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Unleashing the power of human capital
By Don Tapscott and
Anthony D. Williams
Electronics retailer Best Buy continues to crush its
competition. Already North America’s largest
consumer electronics seller, the profitable company plans to open more than
100 new stores this year, while ailing competitors such as
Circuit
City are shutting
locations. A primary reason for Best Buy’s success is CEO Brad Anderson’s
campaign to “unleash the power of human capital” within the company by
relying on its store managers and frontline employees to know best how to
satisfy customers.
Until recently, the company's selling strategies relied heavily on market
researchers at head office pondering the entrails of sales and demographic
data. Today the company believes store managers and associates know customer
habits, wants and frustrations more intimately than market research
statistics could ever reveal.
Best Buy management now looks for innovation at the store level, asking
general managers to fine-tune the company’s broad-brush thinking for the
local market. To stimulate their thinking, store
managers go online to
brainstorm and swap experiences with one another. In the retail realm, this
is radical. But management credits the new strategy for enabling Best Buy to
beat its competitors in the intensely competitive consumer electronics
marketplace.
Just as new information and communication technologies are transforming
media, culture and the economy, they are also reshaping the way many
companies and employees function. New social computing tools such as
wikis, blogs and digital
brainstorms put unprecedented communications power in the hands of employees. The result is a revolution in what leading-edge companies expect when they
ask employees to collaborate.
As a result, the nature of work is changing. It is increasingly team-based
and collaborative, cutting across the organizational silos and bureaucratic
structures of the 20th century corporation. Effective employees have more
social skills, are smarter at using technology and are more mobile. Many
employees are given more autonomy to decide how and where they want to work.
A growing number of firms are decentralizing their decision-making function,
communicating in a peer-to-peer fashion and embracing new social computing technologies
that empower employees to communicate easily and openly with people inside
and outside the firm.
Collaboration 2.0
Only five years ago, many business executives heaved a sigh of relief when
the dot-coms crashed, thinking the threat from the
Internet had evaporated. The dot-com boom was predicated on a nascent
technology that had, in 1995, relatively limited economic reach. And as with
most big innovations throughout history, there was a speculative bubble and
crash. But the next stage—the one we’re entering now—is when the technology
comes of age and new business models come to fruition.
There are many names for this: Web 2.0,
the living Web, the
Hypernet, the active Web, the read/write Web. Call it what you like—this ain’t your big sister’s Internet. The old Web was about
sites, clicks and “eyeballs.” In some ways it resembled the old broadcast
media more than today’s new collaborative Web. As users and computing power
multiply and easy-to-use tools proliferate, the Internet is evolving into a global,
living networked computer that everyone can program.
Software such as wikis and blogs
are proving popular in the corporate world because they help employees work
with more people, in more regions of the world, with less hassle and more
enjoyment than earlier generations of workplace technology. The result is
faster innovation, lower cost structures,
greater agility,
improved responsiveness to customers, and more authenticity and respect in
the marketplace.
Inside-out thinking
Wikipedia is an extraordinary success story. The
collaboratively created encyclopedia is
owned by no one and
authored by tens
of thousands of people. With less than 10 full-time employees, it is 13 times
bigger than Encyclopedia Britannica and just as accurate. It runs on a wiki — software that enables users to edit the content of
its pages. Despite the risks inherent in an open encyclopedia, Wikipedia continues to grow rapidly in scope, quality and
traffic.
Now companies use internal wikis to stimulate
thinking and capture knowledge. At Xerox, the company’s chief technology
officer Sophie VanDebroek uses a wiki to collaboratively define the company’s technology
strategy. Normally, high-level strategy documents are created
in a hierarchical fashion where the boss controls the vision and content. VanDebroek decided to turn everything inside out by
opening the process up to all researchers in the R&D group, and expects more
robust technology roadmaps and a much stronger competitive strategy section
as a result. “We’ll get more content and knowledge in all of our areas of
expertise,” she said, “including everything from material science to the
latest document services and solutions.”
Ross Mayfield is the CEO and founder of SocialText,
one of a growing number of start-ups that supply social computing
technologies such as wikis to corporations. “For a
long time,” Mayfield said, “personal productivity tools and applications —
the kind that Microsoft makes — have been centered on a single user who
generates documents. You also have highly structured enterprise systems
designed and implemented from the top-down — in many ways as an instrument of
control — with rigid workflow, business rules and ontologies
that users must fit themselves into. The problem is that users don’t like
using those kinds of tools and end up trying to circumvent them. That’s why
90 per cent of collaboration exists in e-mails.” In contrast to complex group
collaboration tools, wikis conform naturally to the
way people think and work and can evolve to the needs of the organization.
This flexibility arises from the fact that at their most
basic, wikis are completely unstructured.
“The structure,” Mayfield said, “is created by demanding active involvement
from users. Wikis hand control over to users to
create their own ways of organizing knowledge [and] workplace processes.”
What the employees think
At Dresdner Kleinwort Wasserstein, a Europe-based investment bank, employees started using wikis
in the IT department as an informal pilot to document new software. Soon
afterward, wikis began to migrate out of the IT
department and into the broader workplace environment, where teams picked up
on them as a way to get collaborative projects up and running quickly.
When J.P. Rangaswami,
until recently the Dresdner CIO, learned of the process, he was intrigued by
the technology’s versatility. The company went ahead with additional pilots
and after just six months of usage, the traffic on the internal wiki exceeded that on the company’s intranet.
Lead users
have decreased e-mail usage by 75 per cent and
cut the company’s meeting
times in half. “We recognized that these tools would allow us to collaborate
more effectively than existing technologies.”
A trailblazer in this realm is IBM. In September 2006, the company invited
employees from more than 160 countries — along with their clients, business partners
and even family members — to join in a massive, wide-open brainstorming
session it called the InnovationJam. Over the
course of two 72-hour sessions, IBM engaged more than 100,000 participants in
a series of moderated online discussions. Their combined insights surfaced
breakthrough innovations that IBMers expect will
transform industries, improve human health and help protect the environment
over the course of the coming decades. CEO Sam Palmisano
believes so strongly in the concept that he has committed up to US$100
million to develop the ideas with the most social and economic potential.
Internet search giant Google prizes its employees’ creativity so highly that
the company’s software engineers are directed to spend 20 per cent of their
time pursuing personal projects unrelated to their jobs. This boosts employee
morale and creativity. It also surfaces unplanned innovations that evolve
into successful business ventures. Google CEO Eric Schmidt says he hasn’t had
a product idea in years. “Virtually all of the product ideas in Google come
from the 20 per cent of the time employees work on their own projects.”
If an army marching in lockstep to tightly arranged
military music is a metaphor for yesterday’s workplace, the workplace of the
future will be more like a jazz ensemble — where musicians improvise
creatively around an agreed key, melody and tempo. Employees are developing
their own self-organized interconnections and forming cross-functional teams
capable of interacting as a global, real-time workforce.
Such decentralization of the workflow and the actual workplace will be the
defining trend in years ahead. Indeed, if Linux, Wikipedia
and other collaborative projects are any indication, it will be easier and
less expensive for workers to self-organize productively than to squeeze them
into a corporate hierarchy.
While still in their infancy, these trends will deeply change our experience
of work and especially the experiences of our children. Though these are
long-term changes, self-organization in the workplace can give competitive
advantage to firms that wield it effectively today.
Is there a danger that too much openness and self-organization in the
workplace could lead to disorganization, confusion and lack of focus and
direction? “If you have worked in a traditional company, a place like Google
doesn’t feel right, it doesn’t feel like you have the kind of control over
the way in which decisions are made that you might have had in a more
traditional environment,” said Google’s Schmidt.
And yet, he is convinced self-organization is better. “You talk about the
strategy, you get people excited, you tell people what the company’s
priorities are and somehow it works out.”
Clear goals, structure, discipline and leadership in the organization will
remain as important as ever and perhaps more so as self-organization and peer
production emerge as organizing principles for the workplace. The difference
today is that these qualities can emerge organically as employees seize the
new tools to collaborate across departmental and organizational boundaries.
HOW TO IMPLEMENT COLLABORATIVE TECHNOLOGIES
Six tips that will make wikis work for you
Tools
such as wikis and blogs
have tremendous potential to increase efficiency and lower collaboration costs.
However, the nature of collaboration makes it a challenge to implement within
the enterprise. It is a balancing act between top-down direction and control,
and the need for bottom-up initiative and adoption. Here are some strategies
and methods for dealing with the challenges.
- Use pilot projects to prove benefits: Like any
new technology, collaborative tools should be piloted in order to prove
their utility. Early wins generated by these pilots will make it easier
to gain credibility and buy-in from the rest of the organization. They
also allow project leaders to create and optimize appropriate incentive
systems, control/governance, quality assurance
and trust mechanisms before a wider rollout. Fact-based wikis, such as developing a manual, are easier to
get up and running than those that are opinion-based.
- Choose a receptive area for the pilot: Selecting
where in the company to conduct the pilot depends on the specific
technology and company culture. The most successful pilots involve young
people who are already using consumer versions of collaborative
technologies. One company chose to focus on call centres where many of
the employees were young and open to adopting new technologies and
approaches. Another firm chose a small group of young employees called
the “Young Professionals Network” to experiment with building a social
network.
- Leadership and vision are necessary: As with
any new technology, strong leadership is key.
This is especially critical as many collaborative tools need to acquire
a critical mass of users and content before they become valuable.
However, too much drive and direction can be counterproductive. The
project needs a leader who is passionate but not too controlling.
- Use loose control systems:
Collaborative technologies also require a mind shift for managers who
are used to controlling their employees’ activities. Many managers fear
the tools will be used to waste time on idle interactions instead of
adding true value. The natural response is to clamp down, set strict
rules and monitor content. This will be counterproductive. Instead,
managers should set clear performance goals while encouraging the use of
new tools that will help employees meet the goals.
- Use innovative techniques to achieve critical
mass: Gaining user buy-in is critical for collaborative
technologies to reach critical mass. To increase the chance of this,
identify a key user group to jump-start the collaboration. One IT leader
said he looked for “people who are ready to take risks, ready to take
the lead, do something right, experiment and burn some midnight oil.” A more hands-on
approach is to directly implement or “buy” the critical mass by, for
example, pre-populating a wiki with useful
content.
- Use light incentives: The open
nature of collaborative tools does not lend itself to overly formal
incentive systems. The most obvious incentive is designing a system and
tools that help employees be more efficient. This starts with
establishing team-based goals that require effective collaboration,
which naturally leads to the need for collaborative tools. For
collaborative efforts that engender less immediate payoffs, other
intrinsic incentives include personal rewards such as creative pleasure,
peer recognition of one’s expertise, visibility of work to upper management
and the potential of unexpected benefits of one’s contributions.
Don Tapscott
is chief
executive of New Paradigm, a technology and business think tank, and the
author of 11 books including Paradigm Shift, The Digital Economy and Growing
Up Digital. His most recent book is the international bestseller Wikinomics: How the Power of Mass Collaboration Changes
Everything.
Anthony D. Williams is an
author, researcher and former lecturer at the London School of Economics. He
is vice-president and executive editor at New Paradigm and co-author of
Wikinomics.
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