On May 24, Facebook (the intriguing social network site I wrote about in my previous post) announced that it was opening up its platform to outside developers, allowing them to build applications that were deeply integrated with the Facebook user experience. We can expect, of course, that most of the new applications will be as social —  as oriented toward sharing information, watching what others are doing and publicizing one’s own actions, and profiting from others’ experiences —  as the main site itself is already.

I haven’t yet started to experiment with any of these applications, and so can’t review or vouch for any of them.  I can say, though, that many people in my network have started to download them. Facebook keeps me abreast of what my friends have been up to (if they give the site permission to broadcast their activities), and over the past couple days I’ve noticed that lots of them have been adding 3rd party applications. Intrigued, I visited  Facebook’s applications page just now and saw that there were over 100 applications available already (I believe that all of them are free). These include tools to let members:

• Add music to their profiles and see who else is going to an upcoming concert
• Edit photos and play slideshows
• Extend their profiles beyond the original fields
• Find people based on what they like to drink (!?!?!)
• And much, much more.

For people and companies interested in Facebook’s potential within the enterprise, the opening of the platform is a welcome development, and probably a fundamentally important one. Developers now have the ability to customize Facebook for the needs of the enterprise, and to do so in a low-cost, low-risk, and iterative manner. 

I can’t wait to see what they come up with. As I wrote before, Facebook appears to tap into a set of our deep-seated desires: to reach out to people, to be accepted by them, keep them up to date on our doings, and to stay up to date on theirs. What tools will be built to leverage and extend these desires? And what kinds of impact will they have on companies and their performance? We’ll have to stay tuned.

If you’re using or developing enterprise-oriented Facebook tools, please leave a comment and tell us about them. And give me some on-the-job training by inviting me to use them with you; here’s my profile.

Last week I attended Harvard’s internal workshop on technology in teaching and learning, and got a real education from a couple undergraduates. Sameer Lakha and Rachel Popkin demonstrated all the ways they use Facebook and all the ways it’s become a big deal on college campuses (particularly Harvard, where it started). 

I’ve not been a big user of social networking sites; I typically accept LinkedIn invitations from people I know, but don’t use LinkedIn to manage my own contacts. As a result, I was probably easier to impress with a good Facebook demo than some other people would be. But I was still really impressed.

As I watched Rachel and Sameer demo and talk about the site, it seemed to me that Facebook gets a few things right. First, it’s extremely social social software. It helps you keep track of what the friends in your network are doing by alerting you about their activities — status changes, new friends made, photos added, notes posted, etc. It also lets you interact very publicly with other members by posting a comment on their ‘wall,’ a universally readable message board that Sameer cleverly described as the online equivalent of the whiteboards that students mount on their dorm room doors. Of course, Facebook also lets you grow your network by adding friends. There are many ways to do this; the one I’ve found most productive so far is to page through the networks of my existing friends, looking for "Oh, yeah — I know that person too!" moments. So far, I’ve had quite a few of them.

Some readers probably consider what I’ve just described to be way too much sharing, and are forming an impression of Facebook as a privacy advocate’s darkest nightmare. A second thing that Facebook gets right, though, is privacy and disclosure control. The different elements of your Facebook presence, from elements of your profile to the visibility of your activities on the site, are under your control, and can be adjusted to suit your preferences. I’ve just started to understand the privacy controls, but they appear to be comprehensive and very fine-grained.

The privacy defaults tend toward openness and visibility (which seems right to me given the goals of the site), but also have some intelligent checks and balances. I can’t add you as a friend, for example, until you agree to the addition, and you also get to approve my version of how we know each other.
Facebook also contains both channels and platforms for interaction. Walls, photos, and notes (which are blog-like posts) are platforms, but the site also lets members send private messages to each other, thereby replicating the email channel. 

Finally, Facebook tries in some areas not to impose structure on users and their interactions, and instead to let structure emerge over time. Anyone can form, name, or join groups on the site, and these groups grow and die organically. Rachel and Sameer said that some group names are meaningful, but others are essentially bumper stickers. Users can also define their own status, and tell the world how they met each other. Finally, members can tag photos, and even people within photos. This latter feature makes it much easier for me to find all the photos of a friend, even if she didn’t upload them herself. As long as someone sometime tagged a photo with her name, I’ll be able to find it.

Sameer and Rachel demonstrated how they could add their Harvard courses to their profiles via a nice set of pulldown menus. Harvard’s CIO was more than a little surprised by this, as he didn’t think that the University had given the site permission to integrate its course catalog. The students replied that this was probably true, and that Facebook was probably just accessing publicly available data from the Registrar’s website. I can’t say whether this is in fact the case, but if so it’s an interesting example of a lightweight and opportunistic mashup.

Rachel said that not using Facebook was a "social liability" these days at Harvard, and Sameer said that he doesn’t really think whether he’s using the site for purely social purposes or more academic ones; he just "uses Facebook." This is in part because the site offers something close to one-stop shopping for many of the things students are interested in — uploading media, blogging, calendaring, communicating, catching up and checking in, sharing information, etc.

All of which got me thinking — isn’t this very close to what employees within a company also want to do? And if so, doesn’t Facebook provide a demonstrably powerful, popular, and easy-enough-to-use infrastructure for doing it? The site has been open to all (not just those with a .edu email address) since September of 2006. Some features still reveal its legacy as a networking site for college students, but it’s also now being adopted by plenty of folk who graduated long ago.

So what are the Enterprise 2.0 lessons from Facebook? I think one is the power of one-stop shopping, or an integrated collaboration environment. My current Web 2.0 and Enterprise 2.0 interactions are scattered across a number of tools. While it’s not an overwhelming hassle to check them all throughout the day, it is a bit of work. I got the impression from Rachel and Sameer that a lot of undergrads are doing the bulk of their online interacting within Facebook. Shouldn’t we expect employees within a company to do the same, given the opportunity?

A more fundamental lesson concerns the incentives to participate in online communities. Some of the questions I get asked most often about E2.0 concern motivating and encouraging participation. Lots of companies have introduced technologies intended to facilitate collaboration, and most of them have been disappointed by the resulting levels of adoption and use. So collaborationware that spreads like wildfire is extraordinarily interesting, even before we delve into what it’s used for.

Why has Facebook taken off so quickly? In addition to all the features described above, I learned about one other important aspect of the site when I set up my profile and started using it last week: the desire to be popular and make friends, or at least appear to have a lot of them. I found myself racking my brain to think of who else I could ask to be my friend (after I was done with the MBA students I’d just finished teaching, who probably felt some obligation to accept the invitation). I spent a fair amount of time finding people and sending invitations, and then I spent a lot of time checking back in to see who’d accepted.

I’m still not quite sure why this was so important to me (and I hope the friend-collecting urge abates soon so I can do other things) but I’ll attest that technology-facilitated network building is a compelling activity. If companies want to bring their employees to the collaboration technologies they’ve installed, they could do a lot worse than giving them the opportunity to build their social networks like Facebook does.

Tell us what you think — is Facebook the shape of things to come for E2.0? Is network building a good way to bring people to collaboration technologies?

Also, here’s my profile. If we’ve worked together, if you’ve taught me or I you, if we met at a convention or other event, in short if we have any tenable connection at all, let’s be friends.

I’m really looking forward to our annual faculty research symposium, which is taking place later this week. It’s a great opportunity to catch up on some of the most interesting work being done around the school, and to learn what my colleagues in other departments have been up to. 

Last year I heard David Yoffie talk about the course he’s put together on strategy and technology (at HBS, course development is often considered a form of research). Yoffie has been studying technology-producing companies for some time now, has written extensively for both academics and managers, and has put together a rich and fascinating course. 

As he was finishing his presentation, a question occurred to me.  "Dave," I asked, "when, if ever, are technology companies going to get boring?" Luckily, he understood what I was really asking, which was something like "As you know, at HBS we don’t study industries for their own sake. We don’t have, for example, specialists in the trucking or re-insurance industries, even though they’re large and important. If and when we study specific industries in depth, it’s usually because they illustrate phenomena of broader interest. Early in the school’s history, for example, faculty studied railroads to understand the challenges and opportunities inherent in building nationwide, distributed, and capital-intensive companies that were local monopolies. But none of us study railroads any more. Is the same thing going to be true of high tech? Are we going to absorb all they have to teach us, and then move on? If so, is this going to happen anytime soon?"

If I recall Yoffie’s answer correctly, he said that he didn’t think high tech was about to get boring any time soon. Yoffie’s work, and that of many others, shows that the dynamics of high-tech companies are fascinating at every level: project, product, business unit, company, sector, and industry. At each of these levels, research reveals high levels of both variation and flux: there are large spreads in performance, and lots of turbulence (the ‘winner’ in one period is not necessarily the winner in the next). Both of these kinds of variance attract academics like blood in the water draws sharks.

I mention this discussion not only because this year’s symposium is coming up, but also because I think it sheds light on an important question around IT’s impact. Two weeks ago, Erik Brynjolffson and I published an article jointly in the Wall Street Journal and Sloan Management Review titled "Dog Eat Dog." In it, we presented some of the results of our research, conducted in collaboration with Feng Zhu and Michael Sorell, showing that industries that spend a lot on IT have experienced more intense and dynamic competition since the mid-1990s: more than was the case prior to that time, and more than was the case for industries that don’t spend as much on IT (an earlier blog post accompanying the article’s publication is here).

One common response to the article and the underlying research has been the argument / assumption / statement / hypothesis that these changed dynamics are real and linked to IT, but that they’re temporary. According to this argument, the new information technologies that appeared in the mid-1990s —  the Web, commercial enterprise IT, XML, and others —  were major innovations, and ones that will not be absorbed quickly or evenly by companies.  But they will eventually be absorbed, and once this occurs competition will revert to its ‘pre-IT’ state. As G. Oliver Young commented on my original post:

IT doesn’t matter in the long-run. In the short-run, as firms adopt IT at different rates and rationalize those purchases with different levels of success there will be an amplification of turbulence. In the long-run, however, these forces will shake out as all firms reach the same plateau, rationalizing much of the same technology for the same business benefit. This is not to say that IT doesn’t matter at all — in the short-run it is tremendously important and can change the competitive landscape quite drastically — but the major game-changing shifts do not occur every day, they occur at most once every 10-12 years.

My concern is that your analysis is, due to our place in history, examining the short-term impact of a major shift — where we would expect the competitive landscape to change.

This comment echoes some of the points Nick Carr made in his May 2003 HBR article "IT Doesn’t Matter:"

The trap that executives often fall into… is assuming that opportunities for advantage will be available indefinitely. In actuality, the window for gaining advantage from an infrastructural technology is open only briefly…  the opportunities for gaining IT-based advantage are already dwindling… It may well be that, in terms of business strategy at least, the future [of reduced IT impact on competition] has already arrived.

I certainly agree that the IT innovations of the mid-1990s were major ones, and quite difficult for many companies to internalize. Several of my case studies, in fact, have been about how hard it is to adopt some types of IT. But my colleagues and I think that the phenomenon of slow and uneven adoption is actually not the most important phenomenon relating to IT and competition. The most important competitive impact of IT, we believe, is to make technology-consuming industries a lot more like technology-producing ones. 

The research cited above reveals that the tech-producing industries experience great variation and flux in part because rates of product innovation are so high, and replication of these innovations is fast and easy. As we wrote in "Dog Eat Dog:"

Competition [in high-tech industries] is constant, fierce and characterized by only temporary advantage, fueled by the ease with which software makers and other high-tech companies can copy and distribute new products and services. Instantaneous delivery through the Internet to hundreds of millions of consumers means a company with a slightly better online marketplace or search engine, for example, can quickly dominate the market, and just as easily be dethroned by a rival with a new approach.

We think that what’s going on in technology-consuming industries now is high rates of process innovation and fast and faithful process replication that are exactly analogous to the product innovation and replication we’ve been seeing for a while in technology-producing industries. And IT is the enabler of this new style of process innovation and replication. As we wrote:

Just as Google Inc. can take an improved search algorithm and make it immediately available via the Web, or Apple Inc. can quickly distribute an updated version of iTunes, companies in other industries can invent a new way of doing business, embed it in internal software, and deploy it as widely as necessary across locations, divisions and departments to gain an advantage.

I’ve seen, firsthand, IT used to embed and replicate process innovations in companies as diverse as Zara, CVS, Los Grobo, Alibris, MK Taxi, and SYSCO. These examples, and many others I’m familiar with, strongly suggest to me that IT’s impact on business processes is not limited to a few geographies or industries. Instead, it’s very broad-based. I regard IT spending as a proxy for the amount of IT-enabled process innovation and propagation taking place. It’s an imperfect proxy, of course, but results from our research indicate that it works fairly well.

The distinction between IT-as-innovation and IT-as-enabler-of-process-innovations is critically important. It’s the distinction between one shock to a system, and a system in which shocks become much more common. In the former situation it might be reasonable to expect that many or most members of the system (i.e. most firms in an industry) would eventually figure out how to respond properly to the shock. For a shock consisting of the mid-1990s IT innovations of the Web and commercial enterprise software, proper response would mean something like implementing ERP without crashing and burning and designing an easy-to-use eCommerce site. After this, it would be back to business as usual.

However, if the deepest impact of the mid-’90s innovations in corporate IT is to increase the pace and scope of process innovation, then simply succeeding with a couple system installations is clearly insufficient. It’s insufficient because at least some competitors won’t stop using IT to change existing processes or invent and deploy new ones. 

When this happens, and when the process innovations are competitively valuable ones, rivals will really have no choice except to keep up with the new higher pace of innovation. Not doing so would be the equivalent of a hardware or software vendor’s electing to sit out a couple generations of product innovation in their industry. This would pretty quickly be a fatal decision.

Of course, only time will tell which of the two theories is correct —  whether IT-consuming industries experienced a one-time shock in the mid 1990s, or whether they’re now experiencing more frequent and profound process shocks because of IT. For what it’s worth, our data are showing that the competitive dynamics of high-IT industries (those that consume a lot of IT) are getting more intense, not less so. In fact, just as "IT Doesn’t Matter" appeared in 2003, turbulence, concentration, and performance spread were increasing in high-IT industries, and continued to do so through 2005 (the most recent year for which we have data).

What do you think? What’s the correct way to think about IT’s effects going forward: diminished competitive significance because the technology innovations are being absorbed, or sustained significance because IT has moved industries into permanently higher rates of process innovation and replication? And what logic or evidence supports your argument? Leave a comment and let us know.

Adam Carson just alerted me to Anne Zelenka’s sharp post characterizing ‘busy’ and ‘burst’ approaches to work. The former is characterized by a focus on being ‘in your place’ in all appropriate ways —  at your desk during working hours, in your place on the org. chart, etc. The latter is characterized by an abiding lack of concern for one’s proper place and a great emphasis on fluidity —  geographic, organizational, collaborative, etc. This fluidity, it is hoped, yields great bursts of productivity in response to needs as they arise.

Zelenka’s post and many of the comments in response to it acknowledged the need for both busy and burst, and the difficult necessity of finding a balance between the two within companies. I think this is a very important topic, and I look forward to hearing what others have to say about it. In particular, I’d love to hear about successful ‘balancing acts’ between the two that readers have instituted, participated in, or seen.

One interesting challenge that companies will face if and when they embrace burst-y approaches to organize work is how to measure and monitor it. Hardcore burst advocates would probably respond "Measure it based on results, and don’t bother trying to monitor it while it’s in process. To do otherwise reflects a lack of understanding of burst." 

There are a couple problems with this response. First, the obvious danger of giving a bunch of bursters a job to do and a suite of E2.0 tools to do it with, then sitting back and waiting for the great output is that it might never come. This can be mitigated somewhat by paying them only on delivery, but this is not always feasible (it’s tough to do with employees) and isn’t that smart in situations where the output is critically important. Second, a philosophy of ‘we put smart people together, get out of their way, and don’t even try to stay on top of what they’re doing’ can be extremely dangerous. As Malcolm Gladwell pointed out a while back in The New Yorker, this was almost exactly Enron’s explicit philosophy. Gladwell calls this the ‘Talent Myth.’

So it’s far from clear what’s the right mix of busy and burst, but it’s pretty clear that both extremes are far from optimal. Tell us what you think —  where’s the happy medium, and how do we get to it from where we are now in our workplaces?