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.

10 Replies to “If I Were CEO, I’d Mandate Enterprise 2.0”

  1. Well this is a really nice peace of research! But what I struggle with is the calculation of the benefits and how it is done. I didn’t found a way to measure it without stumbling across intangibles like employee motivation or even cross-org collaboration. Carpenter made a really good approach aligned with the Maslow’s needs pyramid (http://www.cloudave.com/link/maslow-s-hierarchy-of-enterprise-2-0-roi). I also try to find a way how those dimensions of Enterprise 2.0 and Social Software can be measured or even put in a framework.
    What are your opinions about Social Software measurements and which methods do you know? Is it useful or just the old way to argue that you should measure the activities?

  2. @Ellen – thanks for dropping by and pointing out that Mr. Howlett had shared the link

    @Alrik – I believe that social interactions are going to become a very important measurement in the near future – I believe that formal, informal and social measurement criteria will morph, and that we will begin to see companies place value on both Learning 2.0 and Enterprise 2.0 output (connections, contributions, times you’ve helped, knowledge you’ve shared, postings, comments, skills, etc.)

  3. If I Were CEO, I’d Mandate Enterprise 2.0

    Networks are here to stay, hyperlinked information flows are here to stay, interconnected people are here to stay .. the future of the workplace is becoming increasingly clear. If I were a CEO, I’d mandate it too.

  4. MikeGotta 17:16
    @dpontefract @jonhusband we’re not going to agree here. “Mandating” use of E2.0 is the wrong context. It’s a “ready-fire-aim” approach.

    It depends on context:

    A manager could say we are going to broadcast announcements in a blog, and ask questions in a forum.
    This is in-the-flow and nothing extra but re-purposing.

    Mike Gotta calls this the Directed vs Volunteered

    Jordan Frank calls it Alpha vs Beta blogging

    If people continue using email, then copy and paste it till they get the habit…overcome the endowment effect

    I really don’t think there is anything wrong here, as you are not asking anything extra of people, there really isn’t a “What’s in it for me” factor (except convenience…in this respect design and ease of use is crucial), only a new and more effective way of what they are already doing.

    Maybe you need a facilitative approach so people resist less

  5. Great post. If i were a CEO, I’d mandate enterprise 2.0 as its helps in all success of a program that will affect for better throughout the organization. And that is a reason why enterprise 2.0 is built within our software with great importance. Research has told that Enterprise 2.0 will help engage people in the process of transformation and thus increase the success of transformation programs.
    Visit http://www.element8software.com

  6. You say so much in this post, great job. Intuitively, it just makes sense to me that in the coming years business users of social media in these slow-adoption organizations are going to lead a revolt. As the younger crowd continues to enter into the workplace, they are going to make extremely loud voices known about any lack of social media intelligence.

    This revolt will force ‘the difficult to change’ leaders to get on the band wagon. It is a shame that almost 100% of the time, it is better to be proactive than reactive. I foresee the slow-adoption organization having trouble retaining top-talent, either way. Indeed, the people and organizations that do not grow with the times, may fade into less than dust.

    If anything, a company needs to just adopt some formal social media policies and possibly create a few positions. This will given them “luke-warm” status in the social media space, but at least they can increase the budget and resources as time goes on.

    I am baffled by the organizations that have yet to move on this. I am also confused and curious what Board of Directors think about CEOs who are waiting to enter the space.

    Thanks for inspiring some interesting thoughts!

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