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.

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