Energizing and Engaging Employees – Social media as a ...€¦ · EnErgizing and Engaging...

Energizing and Engaging Employees – Social media as a source of management innovation

Dr. Jules GoddardAlan MatchamDavid MoschellaProfessor Lee Schlenker

March 2010

EXECUTIVE PROGRAMME

LEADINGedgeforum

Position Paper

We would like to acknowledge the pioneering work of the Management Innovation Lab (MLab) at London Business School and express thanks to its founders, Professor Gary Hamel and Professor Julian Birkinshaw, for inspiring our work in this area. Two of the paper's authors, Dr. Jules Goddard and Alan Matcham, are Research Fellow and Associate Member respectively of the MLab.

1

The Changing Nature of Work

1

lEf research is focused on the six closely interrelated domains above. during 2009, we launched the most recent of these, which we have labelled The Changing Nature of Work. in this domain, we will examine the extent to which information technology is changing the way companies are organized, managed and led, as well as it’s overall impact on the culture and dynamics of the fi rm.

Whenever we begin work in a new area, we like to start with a position paper that explains the signifi cance of the domain while presenting our initial thinking and research perspective, typically using a highly visual format. We have taken this approach in each of our fi ve other domains – The Consumerization of IT (2004), The Future of the IT Organization (2005), Business/IT Co-evolution (2006), Business/IT Relationship Management (2006) and Business Sustainability (2008)1. once the position paper has been published, our focus shifts to more specifi c topics, issues, recommendations, frameworks and case studies.

thus, in this initial The Changing Nature of Work position paper, we will lay out the reasons why new technologies – often based on social media and collective intelligence – will enable management and organizational innovation to become one of the next big it application frontiers. We will illustrate this potential by examining one particular aspect of this innovation – the widely recognized need to improve the level of employee engagement, an area where social media (such as the social networking sites facebook and linkedin) and other it-based tools show considerable promise.

as in all of our work, the messages from this research are aimed at our cio/it leadership clients, but within this particular domain we think our fi ndings will be equally applicable to cXo-level management, Human resources and other non-it business executives.

This Position Paper launches our latest research domain: The Changing Nature of Work

1 2 3

4 5 6

Business/ITCo-evolution

How are business and it changing each other?

Business/ITRelationship Management

How can Enterprise it add more value to the

organization?

The Consumerization of IT

How are consumer technologies and the

internet affecting both the fi rm and central it?

The Future of the IT Organization

What will the retained central it function

look like?

The Changing Nature of Work

How will management, employees and the

culture of the fi rm need to change?

Business SustainabilityHow can it be used to

help make the fi rm more environmentally

friendly?

1. our work within this domain was initially done under the banner of green it.

For more on our overall research domain strategy, see our December 2009 research commentary ‘Exploring the Intersection Between Business and IT – The LEF Research Approach’.

22

EnErgizing and Engaging EmployEEs – social mEdia as a sourcE of managEmEnt innovation

the points above summarize the focus and top-level messages of this paper. We believe that the combination of social media, collective intelligence, and related tools for engaging and energizing employees (and customers) marks a new phase of Enterprise it evolution, one where the informal connections between people will become a major new source of new value creation. information technology can now make visible what was once largely invisible – individual employee ideas, messages, perceptions, connections, relationships, feelings, opinions and much more. the result will be both more deeply interconnected organizations, and a powerful new set of management tools and practices to drive greater firm performance and creativity.

taken together, we expect that social media and collective intelligence will have significant effects on what it means to be a modern, networked organization. as we shall see, the exact nature of these changes is hard to predict. no one really knows what the firm of the future will eventually look like, and how much cultural change will ultimately occur. legacy systems, structures and thinking will not change easily or quickly. But we believe this expanded set of tools has the potential to shape the next generation of business dynamics, as firms seek to mitigate the recognized downsides of the complex modern firm. Just as the World Wide Web and services such as google are creating a sense of a truly global brain, so will the collective intelligence of the firm start to resemble a deeply interconnected and evolving entity.

Key messages

1. legacy thinking is often a tougher problem than legacy systems

2. management structures and practices are often barriers to innovation

3. legacy it often mirrors and bakes-in existing management systems

4. Employee engagement is not what it could be in most large firms

BUT ... 1. there are many new tools and concepts that leverage collective intelligence to

accelerate strategic, managerial and cultural innovation

2. social media are a particularly powerful tool for improving employee participation, engagement and trust

3. the cio and central it should be leaders in envisioning and enabling the management and cultural models their firms will increasingly need

4. as social media experiments tend to have low costs, firms should have a number of initiatives under way even in recessionary times

5. it will take time for us to understand what it really means to be a networked organization, but patterns are now emerging

33


to illustrate the power of these new technologies, this position paper will focus on the growing intersection of the three realms shown above. our clients are increasingly telling us that employee engagement and the overall culture of their fi rms are serious concerns both within the central it department and across the organization. they believe that advanced information technology – in particular emerging social media, collective intelligence and related Web 2.0 tools – offers a variety of ways to accelerate workforce performance and creativity; but their experience in these areas is limited, and it is not always easy to know where or how to start.

this is why we have chosen employee engagement as our fi rst topic within this domain. the level of employee engagement is widely recognized as a key driver of organizational performance, but engagement is also a function of both the management culture of the fi rm and the specifi c technologies in use. unless the way fi rms are managed changes as new technologies are deployed, the desired cultural changes are likely to prove elusive.

future projects in our Changing Nature of Work domain will assess it’s impact on areas such as strategy, decision-making, leadership, learning, information transparency and performance evaluation. We will pursue these topics over the next few years.

The path to more successful organizations

Engaged employees

social mediatechnologies

innovativemanagement

Performance, creativity and

collective intelligence

P = f(e) performance is a function

of engagement

E = f(m,t)Engagement is a function ofmanagement and technology

4

Key research questions

this paper and our ongoing research within this domain will raise many questions, such as those listed above. as always, we will seek to guide our clients through a combination of in-depth customer discussions, access to recognized global thinkers and our own thought leadership development. as our efforts will necessarily involve practitioners and experts outside of our traditional cio/it space, we hope to engage with clients in a variety of both new and traditional ways. We encourage clients to distribute this paper to relevant constituencies within their firms, so that more voices can be part of the conversation.

the need to broaden the dialogue quickly becomes clear when we ask clients who in their firm is responsible for developing, articulating and implementing responses to the questions above. few firms have a ready or consensus answer. While we think cios should play a strong leadership role, the close support and involvement of both top management and Human resources is equally important. We hope this paper will raise the level of awareness and discussion within your organization.

1. How can technology be used to break down hierarchies and silos, and bring a greater variety of perspectives to decision-making?

2. How can technology be used to enhance collective intelligence, experimentation and change?

3. How can technology be used to flatten the organization, challenge orthodoxies, and create new social and leadership dynamics?

4. How can technology be used to liberate employees, and encourage dialogue, engagement and trust?

5. How can technology help motivate employees to give their best and tap into their innate sense of learning and pride?


5

Changing management dynamics

over the last decade or so, leading thinkers including gary Hamel, tom malone and others have talked about how technology has changed almost everything in the business world except for our basic management approaches. as shown in the figure, business innovation can occur at virtually every level of the firm’s activity, but it seems to become more difficult and rare as one moves up the pyramid. this suggests that management is a largely untapped innovation frontier. it is also an area where advantages are likely to prove more sustainable than those at lower levels of the stack, which are often more easily copied by competitors. a good way to describe the goal of our Changing Nature of Work domain is that we will try to understand the role of it in the pursuit of this sort of management and organizational innovation. While predictions of changes in this area are not new, they have often been premature. part of our purpose in developing this initial position paper is not just to present a set of futuristic ideas, but also to make the statement that we believe the situation has reached a point where these ideas are starting to come to fruition. this confidence stems from our view that the combination of Web 2.0, social media, collective intelligence software, presence sensing capabilities and cloud computing creates a critical mass of enabling technologies that firms can quickly and inexpensively deploy at least on an experimental basis. our clients seem to feel the same sense of possibility and timing.

Operational

Product

Business model

Industry

Management

Amazon 1-click

Viagra

Starbucks

Apple iTunes

Social media and collective intelligence tools can enhance strategy, leadership, decision-

making, forecasting and employee engagement

Levels of business innovation

Where does innovation occur at your firm?sustainable

business advantage

Management should be a source of innovation


While we developed the figure above independently, we have since realized that Gary Hamel had previously developed something very similar, a point we are happy to acknowledge.

6

But management and IT can also be bottlenecks

yet despite all this potential for change, the reality today is that both management and technology are often barriers to innovation as they can easily lock in hierarchies and calcify bureaucracies that make it diffi cult for new ideas to surface. most of the companies we work with readily acknowledge that their organizations face challenges in all of the areas shown above to at least some extent.

the terminology above shows the fi ne line between systems doing what they were designed to do, and having unintended negative consequences that might outweigh the intended benefi ts. the admittedly somewhat charged language is designed to show how dangerous it can be if fi rms drift into bureaucracy and what some have labelled managerialism – the often untested but implicitly accepted belief that managers and ‘the system’ know best.

many of these dangers are discussed openly within the fi rm, except perhaps the last one. as professor Hal varian of the university of california has noted, fi rms don’t experiment enough with decision-making processes, and too many decisions are made by Hippos (highly paid persons’ opinions) – that is, by the powerful barons and baronesses that dominate executive suites and thinking. implicit in many of the new management concepts that we will discuss in this paper is the need for greater democratization of input and sharing of decision rights – changes that don’t always sit well with the traditional power structures within the fi rm.

•Homogenousprocessesandpractices

•Hierarchiesofpowerandbureaucracy

•Silosoffunctionandcontrol

•‘Heads-down’strategyimplementation

•Over-specializationoftaskandexpertise

•Restrictedinformationaccess

•Dominanceoffinancialandproductionmetrics

•Employeesseenas‘users’andfactorsofproduction

•Lackoflargerecosysteminputandawareness

•DecisionsbyHippos (highly paid persons’ opinions)

Are these issues causing problems in your organization?


7

Organizational dynamics are clearly changing

at one level, we all know that signifi cant changes are coming. Just about every fi rm pays lip service to the idea that it must become fl atter and less hierarchical, and ‘corporate bureaucracy’ has long been a pejorative term. most of our clients now work within very complex matrix structures that emerged in response to the shortcomings of the traditional hierarchical management model, and its often unnaturally rigid boundaries. this is especially true with it, which typically has all sorts of dotted-line relationships to various business units, geographies, processes and internal corporate functions, creating an order-of-magnitude increase in business complexity.

indeed, many companies feel that they are often on the verge of being overwhelmed by their increasingly interlocked organizations, which often struggle to answer even basic questions such as: Who owns the customer? Who is in charge of key business processes? Where does the real p&l actually reside? the resulting gridlock is often exposed when new opportunities and challenges arise, as these almost inevitably cut across existing organizational lines. Both the hierarchical and matrix management models often fail to deliver the agility companies need to keep up with fast-changing global markets.

in this sense, one of the great challenges for it – and today’s emerging social media and other collective intelligence tools – is whether they can help simplify the often mind-boggling complexity it has done so much to create. in other words, can connected employees, intelligent networks and collective behaviour somehow deliver the more organic and emergent organization that most fi rms feel they need but in reality struggle to even imagine? such deeply networked (1000 x) connectivity structures will require management innovation on a very broad scale, as well as a whole new set of next and best practices. this is what makes The Changing Nature of Work such an exciting research area.

Hr disciplines

Hr strategies

•Retention

•CRM

•Diversity

•Transformation

•TQM

recruitment Hrd pm p&p Er r&B

national cancerinstitute

center of cancer

research

division of cancerBiology

division of cancer

Epidemiology & genetics

division of cancer

prevention

division of cancer control & population

science

division of cancer

treatment & diagnosis

division of Extramural activities

Epidemiology & genetics research

programme

applied research

programme

surveillance research

programme

Behavioral program

offi ce of cancer

survivorship

Matrix (present)100 x connections

The networked model will have major implications for management,

but what are they?

technicians Engineers

offi ce admin

consultants

managers

vendors

Keypartners

Executive

Networked (future)1000 x connections

Hierarchical (past)10 x connections


8

Two perspectives on management

as we try to envision what a truly networked organization might look like, a logical place to start is to consider what it is that management does, and how these functions might be changed by more pervasive technology and more connected constituencies. traditional management clearly isn’t going away, but we think it will evolve in a number of important ways.

the figure above provides two perspectives. Management scope breaks down the purpose of management as firms seek to make the most of their resources, knowledge and position. in contrast, management processes are the means by which these objectives are pursued. We believe that it is the management processes that will be most affected by it, and thus our research will be focused on changes in this area.

virtually all of the processes above are candidates for considerable change as it enables more open and more participatory dynamics. for example, strategic planning can be democratized to include more diverse input; community members can review, monitor and contribute to projects; social networks can be used for recruitment, promotion and career development; team members can evaluate individual and managerial performance; and learning and knowledge can be much more openly and collectively shared inside and outside the firm.

But, of course, not every process needs to change in every firm. the challenge is to figure out which management processes should be improved, and what new approaches might be appropriate for your organization. as most firms don’t have a lot of experience in these areas, a culture of experimentation would seem to make the most sense, and this is what we see in the marketplace today.

Management scope

Resources accumulating and allocating

Activities coordinating and controlling

Knowledge acquiring and applying

Objectives setting and programming

Effort motivating and aligning

Relationships building and nurturing

Management processes

strategic planning

investment allocation

product development

project review and monitoring

productivity and training

recruitment and promotion

performance and compensation

learning and knowledge management

internal and external communications

How can IT improve the management of your firm?


9

Social media as the enabler of the networked fi rm

We believe that the explosion in social media in both business and consumer markets may well be the tipping point in the market’s pursuit of management innovation. over the next few years, we will track the impact that services such as facebook, linkedin and their equivalents have on the organizational dynamics of leading-edge fi rms, and we are currently seeking to identify case studies in this area.

today, we simply cannot know the extent of the changes that may or may not come about. But what we do know is the actual growth and long-term potential of facebook rivals that of any of the great internet successes thus far – google, amazon, itunes/iphone, etc. – each of which has proved highly transformative, fi rst in consumer markets and increasingly within the enterprise. similarly, linkedin dominates a professional workspace of extraordinary potential that has simply never existed before. then again, maybe these fi rms are the altavistas2 of tomorrow – early market movers that eventually vanish without a trace. as always, we are less interested in particular vendors than in their underlying ideas and potential.

as with earlier consumerization successes, social media face all sorts of challenges as they move into large enterprises. But as shown in the fi gure above, these technologies can potentially address virtually all of the shortcomings of the modern organization. social media technology can connect previously isolated specialists; it can generate ideas that challenge accepted practices; it can fl atten organizations and reduce the role of hierarchies; it can enhance democratization and participation; it can both nurture and make visible the quality of our personal networks; and, as we shall see, it can create a powerful sense of belonging and engagement. all of these possibilities suggest that the long-term impact will be profound.

Typical fi rm today

technicians Engineers

offi ce admin

consultants

managers

vendors

Keypartners

Executive

Networked fi rm of the future

Will these shifts require a generational change?

Specialization of task

Standardization of method

Hierarchy of control

Planning of outcomes

Motivation by money

Expertise shared broadly across communities

new ideas can come from anywhere at any time

relationships based on self-selection, interests and merit

Everyone can have a voice in collective decision-making

Engagement based on identity, self-determination and belonging

2. altavista was an early Web search market leader.


Hr disciplines

Hr strategies

•Retention

•CRM

•Diversity

•Transformation

•TQM

recruitment Hrd pm p&p Er r&B

10

Finding the right balance for your fi rm

But unlike many of the business book and pundit proclamations, we don’t believe that we are talking about a revolution here – at least not for the foreseeable future. it is much more a case of using some of today’s new tools to help mitigate the problems that organizations currently face, with the recognition that no tool or organization will ever be perfect and that every fi rm will need to fi nd its own balance and path forward.

Hierarchies, matrices and networked businesses all have their strengths and weaknesses. steve Jobs is proof that strong, top-down, hierarchical leadership can still be invaluable. But the many fi rms that don’t have this sort of dominant individual vision, dynamism and risk taking will benefi t from tools that help them develop a broader, more participative culture. similarly, it is hard to imagine that the need for sophisticated matrix management will go away, as fi rms clearly will continue to coordinate complex business unit, geographic and corporate structures.

thus, the mix of hierarchical, matrixed and emerging networked organizational models will vary greatly within and between individual industry sectors, especially globally. nevertheless, virtually every fi rm – and certainly every it organization – can identify with the mythical roman image of the Janus face, equally attuned to looking at the past and the future. companies will always be a mix of legacy and emergent systems. for it, maintaining this balance between doing things more effi ciently versus doing things differently is especially hard during today’s recessionary times, as the legacy requirements of the past and present are so clear and pressing, while the rapidly emerging future becomes ever more enticing yet still uncertain.

New tools can address the downsides of the hierarchical and matrix models

•Professionalexpertise•Formalstructures•Centralizedinnovation•Standardprocesses•Directedemployees•Measuredresults•Monetaryrewards

•Collectiveintelligence•Emergentnetworks•Innovationattheedge•Localexperimentation•Self-directedteams•Peerrecognition•Emotionalrewards

Emergingnetworked

model

Traditionalhierarchical

model


11

Employee engagement

The importance of employee engagement

Employee engagement is one of those things that everyone is in favour of. Who is going to make the case for employee disengagement? But employee engagement is inherently hard to measure and compare over time. for example, there is plenty of evidence that employee attitudes toward work are highly correlated with the success of the firm, and it is only logical that engaged employees will help make firms more successful. But growing, profitable firms also tend to create new learning, career and compensation opportunities, and this tends to result in happier, more engaged employees. statistically separating cause and effect is often impossible, and generally not worth the trouble.

the booms and busts of the overall economy are another complicating factor. during downturns, pressures on employees typically rise as their ability to effect meaningful change diminishes, and in theory this should discourage engagement. But during recessions, the fear of losing one’s job can be a powerful motivator for individuals to do their best to try to stand out among their peers. While companies clearly don’t want to rely on fear to sustain engagement in the long run, its importance within the current economic climate can’t be ignored. But regardless of these measurement challenges, improving employee engagement appears to be rising up the corporate agenda for the reasons shown in the figure. as we shall see, technology is tending to push innovation and value creation to the edge, and this requires developing and energizing employees as much as possible. many companies know they have a problem and are willing to act if the costs and likelihood of success seem reasonable. over the next set of pages, we will examine the components of employee engagement and discuss how each is affected by information technology.

•Employeeengagementishighlycorrelatedwithbusinesssuccess

•Employeewillingnesstogotheextramileisclearlycriticaltoquality,safety,customer service and many other key business requirements

•Thedatasuggeststhatemployeeengagementismuchlessthanitcouldbe,and thus most firms are inherently under-performing

•Maintainingemployeemotivationandtrustthroughtougheconomictimesisoften difficult, but can have long-lasting cultural effects

•Asknowledgeworkersbecomeanever-largershareofdevelopedworld economies, ongoing learning becomes more important

•Newtechnologieshavethepotentialtogreatlyempoweremployeesandteams, but this implies new levels of individual and group responsibility

•Managementwouldbenefitgreatlyifthecollectiveintelligenceofcommittedemployees was more easily leveraged

•Acultureofemployeeengagementandtrustisanaturalsteppingstonetomore customer-centric business operations


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Employee engagement – typical and target distributions

as a rule of thumb, most fi rms can recognize the roughly 20/60/20 distribution shown above, with the three group descriptions generally representative of today’s modern workforce. an ideal fi rm might have a 35/60/5 pattern. in other words, it is probably undesirable to have too many overtly courageous and creative people, lest the company gets overwhelmed by a fl ood of ideas, initiatives and debate. Every fi rm needs employees willing to take guidance and carry out agreed-upon processes.

similarly, it is unrealistic to expect to eliminate employee disengagement entirely. Even in a healthy fi rm, ongoing changes and challenges mean that inevitably some people would be better off elsewhere. additionally, there are always a signifi cant number of workers who just aren’t satisfi ed with their personal work and/or life situations, and this will inevitably manifest itself through various combinations of stress, absenteeism, low performance and turnover. the workplace will never be a utopia.

Workforce engagement patterns will also vary signifi cantly by industry and public/private sector. new industries (where learning, opportunities and compensation are often the highest) tend to have more engaged employees than older ones; creative businesses are often more engaging than menial ones; and well-paying sectors clearly have advantages over low-paying areas. the challenge for most fi rms is to make progress both within their own organizations, and in comparison with their direct competitors. despite the inevitable measurement diffi culties, comparative data can be very helpful, as fi rms must have a sense of where they are today and where they realistically want to be in one, two or three years’ time.

Highly engaged< 20%

employees?

Engaged60%?

Disengagedroughly 20%?

committedcourageous

creative

compliantcompetent

conscientious

resistantreservedremote

% employeestoday

Two yearsfrom today

%

%

%

%

%

%

Engaged60%?

Disengagedroughly 20%?

committedcourageous

creative

compliantcompetent

conscientious

13

Sources of engagement – the employee view

many organizational researchers, consultants and social scientists have developed models that break down employee attitudes into various categories, each of which contributes to employee engagement in its own way. the simple model above reveals fi ve of the more powerful sources.

When jobs are scarce and people are struggling to feed their families, basic ‘need’ can be a powerful motivator. But in more prosperous situations, most employees want to believe in the mission and purpose of their fi rms. they also want to feel that what they are doing is right for them in terms of their own identity and sense of self. finally, as we are social creatures, these three sources of engagement may well be insuffi cient without a strong sense of group acceptance, belonging and recognition so that workers feel that they are an important part of a productive team. if need, purpose, identity and belonging can all be aligned, employees are very likely to be highly engaged, and may well use words such as joy, passion, commitment, fulfi lment and even love to describe their attitude to their work and fi rm.

While the importance of each of the above dimensions will vary greatly for individual employees and at individual times, generally speaking, all factors are relevant to all employees at all times to at least some extent. importantly, the search for improvement within each dimension lends itself to different methods and strategies, especially those that are facilitated by it. for example, working at home can help address very specifi c individual needs, while the tools and conditions one is asked to work with can either support or frustrate one’s sense of personal identity. similarly, effective collaboration and organizational communication can greatly enhance our overall sense of belonging.

personal fulfi lment

Belonging andrecognition

personal identity

purpose and trust

financial need

Based on need, purpose, identity and belonging

Based on being part of a committed team

Based on fulfi lling one’s sense of self

Based on organization’s mission

Based on making a living


14

Personal engagement diagnostic

While it might seem to be impossible for an employer to recognize and address each individual employee’s deep feelings and the often hidden emotions behind the five categories of the previous figure, many useful tools and techniques have been developed by the social sciences community.

the figure above is an lEf adaptation of a brief questionnaire used by the author and consultant marcus Buckingham. after conducting surveys of over one million employees while part of the gallup organization, Buckingham concluded that if firms can get positive answers to just a short list of questions, then they can be confident that they have an engaging place to work. in reality, many firms will fall short in at least some of these areas, but these same deficiencies provide a natural starting point for programmes of cultural improvement. as shown on the previous page, it is relatively straightforward to map particular technologies and policies to the various engagement shortcomings that a firm might wish to improve. this type of exercise naturally lends itself to close cooperation between Hr (which identifies employee engagement issues) and it (which can help determine an appropriate technological response).

of course, it is a real challenge to make sure that employees feel safe in providing honest answers to what can easily be seen as politically sensitive questions. a combination of anonymous surveys and open manager/employee dialogue will help, but there is no substitute for a high level of organizational trust. it also helps to track the information over time, so it can be adjusted to account for changing economic, market and/or company conditions.

Personal engagement diagnostic

Highly engaged

• DoIhavetheopportunitytodowhatIdobesteveryday?• DoIhaveanoverallsenseofenjoymentandfulfilment?• DoIfeelgoodaboutmyfutureatthefirm?

Belonging andrecognition

• DoIfeelthatIamtreatedfairlyatwork?• DoIfeelrecognizedaspartofacommittedteam?• Domybossandco-workerscareaboutmeasaperson?

Personalidentity

• Domyopinionsandeffortsseemtocount?• DoIhaveopportunitiestolearnandgrow?• DoIhavetheresourcestodomyworkright?

Purpose andtrust

• Doesthemissionofthecompanymakemyworkimportant?• DoIknowwhatisexpectedofme?• Aremyco-workerscommittedtodoingqualitywork?

Financialneed

• DoIworkherejusttomakealiving?• DoIperformmostlytoprotectjobsecurity?• Isitimportanttooutperformcolleaguestoprotectmyposition?


15

Factors affecting employee engagement

over the next series of pages, we will describe the role of technology in improving employee engagement, but we should never lose sight of the fact that it is just one of the factors that shapes the culture of the firm. for example, if you work in the construction industry today, you will almost certainly find that economic and industry factors trump whatever efforts your own firm might be making. clearly, businesses can’t control their domestic economies, let alone the global marketplace, and most firms have only a relatively minor influence on the health of their particular industry, or even their own short-term success. We have even less control over the personal circumstances of individual employees. thus, the items shown above in bold-faced red – management, culture and technology – should be the main components of an effective employee engagement programme. While many companies have (at least occasionally) had such programmes, they often focus too much on culture alone. the research suggests that the most important cultural determinant is management. While it is an exaggeration to say that employees don’t leave firms, they leave managers, the role of managers in sustaining employee engagement is difficult to over-state. of course, management, culture and technology are closely interrelated, and it can be difficult to separate cause and effect between, for example, management and culture, technology and management, or technology and culture. although these interrelationships are critical, there is also value in looking at each separately as part of any redesign or improvement process. let’s look now at the specific effects of information technology.

Firm’s success

Globalpressures

Local economy

Industryhealth

Personalsituations

Firm’smanagement

Firm’sculture

Firm’stechnology

firm-specific issues


16

IT should improve engagement over time

it’s tough enough to measure and compare levels of employee engagement over time, geographies and changing business conditions. it’s even harder to isolate and compare the impact of any one component such as information technology. thus, we think this is largely a realm of observation and experience.

that said, our perspective on this is an optimistic one. as suggested by the figure, we believe the net effects of it have been increasingly positive over time. of course, it has always had its alienating effects – sitting in cubicles entering data, spending too much time staring at screens and typing on keyboards, feeling obliged to be on call 24/7, adapting one’s instinctive work habits to seemingly dumb and irritating computer-based business processes, worrying about how your work or even your personal communications might be monitored, and so on. these downsides remain substantial and will never go away entirely.

nevertheless, we think for most employees these concerns are increasingly outweighed by it’s positive contributions – the new skills developed, the career opportunities that emerge, the trendiness of the latest it devices, the ability to work on one’s own time and schedule, the powerful sense of belonging created by various social networks inside and outside the enterprise, and in the end the sheer ‘gee whiz’, futuristic nature of where we are all headed.

of course, there are many employees who are put off by some or all of this. But this group will remain a minority, as some level of fluency in modern information technology usage is important for an ever-larger share of career opportunities. companies that make the it learning process more intuitive and enjoyable can expect to reap real, significant cultural rewards.

2020

High

20001980

dumb terminals

Tendency of IT to engage employees

monitoring, privacy

‘gee whiz’

Low

mainframes/minis pcs Web mobility cloud sn/ai

cubicles, data entry

too much screen time

on-call 24/7

Tendency of IT

to disengage employees

skills, learning,

work at home

information, entertainment

lifestyle, fashion

communities, social networks


17

Tools and concepts for collective intelligence (CI)

changes in management processes will require changes in the tools and techniques that companies and managers rely on. in the future, many of these will be based on collective intelligence – which is both a tool for employee engagement and a means to leverage the knowledge of and weak ties3 between employees, customers, partners and society in general.

the fi rst three concepts (shown in the upper half of the fi gure above) are already showing considerable promise in terms of their ability to bring new ideas into the organization. many fi rms have adopted systematic ideation processes, combining traditional tools such as portals and email with various social media that allow for open community interaction. similarly, open innovation processes are now successfully extending the search for new ideas outside the bounds of the organization. finally, the ability to better understand the underlying patterns of unstructured email traffi c, tweets, web content searches and the like is the next frontier in business intelligence gathering. google, for example, employs several hundred statisticians, economists and other experts seeking to gain insights from its vast data sources. Wouldn’t you want to know what searches customers are doing about your fi rm right now?

in contrast, prediction markets, voting systems and other more democratized decision-making processes are less developed, but we think full of potential. companies generally do a poor job of systematically collecting employee views in areas such as strategy, forecasting and specifi c business decisions, and yet this is a natural way to expand decision-making beyond the traditional Hippo (highly paid persons’ opinions) approach. similarly, most fi rms could also do more to develop an honour system culture to nurture an environment of responsibility and trust. potential areas include expense reports, receipt keeping, time and vacation reporting, work-at-home policies, and employee use of phones and computers.

3. for a further discussion of weak ties, see our report, Global Business Collaboration: Where Culture, Technology, and Innovation Meet (may 2009).

Ideation Open innovation

Unstructuredinformation

Predictionmarkets

Voting systems

Honoursystems


18

But social media and CI create new risks

new approaches to information-sharing and decision-making inevitably bring about new risks, four classes of which are shown in the fi gure above. for example, the same ideation processes that capture the thinking and suggestions from employees and the marketplace will naturally be of considerable interest to prying competitors. similarly, if fi rms decide to develop a more transparent culture by making compensation and performance information more widely available, they will have to be prepared for the inevitable privacy concerns and sensitivities.

distractions and wasted time are another potential downside. most fi rms already have all manner of under-utilized voice and online collaboration tools – portals, discussion databases, knowledge management systems, wikis, podcasts, web meetings, voicemail, conferencing systems, etc. adding new methods can send confl icting messages about the importance of existing tools, especially since getting and sustaining a critical mass of usage is often the biggest collaborative system challenge. in business today, the channels of communication are quite complex and uncertain, with email (even with all its ineffi ciencies) often serving as the only real common denominator across the fi rm. many fi rms struggle to decide which systems they should just simply switch off.

finally, while social media can be a powerful tool for employee engagement, it is certainly no panacea. all systems are subject to ‘observer effects’, and certain employees will always fi nd ways to exploit any system the company deploys. for example, employees who eagerly adopt a new system are probably genuinely excited by the new possibilities, but they may also be eager to increase their own personal visibility. in some cases, there may even be an inverse relationship between the enthusiastic system adopters and those doing the bulk of the fi rm’s day-to-day work. in these matters, there is no substitute for informed human judgment.

intellectual property rights (ipr) and

privacydistractions,

disappointments, etc.

complexity observer effects


19

Lessons from some early adopters

Case examples and engagement themes

as always in our research, it is essential for us to understand where companies really are and what they are trying to do. looking across the fi rms above, we can see engagement and innovation being successfully pursued in a variety of ways:

•EliLillyseekstomorefullyandfairlyengageitspartnerandsupplierecosystem

•Corus(TataSteel)isusingWeb2.0toolstoimproveglobalcohesionintough times

•GSKisusingLinkedInprofilestonurturegroupawarenessandcohesion

•CSCisrunningaseriesofenterprise-wideideationprojectsforstrategicinput

•Bupaisusingsocialmediatobuildcommunitiesofspecializedexpertise

•Googleexpectsitsengineerstospend20percentoftheirtimeonself-directed projects

•W.L.Gorehaslongleveragedthepowerofsmall,diverse,self-selectingteams

•HCLcreatesanowhere-to-hide culture through managerial performance transparency

•AESputsspecialemphasisontreatingemployeesasadultsinallcircumstances

many companies are still in the early stages of experimentation, but the initial results appear positive. in our future research we will be developing much more detailed case studies, and we are actively seeking clients to work with us in this area. for now, we think we can summarize what we have learned from these and other examples in the key messages presented on the following page.

Ecosystem development

nurturing a global culture

increasing employee trust

allowing time for innovation

communities of expertise

company-wide ideation

small, multi-disciplinary teams

managerial transparency

treating employees like adults

treating employees


20

Messages from the field

the messages above generally speak for themselves. one of the more intriguing is the role of central it in areas such as social media project leadership and evaluation. of course, it is typically deeply involved and often ultimately responsible for the choice of the software environment. can and should the firm use a public platform such as linkedin or facebook, or opt for one of the many enterprise-oriented collaborative platforms such as Jive, telligent and sharepoint? But this is the easy part. thinking through the role of it in making the project a success is more challenging. success is generally determined by a mix of quantitative and qualitative indicators. companies naturally assess the volume of employee participation, and how this volume changes over time. this of course can be measured relatively easily and accurately. yet the real value of such projects is typically much more subjective. How important were the new ideas from an ideation project? Has a social media project resulted in more motivated and aware employees? Were these gains worth the time and cost? few firms have hard numbers along these lines.

it staff certainly expect to be judged on whether the chosen platform delivers the services and security promised, but how many it professionals see it as part of their job to generate viral employee enthusiasm for using a new system, and how many believe that they should be evaluated on whether such projects meet management’s often fuzzy goals? the answers to these questions will reveal whether central it is acting as a true business partner – using technology to drive meaningful organizational change – or whether it is really just a provider of systems and services.

•Gatheringawidebodyofviews,opinionsandideasisnotexpensive

•Gettingemployeestoadoptnewtoolsandprocessesisoftenthehardestpart

•Expectthattherewillbeoccasionalfailures

•Trulyengagingemployeesmeansenhancingtheirlifestyles,notjusttechnology

•Employeeengagementrequiresvaluingtrust,responsibilityandinnovationasmuch(or almost as much) as hard numbers in performance reviews

•Globalbestpracticestendtomisstheinherentdiversityofmarketsandemployees

•Socialmediasuccessistypicallymeasuredsubjectivelybyfeedbackandquality

•Engagementdiffersasmanagersmovethroughtheircareers.Whatmakessensetoyounger workers may be seen as irrelevant or a threat by older ones

•Transparent360-degreefeedbackisapowerfulwaytodrivebehaviouralchange

•Ideationandalumninetworkscanimprovethefirm’simage,recruitingandretention

•ItisimportanttohelpITstaffunderstandhowtheywillbeevaluatedinsocialmediaprojects and how they are expected to contribute to the project’s success

•Thereisnosubstituteforseniormanagementparticipation


21

Where is your fi rm positioned?

as with just about every new technology, fi rms need to decide how these new capabilities fi t with their overall mission and culture. the simple 2x2 fi gure above shows four distinct models for employee engagement, depending upon how important innovation and employee creativity are to the future of the fi rm. let’s look at a representative case in each area.

on the right-hand side of the fi gure are two of today’s most widely recognized innovation leaders. yet while apple and google have many things in common and are increasingly competing with one another, in terms of culture and engagement they take two quite different approaches. apple embodies the strong company founder hierarchical model, refl ecting the values of steve Jobs who believes in breakthrough, proprietary products, coupled with a sense of perfectionism in design and execution. the quote in the fi gure symbolizes apple’s belief in truly special individuals4. in contrast, google takes a more democratic view of innovation, empowering all its engineers, and releasing a steady stream of new (often not fully fi nished) products into the marketplace. Both models obviously can work very well.

similarly, there are two models on the left-hand side of the fi gure. in the case of pwc (or indeed any of the big accounting, consulting and legal fi rms) there is a very strong emphasis on employee empowerment. But the purpose of this empowerment is much more about effective client delivery than sustained innovation. in contrast, at mcdonald’s and many other companies characterized by relatively low wages, high turnover and commodity offerings, the employee focus is on making the best of an often less-than-attractive work environment, with relatively little emphasis on innovation.

most businesses will have a mix of all four employee environments within their organization, requiring nuanced programmes targeted at particular groups, issues and challenges.

4. the apple quote has been attributed to steve Jobs; pwc and mcdonald’s quotes are from those fi rms’ web sites.

Empowering employees

Managingemployees

Firm’seffi ciency

Firm’s differentiation

“We deliver what we promise and add value beyond what is

expected”

“provide a positive employment experience

through respectful treatment and compliance

with labour and employment laws”

Engineers spend 20% of their time on their own interest areas

“truly outstanding designers, engineers

and managers are not just 10%, 20% or 30%

better than merely very good ones, but

10 times better”


22

gloBal BusinEss collaBoration: WHErE culturE, tEcHnology and innovation mEEtBridging tHE gap BEtWEEn tHE cio and tHE Board

Engagement requires trust

Engagement also requires trust, but societal trust is now very low (at least in the West)

Without sufficient trust, engagement is impossible to sustain. But as we wrote about in our January monthly commentary, societal trust tends to run in cycles and right now we are at a low point on the curve. the top half of the figure above lists just the most prominent (and mostly just the us-centric) of the many scandals, disappointments and exaggerations of the past decade. While every era has its foibles, the last ten years have been particularly disillusioning.

But it is the bottom half of the slide that is more telling: the decline of societal trust across virtually all professions, institutions and government agencies. social scientists have long recognized the critical role that trust plays in all successful societies, but especially in complex capitalist ones. perhaps the best known work in the field is Trust: The Social Virtues and the Creation of Prosperity (1995) by francis fukuyama, which argues that rationality, self-interest and the freedom of the individual are only part of the capitalist formula. Equally important is the social capital that creates the societal trust needed for system stability. this trust has historically stemmed from both the family and the institutions of civil society, which is pretty much the same list of professions and institutions shown above. the general decline in public trust in these groups in recent years seems beyond debate.

as a traditional source of power, authority and expertise, the enterprise’s central it function is not immune from these trends, especially when the increasing consumerization of information technology is factored in. as in just about all of the other areas listed, it is no longer sufficient for central it to try to develop trust based solely on expertise and authority. participation and transparency increasingly must be part of the mix.

Enron, Worldcom, dot.com, sars, bird flu, swine flu, abusive priests, weapons of mass destruction, steroid-taking athletes, philandering politicians, sub-prime loans, mortgage-backed securities, Wall street bonuses and bailouts, Bernie madoff,

climategate, airline security, tiger Woods, toyota …

lawyers, politicians, churches, regulators, doctors, scientists, professors, universities, researchers, journalists, environmentalists, accountants, consultants, risk managers,

cEos, ngos, unions, Enterprise IT? …

23

gloBal BusinEss collaBoration: WHErE culturE, tEcHnology and innovation mEEtBridging tHE gap BEtWEEn tHE cio and tHE Board

traditional hierarchical or matrix

organization

Web,social

networks,cloud

But new trust must

increasinglybe created

here

trustmust still be

createdhere

customers

Word of web

tweets

privacy 2.0google

self- support

interest groups

usercontent

friendscolleagues

peers

communities

Transparency, openness, community review

Social media can develop and nurture trust

the internet is both a cause of declining societal trust and a source of its eventual restoration. on the one hand, the internet has undermined trust in public institutions in a number of important ways. internet fraud, identity theft, malware, etc. are now widespread, and the Web makes it much more likely that we will hear about any scandals, lies or hypocrisies our civic leaders might be guilty of than when communication was more limited and tightly controlled. But perhaps most importantly, the internet has shrunk the gap between the professional expert and the curious, committed citizen. for example, we all know that if we have a particular health problem, we can use the Web to learn as much or even more than a general practice physician could be expected to know.

in this sense, the internet has on balance tended to undermine societal trust. But we are still very early in the game. already we can see that the Web of the future is likely to emerge as a powerful new source of a more participatory, bottom-up and more transparent trust, one that will increasingly leverage relatively weak and informal ties to complement traditional types of professional expertise. it is already common for individuals to trust their particular virtual communities as much or more than their physical ones. consider the high level of community trust throughout, for example, the open source software movement.

personal technology support is another example of the power of this emerging community trust. increasingly, when we have an issue with our pc or smart phone, rather than go to a vendor web site or the company help desk, we simply type the problem or the error message into google to learn from other consumers. companies need to tap into this new dynamic of trusted engagement based on employees helping employees, and customers helping customers.

24

Do employees have trust in your firm?

While the societal and internet forces on the two previous pages are important global trends, the level of employee trust in any one firm is determined by how that organization is seen to operate by its employees, customers, partners and society at large. the figure above provides a quick means for getting a rough estimate of the level of employee trust in your organization. While one could come up with additional attributes to examine, these six aspects provide a core set of trust components that can help a firm understand whether employees see management as inspiring, sensible, open, fair, credible and steady.

using the 1-to-10 scale provided, there is a maximum of 60 points. anything over 40 is pretty good. anything less than 25 is a cause for concern. it organizations will tend to score pretty well in terms of consistency, fairness and transparency, but will often do less well in terms of inspiration, processes and participation. many it-based systems and procedures – device provisioning, help desks, expense reporting, Erp requirements, password and sign-on policies, data and network encryption, etc. – however necessary, often seem cumbersome and counter-productive to employees, and over time this can undermine their confidence and trust.

the figure above also helps us see that technology is only one component in the trust equation, though an increasingly important one. it is entirely possible to have high-trust organizations that make little use of it, but this becomes increasingly difficult as organizations grow and become more complex and it-dependent. Within the large modern firm, it can make major contributions to consistent executive communications, information transparency, sensible business processes, merit-based rewards and open participatory processes. Each is an important building block of trust.

Leadership

Processes

Decisions

Rewards

Authority

Behaviour

alienating

annoying

opaque

unfair

top-down

arbitrary

inspiring

sensible

transparent

fair

participatory

consistent

1 5 10


25

A holistic view of business/IT engagement

thus far, we have talked about engagement mostly from the perspective of motivating the individual employee. But as we have seen in so many areas of our research, one size doesn’t fi t all, and if we really want to understand it’s effects upon engagement, we need to adopt a more tiered and structured approach.

for example, when we talk about employee engagement we typically think of the rank-and-fi le personnel. But executive engagement is not always what it should be either, especially when it comes to it. similarly, we tend to think of engagement across the organization as a whole, but our clients need to think specifi cally about engagement within the it department itself. customer engagement is another frontier that needs to be brought into the mix. taken together, these areas are the building blocks for developing a business/it engagement strategy.

the fi gure above shows how these various groups are becoming increasingly overlapped as ongoing learning and generational change result in an ever-more ‘double-deep’ business/it workforce and customer base. this means that, over time, employee engagement and employee engagement with it will become increasingly inseparable. over the next four pages, we will look at business/it engagement from an executive, central it, employee and customer perspective. Each area will be used to highlight a particular aspect of the engagement challenge.

Business/IT engagement should span four levels

IT-savvyboard and executives

Networked organizational

models

New decision-making

processes

Engaged,IT-savvy

employees

Empowered business/IT

teams

Cultures of trust and

responsibility

For Enterprise IT engagement efforts should span four levels:

1. Executives

2. Central IT

3. Employees

4. Customers

IT management

ITemployees

Business management

Employeesand

customers


‘Doubledeep’

business/IT

leaders

26

1: Disengagement at the top

in our 2009 report5 on the relationship between the cio and the fi rm’s non-executive Board of directors, we learned that the great majority of boards are very much disengaged from the cio and the role of it, despite the fact that computer hardware and software often account for the majority of their fi rm’s capital spending. While it is easy to blame this disengagement on cios’ inability to speak in relevant business terms, we think this stereotype is less than half of the story. as the words below the fi gure suggest, board-level processes and dynamics are often surprisingly weak.

We think one of the biggest reasons that board members avoid it discussions is that they do not understand them, and thus they naturally tend to avoid topics where they would struggle to make a real contribution and where their lack of knowledge might be openly exposed. it is much easier for all involved to just silently agree that “it doesn’t matter”, and that therefore it really shouldn’t be a signifi cant part of a board-level agenda. thus, in this case, disengagement is often rooted in some combination of fear, discomfort and lack of interest. such feelings are not limited to senior business leaders; people at all levels won’t embrace new it ideas unless they feel comfortable doing so.

during 2010, we have been researching cXo attitudes toward it. our initial hypothesis is that while cXos have historically had many of the same inclinations to avoid it discussions as their non-exec board-level colleagues, such is the importance of it to the modern fi rm that this view is becoming increasingly untenable. thus, in theory at least, business/it engagement at the cXo level should be on the rise; but we will have to wait to see what our cXo research interviews reveal.

Primary IT roleLess than 1% of non-exec directors on boards of non-high-tech Fortune

500-class fi rms have a strong

background in IT

If systems in the boardroom received as much scrutiny as systems in the factory, then a step change in the quality of decisions would result

no itbackgroundon the board

99%

1%


some it background on the board

5. Bridging the Gap between the CIO and the Board, lEf, october 2009.

27

2: IT must be more engaged with the business

Whereas it disengagement at the board/cXo level is often rooted in disinterest and discomfort, disengagement within the it department often stems from issues of personality, culture and excessive functionalism. our clients regularly tell us that they struggle to get their it people to fully engage with their business colleagues.

Here, too, there is a stereotype-based explanation. it people are said to be introverted by nature, more comfortable with machines and each other than with their more extroverted business colleagues. as with many stereotypes, there is some truth to this. it is also true that many it staff need to keep a very strong focus on the it aspects of what they are doing. for such detailed work, an introverted personality is helpful, and maybe even required.

But as shown in our familiar ‘4p’ fi gure above, it professionals will increasingly be expected to be true business partners, and this requires a very different model of engagement. Being a business partner means more than just taking a business approach to it; it means seeing the role of it through the business’ eyes. this is especially true with social media and other collective intelligence projects. in these cases, the technologies are often not particularly complex; they may even be off-the-shelf public services. the real challenges are in provoking the company to adapt to new ways of working, sometimes abandoning older ways.

playing the role of organizational change agent typically requires leadership, evangelism and accountability. this has to come from somewhere, be it central it, Hr, the coo, business unit leaders or self-selecting groups of individual employees. We think there are real leadership opportunities for the cio and it in these areas, but only if it is willing to be held accountable for project results.

contractual adoption Jointgoals

strategic

manage supply

createdemand

Enablechange

lead the business

Provider

Promoter

Partner

Peer

Style of collaboration

Primary IT role

Can IT and the CIO be an agent of management and cultural change?


28

3: Engaging employees as resourceful humans

We have long used the 2x2 fi gure above as a way to show that companies need to revisit their traditional one-size-fi ts-all employee technology policies. Employee it knowledge now varies widely, and this means that to both maximize value and reduce risk, different employees need to be treated in different ways. from this perspective, it is easy to see how employee engagement is often dependent upon getting the right tools into the right people’s hands.

this trend will only become stronger over time. in many fi rms, those employees most interested in moving up the y-axis are often among the most valuable employees in the fi rm. they are the most likely to be truly ‘double-deep’, able to fully apply it to their particular job function, even though they themselves don’t necessarily have any formal it background. for these employees, it is not just that work time and personal time are becoming increasingly intertwined; it’s that the very distinction between work and play is not always easy to discern. such employees should be seen more as resourceful humans than human resources. they are anything but mere ‘users’.

When employees are pursuing areas of both their fi rm’s and their own personal interest, and when they are continually learning and interacting with like-minded colleagues, they are much more likely to be fully engaged. When they can do this while using tools that they fi nd both intuitive and attractive, their organizational commitment will grow that much stronger, especially if they believe their company is treating them fairly, like the responsible adults they see themselves to be.

• Behavioural trust

• ‘Double-deep’ learning

• Social networks

• Work at home

• Play at work

• Self-service

Employees aren’t just ‘users’ anymore

•Frustration

•Danger

•Security

• Innovation

• Ignorance

•Danger

EmployeeIT

knowledge

Employee IT choice and responsibility

low High

low

High

• Ignorance

•Danger


29

4: Customer centricity is the foundation for customer engagement – a healthcare example

customer engagement is the traditional holy grail of both modern business strategy and social media usage. Everything said thus far about trust, fairness, participation and transparency inside the enterprise is just as true outside in the marketplace. customer engagement is strongly correlated with loyalty, future purchases, ‘word of web’ references and, increasingly, innovation and the co-creation of new services and value.

in our 2008 report, Customer Centricity and the Role of IT, we argued that although many firms say that they are customer-oriented, that they put the customer first, that they listen to their customers and so on, few firms are truly customer-centric in terms of the way they are organized and go to market. as shown in the healthcare example above, most firms operate inside-out, starting with their own capabilities and processes and working outward to deliver value to the customer. few healthcare firms are truly patient-centric and outside-in. most industries, especially those that sell through intermediaries, are in a similar situation.

one of the big strategic questions going forward is to what extent the use of social media and collective intelligence to foster employee engagement inside the enterprise will prove to be a stepping-stone toward more engaged customers and more customer-centric operations. once processes such as ideation, voting, learning, sharing and self-support are established inside an organization, it becomes a relatively small step to open some of these processes to customers, suppliers, partners and other interested parties. as these constituencies become part of the firm’s networked operating model, the walls between the firm and the outside world will become much more porous. the combination of accelerated executive, central it, employee and customer engagement is a powerful formula for real organizational change.

Passive patients Engaged consumers

Supplier-centric Customer-centric

Product Product

Manufacturing

Distribution

Influencing

Prescription

Requirements

Co-creation

Trusted relationships

Community needs/knowledge


30

Getting started

Questions for the CIO and central IT

the questions above summarize many of the key challenges raised in this paper. as in the trust evaluation survey (see page 24), these high-level characteristics can be used to help evaluate whether it tends to lock in traditional ways of doing business or is a force for change and a more networked operating model. Within each question, the first option represents an example of it as a barrier to business dynamism, while the second choice represents more creative and energized organizational possibilities. it is relatively easy to use these choices as endpoints on a 1-to-10 or other scale if numerical measures are needed. We suspect that scores will vary widely across different firms.

But what strikes us as we look at these issues across the marketplace and our client base is how few it organizations have taken the time to think through and articulate specific positions. the economic downturn of the last 18 months has made it particularly hard for firms to focus on what are easily characterized as soft and less pressing issues. While perfectly understandable, we think this is a mistake. at stake is the extent to which the current use of it is healthy for the future fitness and dynamism of the firm. ignoring company fitness during a recession makes no more sense than ignoring personal health when one’s own finances are struggling.

as we have noted throughout this paper, if it is not debating these issues and considering new alternatives, who should be? if it proves true that new technologies such as social media and collective intelligence are at the core of tomorrow’s networked organization, there will be real leadership possibilities for those forward-thinking it professionals willing to be a force for experimentation and change.

1. is it a force of inertia or innovation?

2. does it homogenize or differentiate the firm?

3. is it baking-in bureaucracy or loosening its grip?

4. is it designed around the needs of central it or employees?

5. does it strengthen the hand of management or individuals?

6. is it reinforcing silos or developing new networks?

7. is it seen by employees as constraining or empowering?

8. is it seen as enervating or motivating to the culture of the firm?

9. is it fostering dependencies or empowerment?

10. is it making the firm less or more customer-centric?

Has IT articulated clear positions on these issues?

Is IT an advocate for experimentation and change?

31

What are your fi rm’s goals and priorities?

since many of the approaches described in this paper are either relatively inexpensive or even free, we strongly encourage fi rms to experiment in the areas that make the most sense for them. it’s particularly important for central it staff all around the world to actually use these new tools and processes to develop a real feel for what can be done and where things are headed.

the fi gure above can serve as an initial decision-making model. the fi rst question to ask is what are your company’s real goals? more energized employees? greater participation and input into business decisions? or do you seek a more open and transparent management culture? How fast do you want or need to change? gaining consensus about where your fi rm is today and where it wants to be on each of these three dimensions should make for some interesting and revealing initial discussions.

once your directional priorities have been set, then you should consider individual experiments within the appropriate areas. ideation and social networking projects tend to be the lead areas for improving participation and enabling more voices to be heard. making time for people to pursue areas of personal interest and develop double-deep skills is a proven way to energize employees, especially when combined with relevant communities and attractive tools and technologies. finally, on the management front, increasing the level of information transparency and taking steps to make previously invisible information – such as email and web traffi c patterns – much more visible and actionable, are the two main areas of innovation today.

initially, this work should probably stay within the bounds of the fi rm. But once processes are stable and trusted, participation by some combination of customers, partners and suppliers may well make sense. Just as the World Wide Web doesn’t stop at the corporate fi rewall, neither will the networked organization of the future.

Is your fi rm changing fast enough? more

energizedemployees

more innovative

management

more participative

culture

• Time for personal projects• ‘Double-deep’ learning

• Effective teams• Work/life balance

• Honour systems• Personal IT budgets

• Consumerized tools

• 360-degree feedback

• Information transparency• Subjective ‘metrics’

• Unstructured data• Email pattern analysis

• Ideation projects• Social networking tools

• Voting systems• Prediction markets

• Customer networks• Alumni programmes

32

Conclusions

the major themes of this paper are re-stated above. taken together, they reflect our view that the emergence of social networking is enabling new forms of collective intelligence and management behaviour that will make the long-talked-about networked organization possible. this has all the appearance of a real business tipping point, although it is still too early to know how rapidly these patterns will unfold.

this is why we have chosen to launch our research domain The Changing Nature of Work, and this initial position paper, at this time. Both actions reflect our commitment to follow these issues as they develop, as we have done with The Consumerization of IT, Business/IT Relationship Management, Business/IT Co-evolution, The Future of the IT Organization and Business Sustainability over the last few years. Each of our research domains has been selected for its ongoing dynamism and long-term business/it importance.

all the work we have done in the preparation of this paper has convinced us even further that social media, collective intelligence and networked organizational models are all areas that will more than meet these criteria over the years ahead. implicit in our view that business and it are now in a process of co-evolution is that organizational and technological practices are becoming impossible to separate. the faster technology changes, and the more powerful and pervasive it becomes, the more the way we work will have to change. this will have enormous implications for both the central it function and the organization it serves.

•Managementprocessesareanuntappedsourceofpotentialinnovation

• ITcanhelpmakefirmsflatter,morenetworkedanddemocratic,butinmostcasestoday, it largely does the opposite

•Therearemanycollectiveintelligencetoolsandprocessesworthyofexperimentation– ideation, social networks, unstructured information – which have the potential to fundamentally change the way management works

• Improvingemployeeengagementisanimportantleadapplication,asmanyfirmsfacea deficit in trust and motivation

•Modernmobileandconsumertechnologiestendtoincreaseengagementasemployees value learning, belonging, style and work/life balance

•CompaniescanuseITtonurtureamoreopen,transparentandcollaborativeculture;cios should take a leadership position

•Employeeengagementmaybeaprerequisiteforgreatcustomerengagementandeventual customer-centricity

•ThechangingnatureofmanagementandworkisamajornewLEFresearchdomain.as always, we encourage active client participation


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Leading Edge Forum

Asia Pacific, Australia26 Talavera Road Macquarie Park, NSW 2113 AustraliaTel: +61(0)2.9034.3000 Fax: +61(0)2.9034.2233

The NetherlandsOrteliuslaan 10043528 BD UtrechtThe NetherlandsTel: +31 (0)30.6574.574Fax: +31 (0)30.6574.570

FranceImmeuble Le Balzac10 place des Vosges, 92072 Paris La Défense Cedex FranceTel: +331.55.70.52.80 Fax: +331.55.70.50.59

United Kingdom, Ireland, Iberia, Italy, The Nordic Region, Germany, Austria, Switzerland and South AfricaVintners’ Place68 Upper Thames StreetLondon EC4V 3BJ United KingdomTel: +44.20.7015.6000 Fax: +44.20.7015.6850

United States and Canada3170 Fairview Park DriveFalls ChurchVirginia 22042United StatesTel: +1.703.641.3479 Fax: +1.703.204.8355

A recycled paper containing a minimum 75% recycled waste and 25% mill broke and manufactured at a mill accredited with ISO 14001 environmental management standard. The pulp used in this product is bleached using an Elemental Chlorine Free process (ECF).

About the Leading Edge ForumCSC’s Leading Edge Forum (LEF) is a global community whose programmes help members realise business benefits from the use of advanced IT more rapidly.

LEF members work to spot key emerging business and technology trends before others, and identify specific practices for exploiting these trends for business advantage. Members enjoy access to a global network of thought leaders and leading practitioners, and to a powerful body of research and field practices.

LEF programmes provide CTOs and senior technologists with the opportunity to explore the most pressing technology issues, examine proven state-of-the-art practices, and leverage CSC’s technology experts, alliance programmes and events. For more information about LEF programmes, visit www.csc.com/lef The LEF Executive Programme is a premium, fee-based programme that helps CIOs and senior business executives develop into next-generation leaders by using technology for competitive advantage in wholly new ways. Members direct the research agenda, interact with a network of world-class experts, and access topical conferences, study tours, information exchanges and advisory services. For more information about the LEF Executive Programme, visit lef.csc.com

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