Reengineering your Social Business

I have mentioned in the past that my professional background lies in the logistics and supply chain domains. Over the years I have been focused on helping clients to meet their business objectives by adopting the principles and practices of Enterprise Resource Planning (ERP) and implementing ERP software. In many cases these ERP initiatives were either preceded by or included significant business process reengineering (BPR) and business transformation efforts which were critical to enabling the ERP effort and delivering businessvalue.  As I investigate the emerging principles and practices of Social Business and develop my thoughts on Enterprise Collaboration I find myself considering the challenges and opportunities from the perspective of BPR.

Much of the current thinking on Social Business is oriented around generic use cases, such as “Ask a Colleague”, “Find an Expert” or “Crowdsourcing”. Given that Social Business is fundamentally about people, networks of relationships, communication and collaboration, it makes great sense to consider things that way. However I think that the key to deriving business value from becoming a Social Business is through changing the way that the enterprise organizes and performs work. This is why my thoughts are drawn back towards BPR.

At first I thought I could simply have a look at a particular process, and the functions and activities that compose that process, and spot the places where I could plug-in one or another Social Business use case that is relevant. As I described in an earlier posting, The Happy Path, there are in fact a number of processes where a use case, such as “Find an Expert”, can be easily employed to help to quickly and efficiently resolve the exceptions that occur during normal operations. An enterprise embarking upon a Social Business journey could analyze their end-to-end business processes and find a number of places where use cases could provide value quickly and with a minimum of effort. It is my opinion that these opportunities would represent only the “low hanging fruit”.

In order to assess and identify the full extent of the opportunities I believe that we need to carefully re-examine each and every function in the business process. I contend that our day-to-day familiarity with “how things are done” obscures the way in which a relative lack of information sub-optimizes the design and capability of the process. For example, once a production operation has been designed and deployed successfully we often take for granted the efficiency and effectiveness of the design. Prior to the availability of social business collaboration (SBC) tools there were no practical means to obtain input in a timely manner from all of the many experts throughout the enterprise. As a result valuable insights into tools and techniques elsewhere would not be leveraged. However, if the manufacturing engineer were to share their work using status updates or by tagging content then it could be visible across the enterprise and stimulate engagement. Well maintained employee profiles can be used to quickly identify resources from around the globe that have the relevant knowledge, skills and experience for the task at hand. Better yet, rather than working alone and then sharing their work, experts can use SBC tools to collaborate synchronously on the creation of work products in the first place.

Is there a limit to the Social Business reengineering opportunities? I don’t think so. Any work that is done by people and which requires information should be considered.

What do you think? Is there a limit to the processes and functions that should be considered? Is there a better approach than business process reengineering?

Please share your thoughts.

Internalizing Positive Externalities

In my last blog post, He just up and did it, I speculated about the potential to use employee education as a means to overcome the resistance of ingrained habits and a fixed mindset that have conspired to prevent potential users of social business collaboration (SBC) tools from investing the time needed to master the new technologies, change the way that they do business and share their valuable content.

A comment about that post from one of my colleagues, Mark Masterson, raised a good point:  

Because one thing you're overlooking here is that there is a cost/benefit analysis implicit in every single worker exposed to the potential change. For some, the cost (amount of effort, degree of education, psychology, whatever) will exceed any imaginable benefit. Every time.

I think that it is worth exploring the economic concept of Externality to see if it can help us to crack the cost/benefit nut.

In standard economic theory an externality occurs when a third-party is affected by a transaction between a buyer and a seller. As a result, the price of exchange does not reflect the full cost of producing or consuming the good or service. The classic example used to illustrate this concept is that the price of goods produced in a factory that emits air pollutants as a by-product of the production process does not reflect the costs to society of the negative effects from that pollution. As a result the prices of the goods are set too low and the goods are over-consumed.

In order to address the problem of the failure of the pricing mechanism there are public policy remedies that can be applied, such as a pollution tax. In theory, the funds collected from the tax could be used to mitigate the effects of the pollution, thus reducing the harm to society. An alternative approach is to establish regulations that require the producer to “internalize” the third-party costs by either paying for remediation or prevention, such as installing pollution control devices. As you can imagine establishing a fair remedy can be very challenging – it is not possible to precisely determine the actual external costs.

Externalities need not always be negative, they can be positive too – the third-party benefits instead of being harmed. However, when positive externalities exist the goods or services will be relatively under-consumed rather than over-consumed.  It has been said that public funding of education is justified by the positive externalities generated by education - the benefit to society of a more productive and innovative workforce.

At this point you may be wondering what all this economic theory has to do with the choices being made by employees and their cost/benefit calculations.

One of the key benefits that can be enabled by deploying SBC tools is access to the Network Effect. As the number of users of the network increases the value to its members, and the enterprise as a whole, increases at an accelerated rate. The network effect is an example of a positive externality scenario.

It is reasonable then to consider what policies can be employed to internalize the positive externalities – to make them part of the employee’s cost/benefit calculation. Should an organization create an incentive for individuals to share content with the network, such as rewards or recognition programs? At the very least, shouldn’t the organization incorporate a discussion of externalities and the network effect into their education curriculum? Can we use these or other approaches to bring the employee cost/benefit calculations into alignment? There may not be a perfect solution to the cost/benefit problem but there are things that can be done.

Before you say “not so fast Henry”, I am aware that there are challenges and potential side effects of creating incentives for sharing. Since it is not possible to determine the actual value of sharing content, then how do you determine the correct level of incentive? Additionally, some employees may game the system for their own benefit, sharing more content just to qualify for incentives. This behavior would degrade the average quality of content and effectively impose a tax on their colleagues. 

It is my experience that social networks have evolved cultural responses to the “over-share” problem, with active policing by the members of those that violate the group norms. Failing that there are means to “turn down the volume” on repeat offenders. I have also found that SBC tools, such as content ratings and “likes”, can be used to highlight the valuable content, allowing it to “bubble up” and separate it from the mundane. The usage pattern for SBC tools is different from earlier collaboration tools. While the norm for reviewing your email inbox may require reading each message, this is not true for an SBC activity stream. I rely on keyword tags and “top liked” widgets to keep me informed of valuable content. I certainly don’t review every document, discussion or blog that passes by in my activity stream.

What is your organization doing to address the challenges of motivating employees to share their valuable content with the enterprise? Have you tried any of the approaches mentioned or perhaps something else? 

I would be pleased to hear what you think.

He just up and did it

In her recent report, Making the Business Case for Enterprise Social Networking, Charlene Li of the Altimeter Group explains that although organizations are embracing social networking inside the enterprise, they are experiencing mixed results.

“Some organizations have deployed social-networking features with an initial enthusiastic reception, only to see these early efforts wither to just a few stalwart participants.” 

She goes on to explain the problem.

“Most companies approach enterprise social networks as a technology deployment and fail to understand that the new relationships created by enterprise social networks are the source for value creation.” 

If you are interested in social business collaboration (SBC) in the enterprise then I suggest that you have a look at her report.

In this posting I would like to begin to explore how our habits conspire to limit the degree to which we unlock the value creation potential of SBC technologies.

We all have heard of the Digital Divide between the Digital Natives and the Digital Immigrants. In his seminal article, Digital Natives, Digital Immigrants, Marc Prensky, said

“It’s not actually clear to me which is harder – “learning new stuff” or “learning new ways to do old stuff.” I suspect it’s the latter“.

I agree.

More recently, in Carol Dweck’s book Mindset: The New Psychology of Success the concepts of fixed and growth mindsets are explored, including their relationship with the ability to change and learn throughout life.

As I assume many of you have, I have seen examples of colleagues failing to use the new ways to collaborate. Some resist the use of instant messaging in favor of the more familiar email messaging. Others insist on sending documents as email attachments instead of simply providing a link. On occasions when a number of colleagues have needed to collaborate in real-time, we have limped along using only a teleconference, painfully describing to a remote participant the contents of a document projected on the screen, when a webinar would have been quick and easy to organize. Ironically, many of the same folks that complain the most about the difficulties of finding content on an SBC platform also fail to use the tools that facilitate search such as tags, likes and ratings.

The people that I refer to are intelligent, hardworking and dedicated to their profession. So, what holds them back? It appears that their ingrained habits and fixed mindset have conspired to prevent them from investing the time needed to master the new technologies and change the way that they do business. For many years as an ERP implementation consultant I have extolled the benefits of a combination of education and training when deploying technology. I believe that an educational curriculum required for successful SBC deployment must include a healthy dose of social psychology, an area which I have not recommended in the past.

If an organization employs a coordinated program of education and change management initiatives, then it is possible to change works habits and to adopt a growth mindset. It does not happen by accident. How-to training will not be enough.

I am interested to know what your organization is doing to help its Digital Immigrants succeed. Please share your comments.

It's Deja vu all over again

[with apologies to Yogi Berra]

When I read the discussions about the challenges of deriving business benefits from Social Business initiatives I am reminded of some of the root causes of failures with ERP initiatives in the past:

• Lack of Executive Management Engagement / Accountability for Project Success
• Unclear Vision and Objectives (Inadequate Business Case)
• Inadequate or Wrong Resources Assigned to the Program
• Weak Program Governance and Project Management
• Failure to Understand or Commit to Data Quality
• Inadequate Process Development / Redesign
• Inadequate Organizational Change and Risk Management Programs
• Competing or Conflicting Business Priorities
• Inadequate Education / Training Programs
• Technology-driven focus with minimal business involvement

As my colleague Mike Gallagher has reminded clients in Executive Education sessions, "People, not Software Solutions, are the Key to Success".

I realize that implementing ERP is not the same as implementing Social Business. The former is formal, structured and hierarchical and the latter is informal, relatively unstructured and networked. I believe that the lessons learned apply nonetheless.

Are you ready to do things differently?