Transforming the Enterprise As We Know It

As I was reading David F. Carr’s latest piece on The Brainyard today, it drove home again for me some of the practically insurmountable challenges that many organizations have in avoiding the growing forces of digital disruption. David’s piece talked about Don Tapscott‘s proposition that we have to fundamentally remake the way our organizations engage with the world and produce useful work. The very-near future of business consists of new methods that are effective in today’s world, not for the era they were created in:

“When most people think of Enterprise 2.0, they think of the use of collaborative tools,” Tapscott said. “I’m arguing that something much bigger is happening than the application collaborative tools within the enterprise–it’s a profound transformation of the enterprise as we know it.” Basic principles of organization that have been established over the last 100 years are being upended, leading to “huge changes in how we orchestrate capabilities to create goods and services,” Tapscott said.

Like Tapscott, I’ve long been a proponent, along with thought leaders like John Hagel, that there’s a deep and profound Big Shift taking place as we get deeper into the 21st century. To survive, we must think in deeply networked, decentralized terms now, not in the rapidly receding business concepts of an age bygone. This means platforms instead of products, ecosystems instead of businesses, peer production instead of central production, and networks instead of hierarchies, to name just a few of the more significant aspects of the shift.

Emergent Business Processes and Enterprise Transformation: CoIT and Social Business Implications of the Big Shift

But how can traditional organizations get there? Web companies have a hard enough time getting there themselves, as digital natives. Most of them certainly don’t become the next Amazon or Facebook, two companies that virtually embody much of the changes taking place. Instead, I see many traditional firms engaging in the cargo cult mentality, hoping that by adding window dressing like social media, a few APIs, and perhaps some user-generated content, that they too will suddenly have a healthy, sustainable future.

Well, it’s not going to happen that way. The changes required are deep and sometimes painful. In fact, the more I examine the issue, successful transformation to a new mode of existence that naturally avoids the disruption inherent in these shifts boils down to a surprisingly few number of key changes. But those changes, though not generally that complex in and of themselves, are almost impossible to drive deeply into many organizations by virtue of their existing structures and processes. As they say, culture eats strategy for lunch.

Many of you know that I’ve been exploring how to foster social business approaches in large organizations for a number of years. When I see successes, they seem to have much in common with what made things like social media so successful. Yes, that’s network effects but also, and more to the point, about enabling an environment where emergent change can actually take root and thrive. A network effect can’t take hold if everything about the traditional way a business operates is to lock everything down into fixed transactional processes. That just doesn’t work in a fast changing new era where the value is in sustaining dynamic relationships and not fixed transactions.

As JP Rangaswami recenty wrote, it’s now all about “The capacity to change. Designed as an integral function. Native.

How then can businesses “fundamentally remake” themselves? What critical changes are at the heart of moving from regular business to things like social business? I’ve been exploring the answers to that question recently in quite some detail, but I’d start with these three things:

  • Local autonomy. Effective, resilient response to business change can’t only be driven by top-down, hierachies. It’s far too slow, low in innovation, and far from problems on the ground. Restructure the organization so that change along the edge is not only possible, but well-resourced, common, and effective.
  • Freeform collaboration. Going beyond Enterprise 2.0 to reinventing the way business models scale and provide value. I’ve previously written about the orders of magnitude cost reductions that are possible and the things they enable, plus how to get there.
  • A culture of experimentation. Of the three, this is the hardest. The first two are different; it’s always possible to create a startup culture at the edge of organizations and it’s also possible to drive mass collaboration. We increasingly see it done all the time in large companies, though it takes time to really establish itself in a transformational way. But to get an organization to be fundamentally more accepting of innovation is very difficult to instill when it does not already exist. Some of it is a skill problem, but a lot of it is more systemic. Solving this is going to be one of the great generational challenges of the social business era.

There’s a lot to consider when undergoing the large-scale transformations that businesses must undertake today, but a focus on these core issue will go way towards getting started.

6 Responses to Transforming the Enterprise As We Know It

  1. Nice piece, thanks.

    Collaboration is a worthy aspiration and one which we might expect as achievable. However, I am sure we have all encountered enterprises where external collaboration initiatives quickly founder upon the millstones of weak internal collaboration, within the prospective collaborators themselves.

    • Yes, Colin, I agree. I’d just add the nuance that weak internal collaboration can come in two forms: Those who are just not good at it, for which collaborative skill building and other education can help, and those who feel that collaboration might not help them personally (that is gives away their information power, helps another competitive fiefdom, etc.) For that, the much harder culture change element comes to the forefront, with incentives and motivations to collaborate better and other methods.

  2. Pingback: Internal collaboration quality is external partnership key | TroubleShooter

  3. Dion-

    As always, a great summary. I would elaborate and say there is another side to this social business coin, one requiring changes in the traditional elements of how we work within the enterprise.

    Specifically, based on our work in this space, leadership must change to help create a collaborative environment. The way we do both day-to-day tasks and strategic projects must also change- defining a new way of accomplishing the short-term and longer-term work of the corporation. Further, we represent the way we collaborate through three dimensions: the guidance we receive, our routines, and our interactions… all requiring change from traditional norms of participation.

    We believe these changes are best accomplished through an evolutionary approach, a blended mix of traditional and community-based structure inside the enterprise. And of course, supporting all of this change is the social platform.

    Supporting some of the statements of change you mentioned above, Professor Gary Hamel has been advocating for management innovation- believing the s-curve of industrial-age management has plateaued. Driven by the change in the work to be accomplished (as you have pointed out in some of your recent writings), we have passed the inflection point where knowledge workers now lead industrial workers as the majority of the workforce in America.

    • Tom,

      Great comments and I agree that some organizations will do better with evolutionary change, while others, especially in industries being disrupted now, simply can’t wait. I saw a great quote go by in Twitter about this yesterday:

      “Every organization must be prepared to abandon everything it does to survive in the future.” ~ Peter Drucker

      This post was addressed more at this audience, than the ones that can afford a more controlled and leisurely transformation to the 21st century methods of business. Apply the best approach to the situation is my recommendation. I do agree, however, that a blended mix of traditional and community-based structure is a strong and effective default position.

  4. genxrecon says:

    I am only 3+ months into researching the social media (SM) space. As an engineer by trade, I would classify myself as a tough critic, some would even say cynic. That said, the more I read and learn through forced immersion, the more connections I seem to find between so many of the hurdles we face in business, and the solutions SM can offer.

    I have wondered where the next innovation storm would come from to spur North American growth. If we can fix our minds and let go of our paradigms, Ent 2.0 could be the next “industrial revolution” to reinvent and reinvigorate our economy. Was a doubter… no so much any more.

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