Enterprise 2.0 and Innovation

I discovered this slideshare presentation by the folks at Acando via a tweet by WeaRo. Its a good one …

The Wizard of Oz is a Carny: the Macworld or Jobs question?

I think there is something seriously wrong.

I sincerely hope that Steve Jobs is not losing a battle with cancer.  I have lost too many people to that disease and have far too much respect for the talent that is Steve Jobs to wish this kind of crisis on anyone.

If that is not the issue, then what could it be?

It’s About Time” says TechCrunch?  I think there is something wrong with the analysis offered in this post.  Maybe there is some sort of relationship at play here and TechCrunch is doing its bit to soften the anticipated blow to Apple’s stock price over this?  I ask this question to peak your interest in social capital, not to suggest some sort of explicit conspiracy.

I can agree with Apple’s strategic decision if they see the need to change the emphasis of the Macworld opportunity or to own the event.  Although … in house management who would need to outsource production would be a misuse of Apple’s core talent, so even if IDG does cost them $10-million, that might hold up in a thorough cost benefit analysis.  Let’s not forget they are sitting on $15-billion in cash.

Managing product expectations or expenses, as suggested by John Gruber in 2002 & resurfaced yesterday by Techcrunch, are weak reasons, IMHO.

The reasons Apple gives in this announcement suggest to me that they are leaving a vacuum in the place of Jobs’ address and completely undervalue the role that Macworld plays for them.

Maybe the problem is that the analysis is being done from a product centric (this includes brand management) perspective, with not enough regard to the real reasons why Apple is the powerhouse that it has become.

Here is the take in the Social Capital Value Add ChangeThis manifesto & ebook (its’s free):

Which asset has more long term residual value? Is it the implicit carnival at MacWorld or the
explicit Steve Jobs address? While the “don’t walk by, give it a try” brand spectacle is the overwhelming subject of envious management deliberation, SCVA is the reminder that the carrier wave for the Carny’s call, the more elaborately produced midway (including the folks on the midway), indicates far more about a company’s ability to create and preserve value. (p. 25 of the ebook released, September 10, 2008).

Apple survived long enough to eat it’s children, i.e. switch from being primarily a computer company to become a consumer electronics giant, because it has a core group of very loyal users (particularly in education).  Vendors who have made iPod a whole product solution depend on Macworld in many ways.  I suspect Steve Jobs knows this, fosters this and is part of the reason for this but maybe not?

I mean, c’mon!  Macworld IS like Christmas to Apple loyalists (hat tip to Chris Thomson for that smile). It is irresistible to most tech enthusiasts. Christmas … now that is a pretty successful strategy for building bonding social capital.  The pilgrimage of physically getting the most loyal together for a communal celebration seems to me to have importance beyond the commercially focused get together at your local Apple store.

This move is very likely a “viral” news story, spinning out perhaps more digital footprint than typical Macworlds, but the quality of that asset is suffering.

Either Steve Jobs is very sick and the first evidence that Apple is sliding into badly motivated reactionary management have started to appear or the analysis is focused on product and brand that does not include a full cost benefit analysis that recognizes scaled up forms of social capital as the company’s most important asset.

Switching the emphasis from product and the Steve Jobs brand spectacle is good strategy if you are replacing that with an emphasis on investing in Apple loyalists.  Why not announce a $1-million contest that highlights the pilgrimage to Macworld in place of their trade show floor space?  Or maybe there is an Apple Day at their stores globally where Apple loyalists are invited to meet up with local peers and connect globally via an interactive Tweet up or web event?

Something is seriously wrong, what do you think?

Note: This post is part of the SoCap&Brand series started by Tim Kitchin.  You are invited to add your own post.

Following Robin Teigland … Leveraging Social Networks for Results

I just started following Dr. Robin Teigland on Twitter.  Get ready to be blown away … check out her slide share presentations.

She is an Associate Professor at the Center for Strategy and Competitiveness at the Stockholm School of Economics (SSE) in Sweden.  For more than ten years, she has researched and lectured on social networks and their relationship with strategy and performance.

You MUST take your time and view this presentation.

I just posted her presentation of Fad or Future: Second Life & Virtual Worlds over at www.memeticbrand.com.  It is spot on.

Innovation: You Need to Eat Your Children

Another great guest post by John Maloney … thank you!

My old boss at HP, Lew Platt, like to say, concerning innovation, you need to eat-your-children. HP is famous for consistently having 80% of profits originate from products two years old or less. That requires the courage to kill (eat) products (your children) to allow innovation to flourish. As in nature, this optimizes the ecosystems. It drives profitability, growth and well-being.

Incredibly, in almost 2009, enterprise KM people are still talking about the obsolete notions of sharing, best practices and continuous improvement. (?) Ridiculous. Shameful.

Continuous improvement was important in the 80s as a temporal artifact of the quality revolution. It originated the notion of ‘best practices.’ Both are now 100% obsolete.

BTW, know who is a recognized master of both best practices and continuous improvement? Yep, General Motors, GM.  Today, right now, turn on the news and watch the GM CEO grovel and plead for tax money to fix the mess of US auto manufacturing caused specifically by excellence in sharing, best practice and continuous improvement. It’d be funny if it wasn’t so pathetic. If you hear these terms in your organization, run, don’t walk, for the exits to escape (and to save your life/career).

Today organizations must achieve perpetual innovation (PI). The new Big Three, Toyota, Nissan and Honda get it (and 54% of the US auto market to boot).

Perpetual innovation inhabits value networks. To achieve mastery, do not focus on information distribution (?) and incremental improvements like KM & quality circa 1990. That is a waste of time and resources. You MUST focus knowledge efforts on value network structures and patterns: roles, links, exchanges and OUTCOMES. Information, practices and improvements take care of themselves in well-configured value networks. See:

http://valuenetworks.com/public/item/219361

Also, please forget about sharing. It too is 100% obsolete. There is NO time to share anymore. Rather, focus on collective intelligence. Accept and lead knowledge-based organizations as markets; as the complex adaptive systems all organizations are. Embrace collective intelligence networks and markets to achieve perpetual innovation. See:

http://www.pmcluster.com/SFO09.htm

Sadly, KM people and orgs are nostalgic. They struggle badly to let go and to focus on the future. They are on the same slippery slope as corporate IT – preserve the past at all cost. (Fully 80% of today’s IT budget goes to supporting legacy apps. Disgraceful.)

KM, IT and organizations fight hard to keep the past and sabotage innovation. Newsflash: They are very good at it! However, sooner-or-later they always lose, to be subsumed by the natural order of value networks and collective intelligence. (It is happening in Detroit as you read this post…)

To move forward, KM and their kissing-cousin, corporate IT, need to heed Lew’s advice, and kill their sacred children of sharing, best practices and continuous improvement.

Post Script from Michael:

In an era where inputs (including financial capital), technology, IP and brand become commodities in very short cycles, I think the problem must be addressed in very practical terms and it is concerning far beyond GM.

In this context, human resources become the source of competitive advantage more than ever.  So is it a race to the bottom or the top?  Ultimately comparative advantage from cheaper labour is a no win, so we can probably agree that innovation is the key.  John is bang on.

Is there anyone reading this that does not recognize that the new consideration is that broadband connectivity is scaling up and making visible the value networks in corporations that Verna Allee & Valdis Krebs have been drawing attention to for years?

Here are a couple of blog posts with additional thoughts:
http://socialcapitalvalueadd.com/2008/11/20/iam-or-social-media-man
http://memeticbrand.com/2008/12/01/memetic-brand-social-capital-value-add-start-socializing

SCVA, unlike brand valuation, is not linked to particular lines of revenue.  This is a model that attributes value to the sources of innovation and growth in a corporation rather than, for example, a commodity like tobacco or cars.

I think a model like this give the corporation the incentive to “eat its children” or switch revenue lines.

It is a happy economic coincidence that optimizing social networks requires hope & empowerment over fear & ignorance because in a hopeful environment informed individuals take risks. Publishing distinguishes emitters.  When they discover better ways, their peers emulate across the network. If fear & ignorance reins, productivity suffers.

Where is the Value? Google Friend Connect

I think that this is another sign that the technologies involved are quickly becoming a commodity.  The real value is in the network.

The Economist has a little piece about Facebook’s play along these same lines.

Rafe Needleham at CNET thinks Facebook will win out over Google Connect because it is a marketing channel.

Social Networks in Plain English by Commoncraft

I had previously visited Simon Small’s blog entitled “Who is in control of your brand?”, but I popped over there again after he made a comment on the IAM or “Social Media Man” post below.

He had this quick introduction to social networks & the utility of social network applications by the folks at Common Craft up.

I hope that both Simon and Sachi & Lee LeFever consider contributing to the SoCap&Brand meme that Tim Kitchin started off.

Technorati Profile

gotta do it sometime

Technorati Profile

IAM or “Social Media Man”

One of the central concepts of Social Capital Value Add is the Individual as Medium (IAM).  I also considered using the more anthropological “Social Media Man” but wanted readers to steer past the buzz words and/or gender concerns.

Which one do you like better?  I don’t care what you call it, as long as the dog brings back the bone.

I am realizing that the IAM concept may not come across very strongly in the e-book.  I dripped references to IAM throughout the e-book.  Let me try to draw them together in this post.

Perception is reality.

Shared perception requires some form of media.  I.e., thoughts must be communicated through some form of artifact whether fleeting or more resilient.  Examples include gestures, words, text, audio and visual … anything that can be sensed among parties.

For most of history, our ability to communicate was relatively geo-spatially limited.  We could communicate as far as our voices could be heard (town criers) or our eyes could see (smoke signals). Perception was very locally oriented.

Then along came technologies that Marshall McLuhan taught us to understand as Extensions of Man.  The printing press, radio and television are a few of the biggies.  These are essentially one way, broadcast forms of media. The telephone is another biggie, it is interactive & reaches far, but does not scale well to large audiences and requires synchronous connection.

McLuhan explained to us that “the medium is the message. This is merely to say that the personal and social consequences of any medium – that is, of any extension of ourselves – result from the new scale that is introduced into our affairs by each extension of ourselves, or by any new technology.”

He also said, “Our conventional response to all media, namely that it is how they are used that counts, is the numb stance of the technological idiot. For the ‘content’ of a medium is like the juicy piece of meat carried by the burglar to distract the watchdog of the mind. The effect of the medium is made strong and intense just because it is given another medium as ‘content’. The content of a movie is a novel or a play or an opera. The effect of the movie form is not related to its program content. The ‘content’ of writing or print is speech, but the reader is almost entirely unaware either of print or speech.”

When digital media started to really emerge with the introduction of the browser in the mid-1990s, it naturally incorporated many previous forms media.  But bandwidth, computing power and storage were still scarce and expensive.  A lot has changed since Netscape came along.

We have arrived at a point in history where the effect of IAM has been made the strongest and most intense form of media we experience because it has been given all other media as its content. The movie, the play, the opera, the newspaper, the television, the radio, commercial music, print and photographs, even the brand (a broadcast concept), have all been given over to the Individual to be reincarnated as the YouTube video, the prosumer indie, the blog, the blog comment, the forum, the Tweet, the IM chat, rating & review, the Flickr album, the podcast, the viral email and the mashup.

Real world social networks (and social network applications like email and MySpace that facilitate) are the infrastructure of these new forms of media that emit from the Individual.

SCVA argues that the effect is a new scale of social capital that marks a point of inflection for business and it is this new scaled-up version of social capital that SCVA is determined to highlight the value of.

Whereas, the network infrastructure to shape shared perception could be rented with great flexibility in the broadcast era (i.e. the 30 second spot), access to social networks is a function of social capital.

This new scale social capital is a critical corporate asset.

I spent the first half of the e-book illustrating how these entirely new scales of social capital are evidenced by new scales of the intrinsic elements of social capital which are individual assets (remember, the corporation is a form of individual).  These include: information flow, exertion of influence, certifications of social credentials and reinforcement of identity and recognition.  These are observations that are consistent with Nan Lin’s network theory of social capital, whose approach enables us to link the thinking to social network analysis and economics.

Technologies have evolved and mapped so tightly to the way humans transact, form relationships and create self-identity that it is time for business management to adopt the thinking of leaders in social network theory, such as the University of Chicago’s Ronald Burt.

Like it or not, the shift from broadcast media to IAM has implications throughout the corporate ecosystem.

Almost all of the changes highlighted in the illustration above have occurred exponentially, which is why we experience them as a sudden shift.  The “more of the same”, “everything that changes, stays the same” mentality will not derive competitive advantage from change like this.  It may not even survive change like this.

Does it not seem natural? Project and scale up the power of the individual, and that value of human connection of which we are all so instinctively aware, emerges in amplified forms as well.

In addition to the new scales of intrinsic social capital elements examined in the e-book, I would like to study further the extrinsic variables of social capital that aggregate into collective assets such as trust and network structure.  I am sure that there is similar evidence of new scale that would shed more light on social capital formation, access and use.

The GM Solution

This is a guest post authored by John Maloney, you should check out all of his work …

Last month I agonized though a lofty lecture on “Change Management.” It was from a slick consultant who assured us with his shiny loafers and PhD. Problem was, it was positively identical to one I heard at Ford Motor in 1988 while participating in a senior management offsite. It was extremely painful, wrenching, and, well, foolish. Ironically, even after a generation, change management hasn’t changed!

Change management is the biggest management and development farce ever known to business. If you have ANY change management or often worse ‘cultural change’ programs in your organizations immediately kill them or resign your post. They won’t work and you will be badly victimized.

Here, for example, is GMs response to change. It is from the BW Article below, ‘The GM Solution: Life Boats, Not Life Support.’ http://tinyurl.com/5qpk7o

And in 2007, with over a million unsold cars in inventory, Mark LaNeve. GM’s head of North American sales and marketing, protested the need for change. “It’s not like we have some crisis,” he told the Wall Street Journal in its Feb. 9, 2007 edition.

If you ever hear the specious change management change mantra, ‘senior management sponsorship,’ run, don’t walk for the exits. If you hear the dopey, ‘change is the only constant’ calmly pick-up your notepad, pen and find a new role.

Change does not originate from the top or the middle. Please. These structures were specifically invented to eliminate change.

(Years ago I rallied against command and control. I was ostracized. GM is now headed to the ash heap of history on their confident rails of command and control.)

Begin to recognize loopy change management experts lament the failure of change management that THEY perpetuate! Woo-hoo! What a $$$ racket…

Here is how friend Shoshana Zuboff in says it in Business Week this week, exactly concerning GM.

“None of this is exactly “rational” behavior, but it tracks with what institutional economists have observed: The more a practice is institutionalized (history, legitimacy, interdependence, codification), the more it is taken for granted, the greater the energy that goes into maintaining it, and the more relentless the resistance to change. In 2006, GM’s CEO Rick Wagoner responded to the call for “new blood” in GM’s leadership with this screed in Newsweek: “These are sophisticated problems with historical tails that run back 80, 90 years. The chance of someone coming in and understanding our business…is absolutely microscopic.”

Today, business and economics is in a headlong flight to value networks and network intangibles.

Toyota, Nissan and Honda get it and helped invent it vis-à-vis TPS & Lean. See: http://valuenetworks.com/public/item/209498

The focus on value and network intangibles allows the new “Big 3” to account for 52% of the US car market. Flatly rejecting the vulgar UAW makes them produce products that are  enormously popular and profitable. Toyota’s annual profit is more that GMs market capitalization!

Here is a reinforcement of network intangibles from Shoshana.

The car is becoming an expression of identity, values, and personal control in ways that move far beyond traditional segmentation and branding. For example, fuel efficiency will be only one consideration for a socially responsible vehicle (SRV). What percent of the parts are recyclable? What is the vehicle’s total carbon footprint? Are there child labor inputs? Toxic paints, glues, or plastics? How transparent is the supply chain? Is the seller accountable for recycling? What methods are used? Are fair labor practices employed?

The new demands for an individualized driving experience at an affordable price require a fundamentally new business model—a discontinuous shift from economies of scale and push marketing to distributed networks of enterprises that cluster around individuals. The single most important factor for competitive advantage will be a brand’s ability to forge durable intimate relationships with customers based on trust, dialogue, and transparency. Similar skills will be needed at the enterprise level, as carmakers collaborate with other entities to support diverse customer needs.

Value networks and VNA are highly instrumental in defining this new business logic and putting in-place “…distributed networks of enterprises that cluster around individuals..”

Sure, it is possible to kick-back and not activate in value evolution of business and the economics of intangibles. That will only prolong and perpetuate our dire situation and put all solidly on the path to oblivion like GM.

Here is the article link. Please read and comment, here and at Business Week.

http://tinyurl.com/5qpk7o

Can’t really say ‘happy reading’ at the moment. Rather, it is time to act decisively.

(Note:  John, thank you for this guest post.  You are a real leader in this movement.  All – please go to the BusinessWeek article and add your comments. sincerely, Michael)

Twitter Matters #5: Twitter and Social Capital

Doug Luberts has an interesting post and thread going about Twitter and Social Capital that is a nice weave into the series that I have going on over at www.memeticbrand.com about Why Twitter Matters.

Doug introduces Felicia Day as an example. Her Twitter following alone is close to 15,000. “She tweets, and she not only hits her 15,000 followers, but taps into their networks as well.  Those followers re-tweet or reply, and everyone who follows them gets a whiff.”

Here is the money quote from Doug:

“In this brave new world of New Media and Social Networking your visibility and ability to attract a following is no less important than the need for a network television show to do the same via Nielsen ratings.”

Twitter really highlights these effects, but the idea is the same for all forms of social media which are scaled up forms of social capital.

As long as Fecilia continues to deliver value to her followers, she will be able to tweet for dollars. However, there is great productivity and value in the obligations that she must take on to maintain her position as arbiter of information and/or entertainment.

This is not the broadcast era, driven by a shortage of bandwidth.  There are millions, soon billions of channels, i.e. broadband empowered individuals who can present a more authentic alternative.  Hollywood stars that fade, do so for these same reasons.

Fecilia can not “sell” her social capital. She must always be fostering it.

She can only align with products, services, ideas, messages, films, shows that help her foster her social capital.

Products, services, ideas & messages must be socially aligned.

This matters to you unless you are content to fade.

I have turned my evolving reflections about twitter into a series of posts.  Catch the other thoughts:

Why Twitter Matters #1: Follow me, Follow You on Twitter

Why Twitter Matters #2: Memetic Logos

Why Twitter Matters #3: Escalopter

Why Twitter Matters #4: social capital discussion evolving

Why Twitter Matters #6: Twitter Love Song

Comment, Kim Patrick Kobza, CEO, Neighborhood America: cognitive outliers, real time group cognition

UPDATE@Nov.4, 2008 – an overview of StockTwits from Stowe Boyd.

UPDATE@Dec.1, 2008 – Tim O’Reilly “Why I Love Twitter”