Enterprise 2.0 is Not THAT Big a Deal

by Andrew McAfee on November 20, 2009

I’ve been thinking about what to write in the wake of the recent Enterprise 2.0 conference. One more summary seems unnecessary, since there have been so many good ones already. And the debates are starting to feel a little trumped up and warmed over, and so less fun to wade back into.

And then I got inspiration from Greg Lloyd, President and co-founder of Traction Software and longtime technologist. In addition to running his company Greg finds time to write a great blog, and his post after the conference was called “Enterprise 2.0 Schism.”

In it, he likens the current E2.0 controversies to a religious schism, and divides the community into three sects: Strict Proletarians, who believe it’s all about the people, Strict Technarians, who believe it’s all about the technologies, and Strict Druckerians, who “believe that “2.0″ should be considered a modifier of Enterprise rather than an allusion to mere Web 2.0 technology…”

Lloyd writes with a light touch and is clearly being a bit tongue in cheek, but he’s also making a smart and serious point. Two of them, in fact. The first is that advocates of Enterprise 2.0 really do believe different things about the phenomenon, and these differences matter. His second point is an argument for the Druckerian point of view: that the use of emergent social software platforms (ESSPs) is going to change organizations so much that a new version number is warranted.

This got me thinking about what I believed. I’ve been using “Enterprise 2.0” in Lloyd’s Technarian sense — as a reference to the adoption of Web 2.0 technologies and approaches by enterprises. And do I also believe that such adoption is going to change companies? Sure –    virtually all technology adoptions do, to some extent. Do I believe that it’s going to change them enough to require a new version number?

Nope. I just think that’s too strong a claim. Let me try to explain why.

I yield to almost no one in my belief about the power and utility of ESSPs, but I just don’t think they’re going to transform the structure or purpose of the enterprise. As I wrote earlier, I don’t see E2.0′s tools, approaches, and philosophies making obsolete managers, hierarchies, org charts, and formal cross functional business processes.

It’s a rainy fall day in Boston, and after a wet walk into work I’m sitting here realizing that I need new boots. So maybe later today I’ll call up L.L. Bean and order a pair of Maine Hunting Shoes (Suave? No. Dry?  Yes.). I’ll talk to a customer service rep who will enter my order into an enterprise system. This system spans the call center, the warehouse, the credit card company and, in all likelihood, the marketing department. The people working in each of these areas have relatively stable job titles and descriptions that are tied to pay and benefits. And they all have bosses who manage and develop people, put together plans and budgets, and take responsibility for performance and improvement.

None of this is going to be swept away or rendered obsolete by the advent of ESSPs, even after they’re fully deployed and embraced. We can tell stories about how the new tools enable amorphous / gestalt / collectivist forms of organization that have no set structures and make their way through the environment much like slime molds do, but these stories are pure speculation, grounded in hope rather than reality or experience. They’re a type of cyberpunk science fiction (as an aside, I find it really interesting and telling that the best cyberpunk, like Neuromancer and Snow Crash, conjures up worlds where big formal organizations are more dominant, not less.).

I want to be clear: Lloyd’s post is fantastic: grounded and very thoughtful. He’s not in the enterprise-as-slime-mold camp. And I definitely agree with him that Enterprise 2.0 is a big deal. So what’s the right way to describe its impact?

Here’s my take: ESSPs will have about as big an impact on the informal processes of the organization as large-scale commercial enterprise systems (ERP, CRM, Supply Chain, etc.) have had on the formal processes.

This is not a conservative statement. Enterprise systems have been a huge deal for organizations. They’ve turned reengineering from a whiteboard exercise into an unignorable reality for many, many companies. And Drucker was right when he said that “Reengineering is new, and it has to be done.”

It’s not a coincidence that productivity in the US really accelerated starting in the mid 1990s, just as enterprise systems started spreading, and accelerated most in the industries that spent the most on IT. And a great study by Erik Brynjolfsson, DJ Wu, and Sinan Aral which I wrote about here, found strong evidence that ERP adoption leads to performance improvement.

I believe that Enterprise 2.0 will be as big a deal for corporate performance and productivity. I believe this because I believe that the informal organization is as important as the formal one for getting work done (do you agree?) and that we have historically had lousy technologies for supporting the work of the informal organization (especially outside our immediate circle of strong ties). With the arrival of ESSPs, the tools available to the informal / emergent organization have gone from lousy to excellent, just like commercial enterprise systems advanced the formal organization’s toolkit from lousy to excellent.

So while I don’t think that the impact of ESSP’s is profound enough to warrant a new version number for the enterprise, I do think that we’re on the brink of a sustained period of corporate innovation, improvement, and productivity growth enabled by these new tools. I take some comfort from the fact that some very sharp and experienced corporate leaders like Cisco’s John Chambers seem to feel the same.

Do you?  In your opinion, what’s the right way to think about the broad impact of ESSPs? Will they lead to Enterprise, version 2.0, or just to Enterprise 2.0? Leave a comment, please, and let us know.

  • http://twitter.com/carvalhop carvalhop

    Excellent Post. Let me reform your question: What will Web 2.0 do to the Enterprise?
    I don’t know, but it will do a lot….as technology always does.
    Will it affect the Enterprise Structure? It will for sure. If you believe Latour, democratization of information and new (technological) Actors will change the power relations, will shake the Formal organizations. Will formal relation be reestablished? That’s a good question! Its my belief that: if you draw the informal power lines of an organizations, those Actors will make an effort in maintaining the power, one of the possible ways is by flattening the organization formal strings.
    Although this exploration is interesting, the Web 2.0 already answered the main question providing us with several new organizations with unprecedented dimension, impact and results.
    In fact, new organizations (True Born 2.0) seem to be more viable and alive than the remaining.

  • http://twitter.com/gialyons gialyons

    “I believe that Enterprise 2.0 will be as big a deal for corporate performance and productivity. I believe this because I believe that the informal organization is as important as the formal one for getting work done (do you agree?)”

    I do. Undocumented human-centric business processes – the stuff we've all been doing in conference rooms, IM, email, the phone, in the hallways – have great potential to become more efficient, and more importantly, become more OBSERVABLE across the enterprise with ESSPs. This means they could benefit from innovative improvement, and ohmigod, even standardization across the enterprise.

    Ok, I might be pushing it with that last statement.

  • http://twitter.com/roundtrip Greg Lloyd

    Andy — Thank you for the kind words as well as the thoughtful analysis. I agree strongly with your take that the impact on the informal processes will be as large as the impact of large scale commercial enterprise systems on formal processes.

    I differ a little by including daily working communication, awareness and alerting (the way people work – not workflow or transactional communication) along with the ESSPs as having a large impact on the informal processes of organizations.

    It's an interesting – Peter Drucker style – question to see how this plays out over time see my Drucker Centenary post http://bit.ly/2VhFmR which really should have been titled: “What questions would Peter Drucker Ask about Enterprise 2.0?”

    On the 2.0 question: I alway took the “2.0″ of Web 2.0 as a tongue in cheek observation that the way people use the web and their expectations have shifted dramatically even though there is no “version” you can associate with the emergent phenomena we call the Web. “Who rolled the version?” on the Web is a funny and enlightening question.

    I wouldn't expect organizations to use “2.0″ as much more that a rallying cry, koan or plain old kick in the pants to take a look around and see what's changed. That's useful too.

  • dorothymead

    I've always felt that Enterprise 2 is itself a platform on which all the great ideas we've had to bring together an organisation through the various links, connections, ties, physical and virtual – of knowledge, communication, collaboration and just wanting to work together without rigid boundaries can finally happen. Perhaps it needs to be positioned as a big thing not because it actually is, but as the only way to make organisations take it seriously enough that they recognise how work should be, and so that the innovation and improvements can happen.

  • BryantDuhon

    How about Enterprise 2.1 :)

  • http://www.nonillion.com/ Franky Redant

    First, I’m absolutely convinced that Enterprise 2.0 (it’s concepts as you have defined them) will alter they way organisations communicate and collaborate. I would place myself in the camp that believes that the technology enables process change and therefore corporate culture. But in my opinion, it will not alter the enterprise as a structured ensemble of people working towards the same goals (at least in an ideal situation), with necessary layers of management and structured processes.
    I do agree however that companies have a intense need to capture the informal information, processes and knowledge. In my experience it is often so that informal channels are quicker to disperse important information than the formal ones.
    In fact the smaller the organisation the more likely that informal processes rule the organisation.

    Isn’t is also true that Enterprise 2.0 too is an attempt to structure unstructured information? or at least capture it and make it more usable and traceable ?

    I see the new technologies and ideas that Enterprise 2.0 brings as an extension of existing technology and structures, not as a replacement. They will open up a source of information that hasn’t been tapped efficiently in the past.

  • http://twitter.com/gkgupta Gita Gupta

    Agree with @amcafee – I think we're looking at Enterprise 2.0, rather than “Enterprise, version 2.0″ because these 2.0 technologies give everyone in the enterprise a voice – they don't give everyone a vote. While they are likely to have a huge influence on a company's efficiency and transparency, they are very unlikely to change its org structure from a hierarchy into a democracy.

  • http://twitter.com/MarkFidelman Mark Fidelman

    Andrew, great post. The missing link from E1.0 to E2.0 appears to be a set of boundaries and use cases that describe the real value these solutions and methodologies are adding to the company. The boundaries outline the structure and process while the use cases illustrate how and why.

    Currently, executives either think you're bringing Facebook into the enterprise or wasting time with tools that don't further the bottom line. They can't grasp the real value of E2.0 because they don't have enough positive references. Consultants and vendors are not taking enough time to outline the differences between an E1.0 organization and an organization equipped with E2.0

  • catherineshinners

    Andrew,
    I agree that the camps and debates are a little tired. Every once in a while one runs into an insight that clarifies things, or as the philosopher Deep Throat is said to have uttered, “follow the money.” A graphic from Jurgen H. Daum's book Intangible Assets and Value Creation was an Enterprise 2.0 “aha” moment for me. (my blog post earlier this summer http://tinyurl.com/nb6mwj

    Since Drucker's heyday, the asset value of public companies has shifted from tangible to intangible assets, thus value creation arises from the knowledge worker's talents, experience and capacity to generate new value from knowledge – that generative process often catalyzed and realized by interactivity and productive engagement with other knowledge workers. Enterprise 2.0 is a helpful construct to discuss both the tools and models of interaction necessary for enabling organizations to innovate and deliver value. Enterprise 2.0 tools foster and facilitate the interactivity and engagement necessary for productivity.

    I do think there are profound changes taking place in companies and organizations, and Enterprise 2.0 is an element…
    And thanks for the reference to Greg Lloyd – I'll start checking in there too…

  • http://twitter.com/DT David Terrar

    Your post maps on to two common threads of discussions that some of us have been having at various of the many (too many?) business related social media conferences that are happening in London at the moment. They are:
    1. The old rules still apply and
    2. The language can get in the way.
    I'm with you completely on your positioning. We don't need a new version number for the Enterprise, but these technologies will have/are having a huge impact on the informal processes that all organizations use to collaborate around their formal processes – the Barely Repeatable Processes as Sig Rinde calls them. Use of these emergent tools is significant enough that the Enterprise 2.0 term is perfectly valid. However I can't help agreeing with some of the recent debate that you mention. The social media term is a hindrance and not a help in getting these emergent tools adopted in the typical organization. The enterprise 2.0 term is better, but I have this feeling that within 6 months we'll have changed the language and we'll all be using better terms for this kind of collaboration. I wonder who is going to coin those definitions?

  • http://twitter.com/euan Euan Semple

    Great post Andrew. I think what is happening IS a big deal but have been wary of labelling it Enterprise 2.0 as this makes it too easy to make it “other” and ignore it or assimilate it – bit like what happened to KM. I don't think our current methods of organisation are inevitable and I don't think we have even begun to see the effect of networked ways of thinking on how we relate to the world. This is why when asked recently how long I thought it would be before the full impact of what is happening works itself into organisational life I said fifty years.

  • joningham

    I still think you're asking the wrong question. It's not how / how far is web 2.0 going to change the enterprise, it's how much is the enterprise going to change (and what is web 2.0's role in supporting this). There's a broad range of drivers which are forcing change in organisations and they're not all about the technology. You put all of these together, and I think you do arrive at Enterprise 2.0.

  • http://www.TractionSoftware.com grlloyd

    I agree with your 50 years – if you start the clock running with Doug Engelbart in 1968!

    More seriously – for a major shift in enterprise use of technology I believe 10 years (from early adopter to common use) is closer : From “We have a Web Page” in 1993 to Web Commerce Bubble of 2001; Rare use of inter-enterprise email 1988 to universal by 1998; “Enterprise 2.0″ in the broad sense 2006 to 2016. Pretty close to Engelbart + 50 years!

    The evolution of the Web itself is an great example of an emergent phenomena. It started from TBL's very austere protocols and concepts though unpredictable and intertwingled rounds of innovation in how the Web was used the tech layered over it (search engines+), see “Reinventing the Web” for my view as early Web skeptic http://bit.ly/hmxcB.

    I believe the motivation for changing informal processes of organizations will come from a combination of: 1) people's expectations on how things can and should work from their direct experience with the public Web (as well as internal examples); 2) a measure of strategic thinking about how patterns of work and management can change based on new technology and expectations – in the spirit of Drucker and Engelbart.

    Very few individuals in an enterprise are experts in ERP / MRP / Supply Chain Management etc so the feedback and demand cycles that drive human factor improvement and evolution of these systems are very weak. I have very few constructive comments on improving my payroll system and only whine about its eccentricities and complexity.

    However *everyone* is a social animal and brings that experience to work every day. That's the “social” in social software that will drive evolution and adoption of new enterprise technology – with the public Web as a practical benchmark.

  • http://twitter.com/euan Euan Semple

    I'm sticking to 50 years from now! I was thinking of the impact on how we structure organisations rather than just common adoption of technologies. Still think that will take a long time.

  • mikegotta

    One challenge is that we still lack a basic definition of social software. Some equate it to blogs, wikis, etc. If you leverage Clay Shirky's definition (which is broad) then you have an historical context (from email forward). But in an E2.0 context, social software is never defined. And if you believe that the software itself is emergent – in what way and at what state is it no longer emergent (and what do we have then). So I'm still left with some basic questions.

    Or, are you talking about the emergent use of social software vs the software itself (which is somewhat techno-centric)? If the focus is on “how social software is used” then we're back to a more non-technical discussion around design, user experience, participatory models, culture, etc.

    Open questions:

    1. What is social software?
    2. What makes a social software platform “emergent”?
    3. At what point is an ESSP no longer emergent and when that happens, what has changed?
    4. What other historical examples of emergent social software platforms are there and what can we learn from them? Ex: e-mail, Lotus Notes

  • mikegotta

    If you look at collaboration over the past 20 years, there have been other examples of social software – such as email and even Lotus Notes. During that time though, any ESSP (if we use that term in an historical context to describe something like Notes in its day) was constrained by platform, infrastructure, and network barriers.

    Also, at that time, most information sharing and collaboration strategies focused on activity-centric improvements – collaborative tools were often applied to more structured (semi-formal or formal) activities and were often designed to improve certain outcomes. In general, solutions were localized, lacked visibility and lacked transparency.

    As platforms, infrastructure, and networks matured to where they are today, we have legacy ESSPs. I think that's an important point so we can think of this as part of an evolutionary technology trend. These older ESSPs were fine in their days (focused on activity-centric participation models) but not solving some of the intractable issues that organizations face now. The current incarnation of ESSPs take on a different focus (more “Web 2.0″ styled).

    I agree with you on the formal/informal organization point but would phrase it as 'formal vs. informal participation structures” or models, just to get away from the scare tactic that you have to turn the organization upside down etc.

    To me, a key concept of E2.0 is that more visible/informal participation structures and more transparent/collective contribution patterns will create network effects that in turn, generate business value.

    The ESSP role in that model though s that of an enabler – it is a quesiton of 'how used” vs. 'what is” – else we fall back into a very techno-centric view of things (repeating many of the mistakes of KM in the nineties).

    ESSPs defacto can position you to participate and contribute – but you need the behavioral/cultural practices to happen within an organizaiton (e.g., design, user experience, adoption, change management, etc) to leverage the benefits.

  • http://www.linkedin.com/in/leijstrom Hans Leijström

    It is a must for customer centric and business minded companies (I call them Enterprise 2.0) to create their own ecosystems at home space to create a hub for online business (social shopping) and be able to respond to customer demands. Here you will find my Blueprint Online Community Enterprise 2.0 http://bit.ly/6Lz16o

    My definition of an online community is available here http://bit.ly/63sBDQ

  • http://www.nonillion.com/ Franky Redant

    Enterprise 2.0 is Not THAT Big a Deal

    First, I'm absolutely convinced that Enterprise 2.0 (it's concepts as you have defined them) will alter they way organisations communicate and collaborate. I would place myself in the camp that believes that the technology enables process change and therefore corporate culture. But in my opinion, it will not alter the enterprise as a structured ensemble of people working towards the same goals (at least in an ideal situation), with necessary layers of management and structured processes.
    I do agree however that companies have a intense need to capture the informal information, processes and knowledge. In my experience it is often so that informal channels are quicker to disperse important information than the formal ones.
    In fact the smaller the organisation the more likely that informal processes rule the organisation.

    Isn't is also true that Enterprise 2.0 too is an attempt to structure unstructured information? or at least capture it and make it more usable and traceable ?

    I see the new technologies and ideas that Enterprise 2.0 brings as an extension of existing technology and structures, not as a replacement. They will open up a source of information that hasn't been tapped efficiently in the past.

  • http://twitter.com/andygreen Andy Green

    Great post. In short, I believe that to be taken seriously long term, ESSP's must demonstrably advance the Enterprise's ability to meet the (over-arching) Druckerian tenet of satisfying a customer need profitably. Its not about the technology, it is about the people, but in the end it must all be distilled into a sustained commercial return.

  • mmorley

    Take the folks at LL Bean for example. The call center rep, the managers, and warehouse workers and general HR organization for that matter. An E2.0 environment affords the workers the opportunity to participate, connect and contribute to the organizations innovation and strategy leadership. (provided the E2.0 concept is applied appropriately). This could and I stress “could” in turn, retain an individual(s) and the companies investment in that person by way of connecting with them and allowing them to connect back and contribute to the organizations IC. How much does it cost an organization to lose an individual? what are the savings in retaining them? What is the net benefit of an engaged employee that cares about the organizations success? Lets not lose sight of the human element to belong and contribute and how the organization needs to evolve in order to satisfy those needs.

  • http://twitter.com/yatman Yatman Lai

    Paraphrasing Clay Shirky: “A revolution doesn’t happen when society adopts new tools, it happens when society adopts new behaviors”. ESSP can accelerate the behavior change.

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    How about Enterprise 2.1?

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    If you look at collaboration over the past 20 years, there have been other examples of social software – such as email and even Lotus Notes. During that time though, any ESSP (if we use that term in an historical context to describe something like Notes in its day) was constrained by platform, infrastructure, and network barriers.

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    If you look at collaboration over the past 20 years, there have been other examples of social software – such as email and even Lotus Notes. During that time though, any ESSP (if we use that term in an historical context to describe something like Notes in its day) was constrained by platform, infrastructure, and network barriers.

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    I believe that the shift described in the article will have a dramatic impact on a rather limited number of segments (e.g. retail, telecoms, etc) which are consumer-oriented, the others will almost feel nothing.. One could even go as far as to raise doubts if the Enterprise 2.0 notion is generalizable at all..

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    I tend to think that the ESSPs have a quite limited impact on the vast majority of the businesses (IMHO a company has to have a very flat organizational structure to successfully use the phenomenon to the fullest extent), yet fully agree with the raised issues otherwise.

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    In it, he likens the current E2.0 controversies to a religious schism, and divides the community into three sects: Strict Proletarians, who believe it’s all about the people, Strict Technarians, who believe it’s all about the technologies, and Strict Druckerians, who “believe that “2.0? should be considered a modifier of Enterprise rather than an allusion to mere Web 2.0technology

  • Anonymous

    thoughEnterprise 2.0 is Not THAT Big a Dealbut it also very useful..Do you think so?

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    This is not a conservative statement. Enterprise systems have been a huge deal for organizations. They’ve turned reengineering from a whiteboard exercise into an unignorable reality for many, many companies. And Drucker was right when he said that “Reengineering is new, and it has to be done.

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    The Japanese were first with an electric machine, because
    environmental issues are a high priority in that densely populated island
    nation. Compact size, low noise, and elimination of oil as an environmental and
    fire hazard led the Japanese to create the first commercially viable EMT. In a
    market dominated by precision mid-to low-tonnage machines and relatively small
    shot requirements, early electric drive technologies could most easily be
    adapted to injection molding in the
    Japanese market.

    We are special in Plastic Injection Molding and Injection Molded Parts
    Manufacturer and please send email to: info@vulcanmold.com our
    website is http://www.vulcanmold.com

  • http://www.vulcanmold.com injection mold

    Yes,your point is great, if you are
    intresting in injection molding,please
    scan the next.

    During injection molding,
    plastics may be subjected to an overload of heat. The result can be immediate
    decomposition and a very short lifetime. For a practical determination of their
    lifetime, plastic molded parts
    generally must go through a time period in actual service so reliable data can
    be obtained. However, the tests (usually per ASTM) used have a degree of
    reliability based on experience or as presented in an ASTM standard. If proper
    material and process controls are used, the parts might outlast predictions.

    We are special in Plastic Injection Molding and Injection Molded Parts
    Manufacturer and please send email to: info@vulcanmold.com our
    website is http://www.vulcanmold.com

  • http://www.vulcanmold.com injection mold

     Yes,your
    point is great, if you are intresting in
    injection molding,please scan the next.

    A tool that has received all the necessary attention and care from
    the designer and moldmaker should be
    handled with extreme care so that the expanded effort is fully protected. Any
    protruding parts should be protected against damage in transfer. The mold surfaces, especially cavities and
    cores, should be covered with a protective coating against surface corrosion.
    The coating should be easily removable before the molding operation starts.

    We are special in Plastic Injection Molding and Injection Molded Parts
    Manufacturer and please send email to: info@vulcanmold.com our
    website is http://www.vulcanmold.com

  • Zetar

    Hi

    Yes,your point is great, if you are intrested in injection molding, please scan the next.

    The mold basically consists of a sprue, a runner, a cavity gate, and a cavity. The sprue is the channel located in the stationary platen that transports the melt from the plasticator nozzle to the runner. In turn, melt flows through the runner and gate and into the cavity. With a single-cavity mold, usually no runner is used, so melt goes from the sprue to the gate.

    We are special in mannufacturing injection moulding.

    Please kindly visit the websit: http://www.zetarmold.com

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