perspective The Web 2.0 revolution has been frustrated by a powerful irony. The one place where Web 2.0 tools hold out the most promise to transform social organization is precisely the location where there has been the most resistance to change. That place is the corporation.
Online social platforms are revolutionizing the way we interact with others, build social capital, and even achieve fame and riches. Yet when Web 2.0 social technologies permeate corporate bureaucracies, they are often regarded as invasive and potentially threatening.
This should not be surprising. The fundamental dynamic of social networking is essentially horizontal and open. The classic design of corporate bureaucracies, by contrast, is based on the opposite dynamic.
Traditionally, the social architecture of corporations has been vertical and closed. Corporate cultures are characterized by rigid hierarchies managed as top-down organizations. Corporations are not cocktail parties. The idea of open-ended wikis or Facebook Fridays would be a non-starter in most companies. Indeed some employees are getting dismissed or disciplined when caught logged onto social networking sites at the office.
Web 2.0 evangelists nonetheless believe that an imminent social revolution is about to transform corporate bureaucracies. The buzzwords employed to describe this e-ruption are numerous: mass collaboration, self-organization, open innovation, distributed co-creation, bottom-up management, networked organization, virtual corporation. When Web 2.0 adoption reaches a tipping point, the major impact in corporations will be a diffusion of power towards employees and consumers.
C.K. Prahalad, arguably the world's most prominent management guru, wrote a decade ago about this new economy power shift towards consumers. "Thanks largely to the Internet, consumers have been increasingly engaging themselves in an active and explicit dialogue with manufacturers of products and services," wrote Prahalad in the Harvard Business Review.
"What's more, that dialogue is no longer being controlled by corporations," he added. "Individual consumers can address and learn about businesses either on their own or through the collective knowledge of other customers. Consumers can now initiate the dialogue; they have moved out of the audience and onto the stage."
The companies that understand this, and adapting their organizational behavior accordingly, are adopting so-called 'enterprise 2.0' models. The generally accepted definition of enterprise 2.0 is a corporation that--thanks to Web 2.0 software tools like wikis and blogs--encourages horizontal collaboration and harnesses the power of collective intelligence to boost productivity, foster innovation and create enhanced value. It also signifies a company where software tools allow top management to have a unified view of the entire operations, instead of managing disparate corporate silos that don't communicate with one another. In its broader definition, enterprise 2.0 encompasses a vision advocating new modes of capitalist production and social organization.
In some respects, the enterprise 2.0 vision is old wine in new bottles. It was trumpeted several decades ago by Alvin Toffler, who in his bestselling book Future Shock predicted that archaic corporate bureaucracies would be replaced by dynamic horizontal adhocracies. At the end of the counter-culture 1960s when Toffler's book was an international bestseller, this was exciting stuff.
Toffler's concept of adhocracy captured the spirit of the times. Adhocracy was proclaimed as a new form of organization that would kick down bureaucratic walls and bring people together to capture opportunities and find innovative solutions.
The same vision found eloquent expression in a 1988 book, In the Age of the Smart Machine, by Harvard business professor Shoshana Zuboff, who described how information technology was leading to new networked forms of corporate organization. Zuboff was a leading evangelist in the 1980s for computer-based technologies that she believed would topple rigid corporate hierarchies and encourage horizontal information flows and power-sharing among employees. A decade later, however, Zuboff was forced to acknowledge that her social vision of the workplace was not happening.
"The paradise of shared knowledge and a more egalitarian working environment just isn't happening," she said. "Knowledge isn't really shared because management doesn't want to share authority and power."
In 2003, Zuboff and husband Jim Maxmin published a new book, The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism, which argued that the potential of information technology failed because of resistance by the corrupted culture of "managerial capitalism".
"Managers are at the center, preoccupied with their own interests," said Zuboff. "But their path has become corrupted, they are insulated and have become a source of governance catastrophes."
So is the enterprise 2.0 model for real this time? Many CEOs are intrigued by the business case for enterprise 2.0. Surveys conducted by consulting firms like McKinsey and Forrester Research reveal that executives are showing openness to Web-based collaboration and social networking tools. Forrester forecasts robust corporate spending on Web 2.0 software--including blogs, mashups, podcasts, RSS, widgets and wikis. It projects consolidated Web 2.0 spending growth at 43 percent annually, from US$764 million in 2008 to US$4.6 billion in 2013.
Still, it can hardly be claimed that Fortune 500 companies--with the exception of a small clutch of leading-edge giants like IBM--are stampeding to join a Web 2.0 juggernaut. Moreover, while US$4.6 billion looks like a big number, it's only a tiny fraction--less than 1 percent--of global corporate spending on enterprise software.
Companies have tended to invest mainly in back-end technologies that enable Web-based automation, while remaining paranoid about losing control if social networking tools like wikis and blogs become standard work tools. For many corporate executives, the enterprise 2.0 model means profoundly rethinking how they structure, organize and manage their organizations. And that challenge is potentially destabilizing.
How can we explain the lag between the bold ambition of the enterprise 2.0 vision and the slow pace of its adoption?
One possible explanation is that corporate executives simply don't understand enterprise 2.0. Corporate executives, in other words, just don't get it. Many senior managers mistakenly believe enterprise 2.0 is a product, like the latest Microsoft Office suite. They don't understand that enterprise 2.0 is not a cost center, but rather a state of mind--a revolutionary new way of managing companies and conducting business. Enterprise 2.0 evangelists believe that old-style, hierarchical corporations have a 'DNA problem' with Web 2.0.
Harvard business professor Andrew McAfee, who has written extensively about enterprise 2.0 issues, attributes resistance towards social technologies to the fact that they have little regard for organizational boundaries,hierarchies and job titles. "They facilitate self-organization and emergent rather than imposed structure," he notes, adding that Web 2.0 tools require a "re-examination and often the reversal of many longstanding assumptions and practices".
A second possible explanation is that executives consider enterprise 2.0 to be little more than a trendy buzzword. Whatever the promise of Web 2.0 tools, many corporate mangers regard blogs, wikis and social networks as an intriguing distraction at best, and a serious security risk at worst. Employee dismissals for spending work time on sites like Facebook are, as noted, becoming disturbingly frequent. In Britain, a survey of 3,500 firms revealed that using Facebook and other social networking sites costs the national economy roughly US$255 million per day in "wasted time".
It's not difficult to find an Internet security firm that, hoping to boost sales of its Web 2.0 blocking software, strongly urges corporations to crack down on online social networking. The list of potential downside risks is indeed alarming: virus and spyware infections, data leaks, illegal activities, damage to reputation, to name only a few. Web security specialists have made a business from playing on the worst fears of corporate managers.
A third possible explanation is that corporate executives understand enterprise 2.0 only too well--and that's precisely why they fear it. This theory interests us most here, since we are examining the Web 2.0 e-ruption's implications for power relationships--specifically, the diffusion of power from vertical hierarchies towards horizontal networks. From a strictly structural point of view, corporate executives used to managing top-down hierarchies naturally distrust horizontal networks because they are difficult to control. Try telling a senior executive that, going forward, there will be no more job titles, reporting lines and organizational boundaries in the company.
There is evidence however that resistance to Web 2.0 tools doesn't come from top executive suites but from middle managers and corporate IT departments. In a paper titled "Enterprise 2.0: Fad or Future?", Gary Matuszak of KPMG International notes that, apart from familiar concerns about security risks, the real problem is corporate culture. "Just as damaging are institutional cultures or norms that work against sharing information, either because of concerns about confidentiality or because of hierarchical structures," observed Matuszak.
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Small companies have most to gain
As is so often the case with the web, it is small, agile companies than can gain the most from embracing Web 2.0 as their larger competitors try to figure out best use.
The web is a great leveller. It's possible for small companies to have a web presence every bit as good as larget companies and that has been proved with website. The same is true of a social media presence, with it taking little time to set up pages and profiles on Facebook, Twitter and WeCanDo.BIZ.
Think about what you are looking to acheive though. Is it better customer support? Is it marketing communications? Is it sales or partner prospecting? Think about where your target market resides (which sites and services) and put your focus there, staying true to your objectives.
The other, less critical sites you may be able to cover using automation to copy the tweets, blogs or other updates you issue through your other activities.
Ian Hendry
CEO, WeCanDo.BIZ
www.wecando.biz
Posted by Ian Hendry on Friday, February 20 2009 01:08 AM