June 5, 2010
enterprise 2.0

If I Were CEO, I’d Mandate Enterprise 2.0

The title doesn’t sound very 2.0-esque, now does it? It’s dripping with irony.

How can one ‘mandate’ something in a world whereby we’re striving to be flatter, more connected, less hierarchical and ostensibly more socially aware of our brethren?

If I were a CEO, I’d mandate Enterprise 2.0 tools, technologies and most importantly ‘culture’ across the organization as quickly as I could. Intrinsically, it’s the right thing to do. For those that are looking for a little more proof, I present to you three studies/surveys (of many) that can help one in their understanding of why Enterprise 2.0 is so critical for the organization.

One facet of Enterprise 2.0, of course, is social networks.

The theory has been, the larger your network, the easier your job can be in terms of access to intellect as well as personal productivity/performance and ultimately, organizational profit.

In 2009, the likes of Lynn Wu (IBM Research and MIT Sloan Management School), Ching-Yung Lin (IBM Watson Research Center) Sinan Aral (NYU Stern Business School and MIT Sloan Management School) and Erik Brynjolfsson (MIT Sloan Management School) produced a study entitled “Value of Social Network — A Large-Scale Analysis on Network Structure Impact to Financial Revenue of Information Technology Consultants” and set out to prove this hypothesis. In a nutshell, they prove the following:

  • Network size is positively correlated with performance
  • Each person in your address book at work is associated with $948 dollars in annual revenue
  • Betweenness is actually negatively correlated. (ie. being a bridge between a lot of people is not helpful, thus having diverse friends or networked colleagues is more helpful)
  • The number of people reachable in 3 steps is positively correlated with higher performance
  • Having too many strong links — the same set of people one communicates frequently is negatively correlated with performance. (ie. frequent communication to the same person may imply redundant information exchange)

In a comment to a blog post entitled “The Holy Trinity: Leadership Framework, Learning 2.0 & Enterprise 2.0“ I stated “Networks don’t need org charts, but org charts need networks”. The research points outlined above accurately correlates my comment.

Next up, is Enterprise 2.0 providing any other correlated benefits inside the organization? According to a Melcrum global study with over 2,000 participants gauging use and benefit of such tools as wikis, blogs, micro-blogging and collaboration in general, users responded as follows:

  • improved levels of employee engagement (21%)
  • better communication with remote workers (16%)
  • knowledge management and collaboration (25%)
  • improving employee feedback (20%)
  • making business leaders more visible and accessible (14%)

The grand-daddy example of all things collaboration has been Cisco, and in particular the transformation they’ve undertaken over many years, spearheaded by their prescient CEO, John Chambers. (watch this video clip for a small taste of his E2.0 & ‘cultivate and coordinate’ passion)

Taken directly from their report entitled “Creating a Collaborative Enterprise”:

Cisco saved US$691 million and increased productivity 4.9 percent in fiscal year 2008 by using collaboration and Web 2.0 technologies. The technology investments, which cost US$81 million to deploy, provided a 900 percent return on investment (ROI)

Cisco is not only fostering a collaborative culture across their organization, they are investing in it, rolling it out as quickly as they can, and ultimately improving productivity, performance and profitability.

As we begin to scratch the surface of Enterprise 2.0 in terms of showcasing correlated benefit (be it quantitative or qualitative) I’m certain Enterprise 2.0 concepts, technologies and the philosophy itself will gain further traction over time.

But, if I were CEO, I’d mandate it today in almost every facet of the organization that I was running, and live with the justified irony of the edict. I just wouldn’t wait to prove its benefit.

Sometimes, one has to trust that intuition trumps ROI. (despite ROI being proven above)

And if American spies are on the E2.0 bus, isn’t that enough proof to shift now?

Related link: “The Return on Collaboration: Assessing the Value of Today’s Collaboration Solutions” – study produced by Cisco.

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