On September 16, I will join the IBM Lotus team in an event in New York City - Reinventing Relationships. The event will explore how the Web, collaboration and social software "will transform - actually reinvent - how organizations relate to their customers, partners, employees and citizens through more compelling experiences.”
Once upon a time, new technologies were first deployed in large institutions - enterprises, universities and research labs, the military and civilian government agencies, - from which they eventually trickled down to the rest of the economy as their prices and complexity dropped. Forty years ago, for example, the computer industry consisted primarily of expensive mainframes and supercomputers that only larger institutions could afford to buy and operate.
But, this trickle-down approach to technology diffusion dramatically reversed itself with the advent of inexpensive technologies, especially digital technologies. As a result of the incredible advances in digital components and personal computing over the past thirty years, many new innovations are first emerging in consumer markets and among communities of experimental users, from which they eventually trickle-up into the worlds of business and government applications. Besides personal computing, we have seen such consumer and user-driven innovations in cellular and smartphones, game players, Linux, and perhaps most prominently, with all kinds of innovations around the Internet and World Wide Web.
As an enterprise-oriented company, IBM focuses primarily on the requirements of its business, government and other institutional clients. IBM is not a consumer oriented company, especially since it sold its personal computer business to Lenovo in 2004. But, following the trickle-up trend in the industry, a number of IBM’s most innovative enterprise initiatives over the past twenty years have been based on consumer and user-driven technologies.
When we started IBM’s Internet Division in December of 1995, many exciting new applications were already being developed for the then nascent Web, but it was not clear at all what the implications would be to companies other than new dot com ventures. A big part of our job was to figure out how our large customer base could leverage the Internet for business value. Quite a few people were claiming that in the new economy of the Internet, born-to-the-Web startups had an inherent advantage over existing companies, which would have a hard time competing and were therefore headed for extinction.
After carefully analyzing what was going on in the marketplace and working closely with many customers around the world, we came up with our e-business strategy. Every business, we were convinced, would benefit from embracing the universal reach and connectivity of the Internet, not just startups. We strongly believed that the brand reputation, customer base and IT infrastructure that businesses had built over the years were even greater assets when properly combined with the new capabilities offered by the Internet.
Social networking is among today’s hottest new technologies and applications. Facebook, which was only started in 2004, already has over 500 million active users. The number and variety of social networking sites keeps growing by the day. Like the dot com applications of the late 1990s, some are very innovative and will likely be successful and others are harder to appreciate and seem built on dubious business models. The vast majority are in the consumer space.
Once more, we need to figure out how to best bring these innovations from the consumer to the business world. This time around, few are suggesting that social networking is ushering a new economy that only applies to new ventures and will inexorably leave existing companies behind. Most everyone agrees that all companies can benefit from embracing social networking innovations, even though we may not have yet figured out how to properly do so.
Social networking applications are not new to business. Most such applications fall into three main categories: external relationships with customers and brand influences; internal relationships with employees and partners; and societal relationships with citizens and communities. Many companies and government agencies already have a variety of applications in each of these categories, but much remains to be done.
We are still in the early days of learning how to best translate our new collaborative technologies and applications into more effective business and societal relationships. The issue is not technology, even though social technologies are still relatively new. The key issue is organizational capital, that is, the management practices and cultural adjustments needed to enable the organization to deploy and take advantage of these new capabilities.
Until the mid-1990s, the rapid growth in the use of computers in business was not reflected in increased labor productivity. This gave rise to the Solow productivity paradox in reference to Nobel prize winning economist Robert Solow’s 1987 quip: “You can see the computer age everywhere but in the productivity statistics.”
But, in the last fifteen years, there has been a surge in productivity, which economists generally attribute to the continuing advances and wide use of information technologies. As MIT’s Erik Brynjolfsson explained in a recent book he co-authored:
“The companies with the highest returns on their technology investments did more than just buy technology; they invested in organizational capital to become digital organizations. Productivity studies at both the firm level and the establishment (or plant) level during the period 1995-2008 reveal that the firms that saw high returns on their technology investments were the same firms that adopted certain productivity-enhancing business practices.”
Companies had to learn that it was not enough to deploy IT to automate existing processes. Organizations had to fundamentally rethink their operations and redesign the flow of work in their companies, which finally started to happen in the early 1990s with the adoption of business process reengineering and similar initiatives. Over the last fifteen years, many organizations have effectively rewired their process and information flows.
Social networking is now giving us the capabilities to leverage digital technologies to help us address the people intensive, services oriented tasks of the organization, that is, its relationships with clients, employees, partners and citizens. Such front-end relationships are not nearly as well understood as the back-end processes where we have made significant progress over the past twenty years.
In addition, the design objectives are quite different. Quality and efficiency are the key measurements we generally use for back-end tasks, but they are not sufficient when people are involved. In addition to efficiency and quality, a major design objective for relationship-based applications must be to achieve positive outcomes and experiences for customers, employees and everyone involved.
Many challenges lie ahead. For example, in a study conducted last year by Forrester Research, Ted Schadler found that in spite of all the advanced social networking technologies we now have, they still have not been widely adopted within companies. This is a problem, particularly for younger workers who are using social media technologies outside of work. The Forrester study found that sixty percent of workers younger than 43 use social networking at home, but less than one quarter of them - 13% - also use such technologies at work.
Ted is co-author of a book being published this month, - Empowered: Unleash your Employees, Energize your Customers and Transform your Business, - which includes many of the findings from the Forrester study. He will participate in the September 16 event.
As is generally the case with early stage disruptive technologies, many institutions don’t know what to make of them. They are suspicious that these social media technologies might be fine for consumers, but not for business and serious applications. They are in the process of learning and developing the needed organizational capital. Leveraging social networking to restructure, rewire and reinvent business and societal relationships is likely to be one of the most promising innovation areas over the next decade.
When we started IBM’s Internet Division in December of 1995, many exciting new applications were already being developed for the then nascent Web, but it was not clear at all what the implications would be to companies other than new dot com ventures. A big part of our job was to figure out how our large customer base could leverage the Internet for business value. Quite a few people were claiming that in the new economy of the Internet, born-to-the-Web startups had an inherent advantage over existing companies, which would have a hard time competing and were therefore headed for extinction.
After carefully analyzing what was going on in the marketplace and working closely with many customers around the world, we came up with our e-business strategy. Every business, we were convinced, would benefit from embracing the universal reach and connectivity of the Internet, not just startups. We strongly believed that the brand reputation, customer base and IT infrastructure that businesses had built over the years were even greater assets when properly combined with the new capabilities offered by the Internet.
Social networking is among today’s hottest new technologies and applications. Facebook, which was only started in 2004, already has over 500 million active users. The number and variety of social networking sites keeps growing by the day. Like the dot com applications of the late 1990s, some are very innovative and will likely be successful and others are harder to appreciate and seem built on dubious business models. The vast majority are in the consumer space.
Once more, we need to figure out how to best bring these innovations from the consumer to the business world. This time around, few are suggesting that social networking is ushering a new economy that only applies to new ventures and will inexorably leave existing companies behind. Most everyone agrees that all companies can benefit from embracing social networking innovations, even though we may not have yet figured out how to properly do so.
Social networking applications are not new to business. Most such applications fall into three main categories: external relationships with customers and brand influences; internal relationships with employees and partners; and societal relationships with citizens and communities. Many companies and government agencies already have a variety of applications in each of these categories, but much remains to be done.
We are still in the early days of learning how to best translate our new collaborative technologies and applications into more effective business and societal relationships. The issue is not technology, even though social technologies are still relatively new. The key issue is organizational capital, that is, the management practices and cultural adjustments needed to enable the organization to deploy and take advantage of these new capabilities.
Until the mid-1990s, the rapid growth in the use of computers in business was not reflected in increased labor productivity. This gave rise to the Solow productivity paradox in reference to Nobel prize winning economist Robert Solow’s 1987 quip: “You can see the computer age everywhere but in the productivity statistics.”
But, in the last fifteen years, there has been a surge in productivity, which economists generally attribute to the continuing advances and wide use of information technologies. As MIT’s Erik Brynjolfsson explained in a recent book he co-authored:
“The companies with the highest returns on their technology investments did more than just buy technology; they invested in organizational capital to become digital organizations. Productivity studies at both the firm level and the establishment (or plant) level during the period 1995-2008 reveal that the firms that saw high returns on their technology investments were the same firms that adopted certain productivity-enhancing business practices.”
Companies had to learn that it was not enough to deploy IT to automate existing processes. Organizations had to fundamentally rethink their operations and redesign the flow of work in their companies, which finally started to happen in the early 1990s with the adoption of business process reengineering and similar initiatives. Over the last fifteen years, many organizations have effectively rewired their process and information flows.
Social networking is now giving us the capabilities to leverage digital technologies to help us address the people intensive, services oriented tasks of the organization, that is, its relationships with clients, employees, partners and citizens. Such front-end relationships are not nearly as well understood as the back-end processes where we have made significant progress over the past twenty years.
In addition, the design objectives are quite different. Quality and efficiency are the key measurements we generally use for back-end tasks, but they are not sufficient when people are involved. In addition to efficiency and quality, a major design objective for relationship-based applications must be to achieve positive outcomes and experiences for customers, employees and everyone involved.
Many challenges lie ahead. For example, in a study conducted last year by Forrester Research, Ted Schadler found that in spite of all the advanced social networking technologies we now have, they still have not been widely adopted within companies. This is a problem, particularly for younger workers who are using social media technologies outside of work. The Forrester study found that sixty percent of workers younger than 43 use social networking at home, but less than one quarter of them - 13% - also use such technologies at work.
Ted is co-author of a book being published this month, - Empowered: Unleash your Employees, Energize your Customers and Transform your Business, - which includes many of the findings from the Forrester study. He will participate in the September 16 event.
As is generally the case with early stage disruptive technologies, many institutions don’t know what to make of them. They are suspicious that these social media technologies might be fine for consumers, but not for business and serious applications. They are in the process of learning and developing the needed organizational capital. Leveraging social networking to restructure, rewire and reinvent business and societal relationships is likely to be one of the most promising innovation areas over the next decade.
There is nothing more thrilling than to see this vision take shape on such a magnificently grand scale. Having been on the empowerment soapbox for a few years now, the major obstacle companies face is cross-functional collaboration among leadership.
In my opinion, there needs to be clear direction and decisive action by the CEO commissioning a core team to include the CMO, CHRO, CIO, PR, Internal Communications, Analysts, Learning & Development and everyone (literally) in between.
Silos and misalignment are barriers across functions, business segments, locations, not to mention brands, that add significantly to issue of fear and confusion around deployment.
Control plays a big role here in terms which business area should have majority rule. Hence why the CEO must drive and continue to push a collaboration. However, many CHRO's will argue, and for good reason, that as a Human Capital initiative at the core, it should be under their umbrella.
On the flip side you have Marketing who faces steep challenges with the customer experience when the answer is in plain sight: employees. The HERO's as advocates, the entire organization as brand and the brand as a business strategy.
To your critical point in reference to Solow, productivity couldn't be measured the way he may have envisioned in 1987 however today, through the addition of behavioral management as part of the overall performance system, it can be measured.
None of this will be easy. Believe me, I know. But then again anything worth reinventing or fighting for never is.
All my best to the team for a creatively charged and abundantly productive meeting on Tuesday.
Charee
Posted by: Charee Klimek | September 11, 2010 at 02:38 AM
I'mm looking forwared to the September 16 event. See you there!
Posted by: Marjorie Madfis | September 14, 2010 at 11:11 AM
For the folks who are unable to see you live, they are more than welcome to check out the livestream at http://www.ibm.com/social/northstar on Septh 16th.
Regards,
Bilal Jaffery
Worldwide Social Media & Competitive Marketing Leader
IBM
http://www.bilal.ca
Posted by: Bilal Jaffery | September 14, 2010 at 12:59 PM
What worries me about social networking is that there is real business value to be had with face-to-face meetings.
The problem is working out where face-to-face meetings deliver the most value and where Web 2.0 contact does.
Posted by: Liam @ Product Creation | September 16, 2010 at 09:21 PM
I love this idea and agree with it almost completely.When it comes to business its always other peoples money, just some precaution on not to blow it all and making the smarts decisions.
and you and me all agree it,and I am working to buy some shoes in my website,welcome to see it,link my name firstly.
Posted by: Air Jordan Flight 9 | October 13, 2010 at 04:23 AM