments as they seek to capture this value over time.

The idea of communicating with colleagues across a company the way employees communicate with friends on Facebook is easily understood, but actually embedding the use of social technologies into day-to-day workflows is
 a considerable challenge. It is also easy to see how turning business messages into content that can be discovered and accessed by many people can make life easier for interaction workers, but making sure that the most relevant information is fed to people when they need it is a problem for which technology solutions will continue to improve. (…)[6].

Creating content and feeds of ideas, actions, comments, questions and other “stuff” is one thing. Making sure that people can be 100% certain that they won’t miss out on essentials is another (ref. to http://goo.gl/i7X4d; a related blog post on the subject). I agree that technological solutions will improve over time. However, I do not believe that we will be ever reaching the “everything on a silver plate” level of automation (ref. to http://goo.gl/H8gJ5; related blog article on pro-activeness and responsiblity). A lot of the – even in the MGI report so often emphasized – required cultural and operational change will have to do with the mind set change of employees. There will be a lot more means to be more effective, efficient and well informed. To achieve this will only partly have to do with technology. Employees have carry more responsibility for themselves as well as for others. Managers will have to support that development and create the formal framework in which performance evaluation has to incorporate collaborative elements as well as the ability to share (not just dump stuff into an activity feed) and retrieve (not just sit at a dashboard waiting for relevant stuff to pop up).

Facit

The social and commercial media inspired workplace and the related organizational, structural as well managerial change is a revolution. Things will never be the same and information work will be transformed into something that wouldn’t have been possible without the inspiration of commercial IT. If one has the chance to get involved with the subject: go for it! Following the evolution of available publications on enterprise 2.0, social business and social technology is mind boggling. It’s already obvious that we’re on off the plateau of the enterprise 2.0 hype – slowly but steadily. We shouldn’t make the mistake to completely suffocate the new potential by ROI, excel sheets and cries for KPIs. However, if the enterprise 2.0 enthusiast (I count myself to those) want to tap into the same budgets as the ERP folks we have to prove the value of the “new way of working”. We have to show how socially inspired business IT can change the day to day work and unleash incredible potential that lies hidden within large corporations.

It couldn’t be more exciting, could it?

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#ROI of going #enterprise20; quantification obsession is a killer; pls discuss #e20

Mckquaterly-web20payday

Today I am posting out of frustration 🙂 I've heard of a company that seems to be interested in approaching the enterprise 2.0 way of working. However, their first decision point is to calculate a business case (in this case an excel file) for the return on investment of the approach. Of course there is no progress in the project because no partner – not even the technology folks that are so keen on getting their licenses sold – were able to provide the quantified forecast of business contribution (side note: what company would share methodology or numbers on an internal evaluation in that field as a use case??).

Surprised?

I am not surprised. I am rather frustrated. Why hasn't it sunk in with all corporations that the ideology behind enterprise 2.0 (motivating employees to behave in the same agile, pro-active and networked way as they do it in social media) is obviously the key to unlock all the potential that lies within their best assets: their people and the intelectual property that's driving value creation.

Yes, yes, yes. Contribution IS measurable. Improvement of productivity and work efficiency CAN be quantified. Measuring sales acceleration and innovation speed (go to market) IS possible. Sure. I am only challenging the sense in spending hundreds of thousands of Euros in creating benchmarks, driving people nuts by analyzing their daily work and somehow raising the suspicion that there's something going on that might affect corporate headcount… Since I am quite close to the guys in our Customer Interaction business (contact centers) and their project around task work I am aware of the fact that there are methodologies and ways of measuring work place performance. When it comes to taks work and the key indicator of throughput I even agree that initiating projects requires some kind of quantified trigger. Information and knowledge work, where the main goal is to follow the (yaawn) old marketing rule of 1+1=3 shouldn't be approached in that way.

If you disagree of if you have a strong opinion here please(!!!) respond to this post by Twitter, commenting, DesireIT-Group or sending me an email to philipp.rosenthal (at) gmail.com. I am so keen on sparring my thinking with others that have experience in this field. And if you have experience in the actually conducing studies and evaluations in the information worker productivity and networked knowledge field: please share it with me :)) I am eager to learn!

Discuss with me online!!
Please submit some comments, ideas and thoughts at: http://goo.gl/8H6MZ – I am really really keen on getting more beef to the bone of ROI calculations!

Here some background information and source of my inspiration when it comes to my thinking around enterprise 2.0 and its add value:

Networked enterprise finds its payday (by McKinsey)
The graphic attached to this post was taken out of the article posted by McKinsey in December 2010. What I would really like to know if the respondents have actually (methodologically) measured the stated improvements or if a more qualitative study was conducted with employees to get their feedback on how they perceive and experience the change…

Six ways to make web 2.0 work (by McKinsey)

http://www.mckinseyquarterly.com/Six_ways_to_make_Web_20_work_2294

Even though I consider it pretty common sense I'd like to share  the 6 ways McKinsey has stated in their report that contribute to potential success of the transformation towards a web 2.0 inspired corporation: 

1. The transformation to a bottom-up culture needs help from the top.
2. The best uses come from users—but they require help to scale.
3. What’s in the workflow is what gets used.
4. Appeal to the participants’ egos and needs—not just their wallets.
5. The right solution comes from the right participants.
6. Balance the top-down and self-management of risk.
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#mckinsey on #information #overload and recovering #productivity; my take in #enterprise20 context

McKinsey has just published a very interesting article on the impact of multitasking and always-on on executive's productivity and focus (http://www.mckinseyquarterly.com/Recovering_from_information_overload_2735) in their Quarterly (awesome source!!). For me this phenomenon does not only apply to executives that get distracted from making key decisions and forward thinking. It also applies to the standard knowledge worker that is supposed to contribute 24/7 as he/she's equipped with smart phones, tablet PCs, mobile e-mail and information access.

Providing the social media inspired workplace won't be a solution

Even though I believe that the current use of e-mail in combination with the always-on approach is completely out-of-date and should be replaced by other means of communication and information exchange I am sure that the social media inspired workplace with RSS and activity feeds, likes and comments won't be the key to the solution. In my eyes the key to relieving information workers from this multitasking and doing-things-inbetween culture lies within a change of collaboration culture and a slight decrease in speed.

Yes, we all have to slow down a notch.

Because the most sophisticated workplace and concept for distributing information and connecting talent only takes away efficiency and motivation if the culture doesn't support the proper use. Just tink about it: where's the point in moving updates and one-to-many communication from e-mail to RSS feeds if the sender keeps expecting response and action within a 60 min time frame? Why would we share know-how and come together in virtual communities if it's considered to be dead and uninteresting because its followers don't share and interact in real time?

The more I think about it – and the past 8 weeks did provide me with enough time for thinking and digesting my past experience in the field of enterprise 2.0 – the more I come to the conclusion that one pillar of the cultural change must be: quality before quantity. Do less and do the things you do with excellence.

Now is the time to make excellence the new benchmark

For too many years throughput and "efficiency" in closing tasks (just getting sh** done) has led to a "ticked off – job done" culture. As soon as the response was out of the mailbox there was no point in further thinking about it. Of course thinking too much about it in the first place wasn't really part of the job either since sender or recipient did expect feedback/input in digital-age style: immediate.

Let's change the way we all work together, how we contribute and how we communicate. Do it slowly and so that everyone, not just the digital natives and nerds, can adapt to it. And let's introduce a culture where "consuming information when it's the right time" is really ment that way. Not in the sense of "when it's the right time for the sender" but more in a sense of "when it's the right time to concentrate on it, read it, digest it and contribute real add value".