Holism: The Real Enterprise 2.0 Opportunity! - Part 2

THIS IS PART 2 OF A MULTI-BLOG POST ON HOLISM & E2.0

Click Here to Read Part 1: Introduction

Click Here to Read Part 3: Process Complexity

Click Here to Read Part 4: Technical Complexity

Organizational Complexity

Typical organizational structure stems from the military model. The classic hierarchical model is intended to ensure proper chain-of-command, decision making and consistency. The "cascade" method of information and delegation, ensures a single focus especially in complex situations where the explanation of details impeded action. For example, in a war, immediate actions needed to take place and there was no time to explain every single action to every single person. Business operates in a similar fashion. We create hierarchies to ensure speed since the ability to manage all the details and make smart decisions on every aspect of a business is simply impossible for any single person. We "empower" the different levels in a hierarchy allowing them them to make their own decisions but always from a cascaded fashion to ensure a "single" direction.

So far, this seems to make sense. The side-effect however is that the bigger the organization and the larger the hierarchy, the more difficult it is to truly understand the entire business. This lack of holism, eventually results in decisions and ideas that may be good for a small group but is actually not the best option for the larger group. We get what we reward for.

For example, consider a company that is organized as shown in the org chart. This company makes widgets, and has grown rapidly over the last 5 years. To accommodate this growth, they've needed to hire more and more people. The size of the company requires the President to delegate decision making authority. Each SVP has clearly defined objectives. The SVP of Manufacturing, is tasked with reducing the per unit cost by 10%, the SVP sales is tasked with increasing total sales by 25%, etc... For the SVP of sales to hit her targets, she knows the biggest growth area will be in North America, and that her efforts should be slanted to growth and cascades targets to the VP of N.A. to 35%, and 20% to Europe. This cascaded approach attempts to ensure a single focus and continues down the hierarchy.

There are several examples, we can now illustrate where the need of the "division" goes counter to the best value for the company. The organizational structure inadvertently rewards people to think in silos. Here are a few examples, I am certain you can think of more.

1. GM of Prod A in North America has client who really needs Prod B but doesn't realize this because his specialty is Prod A and is rewarded for Prod A sales.
2. GM Prod A in Europe has client who wants Product B which is only available in North America for now. Since this doesn't contribute to the goals of the SVP nothing becomes of this opportunity.
3. Manufacturing is testing out a new development process that will increase the strength of the product. Sales person in North America knows of a client who would is in need of a stronger product. The two never talk.
4. Manufacturing fixes a "bug" with it's products but the ground sales staff, have found out that some of their lead customers are taking advantage of the "bug" to do interesting things with the product.
5. Techniques used to sell Product B in Europe could also be applied in North America but are not necessarily shared.

In some cases, we incent people to not collaborate and in other cases we don't even know what we don't even know. This is where Enterprise 2.0 technologies can level the organizational structure and allow flow of information, to cross all parts of the organization and not be restricted to the hierarchical model.

It doesn't mean we abolish the hierarchical structure (although I know some of the readers of this blog would argue that... I did write a piece on self-organization which you may find interesting), but at a minimum it means providing the decision makers at every level of the hierarchy with unfiltered raw information. Information that would likely not float up and over. At least not having been filtered for "relevancy" at each level.

Not only is it information flow, it's connecting people in ways we wouldn't have had them connected. Allowing the right people to get connected. What if we brought in that sales person who was very close to a product and knew exactly how the clients were manipulating the product to suite other needs. What if you tapped into his knowledge when testing out the new designs? What if you connected 5 people out of 10,000 who all had dealings with a specific client but didn't know one another?

Discussion Forums, Blogging, JAM sessions, all have the opportunity to open up communication. Tagging, RSS, social bookmarking, Next-Gen Search capabilities provide the means to wade through the information.

Classic delegation through hierarchies and the creation of silos have the inadvertent effect of filtering information. If it's not relevant to my department or business unit, it's unlikely to stored by the company. This is where Enterprise 2.0 can have a direct impact. We can now ask the questions across the entire corporation (if you don't ask, it's unlikely you'll get an answer). Not only can you ask questions, by allowing people to express themselves on those things they personally judge to be of interest could answer questions we have yet to ask. The personalization of Enterprise 2.0 means that not only does information flow, but the people either "answer" the questions, or provide insight can be brought together to work on new initiatives, or ad-hoc requests in teams that may never have known one another before not bound by department, functional area, or hierarchical level.

Holism: The Real Enterprise 2.0 Opportunity! - Part 1

The BIGGEST opportunity for a company that applies web 2.0 internally (aka Enterprise 2.0) is to create a holistic understanding and achieve holistic execution.

What is it worth to have a complete unified end-to-end understanding of your company, products/services, processes and customers!? Using that knowledge to truly create a holistic strategy for your corporation and then able to execute and track it holistically! Imagine being able to have all the benefits of being big (economies of scale & scope, stable infrastructure, reliability, credibility, financial strength, etc...) combined with the benefits of being small (agility, innovation, intimate knowledge, flexibility, etc...)!

This is part 1 of a multi-part blog that explores the achievement of holism in a company, why it fails today and how Enterprise 2.0 technologies, processes and philosophy (yes there is a philosophy behind this) COULD allow large companies to achieve impressive achievements. Like all things, there is no "magic bullet" but there is opportunity for those that are willing to invest, be patient, nurture and commit to an Enterprise 2.0 strategy.

Most of what you will see today on applying web 2.0 in a company (aka Enterprise 2.0), revolves around achieving similar benefits internally that have been proven successful out in the Internet. For example, people talk about Wikipedia and say... "Now what if we made a Wikipedia but just for our company? Could we create a Companyipedia that allows employees to document terms we use in our company? We could achieve the same results Wikipedia has done...". This kind of "replicating" value internally could be stated about most of the web 2.0 type technologies (RSS, Tagging, Social Networks, blogging, etc...)

There is nothing wrong with this, but it is only a small part of the story. Sure, you will be able to gain value from the technology, but it's the ability to integrate thoughts, knowledge and ideas that smash through silos & bureaucracy for a unified corporate vision that should excite smart companies. As companies grow in response to growing demand for their products/services, or to improve their offering or to achieve economies of scale & scope, they often unknowingly sacrifice agility, innovation & flexibility.

Growth leads to specialization in different areas which ultimately adds overall complexity to the organization. This complexity ends up destroying our ability to achieve a complete holistic (end-to-end) understanding of the company, the products/services, and it's customers. How exactly does this happen? Well, it's complicated but can basically be grouped into 3 areas.

1. People/Organizational Complexity


2. Process/Competency Complexity


3. Technical Complexity

The next series of blogs will focus on each of these 3 areas and how Enterprise 2.0 can start to address these areas to re-gain holism for a large company. Although I am speaking primarily to large corporate entities, the same could be applied to other large organizations. For smaller organizations, they can also reap the benefits however theirs is not the same challenge. In a small company, the ability to know everyone and what they do and how it affects everyone else is easier. Until Enterprise 2.0 however, there was arguably no real way to achieve mass collaboration.

Read Part 2 Here

Read Part 3 Here

Read Part 4 Here

Considerations before jumping on the E2.0 Bandwagon.

Here is a recent post I did on the Wikinomics group on Facebook. I thought I'd share it here for those readers that are not on that discussion group. This post was part of a discussion around good & bad experiences with social networking. Regular readers of this blog will see the first point a recount of the Mesh07 session on Digital Blinders.

Aug 6, 2007

Here are a couple of my thoughts related to the the conversation. Let me start by saying, I am convinced about the positive power of mass collaboration but so much is written on this, that I didn't think I would add to it here. Instead I picked a couple of thoughts that hopefully are a bit different.

1. In theory, could social networks of self-organizing individuals actually pull people further apart? The concept is that people often band with those that have similar thoughts and ideas rather than thoughts that have ideas that go counter to theirs. For example, if I was active in politics I might join a community that caters to and reinforces my political beliefs further driving in my beliefs and "dismissing" others beliefs. I saw a news show that talked about some disturbing organizations that held beliefs that were downright scary (and illegal) but apparently members banned together to reinforce that their beliefs were "justified" and everyone else is "wrong". I spoke to an editor of Wikipedia at a recent conference around some apparent concerns that Wikipedia, was "slanted to the scientific" beliefs and not accurately providing "creationism" a fair chance, so a separate encyclopedia for "creationism" perspectives has been created. What is good though, is that at least one of the ingredients is there to improve upon understanding and that is availability. An individual can choose to open their minds to alternate concepts or not. If however they choose not, they can likely find ways to reinforce their beliefs and dismiss others. I was introduced to this concept at a recent Mesh conference. Here is my blog on it if you're interested:

http://rexsthoughtspot.blogspot.com/2007/05/mesh07-digital-blinders-are-we-inch.html

2. The "whisper" and "smear" topics made me think about the reality of speed and the potential negative impact if we're wrong. Recently in Ontario, a government official made a derogatory remark referring to a citizen as a "ghetto dude". They didn't realize that they had sent the e-mail back to the citizen and when news broke, groups started popping up in several spots (including facebook), many of which publicly showed the picture of the person and demanded their resignation. The concern here was that some of these sites actually put the wrong picture up! Same name, wrong person. I listened to the mother of the falsely accused girl on the radio tell her story,(I suppose the girl herself was too distraught to tell her story directly) about how people accepted these pop-up groups as truth and immediately started harassing the girl and her family. Yes, they got the picture removed eventually but it seems much damage had already been inflicted. Here's the Toronto Star article on this:

http://www.neowin.net/forum/lofiversion/index.php/t576946.html

I guess a common thread here is that each individual has the opportunity to seek multiple perspectives and sources of information through the Internet and social networks. But do they? Do they REALLY seek to understand those different beliefs? Are we sometimes victim to the zero-sum game concept? That there can only be 1 right answer? I don't know the answers but would recommend enterprise 2.0 practioners consider these concepts when building their overall strategy.