The Multidimensional Organisation

Corporations today are in a rapidly changing and increasingly complex environment, they reorganise frequently. In fact, some appear to reorganise continuously. This reorganisation consumes a great deal of time, energy, money and lets not forget morale. The latter, the fear of layoffs is very unsettling and often leads to a marked decrease in productivity and quality of output across the enterprise. In this kind of environment innovation comes to a halt and executives and leadership typically view this as too risky.

When organisations are in this state, the stable state, they are like a coiled spring, their resistance to change tends to be proportional to the effort to change them; the more turbulent the environment, the more stability they seek.

Imagine though, for a moment, that you take the view that your organisation, in these times you should choose to be dynamic. Imagine you could adapt to change without reorganisation, without reorganisation, with less disruptive interventions, then the resistance to change would be significanlty reduced and you would have a more motivated, more productive workforce. This is the multidimensional organisation.

Most organisations are a division of labour. There are typically three; starting with functionally defined units whose outputs are principally consumed or used internally, for example, purchasing, finance, operations, legal, personnel and R&D. As such the organisational chart has a horizontal dimension which shows how labour is divided at each level, that is, how responsibility is allocated. The vertical dimension shows how labour at different levels is coordinated and integrated, that is, how authority is allocated. Typically they are designed from the top down, beginning with the CEO and sometimes a COO. At each successively lower level labour is divided again with one more criteria used at each level. The higher the level of criterion is used, the more importance is attributed to it.

Product or service defined units (its products) the outputs of which are principally consumed by the public such as soft drinks, entertainment and plastic containers for example.

The third and final part of the organisational unit is the market, or user defined units, which are defined by external customers to whom the organisation tries to sell its product. Here the organisations customers are defined by geography or definitions (ultimate consumer, retailers and wholesalers).

By bringing Social Business Software (SBS) into an organisations equation the functional dynamism of the organisation can be fully harnessed. By bringing and entire enterprise across the organisational spectrum together they can, through collaboration move from one needed state to another. For example, should an organisation be experiencing product issues, the enterprise can swarm and assist the product or service defined units into resolving issues and solving problems. Should the enterprise be experiencing consumer related issues, the enterprise could swarm to assist the market, or user defined units into solving problems.

Social Business Software (SBS) breaks down the hierarchies and silos that are prevalent in many organisations today. The overarching methodology is that organisations that deploy SBS successfully become more competitive, more innovative and more successful than their competitors.

Recent statistics reported by McKinsey have the following to say about businesses that have deployed SBS: 79% increase in ideas and innovations for the enterprise leading to a 13% increase in sales revenue leading to a 3-5% increase in overall deal size and bottom line improvement.

By believing that your workforce has a substantial brain capacity and that it is largely untapped leaves many organisations with a great capacity to innovate.

Building your Social Business Mission and Vision

It has been a while since my last post, apologies.

I recently read an amazing quote by Jose Ortega Gasset, 1966:  “Man has been able to grow enthusiastic over his vision of … unconvincing enterprises. He has put himself to work for the sake of an idea, seeking by magnificent exertions to arrive at the incredible. And in the end, he has arrived there. Beyond all doubt it is one of the vital sources of man’s power, to be thus able to kindle enthusiasm from the mere glimmer of something improbable, difficult, remote.”

During the initial phases of a Social Business Software deployment phase you have to engage and construct your Social Business Software Mission. This mission has to guide you in delivering your enterprises overarching Mission and Vision over time.

In this post, I will share some of our ideas and our methodologies.

So when we start out we make it clear that the social business mission is not a “motherhood statement” filled with pious platitudes… as an example “to provide the best value for money” or “intelligent and disciplined application of proven principles of organisation and management.” This is common sense right? No business would exist with saying they provide the worst value for money or that they intend to make undisciplined or unintelligent applications of unproved principles of organisation and management!

So here are five guiding principles:

1. A Social Business Software mission statement should contain a formulation of the organisations ideals and do so in a way that makes possible valuation of its progress possible;The statement mustn’t state what it must do survive; it should state what it chooses to do to thrive. 
2. A Social Business Software mission statement should define the business that the organisation wants to be in, not necessarily what it is in; (I have written on the the Open  Innovation Paradigm)How can the social business mission statement identify the general means by which the organisation can achieve its ideals. How can the platform expand on the organisations concept of itself?
   
3. A Social Business Software mission statement should be unique and not suitable for any other organisation.. what will define the enterprise to match its overarching mission and vision;It also needs to layout the uniqueness of the organisation wrapping into it and understanding its culture.
   
4. A Social Business Software mission statement should be relevant to all of the organisations stakeholders by stating its function relative to each type;How can the foundations be constructed so as to serve the interests of its stakeholders over time, not just those of management, stockholders or both. It must appeal to everyone in the enterprise.
5. A Social Business Software mission statement should be exciting, challenging and inspiringIf it fails here, it will fail to produce change no matter what its other properties are.

Brief insight which hopefully provides insight into your building blocks for a successful SBS deployment.

Have a great weekend

Role of social business software in delivering innovation

Businesses today operate within a dynamic environment, shaped by variables, such as evolving legislation, globalisation and economic volatility. Disruptive new technologies create new competitors overnight and the only way to get and stay in front is constantly to innovate.

Innovation is sometimes thought of as the product of inspiration – a spark of genius whose timing or vessel cannot be predicted, or a closed process driven by research and development. In fact, creativity can be cultivated as a habit – by anyone – and it is better when it draws on more ideas.

By using a democratic, collaborative approach to innovation – called “open innovation” – companies can nurture an innovative capability and increase their output of quality ideas, thus increasing their chances of bringing about or weathering disruptive market change and gaining a competitive edge.

Stories abound of market-leading companies that do not respond to disruptive changes in their field of play with a more open approach to innovation. Once great, they find themselves unable to recreate the spark, as they are too set in their assumptions to deal properly with shifting realities. Inevitably, they fail.

One example is Eastman Kodak. The inventors and market leaders in photographic film for over a century filed for Chapter 11 bankruptcy protection in America at the beginning of 2012. ZDNet noted that while the company had actually made a latter-day innovative breakthrough with the first digital camera, it failed to respond to the erosion of its monopolistic hold over film and film development, brought about by the commoditisation of the digital camera by Sony and others.

Bitter defeat

Others, too, have tasted bitter defeat by not ably responding to change. Nokia, the world’s leading mobile phone producer, lost more than USD18 billion in market capitalisation when Apple created an irresistible wave of change with the iPhone. The resulting smart phone innovation went unmatched by anyone for years – certainly not by Nokia.

Then, suddenly, Samsung overtook Apple in global smart phone shipments. The difference? Samsung is a dyed-in-the-wool open company (unlike Apple) that taps its workforce and partners as well as the competitive landscape for ideas. The results speak for themselves.

Open companies communicate well, but traditional communications technologies haven’t kept up. Many comms channels have proliferated over the years, giving rise to an overwhelming range of ways to stay in touch, but none that offers an open, collaborative environment – one that everyone is at home in and in which their contribution is given equal weight and visibility.

Email doesn’t lend itself to elegant mass participation or visibility. Intranets have become notice boards with little chance of interactive discussion. Collaborative platforms do not include sophisticated communications that are so necessary for idea sharing. And unified communications platforms (videoconferencing, IP telephony, white boards etc) are expensive.

A new breed of “social business software”

Of late, social technologies have entered the corporate consciousness. A new breed of “social business software” (SBS) platforms, also known as enterprise social software, uses social principles in a business context, offering great promise for inclusive, structured brainstorming within communities. They take the form of social and networked modifications to corporate intranets and communications software platforms or standalone SBS platforms.

SBS, itself a disruptive change in the market, combines and integrates “sharing” features of social media sites with collaboration and standard unified communications support, giving company stakeholders a collective or group-based platform within which to contribute to the corporate conversation, with the safety and equality that comes with openness.

It is clear that a company of information workers who communicate better will also increase their workplace and project efficiencies. In addition, they will co-create better, more nuanced ideas – faster. And more efficient companies that have better ideas stand a better chance of leading markets.

Platforms like WyseTalk, Yammer and Jive have been successful at “ideation” or the seeding, testing and framing of ideas within companies. They harness the untapped brilliance of individuals on the strength of the principle that many heads are better than one, provided their cross-pollination is managed systematically. Collaboration-driven SBS tools provide that systematic, open approach to innovation.

Since the introduction of this nascent (two-year-old) field in South Africa, leading companies in health care, financial services, mining, software, retail and hospitality have embraced it to create workplace efficiencies, knowledge and best-practice sharing, and communication.

As a result of implementing SBS successfully (a certain amount of change management is essential), excellent ideas need not be wasted. They will be given the exposure that is traditionally reserved for inner-circle employees, subjected to open scrutiny and a wide array of potentially complimentary or better ideas, earning individuals and companies the recognition that might otherwise have been denied them forever.

(a recent article published in Biz community http://www.bizcommunity.com/Article/410/542/93631.html)

How Social Business Software (SBS) captures and integrates end user knowledge into improved business knowledge

Dynamic and Highly adaptable organizations today have been blurring the lines between strategic decision and operations. Here employees are generally expected to understand the organizations goals and strategies. Due to the pace of change businesses have to react, change and adapt these strategic goals frequently and do so rapidly.

If employees understand the visions and strategies and are in a well-designed social business software framework they can assist organizations achieve these goals.

Social Business Software aims to capture end-user tacit knowledge and integrate it within the existing knowledge of the business process models therefore forming a decentralized knowledge management framework. Thus the business processes that are designed are done with the participation of the organisational community aligned with the businesses strategic goals. Hence knowledge management through the use of SBS is created in two ways. Firstly current knowledge that exists within the organisation can be shared through the platform and secondly end-users can contribute to the existing knowledge with their own tacit knowledge.

Social Business Software allows for both a top-down and a bottom-up view of knowledge creation to occur through collaboration within their own business environment. One could argue that the top-down view of knowledge is very structured and compliant while the view on knowledge as ideation from the bottom-up can be seen in a less structured paradigm. Businesses that have fully embraced SBS have the ability to integrate formal and informal knowledge which allows to environment to adapt and change in order to achieve the strategic goals and vision of the enterprise.

The diagram below illustrates the Causal Loop of the Social Business enterprise commnity and knowledge capturing process.

In conclusion, the distance between business strategy and business operation is becoming shorter. Organizations can no longer rely on crystallized procedures, though they strive for optimized business operation. Businesses today have to constantly adapt to environmental changes. Therefore SBS allows an organisation to emphasize standardization and optimization and pair it with adaptation and the achievement of needs. Overall it creates an environment, which integrates the formal knowledge described in business operation with tacit human knowledge and is able to constantly allow for the reinterpretation of business strategy in the face of business environment changes.

Moving from Closed Innovation To Open Innovation

In the mid twentieth century, key technologies were developed by large enterprises within their Research and Development departments and were always applied to a firms own products. It was the vertical integration within those companies that provided their competitive advantage. Furthermore, the economies of scale of these large companies set them apart from their smaller rivals. This is seen as the traditional setting for closed innovation as the innovations are produced and commercialized only within a companies boundaries.

So what do we do when our highly skilled, highly mobile, knowledge employees are coupled with a world of rapid change and alternations in consumption and production functions are ever shortened? Well, we have to make an R&D paradigm shift. We need to shift to an Open Innovation Paradigm.

R&D needs to start enhancing technology and out-sourcing. By out-sourcing I mean incorporating a larger pool of your companies brain capacity, resourcing your customers to crowd-source better product development and incorporate your suppliers into your decision making processes. This provides the sum of collaborative Innovation and is in essence the Open Innovation Paradigm. As organizations we need to thrive and in order to do so we need to find new ways to access knowledge through technology in an ever-increasing world of complexity and uncertainty.

I have written frequently about how Social Business Software (SBS) can reform and assist businesses into becoming more openly innovative. So consider the following: an effective deployment of SBS will allow your business to improve in the following innovation Performance areas namely; new products, new methods of production, new sources of supply, exploitation of new markets and even new ways to organize business.

On the one hand an organizations ability to improve the effectiveness of what it does is greatly increased and by incorporating other stakeholders namely Customers into the process product options, design and even aesthetic, symbolic or emotional meanings of products can be enhanced. Another stakeholder group to incorporate into the open innovation transfer is that of the suppliers. Suppliers are able to assist and streamline supply chain management processes as well as assist with new product development.

The ability of an organisation to innovate with the cooperation of different stakeholders during the R&D processes will improve the firm’s absorptive capacity to recognize the value of these stakeholders and make use of them.

Factors Influencing knowledge creation and Innovation in an organisation

As organisations we need to understand the factors that influence the innovative power of the enterprise. There are three processes which incapsulate innovative power within the organisation. These are knowledge creation, innovation and learning to learn. The factors that may also influence this cycle are added value for stakeholders, leadership, climate, strategic alignment and structure.

At the end of the day if your innovation cycles are not continuous and driven the innovation will spiral and be conceptually destroyed with great difficulty in being recreated within the enterprise. However if innovation is regarded as a strength within the enterprise then it becomes part of moulding the future and the model has power.

Organisations today focus on the use of information technology and have the opportunity to become creative and smart. In essence innovative organisations have a deep understanding of the importance of knowledge creation. Therefore innovative organisations are defined by their ability to create knowledge.

Innovation begins from the start of an idea through to the production of a product or service onto the market. The alignment between R&D, production and market is vital.

Indeed the design, and implementation of new product lines, plants and people are part of the whole process of innovation to deliver added value to the stakeholders of the company through valuable knowledge.

So what is knowledge… well Davenport and Prusak (1998) defined it as follows: ‘A fluid mix of framed experiences, values, contextual information and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of the knower. In organisations, it often becomes embedded not only in documents or repositories, but also in organisational routines, processes, practices and norms.”

Organisations are said today to be in the innovative age. The advent of Social Business Software allows for the creation of knowledge over time as it has the ability to become a knowledge repository for documents and best practices but it has the ability to encapsulate the culture and that is very very powerful.

Creating Organisational Knowledge with Social Business Software

Welcome to 2013. It has been a while since my last blog, but over the Christmas break I came upon an amazing paper published in 1994 entitled “A dynamic theory of organisational knowledge creation” by Ikujiro Nonaka. The paper really enforced for me the power that organisations have with regard to the aspect of its people and how an organisation can become more innovative through this knowledge creation.

The following paragraphs are summaries of the paper.

The paper postulates that we are moving into a “knowledge society” and that the ever in-creasing importance of knowledge in contemporary society calls for a shift in our thinking concerning innovation in large business organizations. It raises questions about how organizations process knowledge and, more importantly, how they create new knowledge. Such a shift in general orientation will involve, among other things, a re-conceptualization of the organizational knowledge creation processes.

It would be true to say that solving problems in an organisation can only be done through knowledge and that the best companies deal with this in more efficient ways than others.

What is generally ignored however is the organisations ability to create knowledge freely as it is often resisted by hierarchies or silos within them. Any organization that dynamically deals with a changing environment ought not only to process information efficiently but also create information and knowledge. It can be argued that the organization’s interaction with its environment, together with the means by which it creates and distributes information and knowledge, are more important when it comes to building an active and dynamic understanding of the organization. For example, innovation, which is a key form of organizational knowledge creation, cannot be explained sufficiently in terms of information processing or problem solving. Innovation can be better understood as a process in which the organization creates and defines problems and then actively develops new knowledge to solve them. Also, innovation produced by one part of the organization in turn creates a stream of related information and knowledge, which might then trigger changes in the organization’s wider knowledge systems. Such a sequence of Innovation suggests that the organization should be studied from the viewpoint of how it creates information and knowledge, rather than with regard to how it processes these entities.

Although ideas are formed in the minds of individuals, interaction between individuals typically plays a critical role in developing these ideas. That is to say, “communities of interaction” contribute to the amplification and development of new knowledge. While these communities might span departmental or indeed organizational boundaries, the point to note is that they define a further dimension to organizational knowledge creation, which is associated with the extent of social interaction between individuals that share and
develop knowledge.

At a fundamental level, knowledge is created by individuals. An organization cannot create knowledge without individuals yet it is oftentimes difficult for these individuals to contribute to knowledge or create it due to hierarchical or silo barriers within an enterprise. With Social Business Software new knowledge associated with more advantageous organizational processes or technologies will be able to gain a broader currency within the organization.

Through the deployment of an SBS platform it must be remembered that group sizes should  be between 10 and 30 people with 4-5 “core” team members with career histories which include multiple job functions. This self-organizing team triggers organizational knowledge creation through two processes. First, it facilitates the building of mutual trust among members, and accelerates creation of an implicit perspective shared by members as existing knowledge. Shared experience also facilitates the creation of “common perspectives” which can be shared by team members as a part of their respective bodies of the existing knowledge.

Finally, in order to facilitate organizational knowledge creation, qualitative factors such as truthfulness, beauty, or goodness are equal important to such qualitative, economic factors as efficiency, cost or ROI.

Social Business Software provides a platform for organisations to create knowledge, innovate and ignite the spirit within its workforce as they are allowed to contribute and create within the enterprise.

The Open Innovation Paradigm Continued….

There is a very important part to Open Innovation that is essential to
its success and that is Social Business Software.

The Success of Open Innovation is dependent on two critical factors:

1) The desire for thebusiness to become more openly innovative; to seek the physical
breakdown of hierarchy and silos within the ecosystem and

2) the successful implementation of Social Business Software to achieve this.

This new ecosystem which collaborates with its own people, its
customers and suppliers will lead to more creative and successful
innovations over time resulting in a truly ‘open’ ecosystem.

The social business software platform will assist with collaborative
internal R&D tied with external R&D resulting in desired business
objectives that shapes the new direction that this coordination and
collaboration sets out to achieve.

Having deployed social business software within an enterprise
ecosystem provides users with a central repository of individual or
group intellectual property.
Another important aspect to consider is that of co-creation. By
co-creating with your customers and with your suppliers your internal
R&D will actually drop but the most important factor to consider is
the real partnerships that are constructed over time.

Tearing down silo’s in the enterprise is not easy to do but it can be
achieved if there is senior management commitment to get this done.
Naturally the culture of the business needs to envelope a culture of
trust and an overall acceptance that everyone within the ecosystem can
contribute, add value and innovate!

What leaders need to do today

I am reading Judgment Calls by Davenport and Manville and there are some really interesting sections in the book that I wish to share today. The book talks about leadership and the issues surrounding judgment calls that leaders have to make and how they, in most part, need to change current approaches and paradigms. The reason why I found it so interesting is that it aligns with Open Innovation, collaboration and social business software…

The first is this… ‘ Great organisations expand the number of people involved in important decisions, because they know that while individual humans are fallible, in aggregate they are usually more effective.’

‘… Great leadership of the future knows the role is not to decide important questions alone, but rather to ensure that all the right things happen across the enterprise so that the best thinking and the best problem solving results in a better answer.’

In my view, it really says that the more collaborative you are, the better your decision making. Remember though that the decisions need to be done in conjunction with data and analytics.

The book goes on to say that ‘ the recognition that “none of us is as smart as all of us.” Social Business Software coupled with prediction data and involving customers in product development are evidence that leading organisations want to tap into the wisdom of the crowd.’

so how do you ensure that you can successfully deploy Social Business Software

From one of my earlier posts and building on from my Masters Thesis on the topic, Levels of Trust in the organisation are absolutely essential. The higher the Levels of Trust the Higher the perceived levels of collaboration.

In addition to this, there are a few other things to look at namely:

• You need to encourage internal entrepreneurship — give people within the organisation to become creative and seek solutions.
• Groups of Innovators need to be created and these can be sourced from the ‘expertise’ profile within the community.
• This needs to be pushed hard by the executive but actually at all levels… you need to find those champions.
• The executive must allow for free, business driven discussions.
• Negativity and harsh commentary from the executive and other leaders within the organisation will not help. Protect against negativity.
• Small wins is what you are aiming for in the beginning. Small wins help the organisation WIN big.
• This process takes time so be PATIENT.
• KISS (keep it simple s…..). Don’t make this too complex.
• Plan, Act, Decide, Implement.