CollaborativEye

Not another book on the power of social networking. Pleeeaaase. But I went ahead and bought a copy of Groundswell anyways. I would characterize this as an "evidence and endorsement" book for social and collaborative technologies, rather than a visionary or revolutionary book. But that can be a good thing. Li and Bernoff base the book on case studies, practical advice, and even ROI CALCULATIONS. These calculations alone (actually the methodology behind the calculations) make this a highly recommended book. Yes you can determine ROI numbers for social networking applications!

The POST (People, Objectives, Strategy, Technology) planning process described in the book is a very usable, and smart approach. Among the various insights that derive from this , I believe two stand out:

1) Solve your customers' problem, not yours.  How many times have you been in a planning session where the situation analysis focused on the challenges and strategic objectives of the company? Of course the customer needs are incorporated LATER into the process. Be honest -- you've probably led a few of these sessions yourself.  Li and Bernoff challenge us to start with the customer -- what would they get out of a community, for example? How can a blog help your customers or prospects? This advice is wise, obvious, and usually ignored. Added benefit: it can also be applied to business decisions far beyond social technologies.

2) Start small, build successes one at a time. This is not about technology. It is about culture change. It is about re-visioning your relationships with customers. It is about getting buy-in from all levels of an organization. These things take time. Li and Bernoff describe several cases where companies built successful social-based strategies over a period of years, usually starting with something that was very focused, and didn't require corporate-wide endorsement. This advice may seem overly simplistic, but it is easy to fall into the "got to hit a home run, NOW" trap, especially if you feel pressure to catch up with everybody else.

Near the end of the book, Li and Bernoff touch on the issue of short-term, reactionary behavior verses long-term strategies. Some (not the authors) may view the hyper-responsive, close-in contact with individuals that social networking enables, as at odds with long term planning. Some believe, erroneously in my opinion, that with social technologies, products and services will just design themselves. Yes there is a place for customer involvement in the design and development process, and yes many companies have isolated this process from the customer. But there is still a need for product road maps, requirements gathering and synthesis, forecasting, and other long-term planning exercises. Truly connecting to the "groundswell" will enable you to react quickly, and to feel your customers' pain and understand their goals and desires -- things that have always been necessary to run a successful, long-term business.

Why aren't there any books on how to ride a bike? (OK -- I found one on Amazon, but work with me...) You can read and learn from books on molecular biology, cost accounting, and computer programming, so why not something as simple as learning to ride a bicycle? The truth is, you don't really KNOW how to ride a bike, until you've been on it, fallen off a few times, and become personally engaged with the bike. Philosopher Michael Polanyi called this "Personal Knowledge" in his ground breaking book of the same title back in 1958. Fast forward 50 years to several McKinsey studies in which three types of knowledge interactions as posited: transformational, transactional, and tacit. Transformational interactions change raw materials into finished goods; transactional interactions involve knowledge which can be codified and explained as a process or set of steps (e.g closing the books for the month, or entering sales data into a CRM system). Tacit interactions, on the other hand, are much more complex, ambiguous, and involve what Polanyi called personal knowledge. Tacit knowledge requires judgement, context, and interaction with others to determine the best solution. For example, how should you respond to an irate customer? What features should be included in the next release of product X? Which logo treatment is best? What investment fund is most appropriate for this customer?

McKinsey research indicates that 70% of all jobs created since 1998 involve tacit knowledge interactions as their primary component. However, only 24% of software spending is aimed at improving tacit knowledge interactions! No wonder we feel that we are getting further behind even though we have more and more technology at our disposal!

The implications of tacit knowledge on business cannot be overstated. Organizations which successfully improve the productivity and effectiveness of their tacit knowledge workers will be able to build competitive advantage which will be difficult for others to copy. There will be no "play book" to copy -- rather the competitive advantage is built into the tacit interactions between employees, customers, partners and the ability to innovate and come to the right solution to a problem more quickly.  How can business leaders improve their organization's tacit knowledge effectiveness?

1) By providing the tools where interactions and collective knowledge are encouraged and preserved.  Technology examples include collaboration platforms such as blogs, wikis, instant messaging, knowledge management platforms, etc. The goal is to make collaboration  so simple and pain free that it increases meaningful, shared communication dramatically. And no, email is obviously not the answer.

2) Exploring communication platforms that can capture experience, context, and nuanced judgement more successfully than stand-alone text. For example, listening to a set of successful conversations between a customer service rep and an irate customer may be much more effective than reading a 10 page paper on customer service protocol. Or another example, providing tutorials on the use of a CRM system which show exactly how to perform an operation, complete with screen recordings, and audio narration discussing possible exceptions, alternate approaches, and considerations.   

3) Clear the decks for more tacit knowledge interaction by reducing the burden of transactional interactions. Very little time should be spent learning how to fill out an expense form or learning how to run a monthly report in the ERP system. Companies must provide focused, on-demand learning that provides employees with transactional knowledge when and where they need it.

In our previous post, we discussed game theory and highlighted 5 conclusions from Axelrod's work on the Evolution of Cooperation which help promote cooperative environments:

1) Enlarge the shadow of the future - make future interactions more frequent and likely and important

2) Change the payoffs - give incentives to value cooperation more than non-cooperation.

3) Teach people to care about each other

4) Teach reciprocity

5) Improve recognition abilities

We will focus on several of these as ways to foster cooperative and collaborative environments.

Enlarge the Shadow of the Future

Collaboration thrives in environments where current behavior is heavily weighted by future prospects of interaction. Keeping units small (see the"magic" of the number 150 in a previous post) is key to encouraging frequent and repeat interactions between individuals. Social networking software can also aid in bringing people together more frequently because the costs of interaction are reduced, and it is also easier t find the "right people" to maximize the benefit of the interaction.

Change the Payoffs

Can leaders make it more attractive to collaborate than to not? Certainly, and we are not talking about monetary awards for "most wiki entries" or "most prolific blogger." Rather, ingrain collaboration in the culture by sharing stories of effective collaboration, giving public recognition, and promoting known collaborators into positions of leadership. Again, social networking software can aid in sharing the story of the power of collaboration and increase the implicit value of these types of interactions.

Improve Recognition Capabilities

In game theory, cooperation is predicated on the ability of the "players" to recognize each other between "games" (iterations), and see and understand their behavior so that they can react to it appropriately at the next iteration. Transparency and reputation management from social networking systems can aid tremendously in this vein by reducing uncertainty about the past behavior of individuals. And coming full circle, reputation management also serves to enlarge the shadow of the future by increasing the "durability" of interactions, i.e capturing the behaviors in a system that is open for others to see.

The bottom line is that collaborative environments can be created and nurtured through attention to factors such as those outlined above. And such factors as enlarging the shadow of the future, changing the payoffs, and improving recognition capabilities can be enhanced through the judicious application of social networking capabilities.

Game Theory is a little known field of applied mathematics that has a doubly unfortunate name: "game" seemingly indicates it is about play things, and "theory" indicates ivory tower aloofness. This is too bad because the field has much to offer those of us interested in collaboration in a business environment. Here we will discuss the theory only briefly, and then jump into applications to business environments, including Web 2.0 applications: see Wikipedia for more background on the theory if you are interested.

The classic "game" of game theory is known as the prisoners dilemma. Again, Wikipedia provides a fine, concise description:

Two suspects, A and B, are arrested by the police. The police have insufficient evidence for a conviction, and, having separated both prisoners, visit each of them to offer the same deal: if one testifies for the prosecution against the other and the other remains silent, the betrayer goes free and the silent accomplice receives the full 10-year sentence. If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a five-year sentence. Each prisoner must make the choice of whether to betray the other or to remain silent. However, neither prisoner knows for sure what choice the other prisoner will make. So this dilemma poses the question: How should the prisoners act?

The dilemma is that when viewed from the standpoint of the individual prisoner, the only rational choice is to betray the other. Why? Because if the other person betrays me, I am better off also betraying (I would reduce my sentence from 10 years to 5 years.) If the other person doesn't betray me, then I am still better off betraying because then I would reduce my sentence from 6 months to ZERO months! Unfortunately, both of the prisoners think this way (it is only "rational"), so instead of both shutting up and taking a 6 month sentence, we both end up betraying each other and therefore receive 5 year sentences. So it seems that rationality has led us astray, thus the dilemma.

Robert Axelrod took game theory in a new direction when he asked what would happen if various players in a prisoners dilemma played their "strategy" many times in repeated games -- would the outcomes be different? In other words, in the prisoners dilemma outlined above, it is a one-shot deal. But forms of the prisoners dilemma exist in which repeat games, or iterations, occur. This is more like real life where we have interactions with people now and in the future, and our current behavior is affected by what we think people will do in the future as well as right now. For a full overview see his book The Evolution of Cooperation. Axelrod held a computer competition in which people entered their strategies, and these strategies were pitted against each other in tournaments. (An example of a strategy: cooperate (don't betray) until the other person does, and then don't cooperate anymore. Another example strategy: alternate cooperation and non-cooperation with no regard for what the other person does). The winning strategy turned out to be extremely simple, and was called TIT-for-TAT: cooperate on the first move, and from then on do whatever the other person did on the previous move. So if the other person cooperates all the time, so will TIT-for-TAT. If the other person cooperates most of the time, TIT-for-TAT will only be non-cooperative when the other person isn't, and then return to cooperation along with the other individual.

OK -- enough about theory and artificial "games". Suffice it to say that lots of smart people have modeled many systems utilizing game theory (of which the prisoners dilemma is only a specific sub-set of the possible types of games) including the nuclear arms race, biological systems, and economics. Axelrod was able to experiment with many different factors in his computer simulations, such as the relative importance of the future, the amount of interaction, etc, and from this drew several interesting conclusions on how to foster environments of cooperation or collaboration. We will end this post with a listing of his conclusions, and then discuss some applications in my next posting.

1) Enlarge the shadow of the future - make future interactions more frequent and likely and important

2) Change the payoffs - give incentives to value cooperation more than non-cooperation.

3)  Teach people to care about each other

4) Teach reciprocity

5) Improve recognition abilities

We all intuitively know that smaller groups seem to operate more efficiently, but why? Malcolm Gladwell refers to the concept of transactive memory in The Tipping Point, referring to the work of psychologist Daniel Wegner from the University of Virginia. Simply put, transactive memory is based on the idea that individuals can provide external memory for each other. In the example of a married couple, the husband may not pay attention to the yard care equipment since he knows that his wife handles this area of the household; the wife may in turn rely on the husband for detailed information regarding the computers in the house. This enables the couple to handle more information as a team, since they don't both need to try and remember everything necessary to run the household.

The ability to manage transactive memory gets more difficult as the size of the organization increases. In the example of a married couple, it is obviously easy to track who is the keeper of specific information: either the husband or the wife. Although larger organizations may have more total knowledge available, it is often very difficult to tap into that knowledge, and the cost to mine the knowledge often outweighs the gain from the knowledge itself. Gladwell discusses Gore Associates (the makers of Gore-Tex) and their management of transactive memory by limiting operational units to 150 people. He quotes a Gore associate: "It's not just do you know somebody. It's do you really know them well enough that you know their skills and abilities and passions. That's what you like, what you do, what you want to do, what you are truly good at." (The Tipping Point, page 190). 

How can organizations develop their transactive memories? An obvious area to consider is size of operational units. Gladwell mentions several other examples which indicate 150 as a "magic" upper limit on organizational size. However, I believe that collaboration tools, and particularly social networking tools may be very useful in helping to develop transactive memory, even in larger organizations. How can organizations help their employees to connect and get more in depth knowledge of each others strengths, weakness, passions, etc? Is time spent reading each others blogs (even our personal blogs), really wasted time for the organization? Rather than viewing social networking tools as time sinks, leaders should instead consider how to encourage their employees to connect with each other more frequently, and at a deeper level. Such organizational knowledge enables incredible efficiency and rapid innovation: instead of endless meetings to manage turf wars, and assign and monitor tasks, the organization will in a sense be able to self-organize quickly as new challenges arise. Such collaborative self-organization is only possible when employees are intimately aware of each others interests, strengths, and idiosyncrasies.