I just finished working with my editor on an article about Enterprise 2.0 to appear in the November Harvard Business Review. I wrote long, knowing that my draft would have to be cut down a fair amount. And knowing that content that didn’t make it into the article could still appear on my blog…

So here are a couple paragraphs that aren’t going to be in the conclusion of the article when it appears this fall. I like them because they contain a great quote from a very smart person who found a way to be an effective leader and agent of great change within a huge, tradition-bound organization:

The father of America’s nuclear navy, Admiral Hyman Rickover, was highly effective within a large bureaucracy, yet never ceased to point out its deficiencies and fight against them. He saw that too much deference to formal authority and expertise could hamper effective problem solving, and said:

“The Quakers have an excellent approach to thinking through difficult problems, where a number of intelligent and responsible people must work together. They meet as equals, and anyone who has an idea speaks up. There are no parliamentary procedures and no coercion from the Chair. They continue the discussion until unanimity is reached. I want you guys to do that.”

Emergent social software platforms are ideal technologies to enable this style of problem solving; they impose no procedures on interactions and cannot be used to coerce others. And because they make each individual’s contributions permanently visible and findable, they have another powerful property: they let people’s ’slices of genius’ –   the domains of their expertise — emerge over time.

I’ll post an update here when the full article is available later this year. And in the meantime, here are a couple other great quotes from Rickover about getting work done in organizations that resonate with me. They’re all from his Wikiquote page. Hope you like them:

If you are going to sin, sin against God, not the bureaucracy. God will forgive you but the bureaucracy won’t.

Sit down before fact with an open mind. Be prepared to give up every preconceived notion. Follow humbly wherever and to whatever abyss Nature leads, or you learn nothing. Don’t push out figures when facts are going in the opposite direction.

Free discussion requires an atmosphere unembarrassed by any suggestion of authority or even respect. If a subordinate always agrees with his superior he is a useless part of the organization. In this connection there is a story of Admiral Sims when he was on duty in London in World War I. He called a conscientious hard-working officer in to him to explain why he was dissatisfied with the officer’s work. The officer blushed and stammered when Sims pointed out that in all the time they had been working together the officer had never once disagreed with Sims.

To doubt one’s own first principles is the mark of a civilized man. Don’t defend past actions; what is right today may be wrong tomorrow. Don’t be consistent; consistency is the refuge of fools.

Avoid over-coordination. We have all observed months-long delays caused by an effort to bring all activities into complete agreement with a proposed policy or procedure. While the coordinating machinery is slowly grinding away, the original purpose is often lost. The essence of the proposals is being worn down as the persons most concerned impatiently await the decision. The process has been aptly called coordinating to death.

One must permit his people the freedom to seek added work and greater responsibility. In my organization, there are no formal job descriptions or organization charts. Responsibilities are defined in a general way, so that people are not circumscribed. All are permitted to do as they think best and to go to anyone and anywhere for help. Each person is then limited only by his own ability.

Everything new endangers something old. A new machine replaces human hands; a new source of power threatens old businesses; a new trade route wipes out the supremacy of old ports and brings prosperity to new ones. This is the price that must be paid for progress and it is worth it.

The Devil is in the details, but so is salvation.

I heard via Twitter a little while ago that some people were taking issue with my definition of Enterprise 2.0, and finally got around to checking out the posts in question. The first one appears to be “Annoyed at Enterprise 2.0,” by Tom Graves, which led to “Why McAfee’s definition of Enterprise 2.0 is flawed” by Oscar Berg and then the more charitably titled “Is McAfee’s definition of Enterprise 2.0 flawed?” by James Dellow.

In them I found a mixture of strange statements, flawed arguments, minor quibbles, and points that one could agree or disagree with. I’m tempted to deal only with those points and ignore the rest, but like many other people who traffic in ideas I get upset when my ideas get mangled and mistreated. So let’s take the posts in order.

Graves gives the definition I posted in May of 2006:

Enterprise 2.0 is the use of emergent social software platforms within companies, or between companies and their partners or customers.

Social software enables people to rendezvous, connect or collaborate through computer-mediated communication and to form online communities. (Wikipedia’s definition).

Platforms are digital environments in which contributions and interactions are globally visible and persistent over time.

Emergent means that the software is freeform, and that it contains mechanisms to let the patterns and structure inherent in people’s interactions become visible over time.

Freeform means that the software is most or all of the following:

• Optional
• Free of up-front workflow
• Egalitarian, or indifferent to formal organizational identities
• Accepting of many types of data

He then immediately says “People are not even mentioned in this definition. Neither is the enterprise…” Well, the word “people” occurs in the definition of “social software,” which is the second sentence in the above quote and part of my sub-definitions for E2.0. My main, one-sentence definition includes the people-ish “social.” And I used the plural of “company” instead of “enterprise” in this definition because of a basic rule of good lexicography: the definition of a word should not contain the word itself.

Graves then asserts that this definition is “worse than meaningless” because “by ‘hijacking’ what would otherwise be a meaningful term, it actively blocks us from the possibility of meaningful discussion about the nature of the enterprise within which such software might be used.”

Two points here. First, I was the first to write extensively on Enterprise 2.0 (the only prior close term I could find was “Enterprise2.0″ in a single February 2006 blog post by Stuart Eccles) and the first to define it. I can’t hijack something that I started; the verb in that context is, to use Graves’s phrase, worse than meaningless. It can be hijacked from me, but not by me. I gather that Graves didn’t take the time to familiarize himself with the history of the term.

Second, I find it hard to believe that my definition “blocks us from the possibility of meaningful discussion about the nature of the enterprise.” I offer a definition of a phenomenon, and as a result discussions about organizations are no longer possible? Talk about unintended consequences! I just don’t know what to do with rhetoric like that, so I’ll stop trying to engage with it and move on to the next post.

Berg says that my “technology-centric definition… is missing what made the social web the social web – the people, not the technology.” I’ve asserted from the get-go that it’s the combination of the people and some novel technology that yielded Web 2.0 (a term I like better than “the social web”) and Enterprise 2.0. People have always been around on the Web and in the enterprise, and they’ve always wanted to find each other, interact, and collaborate.

The 2.0 era came about because the technology toolkit available to help them do these things took a great leap forward with the appearance of emergent social software platforms (ESSPs. This is another term I coined, so please don’t accuse me of hijacking it). I’ve written about their genesis here, here, and in my book.

The Web has changed and improved a lot over the past few years, and not because people suddenly became important. It changed because its constituent technologies became skewed much more heavily toward ESSPs. Similarly, Enterprise 2.0 is not taking place because organizations have recently woken up to the fact that their people are important. Trust me, there has been no shortage of voices telling them so over the past eighty years or so. It’s taking place because the digital tools that enterprises can give to their people have improved. So yes, my definition is technology-centric. This is because while some things are not about the technology, others are not not about the technology, and Enterprise 2.0 is one of them.

Dellow writes that “ultimately my point here is that while McAfee warned us about this challenge [of organizational change], it wasn’t part of his definition.” This is true, and appropriate. A definition is not a discussion; it’s “a concise explanation of the meaning of a word or phrase or symbol.” Once we define a phenomenon of interest, then we can start talking about its implications, manifestations, challenges, etc., but these should not be part of the definition itself.

I just looked up the definitions of curveball, fastball, slider, and knuckleball, and none of them told me which were the most challenging to hit or throw; they just concisely explained the pitch. My definition of Enterprise 2.0 is an attempt to do the same for a technology-enabled organizational phenomenon. It’s a starting point for valuable discussions about this phenomenon, not a container for them.

For what it’s worth, I’ve modified my definition just a bit to include the why of E2.0. In my book and a Harvard Business Review article that will appear in November, I say that “ Enterprise 2.0 is the use of emergent social software platforms by organizations in pursuit of their goals.” I hope it’s clear enough, and helpful to you.

As cloud computing gathers momentum in the business world, so too do its critiques and detractors. They tell us that the cloud is insufficiently secure, robust, and stable. That it might suffice for lower-level activities like email and calendaring, but won’t handle chores that require massive computational power, transaction volumes, or bandwidth. That it’s not well suited for a truly mobile worker. That cloud applications are trivialized versions of desktop and client-server ones. That to give up local control over data, software, and infrastructure is to strike a Faustian bargain — one that will someday bring grief. That the full-fledged desktop computer and self-managed data center are here to stay because real industrial strength corporate computing require them. That the cost savings available from the cloud are minimal or nonexistent. And so on…

None of these claims is ridiculous. Each of them, in fact, has a lot of merit. But how many of them have lasting merit? As I listen to most critiques of the cloud I’m not sure if they’re addressing the cloud as it exists now, or the cloud as it will ever exist.

I was reminded again recently of how critically important this distinction is as I was doing background reading for the book I’m digging in on (book #1, on Enterprise 2.0, comes out later this year). This book will be about IT’s impact on business and competition. To better understand this phenomenon I’ve been learning about previous technologies that were a big deal for the economy. Electricity is one of the most obvious of these, and anyone hoping to understand the digitization of business will learn a lot of lessons from the electrification of American manufacturing.

I came across a wonderful 1983 paper by Warren D. Devine, Jr. in the Journal of Economic History called “From Shafts to Wires: Historical Perspective on Electrification.” Devine combed through the contemporaneous business and technology press to learn what ‘experts’ were saying as manufacturing switched over from steam to electrical power, a process that took about 50 years to complete.

Three main points stood out for me as I read this paper with cloud computing in mind:

The real impact of the new technology was not apparent right away. Electrical power didn’t just save costs or make factories a bit more efficient. It allowed radically new designs and approaches. Prior to the advent of electricity, factories were powered by a single big steam engine. This power source drove all the machines in the plant via a complicated system of shafts and belts, an arrangement know as ‘line drive’.

Electric motors were first used as simple replacements for steam power, and factory layouts remained unchanged. But engineers and designers eventually realized that electric motors could be shrunk down and used to power smaller groups of machine in a configuration called ‘group drive.’ This reduced power losses from friction, let parts of of the factory run independently of each other, and increased uptime. Motors were then shrunk even further and applied to each individual machine; this ‘unit drive’ arrangement is the one we still use today.

The shifts from line drive to group drive and group drive to unit drive opened up new possibilities for reconfiguring factories, allowing them to become bigger, more efficient, more flexible, more robust, etc.. US manufacturing became enormously more productive in the first decades of the 20th century. This was not so much because electrification let motors become better, but because it let factories become better.

This happy result was not obvious at the dawn of the electric era, when electricity was seen just as a replacement for previous power sources. Devine includes a couple great quotes to this effect. Prof. F.B. Crocker of Columbia wrote in 1901 that:

There were many factories which introduced electric power because we engaged to save from 20 to 60 percent of their coal bills; but such savings as these are not what has caused the tremendous activity in electric power equipment that is today spreading all over this country . .. those who first introduced electric power on this basis found that they were making other savings than those that had been promised, which might be called indirect savings.

He cited many types of ‘indirect saving.’ For example, electrification eliminated the need for overhead shafts. With them gone, overhead cranes could be installed to carry heavy loads. In 1895, Crocker said:

I do not think any of us rightly conceive of the great convenience and rapidity of work that is coming from the handling of our… loads by [cranes]… this is going to be one of the direct results of the clear headroom brought about by the use of motors.

By 1912, Devine points out, writers about factories considered the value of cranes “so generally recognized as to require no comment.”

The transition to full exploitation of the new technology was long, but inevitable. Electrification of industry in the US began around 1883 and continued for more than half a century. Devine shows that as late as 1930 nearly 20% of factory power was still supplied by steam engines; he also notes while line drive configurations became rare after World War I, they persisted in some old factories into the 1960s.

Full electrification took a long time for a couple reasons. For one thing, it was often cheaper to continue running an old factory the old way than it was to build a new electric one, or even to replace a steam engine with an electric motor. Electrification also required the development of power generating utilities and a transmission grid, both of which took time. It also took time to spread the word and the knowledge about the new technology throughout different regions and industries.

Despite these impediments, though, the march of electrification was inexorable. In most sectors a factory that continued to rely on steam power, or on line drive or group drive configurations, would simply find itself unable to compete with an electrified rival using motors and unit drive. The factory using the legacy technology would be too much less productive, efficient, and agile to stay in business.

At the turn of the 20th century electric motors and unit drive seemed the stuff of science fiction; Crocker wrote in 1895 of “the extreme view… that a motor should be applied to every tool.” But by the 1920s this extreme had become the norm.

There were detractors and skeptics about the new technology throughout the transition. In 1891, Dr. Louis Bell presented the results of his analysis showing that electricity made sense in situations where only small amounts of power were required, but steam was best otherwise. And experts argued about the right answer for powering and configuring factories throughout the following decades. As Devine writes:

… the merits of driving machines in groups or driving them individually were discussed in the technical literature throughout the first quarter of the twentieth century. Between 1895 and 1904, this subject was vigorously debated in meetings of technical societies; neither technique could be said to be best in all cases… And, over 20 years later, group drive was still being strongly recommended for many applications… Two textbooks printed in 1928… make it clear that there were many situations in which group drive was justified.

The people arguing for steam power, line drive, and group drive may not have been wrong about the ‘right’ answer at their particular point in time, but I’m left with the impression that they were concentrating on a moment and ignoring a trend. In other words they were making simple static calculations and failing to take into account that technical progress would, within a few short years, cause the same calculations to come out very differently.

This short-sightedness matters because factory owners made long-term bets at the time they built their plants. If they built for steam power or line drive or group drive they were constrained by these choices, and often unable to take full advantage of electrification even when they woke up to its power. A factory configured for electricity and unit drive from the get-go, in contrast, could take full advantage of all the direct and indirect benefits of electrification as they presented themselves over time.

I hope my purpose here is clear. I’m not bringing up this chapter in business history just because it’s interesting (to me, at least). I’m bringing it up because the analogies between electrification and cloud computing are very tight ones, and are highly relevant for anyone trying to understand how the corporate cloud is going to play out.

So based in part on what I’ve learned about electrification, here’s are my predictions about the move by businesses to cloud computing: It’s going to be a long transition, but an inexorable one. There will be skeptics all along the way, many of whom will have objections and arguments that are valid at particular points in time, but not over longer periods of time. And the longer time periods are the ones that matter, because the move to the cloud is going to be accompanied by benefits that we can’t yet perceive, but that will be substantial.

I believe that what Nick Carr calls The Big Switch is underway. Business computing is in the process of moving to the cloud just as surely as factories moved to electrification about a hundred years ago. We’re at the early stages of this process and it will take a long time to unfold, but it will happen. And business owners who ignore this transition or choose not to participate in it will eventually find themselves constrained and left behind to the same extent as factory owners who sat out electrification.

I know that at present the answer to the question “Should we move this task / process / application to the cloud?” is usually “Well, it depends.” But that’s only because we’re at the relatively early stages of the long transition period. The day will come, probably sooner than many of us think, when the answer to that question becomes simply “Yes.” (or, more likely, something like “Well, duh.”).

There’s clearly a great deal more to say about cloud computing and the transition we’re now going through, and I’ll be writing more about it here and elsewhere. I wanted to kick this topic by looking at a relevant previous period in business history because as Mark Twain said “The past may not repeat itself, but it sure does rhyme.”

What do you think? Do you think the move to the cloud is inevitable? If not, what are the best arguments you’ve heard for why business computing will remain locally owned and operated? And do you think the example of the electrification of industry is a useful one for understanding how cloud computing will play out? Leave a comment, please, and let us know.

More than a few people have told me that the best / coolest / most fun / most informative tech shindig of the year is South by Southwest Interactive (SXSWi), which takes place right before the long-running SXSW music festival. I’ve never been, but enough of my friends and colleagues came back raving about the 2009 event that I resolved not to miss it again.

So I submitted an idea for a presentation (called a ‘panel’ in SXSWi parlance) that I thought would be of interest — one that leverages my position at the suit-geek interface. My panel is titled “What Does Corporate America Think of 2.0?”

I do a lot of teaching, consulting, and presenting to executive audiences from virtually every industry. Such work gives me some perspective on how this community views Web 2.0 and Enterprise 2.0 — how much they know about the underlying technologies, trends, communities, practices, and philosophies, how comfortable they are with them, and the really interesting mixture of nervousness, excitement, worry, optimism, skepticism, ignorance, insight, and enthusiasm within this community.

And for the digiterati who attend SXSWi, executives from mainstream industry are an important community. They will decide which technologies and practices to embrace, and which will be banned or shunned. They’ll thus have a huge role in deciding how the 2.0 ecosystem will evolve.

I’m confident that I can do a decent job of synthesizing corporate America’s messages for 2.0 technologists and enthusiasts, and I love the opportunity to do so. So this is a plea for your support.

Panels for SXSWi are selected based in part on votes from the browsing public, and voting is now open (registration is required). My panel is here; I’d really appreciate your thumbs-up vote, as well as any supportive comments (thanks, @robotchampion, @immunity, and others). An email I got from SXSWi confirming receipt of the panel proposal said “”This is a really well thought out idea. I like the topic, the tight focus and I think the description and the questions are great.”

If you have any topics you’d really like to have included in this panel, please let me know via a comment to this post. I look forward to hearing from you, and to seeing you at SXSWi.

Here’s full descripion of my proposed panel:

What Does Corporate America Think of 2.0?

Event:

Interactive 2010

Level:

Beginner

Type:

Solo

Category:

Business / Entrepreneurial / Monetization, Case Study, Community / Online Community, Economic Concerns, User Generated Content

Organizer:

Andrew McAfee, MIT

Questions:

1. What is Enterprise 2.0?
2. How is social media being used behind the firewall?
3. What 2.0 tools do companies find most scary, and why?
4. Which mainstream companies, if any, are using social media effectively? How are they using it?
5. What business problems does social media address? How important are these problems?
6. What have we learned so far from the initial corporate experiments with social media?
7. Which technology vendors are most likely to crack the enterprise market? Why?
8. What kinds of innovation are taking place in the public sector? What is Government 2.0?
9. Can crowd wisdom be applied to business problems?
10. How should Web 2.0 technologies be modified for the enterprise market?

Description:

Do mainstream companies get Twitter? Are executives in non-high tech industries embracing social technologies and the communities that form on top of them, or are they scared to death? This session will be a report from the field delivered by MIT scientist Andrew McAfee, who coined the phrase “Enterprise 2.0″

“Generosity lies less in giving much than in giving at the right moment.” – Jean de la Bruyère

“The only gift is a portion of thyself.” – Ralph Waldo Emerson

Is there a better feeling than being reminded of the generosity of friends and strangers? A while back I asked a few of each if they’d be willing to read my upcoming book on Enterprise 2.0 and, if they liked it, to provide a quote to be used on the book’s jacket and in other marketing materials. No fewer than eleven people responded, none of whom owed me a favor and all of whom are, I’m confident, insanely busy.

Their quotes are below; I’m immensely flattered and very grateful. I’d like to thank Clay, Gary, John, Tom, Paul, Erik, Léo, Irene, Warren, Bruce, Roger, and Chris for taking the time, for the kind words, and for brightening my day with their generosity.

With Enterprise 2.0, Andrew McAfee has identified a truly disruptive innovation. If you want to profit from it, read this book.

Clayton Christensen, Robert and Jane Cizik Professor of Business Administration at the Harvard Business School, and author of The Innovator’s Dilemma

We are on the cusp of a management revolution that is likely to be as profound and unsettling as the one that gave birth to the modern industrial age. Driven by the emergence of powerful new collaborative technologies, this transformation will radically reshape the nature of work, the boundaries of the enterprise, and the responsibilites of business leaders. In Enterprise 2.0, Andrew McAfee delivers essential insights into the critical and fast-changing interface between IT and the organization. If you’re intent on positioning your business for the future, and would rather lead than follow, you need to read this book.

Gary Hamel, author of Leading the Revolution and Competing for the Future

As businesses and organizations leverage the power of networked Web 2.0 technologies, we will see companies and countries drive the next significant phase of Internet productivity. In Enterprise 2.0, McAfee articulates both the opportunities and the challenges ahead of us that will require a shift in thinking as well as new business models. This book is a valuable resource that underlines the importance of staying ahead of this market transition or risk missing the opportunity to capture the power of collaboration, new innovations and operational efficiencies.

John Chambers, CEO of Cisco

Andrew McAfee is the king of Enterprise 2.0. He’s written a book that is low on hype and high on business value. There is much to gain from exploring these participative technologies, and little to fear.

Thomas H. Davenport, President’s Distinguished Professor of IT and Management, Babson College, and co-author of Competing on Analytics

Andrew McAfee coined the term Enterprise 2.0 to describe a phenomenon that has changed the way the world does business. Now, he takes it a step further. Whether your firm is already deeply embedded in Enterprise 2.0 or you are trying to communicate its value to your staff and your customers, you will soon wear out this book by repeatedly referring to its thoughtful descriptions, advice, and insights.

Paul F. Levy, President and CEO, Beth Israel Deaconess Medical Center

Web 2.0 has opened a new frontier for coordinating work, presaging a revolution in innovation and productivity. Andrew McAfee’s book provides the best guide yet to this new terrain. The wise executive will master it before the competition does.

Erik Brynjolfsson, Schussel Family Professor at the MIT Sloan School of Management, director of the MIT Center for Digital Business, and Co-author of Wired for Innovation

Technology continues to increase transparency and visibility into companies’ business decisions, enabling transformation and driving competitive advantage. McAfee clearly understands the role of IT to create superior customer value. His straightforward approach and the frameworks presented in this book will help organizations derive maximum value from their investments.

Léo Apotheker, CEO, SAP AG

McAfee combines enlightening anecdotes with in-depth case studies and sensible recommendations on how to think about and use Web 2.0 technologies in organizations. This book will persuade anyone skeptical of the value of Enterprise 2.0.

Irene Greif, Director, Collaborative User Experience, IBM

This is an intensely practical book on what the Web 2.0 Revolution is and what it means to managers. Highly readable, it succinctly describes the new web 2.0 technologies, what capabilities they can bring to an organization and their challenges of implementation. Whether or not you are familiar with Web 2.0, this book is a mandatory read.

F. Warren McFarlan, Albert H. Gordon Professor of Business Administration, Emeritus, Harvard Business School

Professor McAfee has written an important book for the true “silent majority”—the hundreds of millions of workers globally who have had expensive technology dumped on their desks. Here he shows how non-IT managers can leverage the new wave of free, collaborative software that they actually enjoy using.

Bruce Richardson, Chief Research Officer, AMR Research

Andrew McAfee spotted and shaped the trend toward Enterprise 2.0 early on, and shows a clear perspective on where value will be created as this new wave of technology applications changes some of the longstanding rules of business. He very effectively keeps the focus not on the technologies themsleves but rather on the implications for how executives will run their businesses in the future. The insights from his fieldwork provide today’s business leaders with a pragmatic view of the opportunities and challenges these trends and technologies will create for their organizations.

Roger Roberts, Partner, McKinsey and Company and leader of McKinsey’s Business Technology Strategy service line in North America.

Afraid of anything and everything 2.0? This is the book for you. McAfee captures why it matters – and highlights case studies that demonstrate how you can make collaboration work for you. And I love that a government example is among the case studies. It is a must read for those looking to build their sea legs for the changing times ahead.

Chris Dorobek, co-host of “The Daily Debrief” on federalnewsradio.com and former editor-in-chief of Federal Computer Week.