Recently in Harvard Business Online my friend Tom Davenport posted another smart piece registering his skepticism over Enterprise 2.0, which he calls "the next small thing" for business (ouch!). Tom and I exchanged thoughts on this via the blogosphere last September (here’s his article, and here’s mine) and have talked about it a couple times since.

Tom is performing an essential service by reminding us not to get too enamored with the cool features of any set of new technologies, and not to confuse the Internet with the Intranet. The Internet is by definition a boss- and hierarchy-free technology platform, while the Intranet most surely is not. I hope Tom won’t mind if I quote him at some length:

"The absence of participative technologies in the past is not the only reason that organizations and expertise are hierarchical. Enterprise 2.0 software and the Internet won’t make organizational hierarchy and politics go away. They won’t make the ideas of the front-line worker in corporations as influential as those of the CEO. Most of the barriers that prevent knowledge from flowing freely in organizations – power differentials, lack of trust, missing incentives, unsupportive cultures, and the general busyness of employees today – won’t be addressed or substantially changed by technology alone. For a set of technologies to bring about such changes, they would have to be truly magical, and Enterprise 2.0 tools fall short of magic."

I’ve never heard it said better, and I couldn’t agree more. Tom is deflating the techno-determinism and -utopianism that I’ve sensed in some E2.0 enthusiasts, and that I’ve been arguing against for a while now. As I posted a while back, my most likely scenario is spotty deployment of E2.0 technologies, not broad or deep adoption. My pessimism comes from exactly the factors that Tom describes.

My optimism, and my interest in the component technologies of E2.0, comes not (solely) from my inherent geekiness, but from the fact that these technologies really are something new under the sun. They’re not extensions or enhancements to previous generations of corporate tools for collaboration and knowledge management; instead, they’re radical departures from them. Technology platforms that are initially freeform and eventually emergent, that require no nerd skills to use, and that contain the SLATES elements I proposed a while back were born on the Internet just a couple years ago, and are now starting to make their way behind the firewall.

Tom is correct to say that these platforms won’t by themselves turn our existing hierarchical, political, and busy companies into egalitarian gestalts of knowledge creation and continuous bottom-up innovation. What they will do, I believe, is give managers who want more lateralism, egalitarianism, crowdsourcing, idea percolation, self-organization, collective intelligence, etc. a new and unprecedented opportunity to obtain them. 

A lot of the interesting discussions around E2.0 now concern managers’ proper roles after installing the new technologies —  whether their job consists more of intervening, or of getting out of the way. Another interesting topic, I think, is figuring out how many managers are truly interested and enthusiastic about the possibilities brought by these new tools. Such managers would have to be somewhat technically literate, but more importantly they’d have to really believe the corporate mission statement boilerplate that "people are our most important asset… we strive to encourage collaboration and participation… we value the contributions of all our team members… we pride ourselves on our healthy and collegial work environment… etc." 

How many bosses and executives really have this as their model of how their organizations should work? I don’t mean at all to sound jaundiced about managers or the profession of management, and I’ve come across very few corporate fascists in my career. But hierarchy and command-and-control mindsets are the longstanding and safe defaults, and they’re quite hard to let go of. Furthermore, I think it’ll only take a few missteps to knock a nascent E2.0 environment off course, causing people to retreat to their old, safe behaviors.

My enthusiasm about Enterprise 2.0, even after acknowledging Tom’s points, stems from three sources. First is the fact that, as discussed above, its component technologies are both novel and very valuable. Second is a feeling that there are actually a lot of managers who want to make concrete this fuzzy notion of empowerment, and to get out of the way enough to let their teams do all the work they’re capable of. These managers want to address the dysfunctions that Tom articulates so well, and they’ll seize on any tools that help them do so. Third is a belief in the power of competition. If Enterprise 2.0 technologies and mindsets do in fact help some companies get ahead by creating and disseminating more knowledge, innovating more, reacting faster, etc. then interest will grow, and so might new approaches.

For some people, Enterprise 2.0 will be the next big deal if its component technologies are widely and thoroughly deployed across companies, like email and Office are at present. By this definition, though, the Toyota Production System is not a big deal. TPS is deeply deployed within probably only a handful of companies outside Toyota itself. Many other organizations have adopted small portions of it, but full-fledged TPS remains quite rare. However, it’s helped Toyota become the most successful (and currently almost the largest) company in one of the world’s biggest industries, and it’s spawned a massive amount of research, writing, and attempted imitation. I’d certainly call TPS a big deal not because of its ubiquity, but because of its novelty and impact. I’m not saying that Enterprise 2.0 is certain to have anything like the impact of TPS —  I just want to point out that there are many ways that a concept can be a big deal in the world of business.

In Paris on the 21st of November, 1783, two brave Frenchmen made the first manned flight in history using the hot air balloon invented by the Montgolfiere brothers. According to lore Benjamin Franklin was among the crowd that witnessed the event. All spectators were impressed, but some were still skeptical. One grabbed Franklin’s arm and said "Sir, frankly, what’s the use of flying in the air?" Franklin replied "Sir, what’s the use of a newborn baby?"

As we watch Enterprise 2.0 start to grow up —  as we observe the technologies of freeform, emergent collaboration being deployed within companies —  now is a good time to formulate at least provisional answers to Franklin’s question. At this stage, of course, it’s impossible to foresee all the ways E2.0 tools will be used, or even what all these tools will be.  But as I and others have watched this newborn we’ve seen it doing a few interesting things.

Here’s my overview of current corporate uses of Enterprise 2.0 technologies —  blogs, wikis, tagging systems, prediction markets, signals like RSS, etc.. Let me make a couple points about this list.  First, I guarantee that it’s incomplete.  I’m sure companies are doing many more things with the new tools, and I hope that readers will leave a comment and let us know about them. Second, the uses appearing below are not mutually exclusive.  Instead, they bleed into each other frequently, especially over time.  An E2.0 infrastructure can be deployed with one set of intentions, but come to be employed for very different purposes. This is exactly the point of freeform and emergent collaboration —  it’s collaboration where no one has to accurately guess the end point up front. Clever managers, entrepreneurs, users, and other innovators will figure out the most powerful uses of the new tools over time.

What have they come up with so far? We’ve seen Enterprise 2.0 infrastructures used:

• For collaborative document production.  Rod Boothby said that when he was a consultant at least one of his clients used wikis to let groups collectively build documents such as Sarbanes-Oxley compliance statements. Zoho’s Office Suite, Google Docs & Spreadsheets, and other offerings make it simple to open up a report, a spreadsheet, or a presentation for group editing.
• To build an encyclopedia. Some organizations are following Wikipedia’s lead and using E2.0 techs to build knowledge repositories. This is particularly attractive for professional service firms, and for educational institutions. When I set up my course wiki at the start of this semester, I told my students that their goal should be to capture all the learnings from the course in one place. I’ll burn it onto CDs at the end of the semester and hand them out, so they’ll have a Managing in the Information Age reference work that contains not just their notes and conclusions, but those from all of their colleagues as well.
• As all-purpose ‘teamware.‘ This was the first use I came across at the first E2.0 case studies I wrote, at the investment bank Dresdner Kleinwort. Some managing directors in the bank saw E2.0 tools simply as better mousetraps for keeping everyone in their organization on the same page about the agenda for upcoming meetings, outstanding tasks and action items, etc. 
• As a ‘war room’ for fast-changing situations. I’ve heard from a couple sources that the flu wiki has often been the best source for up-to-the-minute information about Avian Flu. The excellent New York Times Magazine story about ‘open source spying‘ relates how the DIA has started using E2.0 tools to let intelligence analysts quickly assemble and maintain sites about nascent threats and situations.
• For knowledge broadcast. After I taught a couple classes on E2.0 to the participants in HBS’s Owner/President Manager program, one of them came to my office to talk over an idea.  He ran a commercial cleaning company that had many branches around the country, each of which was highly autonomous. One problem with this org. structure was that the person in (for example) the Seattle office who had the company’s deepest information about how to clean a newly introduced carpet without damaging it had no effective way to share this information. According to the owner this person had no incentive to hoard such information; the corporate culture was a pretty healthy and open one. So he (the owner) was excited about the idea of introducing a blogging tool behind the firewall to let employees broadcast their expertise to their colleagues. I thought this was a fine idea, and when I learned recently from Forrester that blogs are one of the E2.0 tools that CIOs are least excited about I wondered if they were missing something important, or if I was. 
• For broadcast search. my colleague Karim Lakhani has done some fascinating research on how R&D organizations are using Innocentive to post problems for which they can’t find solutions.  Innocentive puts these problems up on the Web and lets anyone take a crack at solving them (Innocentive makes sure anonymity is preserved and that IP rights are properly transferred). Karim calls this phenomenon ‘broadcast search’ and has documented how effective it is at generating solutions to vexing problems. I see small-scale examples of this on my course wiki all the time. Students have set up a ‘questions for the geeks’ page where they post their queries.  One of the posts to this page asked what RSS was.  This question got quickly and thoroughly answered, thereby enlightening not only the student who asked the question initially, but also everyone else who visited the page. In this case, the fact that the search was broadcast and answered on a public platform meant up to 80 people were made better off, instead of just one.
• For ‘crowdsourcing,’ or farming out a large task to an amorphous crowd of people and letting them decide what element(s) of it they want to work on. Karim and I are writing a case on Cambrian House, a Canadian software ‘maker’ that’s relying on its crowd to tell it what to build, and also to do a lot of the coding. As I’m writing the political blog Talking Points Memo (TPM) has uploaded thousands of pages of documents from the White House relating to the firing of several US attorneys general. TPM is asking its readers to help sift through this mass of information and highlight items of interest. This process has evidently already yielded some interesting results.
• To express collective judgment.This is even more specific than collective intelligence; it refers to letting a community weigh in with their opinions on topics of interest. Prediction markets are a very powerful tool for accomplishing this, as companies like Google have learned. I challenged my students outpick me in the March Madness tournament, telling them that I was confident in my abilities because college basketball was a passion of mine. This was a baldfaced lie (I went to MIT, after all). I know nothing about college basketball, but have faith that the traders at Tradesports and NewsFutures do. I used the prediction markets at these sites to make my picks, and am currently in 5th place out of 24 entries. I think I’ll rise in the rankings, too, because no one else has more potential correct picks remaining than I do.

What else is going on out there?  What other uses for this newborn baby are people seeing?  Leave a comment and let us know, please.

MIT Sloan Management Review (SMR) has a special report in its spring issue on "The Future of the Web." As part of it, they asked me and Erik Brynjolfsson to sit down together and swap ideas about what’s "Beyond Enterprise 2.0."

I jumped at the chance, largely because I was eager to hear what Erik had to say. I’ve referred to his work several times in this blog, and like all academics who study IT I’ve been deeply influenced by his work and cite it often. He did some of the earliest (and still best) work to resolve the productivity paradox of IT, and he’s been at the forefront of most important topics in the field for a long time now.

I’ve been collaborating with Erik for a while on research that attempts to assess the competitive impact on IT in the US.  Together with Feng Zhu and Michael Sorell, we’ve been looking at ways to test the simple hypothesis that when it comes to competition, "IT Doesn’t Matter." Publications on this topic are coming soon, as are blog posts. For now, let me just say that our data show that there’s clearly a strong association between IT investment and changing competitive dynamics since the mid 1990s, and that we believe IT is driving these changes rather than merely being a symptom of them.

To advance this work we meet regularly to review analyses and drafts of papers, but we’re pretty focused during these meetings and rarely have broad what’s-it-all-mean, where’s-it-all-going conversations. So when SMR proposed exactly that kind of conversation with Erik, I was eager to participate.  We both work to understand IT’s impact, but from very different starting points.  Erik is trained as an economist and often works deductively, generating and testing hypotheses using large data sets.  I’m trained as a field researcher and usually work inductively, building hypotheses and conclusions from the case studies I write. I was very interested to see how much overlap there was in our perspectives.

As it turns out, there was a huge amount.  Readers hoping for academic fencing are going to be disappointed.  We found ourselves agreeing virtually across the board, and reinforcing each other’s arguments and points.  I’m pretty sure that the unedited transcript of our talk would contain even more phrases like "I think that’s exactly right" or "and let me just build on that" than made it into the final draft. To me, this is evidence not only that Erik is a truly nice guy, but that my work on Enterprise 2.0, which got kicked off just about a year ago with the original article in SMR and the initial posts on this blog, is focused on at least some of the ‘right’ questions —  the ones of both practical and intellectual importance (what a relief!).

Rather than trying to summarize the article, which is freely available here (at least for a while) and which will show up in the spring print issue of SMR, let me pull out a few quotes that give a feel for the entire piece:

Erik (EB): "Really, what we need is ‘meta-innovation’ — innovation about ways to innovate. We need innovation not just in the technology but innovation in some of the institutions that manage the collaboration and that manage a global community working on problems."

me (AM): "The manager’s job is to increase the ambient level of participation in and contribution to these Enterprise 2. 0 environments…  One of the simplest and most effective techniques I’ve seen –  and I’ve seen it over and over – is for a boss to just say “I’m not reading any emails about this project; put all your information up on the wiki where we can all see it and use it.

EB: ".  If people in organizations have more freedom to work laterally and diagonally and in all the other directions within the organization, then you’re going to see more creativity and innovation. You’re also going to see a lot more potentially useful connections emerge organically… This doesn’t come costlessly. One of the benefits of the organization of a corporation is the potential for streamlining and efficiency that hierarchy brings to bear. Ultimately, it’s a trade-off, in terms of where you want to be on that creativity vs. efficiency spectrum. The nice thing is that innovations in technology and in organizational design are allowing us to push out the frontier of that trade-off, so that you can get more innovation without sacrificing efficiency to the same degree."

AM: "An existing company can take advantage of both the benefits of imposing structure and hierarchy and some level of managerial intervention while simultaneously, getting out of the way in other areas and letting the lateralization and the diagonal innovation emerge. And I don’t think that it’s naïve to expect that both of these phenomena can happen – just as it’s not naïve for an organization to have an ERP [Enterprise Resource Planning] system and a wiki at the same time…  One way to think about managers’ role in this era is that they grab the good ideas that percolate up and then propagate them throughout the organization."

EB: "In general, the whole concept of internal and external [to the corporation] is becoming a lot blurrier. And that’s again, partly, because of these kinds of tools…  The traditional corporate organization was tremendously successful throughout the twentieth century. But, as we said at the outset, the technology innovations are engendering a whole set of complementary innovations in organizations. The traditionally sharp distinction between markets and firms is giving a way to a multiplicity of different kinds of organizational forms that don’t necessarily have those sharp boundaries."

AM: "we find that these changes actually heighten the role of managers and executives, who need to think about how to organize and compete in the new environment. And this implies another really interesting set of issues and challenges for management: thinking about what they want to have inside the boundary of their own firm vs. what they want to have outside."

EB: " the bottleneck – the real place where there’s room to make excess returns if you’re an entrepreneur or a manager or venture capitalist – is in finding creative ways to use those technologies…  We are very far from exploiting the full potential of the technology. The set of technologies we have floating around today are fodder for at least a decade or two worth of organizational innovations."

I’d like to thank SMR’s contributing editor Martha Mangelsdorf for turning what was surely a rambling conversation into something that’s quite coherent on the page, and to Chris Bergonzi for giving us the opportunity to participate in the special report.  SMR is doing some interesting things these days, including a collaboration with the Wall Street Journal called "Business Insight."  This is a special section that will appear six times a year in the print edition on the Journal and on the websites of both publications.  Erik and I will have an article in the next edition of Business Insight on our work on IT and competition.  I think it’s due to come out in late April; I’ll let you know when it does.

Please leave a comment and tell us what you think of the ideas that Erik and I tossed around, and your take on our conclusions.

In most work environments there are plenty of mandatory-use information technologies.  If an employee wants to pay a vendor, take a customer order, submit an expense, schedule a service call, or participate in many of the other formal, well-defined business processes that companies execute for a living, they very often have no alternative except to use the enterprise systems that support those processes. It’s highly uncommon (to put it mildly) to find environments where people still get orders shipped by yelling down to the factory floor, or get subcontractors paid by walking into a colleague’s office and saying "Hey, could you cut me a check for $6500?  I gotta pay this guy…" Instead, people use Enterprise IT each and every time they want to get these jobs done.

But when it comes to collaborations and interactions that take place around, on top of, or in parallel with these formal business processes, the situation is almost precisely the reverse.  For such collaborations, it’s almost meaningless to speak of mandatory-use IT.  "Employees will use email for all unstructured interactions" or, conversely, "Employees will never use email for unstructured interactions" are equally ludicrous statements.  They’re dictatorial, procrustean, and unenforceable, all at the same time. And substituting other technologies —  IM, groupware, wikis, blogs, the phone —  doesn’t bring these sentences into the reality-based community.

For work outside the formal, enterprise IT-enabled business processes of the company, employees will use the available tools that they find most convenient, and ease of use and usefulness are the two best predictors of use.

This brings us to Euan Semple’s recent short but very sharp post describing the first, second, and third easiest routes to Enterprise 2.0 success. The first, as he says, is to simply do nothing as a manager —  install no new software behind the firewall, and provide no guidance to the workforce.  I agree almost 100% with his predicted result:

"your bright, thoughtful and energetic staff will do [Enterprise 2.0] for you. Trouble is they will do it outside your firewall on bulletin boards, instant message exchanges personal blogs and probably on islands in Second Life and you will have lost the ability to understand it, influence it, and integrate it into how you do business."

The only reason I don’t completely agree here is that I think Euan is assuming that in this scenario managers and IT departments are not blocking these tools at the firewall —  they’re not precluding employees from using these technologies while at work.  Some readers probably said to themselves "Wait a minute —  it’s not ludicrous at all for managers to say that employees will never use wikis for unstructured interactions.  All they’d have to do to enforce this policy is refuse to install wiki software on the Intranet and block a few domain names.  Viola —  no wiki use!"

I’ve been in many offices where I couldn’t check gmail, and it’s not hard at all to imagine that many companies will try to keep employees from putting company data beyond the firewall on servers hosted by Socialtext, Zoho, Google, 37 Signals, or any of the other collaboration service providers.  Whether or not this is a smart approach, it’s clearly a feasible one. When companies take it, I can imagine that Euan’s bright, young, thoughtful, and energetic staff will resort to ‘pirate collaboration’ using their home computers.  Or they’ll find that too much trouble, and just keep using email for everything. In either case he’s right; something will have been lost.

Euan’s also right with his labels for the second and third easiest E2.0 approaches:  "Get out of the way" and "Keep the energy levels up," respectively. A couple recent posts have portrayed me and Euan as being engaged in a debate.  I’ve checked with him, and we’re pretty sure we’re vociferously agreeing.

For me, the most surprising moment at the recent FastForward conference came during an afternoon roundtable discussion. During this session I kept asking questions about the most likely adoption paths for E2.0 technologies, and some participants started politely voicing their frustrations with this line of inquiry. One person eventually said something like 

"Could we please talk about something other than adoption?  It’s just not that interesting.  These technologies are going to get adopted over time just like other corporate technologies have been in the past. The interesting questions have to do with how companies will use them, not if they will."

After you spend a while teaching via the case method, you develop a sense for whether one person’s comment represents a widely-held view. And it seemed that this one did. I found this amazing, and said so. I explained that I was interested in adoption issues because I didn’t think that there was any single adoption path for information technologies, corporate or otherwise. 

I reminded the audience that there were plenty of conferences devoted to knowledge management (KM) systems and approaches in past years, and that these events had almost certainly featured rooms full of enthusiasts wondering exactly what the future was going to look like, and probably paying very little attention to the possibility that the future would be KM-free. I asked the room how many people wanted to be remembered as this decade’s equivalents of KM enthusiasts and evangelists, and got a few chuckles.

But it still felt as if most people weren’t with me —  as if most participants in the round table felt that enterprise 2.0 was essentially a historical inevitability.  So I asked for a show of hands. I asked "How many of us, when we look into the crystal ball that shows the organization of the near future —  say 3 to 5 years from now —  see widespread deployment of E2.0 technologies?"

Almost every hand in the room went up.

At this point I completely lost my poker face. I sputtered "You have got to be kidding me!!" or something equally profound as I stared around the room.  I noticed that a couple people from large Wall St. firms had their hands in the air, even though they had minutes earlier been discussing how hard it was to get their colleagues to adopt any new technologies or collaborate in new ways. I said to one of these people "You were just telling us that some people where you work still have their assistants print out their emails for them, and how if your colleagues don’t immediately see how a new tool will help them make money, they’re not interested. Why is your hand in the air?"

His response was essentially that five years is a very long time, more than enough for the virtues of E2.0 tools and approaches to become evident, even within large, busy companies like his. He also reminded me of a point I made earlier —  that young people now entering the workforce from college use platforms (like all E2.0 technologies) rather than channels (like email) as the default for communication and collaboration, and that these new employees would drive adoption. Finally, he said that he already saw significant interest and energy in his company, and that he’d been given a mandate to "figure out what’s going on with Web 2.0, and how we can take advantage of it."

A number of other participants in the discussion picked up and extended these arguments, and I noticed that more than a couple of them were looking at me a little strangely. Was I just playing devil’s advocate, or did I really believe that the new tools and approaches might not take off?

I was doing both, and I’m not sure in what proportion. As I wrote at the end of last year, my most likely scenario for the near-term future of Enterprise 2.0 is somewhere between niche deployment and spotty mainstream adoption. The things I’ve learned since then —  from field research, conversations, other writers, commenters on my blog, and comparatively large surveys like the one that just came out in Information Week —  have reinforced this view. 

I want to state very clearly that I still believe E2.0 to be a better mousetrap.  Platforms for freeform collaboration capture both the practices and the outputs of knowledge work so that they can be consulted by current, future, and prospective colleagues.  These platforms also enable emergence. And despite the 9X problem of email, they do stand a good chance of becoming the default collaboration tools. Teenagers and collegians, after all, can choose between email and platforms like MySpace and Facebook, and I keep hearing that they prefer the platforms.

My skepticism about any wildfire spread of E2.0 stems from the fact that the new tools and approaches will succeed over time only in environments that have a set of characteristics.  Technical characteristics are the most obvious of these.  As the IWeek survey highlighted, security and access control remain key concerns among technologists, and they’ll have to be addressed before most IT departments give their blessings to Enterprise 2.0. In addition, the user interfaces of many (most?) current tools will also need to be improved. A student told me last week that employees at a large tech company she’s familiar with used to use wikis heavily, but now they just use Google Docs for group-level collaboration.  The Docs are trivially easy to set up and edit, and even though they don’t offer full wiki functionality (yet) they work well enough for many purposes.

This example highlights to me that no matter what we enthusiasts, technologists, pundits, vendors, and managers want to have happen, users are going to vote with their feet when it comes to collaboration technologies. They’re going to adopt the ones that make the most sense for them, not for any greater good. Some corporate technologies can and should be imposed on their users. But how would you effectively mandate that employees collaborate primarily via wikis, or tag lots of pages so that a corporate folksonomy develops, or trade in the internal prediction market? The idea itself seems a little ridiculous.

So let’s review where we are. Heavy-handed adoption approaches aren’t going to work. Virtually all companies already have a collaboration technology, called email, that works pretty well for most people. Most companies also have a large ‘Empty Quarter‘ of employees who aren’t especially young or especially technical. Many E2.0 tools could be easier to use, especially for the generations that entered the workforce prior to Web 2.0 (to say nothing of Web 1.0). And many, many managers believe that they have higher priorities than fostering the use of a new set of collaboration technologies, especially if it turns out that encouraging their adoption and productive use requires a bit of work.

I believe that managers and companies that are in fact willing to do this work will gain valuable capabilities and quite possibly get a leg up on the competition.  But can you see why I think there might not be a lot of them, at least in the short term?