Posted by Dion Hinchcliffe.

While there are a number of key factors that help organizations create important new types of business results using enterprise social networks or online communities, leadership is almost always at the top of the list.

There is no avoiding the fact that what executives and middle managers actually do when it comes to leadership with digital networks has a inordinate determining effect on whether workers usefully employ social tools in their day-to-day work, take unique advantage of what makes them special, and create meaningful new levels of business value.

I’ve studied or helped organizations apply the key adoption factors of social business for years, and there’s a key question that still seems to come up as frequently as ever:

What exactly can leaders do to enable their organizations to incorporate the vital concepts and work techniques of digital networks into their daily work?

It turns out that enablement of the overall underlying concept, social business, by corporate leaders requires some of the same key skills that made them top managers in the first place: Effective communication, the ability to get others to follow their lead, the ability to formulate a vision and inspire others with it, getting things done, and perhaps most of all, the ability to encourage others to help carry out positive change.

Sidebar: Study a thumbnail sketch on the concept and progress of social business.

Leadership today also requires a set of attributes that many managers usually do not yet have today: Knowledge of and skills with modern digital collaboration tools, and their techniques and strategies. As my industry colleague Cerys Hersey recently noted, the enterprise social network is becoming our corporate ‘operating system’, at least in a significant — and steadily growing — percentage of large organizations today.

Related: What Are the Required Skills for Today’s Digital Workforce?

Comparing Traditional Leadership with Network Leadership

The full and compelling motivations for using a social network as a foundation for how a modern corporation operates is beyond the scope of the analysis here. However, I’ve explored it in detail recently on ZDNet, and the short version is that it enables truly engaging employees, helping them work together in improved ways, tapping deeply into their knowledge to enable widespread learning, scaling work processes in new and potent ways, creating richer/better institutional practices, and capturing a highly differentiating corporate body of knowledge, among other known benefits.

So, of all the new skills that executives have to learn today, perhaps the most important isnetwork leadership, which the conservative and well-respected Executive Board recently pegged in their report, The Rise of the Networked Leader, as a major new evolution in management skills, which can contribute up to twice the profit growth in organizations which have the most effective leaders:

Analyzing the relative performance of more than 3,000 leaders, CEB has found that organizations with the strongest leaders have double the rates of revenue and profit growth compared to those with weaker leaders.

Unfortunately, many organizations and their leaders struggle to meet these mounting demands; those who struggle are hard pressed to maintain their advantage as the work environment changes and the nature of leadership in the new work environment shifts. CEB research shows that many leaders are poorly equipped to thrive in the new, rapidly changing work environment.

DIGITAL NETWORKS: THE NEW MANAGEMENT IMPERATIVE

The lesson here is that it’s now urgent for executives and managers to acquire network leadership skills in order to succeed in today’s modern work environments, rife as they are with many new types of digital collaboration environments that can help them wield outsize leadership influence, which they can use to then orchestrate high-scale performance improvements for their organizations. Beyond the usual corporate focus on revenue and profit, which network leadership can deliver in potent and innovative new ways, network leadership also fosters a fundamentally better, more aligned, and more satisfying workplace for everyone.

As Altimeter’s Charlene Li, in her examination of how digital is remaking the styles, techniques, and even the very culture of leadership, singled out in her best-selling new book The Engaged Leader, notes that:

In order to be truly effective today, leaders in business and society must change how they engage, and in particular how they establish and maintain relationships with their followers in digital channels.

The good news is that top corporate executives are realizing the imperative of leading through digital channels. There are now leading examples of network leaders from highly respected organizations around the world, including business luminaries such as Richard Branson, Rupert Murdoch, Mark Bertolini, Marc Benioff, Marissa Mayer, and even Harvard’s Bill George, though there are certainly still considerable differences in digital engagement depending on corporate responsibility.

So, to understand exactly what top network leaders do in enterprise social networks, let’s examine the patterns that are emerging in what leaders do, day-by-day, to cultivate and exert effective network leadership in their organizations, and even outside of it.

Create Reach: Cultivate Network Capital

Network Leadership | Step 1: Cultivate Reach and Social CapitalGetting an organization to engage with an executive over an enterprise social network can be straightforward if you’re a well-known and/or well-liked leader. But most executives will have to work fairly diligently on building a network of followers in the organization. Over time, these individuals will pay a growing amount of attention to them communication and value steadily flows from the executive through their daily activities. And that’s just internal cultivation of network capital. It can be much more work to gain a relevant network following on the other major arena: Out on the Internet. In its simplest form this is gaining followers interested in your industry work on popular social networks. More meaningfully, it becomes the entire set of online conversations, group activities, and concrete value streams that have your professional social identity connected to them in some way. Fortunately, there are plenty of resources that can teach executives the necessary skills. In particular, reverse mentoring programs such as at Bayer Material Scienceshave been known to be particularly effective at helping executives rapidly acquire the necessary skills.

Be Transparent and Communicative: Working Out Loud

Network Leadership | Step 2: Working Out Loud on Social NetworksSocial networks only become truly powerful business tools when executives start to set their knowledge free to work out in the network, 24 hours a day. Leaders must also build authentic and meaningful conversations with other stakeholders on the network, and so the currency of lightly narrating your work activities on social channels, including what you’re doing and what issues you are facing is considered a key network leadership technique. Cultivating these digital habits will have the benefits of automatically creating more transparency and a shared understanding of what the organization is actually facing at an executive level. Working Out Loud can also directly improve employee engagement, which can be low particularly because meaningful ongoing storytelling is often missing in large organizations, despite inclusive corporate cultures being widely regarded as drivers of high performance. This narration process, which can be usually be accomplished in the margins of executive schedules, also becomes the basis for building even more social capital, as well as enlisting the organization to help just-in-time with key issues, as ideas and solutions have a strange way of coming from where you least expect it. You can learn more about Working Out Out from Deutche Bank’s John Stepper, who has long promulgated it.

Engage on the Network Regularly: Stay Involved at Multiple Levels, Channels

Network Leadership | Step 3: Regularly and Proactively Engage on the NetworkAs one might suspect, just narrating your own work is not sufficient to be a network leader. One must also track key conversations and work streams happening within your networks and social followings. While there’s no way to keep track everything that’s happening, most enterprise social networks have volume controls and filters to let you focus on what matters to you at the time, such as what particular teams, projects, or even people are doing, while still making sure enough serendipity still occurs. It’s important to stay involved at a sustainable pace at multiple levels in the organization across the key digital/social channels, as it’s long been understoodthat diversity of information and stakeholders creates the most vibrant and useful knowledge networks. Opportunities for doing more within network, as well as learning about the organization — and perhaps most of all about your customers — faster than ever before, soon become obvious.

Related: What Network Leaders Should Do About Customer Communities

Work Through the Network: Orchestrate and Co-Create

Network Leadership | Step 4: Orchestrate and Co-Create Through the NetworkOnce a leader has sufficient network capital, along with involvement and credibility within various digital networks and communities, they can begin to more actively wield their influence and leadership strategically over the network. What’s more, this engagement can scale far higher — and much faster — than traditional relationship networks, which is one of the key benefits of digital/social.

Leaders can also use networks to proactively enlist stakeholders in driving successful change, seizing business objectives, solving vital problems, and harvesting needed innovation, or even just getting important work done. Executives can maintain corporate alignment across a highly diverse workforce, while directing the co-creation of solutions to the issues of the day. What’s fascinating is that these activities don’t tend to put much of an additional burden on the workforce because of two sources of headroom: Many employees aren’t fully engaged until their leaders work more closely with them, and most organizations have a significant cognitive surplus. So while network leadership is fundamentally about moving towards improved engagement with your stakeholders, it also has transactional benefits as well. Finally, if you’re still not sure about all this, the Collaborative Leaders Network has many compelling example of executives using collaboration and co-creation — many over networks — that led to better outcomes.

Use the Network to Learn, Then Optimize

Network Leadership | Step 5: Use the Network to Learn Then OptimizeAs I’ve recently pointed out in exploring how our organizations are heading towards a 4th Platform, networks are also the ideal place to learn, and from the learning to improve ourselves and our organizations. Enterprise social networks are therefore terrific environments to learn in the large, because most of the activity is out in the open and can therefore be analyzed for a variety of strategic business objectives. Leaders can also use their social networks for informal and unstructured learning, and getting ‘ground truth’ about what’s really going on and how things are actually accomplished within their organizations.

NETWORK LEADERSHIP: HOW TO GET STARTED, AND WHAT’S NEEDED

Fortunately, since nearly two-thirds of organizations now have the necessary networks internally, and 100% have the needed external networks (social media), almost everyone can get started on network leadership these days.

Note, however, that one key concept that is depicted in the visuals for each step above is thecapability of community management, an essential function to maximize the operational results of enterprise social networks. Community managers can also make the process of leaders getting involved and developing the skills, and even working through high value scenarios, far easier than it would be otherwise. Chances are good that your organization has people that do this, but if not, they can be found online with a bit of effort.

Lastly, this is a new journey and new management skill that we are all learning together as business evolves into more organically networked structures. There is little doubt in the value of network leadership, but the rule of thumb tends to be the more that you put into it, the more you and your organization will get out of it.

Ultimately, we now believe that the real question leaders must ask themselves is this: What will I do with this unprecedented new strategic management capability?

Additional Reading:

How Boards of Directors Can Prepare for Digital Transformation

How Social Networks Drive High Performance for Business

Adjuvi’s Services to Help Executives Prepare for Digital

Posted by Dion Hinchcliffe.

The vast majority of top executives in the world’s leading organizations now believe that achieving digital transformation has become critical to their organizations for growth, sustainability, and even survivability according to an authoritative and widely respected survey by the MIT Sloan School of Management. The reasons for this are clear, as similar studies have shown that making the shift to digital business is strongly correlated to higher revenues, profitability, and market capitalization.

However, even though 78% of executives agree, nearly two-thirds of them also say the pace of technology change in their organization is simply too slow. Given this it’s not surprising that only 38% of CEOs have adapting to digital on their top roster of actual corporate priorities, according to the same data.

This then is exactly the sort of existential challenge in an organization’s trajectory that boards of directors are supposed to help companies navigate via their role in maintaining oversight of the chief executive. But the insular nature of digital business, especially its specialized domains of technical knowledge and unique fast-emerging new operating models, has put up a difficult barrier in front of most boards to foster the requisite proverbial ‘digital DNA.’

Most Boards Still Not Ready for Digital

Boards of Directors are Slowest in C-Suite on Digital TransitionThe current data on boards and digital is fairly grim, with the most authoritative data available (McKinsey & Company) showing clearly that boards significantly lag every other C-suite role in prioritizing what is likely their single largest opportunity to seize opportunity and thrive in today’s global marketplace.

Most worrisome is that it’s likely not that board members believe there is no future in digital for the organizations they govern, it’s that they typically have little experience with it. A detailed analysis last year by Russell Reynolds Associates of the background of the boards of directors for the Fortune 100, as well as equivalents in Europe, totaling 300 leading organizations, found that fully 80% of board members did not have the necessary experience to guide their organizations into the digital era. They also examined the financial performance of those organizations, and the ones with well-resourced digital initiatives and leadership with digital backgrounds both turned in impressive performance numbers compared with ones led by boards with little digital savvy, with 9% higher revenue on average, 26% more profitability, and 12% higher market valuation.

This data is unambiguous enough that most companies today can say with confidence that they have a skill and experience gap on their board of directors that must be addressed. But how can this gap be closed in time? Part of the issue is one of apparent gains/misses: Unrealized business opportunities are not nearly as visible to shareholders as poor performance in existing lines of business. And the opportunities typically look very foreign in the digital world, and are difficult to quantify, as the digital re-imagining of a traditional business often results in models that look almost nothing like the original way of operating.

As a well-known example of the challenges boards face, and they face many challenges according to Dominic Barton, is by comparing that poster child of modern digital business, Airbnb, with the Hilton Hotel chain, formerly the largest hospitality company in the world. Hilton is now easily eclipsed in total rooms available by the new digital gazelle in just a handful years. One could now argue that Hilton’s board should have been aware — and had a primarily responsibility in understanding — that this was coming and better positioned the organization. There are now a long list of examples of major corporate misses in digital transformation that have circulated for years and the evidence shows many more will join the list. But digital growth is inherently so rapid given the underlying operating environment, that it can overtake existing systems of governance and oversight such as traditional boards.

The Top Obstacles to Digital Transition

To answer what must be done, let’s look at the primary reasons that organization’s miss on digital opportunity, beyond just lower visibility of lack of performance against the unknown. Forrester’s Martin Gill sums it up as three top issues, and in our experience we would very much agree: a) Thinking digital is primarily a technology problem; b) Lack of ability to make large scale changes successfully, and; c) Believing they have command of the issues on digital internally. In contrast to most organizations today, digital-ready boards tend to have the experience and background to navigate their organizations past all three leading challenges to digital transformation.

To understand how boards of directors can close the gap and become more digital-ready, it’s worth looking at the existing responsibilities and objectives of the board, which can be seen in the figure below:

Related: What Exactly Does Digital Business Mean Today?

Top Responsibilities of Traditional Boards of Directors

It’s clear from this that many of the responsibilities include understanding how to deal with execution of the business, fending off competitors and other unforeseen external risks, building the right leadership team, and guiding the organizations through changes of all kinds, from leadership to mergers and acquisitions. How then does this help the organization deal with the top three issues holding back effective digital transformation, as mentioned above? The answer, based on our analysis of available data and relationships with top executives and board members in global organizations, is that the first issue, an understanding of how digital technologies can alter your business is well known, it just must be prioritized and studied. So too is the third problem: Not-invented here, or thinking you understand the issues of digital change well enough. That can be resolve by understanding how the board must look outside for competence and experience for help and perspective.

Rather, it’s the second problem that’s the sticking point for most boards: Confidence in — and the actual possession of — organizational capability to make bold and sufficient changes for digital, while heading off the well-known risks and challenges with large scale transformation to the business.

With CIOs and Chief Digital Officers both in the position of direct responsibility for digital, boards may feel they have vast and well-funded resources for digital, but as we’ve observed in recent analysis, lack of funding and prioritization is actually starving the IT departments and digital lines of business from seizing the large opportunities that still lie in front of most organizations’ today. At this point, few informed observers believe that the CIO, CMO, or CDO will succeed in leading the organization in digital transformation, which Altimeter characterized last year as a “marathon”, not a sprint, and requires the sustained resources and top leadership of the organization to achieve.

Preparing for the Digital Marathon

To run that marathon while addressing the top three issues impeding successful realization of digital transition will end up requiring the board. No single C-level role in the organization has the purview or the ability to mandate the changes and marshal the resources sufficient to the challenge, except perhaps the chief executive. But we would argue that the complexity and magnitude of the required changes for digital are bigger than any one person, and requires a deep bench of experience and capability. The board can be the backstop in terms of responsibility, it can build and lean on the right experience, but it’s the possession of effective operational capability to seize digital opportunity that most organizations lack.

It’s here, in the structure of the responsibilities and objectives of the board, that there is a major opportunity in most organization. By recasting the traditional role of succession planning and positioning it for what it needs to be today, transformation, the board can sponsor the requisite resourcing, skills, and operational change model.

This should lead boards to the key question to address the hardest of the three challenges: What will the operational change model be for digital in most organizations? For many digital initiatives, it’s been the Center of Excellence model or the strategic initiative. But our combined research and work in top organizations has shown that we’re moving beyond most of these to a new model that is much more enabling, decentralized, and effective. In fact, we’ve noted that in 2015, acquiring such a capability should be a top priority of the C-Suite overall.

We’ll explore in detail the digital-ready board of directors in an upcoming research post, but one can get a sense of what it looks like in the visual below.

Top Responsibilities of Digital-Ready Boards of Directors

The underlines areas above show where the board of directors must add a vital new responsibility for digital. Digital transformation will effect nearly every board role in some way, but succession more than all, which becomes transformation, and is where the continuous change capability, matched to the rapid speed of digital change, is sponsored and overseen.

What remains to be seen is what actions and remediation that boards of directors will carry out, as it’s not entirely clear if urgency will be found in time. But of time, there is a bit remaining, and proactive organizations have a significant remaining opportunity to seize the digital high ground if they are willing to create the necessary capabilities, backed by board-level mandate.

Related Reading:

Designing the Next Enterprise: Issues and Strategies

The Role of the CIO in Digital Transformation

Adjuvi’s Digital Transition Concierge Services for Boards of Directors

Posted by Dion Hinchcliffe.

I’ve been working in social collaboration for about a decade now, about as long as it’s been a serious model for enabling workforces to function more effectively. We’ve seen the conversations and lessons learned cover the whole landscape over the years, from why the emergent nature of social tools leads to richer outcomes and how to drive early adoption to what the ROI for the average company is and how to organize best for getting optimal results.

Recently, however, we’ve seen a resurgence in the popularity of team-based collaboration tools like Slack that are missing some of the key elements that makes large scale social collaboration so effective. We are also finding they are difficult for large teams to use. Thus I believe it’s worth a brief revisit of what we’ve learned as an industry so far about what makes the more open, participative, and dynamic models of social business uniquely and strategically valuable to our organizations.

High Performance with Social Collaboration: Scale, Connectedness, Diversity

The issue is not that team-based collaboration tools don’t have value. They certainly do and I’ll compare and contrast them with larger scale social collaboration platforms soon. But they don’t create the strategic value that the latter can. The concern here is that they can potentially be perceived, especially at the management and executive level, as being sufficient to enable social business within an organization. Business leaders usually understand quite well the value of collaboration and its central importance to operating an effective business, but they often don’t fully understand the nuances of the supporting technologies and what course of outcomes their decisions will commit them to.

What then is the typically root decision for enterprise collaboration in most organizations? Unfortunately, despite a great deal of experience encouraging us to avoid it, even for well managed companies, the main decision point still tends to be around technology choices and not putting the focus on the collaborative needs of the business itself. Because digital tools are considered the entry point for modern workforce collaboration and are most obviously what’s different than what came before, they tend to wag the dog in the planning process for improving how workers interact and work together. Thus a choosing between a team-based toolkit versus a broader and more comprehensive multiple scenario collaboration platform often happens early on.

Related: How to Deliver on a Modern Enterprise Collaboration Strategy

To make the right decisions for collaboration strategy, we have to focus on what matters most in terms of value creation. In this light, what can we tell our senior executives and board of directors about the momentous commitments that are made by deciding on the style of collaboration too early, before you fully understand what your business needs? These days, we suggest making these key points:

  • The most effective collaboration is open and inclusive. We’ve learned that to achieve the best results, those initiating a collaborative process must not assume perfect foreknowledge of who needs to participate, take excessive control of the process, or begin the process with foregone conclusions on what the outcome should be. Social collaboration encourages these values to a greater degree than less social approaches, and can achieve richer and dynamic outcomes by harnessing a much wider connected network, working out in the open, and thereby involving anybody who considers themselves a stakeholder. This perspective underpins many of today’s most effective digital workplace skills, such as Working Out Loud.
  • Great collaborative environments scale easily to the size and nature of the opportunities at hand. Social collaboration was borne out of the incredible examples of mass collaboration that began happening on the Internet after the first decade of wide-ranging industry experimentation showed that older models of collaboration simply couldn’t support the sheer numbers of participants being brought together to create outcomes. We learned there were better ways to share and work together. Ultimately, social media ended up showing us the way and it’s now the primary form of communication on the planet. However, consumer social media had to be adapted to business needs, and I’m pleased to report that it largely has these days, as social collaboration platforms have matured and evolved. Today’s enterprise social tools now have the ability to enable very sophisticated and large scale collaborative scenarios to take place in our institutions that older, smaller tools simply could not. As I observed in the dozens of successful social business case studies in Social Business By Design, the leaders that ensure that these scenarios are not only possible — but proactively enabled — in their organizations are the only ones that will have them take place. In short, if you want a lot more value from collaboration, you have to make sure it has the headroom to be as strategic and impactful in the large as it can be. We should avoid retrograde models that won’t support size and open participation, and potent new ways of working. This is vital for enabling some of the most valuable business scenarios that involve large portions of our organizations, such as budgeting, forecasting, hiring, exception handling (especially in supply chain), and resource allocation.
  • An outsized amount of collaborative value comes from encouraging diverse participants. The sheer amount of data that has accumulated around the business value of diversity should no longer have to be stated. However, when it comes to collaboration it turns out diversity has a particularly significant effect. Social collaboration, by virtue of its open, inclusive, and transparent nature, ensures that business processes can be influenced by stakeholders far and wide, who will discover them and contribute their points of view. This has become an essential tenet of modern collaboration, that we have to think in terms of “letting the network do the work“, and along the way we’ve learned that it very much will. Data has shown for a while now that the majority of people are interested and willing to co-create, for a wide variety of motivations, mostly self-interested. We’ve also learned that those with which we don’t have a lot of contact normally often have the most valuable new ideas to contribute. Known as weak ties, this was one of the early discoveries in social collaboration. You can study Granovetter’s seminal paper on the subject, and it has since been confirmed in many aspects of collaboration. In short, social collaboration reproduces the invaluable informal networks we had before digital tools and brings them into the modern age. But without the ability to tap into weak ties, which digital social networks do best, you can’t take advantage of them, losing considerable richness and value in the process.

Of course, there are many known benefits to collaboration in almost any form. But I too often see digital approaches to collaboration go for a one-size-fits-all, which is literally impossible for today’s largest, complex enterprise, or employ fashionable new technology, without a full understanding of what they are committing their organization to. These days, I urge business leaders to educate themselves as much as they can on the art of the possible for instrumenting their workforce with genuinely high impact tools and techniques that can truly unleash knowledge, enable remarkable outcomes, while rapidly aligning and orchestrating their workforce, business partners, and even (perhaps especially) their customers in high stakes, high value digital workplace environments.

As a growing number of large organizations demonstrate how valuable the strategic adoption of the social business model of collaboration is for driving high performance, it’s literally become a key plank to competitive advantage in today’s global operating environments. Social collaboration is that differentiating. As corporate leaders, let’s make sure we’re making the most responsible and sustainable decisions about how to best organize how we work together to create meaningful, shared outcomes with our stakeholders and the marketplace.

Additional Reading:

Collaborative Performance Improvement: The Second Wave of the Contemporary Workforce

Digital Priorities of the C-Suite in 2015

Posted by Dion Hinchcliffe.

Digital transformation has become one of the very top priorities for large organizations this year, as companies seek to adapt their products and services — even their very business models — to the modern marketplace.

But literally reinventing a company, changing fundamentally how it engages with and delivers to the marketplace, is perhaps the single largest challenge in business these days. What’s more, just about everyone realizes there’s too much to do but that one also can’t boil the ocean. This means there’s often of a vital question of where to focus first in digital transformation, and in what order to proceed.

Digital business in its own right has become a very broad topic with many sub-disciplines. Now the conversation has moved directly into the C-suite and to corporate boards of directors. These leaders are now on the front line of these changes, grappling with and making momentous decisions on where to spend precious company time and resources as they attempt to evolve the fundamental design and operating model of their organizations in order to sustain their future growth and existence.

As the story unfolds, it’s become clear that often the biggest hurdle is having a management team that is highly skilled and well versed in the prior way of working — the way the company used to do things and is largely still doing them — and not the very latest digital business methods. As I’ve noted before in discussions of digital change, the tendency to clearly understand the world through the present way of doing things acts as a corporate immune system, throwing off inbound innovation and inevitable change until confronted unavoidably with reality, often when it’s far too late.

http://www.enterpriseirregulars.com/40186/connecting-digital-strategy-with-social-business-and-next-gen-mobility/

What does Digital Business Consist of Today?

So the first question then is whether e-commerce is a necessary and sufficient description of digital business today. In our view, it’s certainly not for most organizations, even though most digital business units attached to the traditional enterprise have this as by far the largest revenue source today.

It turns out there are a number of essential digital business capabilities well beyond e-commerce that we find that business leaders are often unaware of, or at least don’t fully appreciate their strategic import. These newer capabilities are essential for building the digital ecosystems of customers, suppliers, and business partners at scale using growth models of the Internet startup world. Without these ecosystems, businesses have little digital network effect (one of the fundamental power laws that digital businesses must be expert at) or marketplace differentiation, which is absolutely critical for top performers in digital business to have.

This is perhaps the most essential point in understanding digital business: The inherent value and power of creating one lies in building a high-scale capability for the network to build out the value for your business. Enabling your ecosystem to co-create marketing, sales, customer care, and even the product development, all on top of the vast assets that a typical enterprise uniquely controls, is the name of the game here. Without such a set of ecosystems and the millions of points of self-reinforcement of a company’s value — again, it must be emphasized, primarily created by its stakeholders — is something no traditional business approach can possibly compete with.

Companies that go up against the eBay or Amazon of their industry using the early models of online business are simply not going to succeed. That’s because they missing the key pieces required today: They aren’t playing the platforms game, the ecosystems game, or the community game. And unless you’re playing all three at a strategic level, you’ll be just another point online service trying to do it all on your own.

In sharp contrast, digital leaders have learned to make the system do most of the work. For example, Amazon has millions of self-onboarded partners connected to its ecosystem at every level, from customers contributing data at scale (reviews, ratings, and much more), to hundreds of thousands of partners listing unique and hard-to-find products, to startups reusing their computing infrastructure to build hundreds of world class products, all of which benefits Amazon’s network effects. They also generate bottom line revenue. eBay, for instance, gets a surprisingly percent of its revenue from these unexpected digital business sources.

In fact, it’s often not well known that new forms of digital business frequently generate most of the revenue in leaders today. Just look at the revealing revenue numbers of top performers using strategic digital business approaches like APIs:

Expedia gets 90% of revenue from APIs. Salesforce gets 50%. eBay’s share of revenue from APIs is a whopping 60%.

Yet few executives preparing for digital business are even looking at these models, and this is the point here: We’re in our third major generation of digital business, and organizations have to get to the third generation as rapidly as possible.

It’s the same with highly disruptive digital business approaches like the collaborative economy. Companies like Uber and AirBnb have no assets such as taxis or hotel rooms whatsoever, but are quickly becoming a dire challenge for traditional hoteliers and taxi services not only have those resources, but are being dragged down by investing in and maintaining them on their own. These two companies are just a drop in the ocean of how many startups are vying for dominance in this vast new space.

So how are collaborative economy startups achieving these results? They have successfully gathered around them networked communities of suppliers that have these resources and then then orchestrate those suppliers in scale, wrap a product interface around them, and deliver them to customers. This dramatically reduce their costs to scale and deliver to the marketplace, because they actually have no inventory or overhead themselves. To get ahead of the stratups and competitors, any capable digital strategy today will examine how collaborative economy approaches can be integrated into the business in scale.

In fact, scale is the name of the game when it comes to digital business. Whoever can 1) build their ecosystems the cheapest and fastest, by enlisting as many of the resources on the network (the global Internet in this case) as possible, and 2) provide best-in-class services that delight customers through stellar user experiences on the channels and devices of the day will likely win.

And there is a powerful competitive lock-out that comes when the network has gathered around you: It confers real, highly differentiated capital in terms of hard-to-replicate community, accumulated data, and marketshare. Or in the parlance of startups, virtually impossible to dislocate network effect. In fact, very few companies that have reached the top of their industry segment with the largest community, the best data, or best partner ecosystem have been dethroned.

So, these days a viable digital business must go well beyond putting up a digital storefront. The reason is simple: This is now something any company can do easily today with a minor investment in an e-commerce provider, and a considerable and sustained investment in marketing. It’s not differentiated, is not a road to becoming a dominant digital player, and will not see anywhere near the kind of growth that a corresponding investment in a truly native digital business model could achieve. Look at the current returns of venture capital firms who are funding tiny companies starting with none of the strategic assets of large existing companies but just these more sophisticated digital concepts.

Related: Designing the New Enterprise: Issues and Strategies

The Key Elements of Modern Digital Business

Instead, enterprises must look more deeply at the current chess pieces of digital business strategy and integrate them into a combined transformation and growth strategy that captures the ground that matters most in the online marketplace: Hard-to-create data, products that get better the more your customers and partners use them, and delightful be-everywhere digital customer experiences. The key elements for success now include:

  • Proactive support for the entire digital customer journey. One can find a lot of recommendations to map out customer journeys, identify high value personas, and to segment audiences. These are certainly important to have and are useful views that must be maintained. But likely the most important rule of all is to never give customers a reason to go somewhere else to get help with a given part of their journey. They are likely to stay there. Unfortunately, companies that started support for the customer journey right at the ‘purchase’ stage often have a hard time widening their support for it that it has the most direct tie possible to revenue, and the others stages appear less promising as a result. But a look at leaders like Nordstrom and Burberry show that owning the total customer journey is required to be a digital business leader.
  • Omnichannel touchpoints, on all major and high growth emerging channels. This means going well beyond sales microsites and mobile e-commerce, which are still important of course, but far from sufficient to be a top-tier player today. Modern leaders in digital business need strong customer communities as well as social architectures across their digital touchpoints to a) capture co-created value, b) scale up and spread out customer support to the marketplace, and c) develop advocacy as a strategic asset. Open APIs are often required to be a digital leaders today, as the aforementioned revenue numbers from many top leaders show that APIs are often the highest of all growth strategies, and it turns out, are crucial to developing a healthy digital ecosystem and downstream network effect.
  • A strong, multidisciplinary digital business foundation. Yes, this does mean having leading e-commerce capabilities with the latest features and techniques, however it also means exploring opportunities to explore collaborative economy options — something traditional firms are starting finally to get good at — by turning existing customers and suppliers into lowest cost or highly differentiated offerings through sharing of goods and services, building affiliate and supplier networks, or offering open APIs, all strategic capabilities that leading e-retailers typically have, including well-known traditional retail leader Walmart, with their new Developer Network. Contemporary digital businesses also are integrating branding, marketing, sales, and customer care experiences under a unified Customer Experience Management capability to break the moribund silos that these functions typically engender as departments and often cause customer experience to significantly underperform.
  • Well-resourced supporting capabilities for digital business. These come in many forms, more than those listen in the diagram above, but the most important ones are: a) An involved and visionary set of executive leaders supported by the CIO and/or Chief Digital Officer, b) digital business architecture, governance, and security, c) an experienced and adequately staffed community management team for the relevant community ecosystems, d) change champions organized to support digital transformation and e) new big data analytics services to allow fast-feedback loops to manage the flows of data, transactions, and ecosystem growth.

So how can executive leadership deliver on this rather large and complex vision for digital business? Bolt-on digital transformation is known not to work, and fashionable new models for bi-modal and tri-modal tech change to allow an agile development process to move forward to quickly seize digital ground are now in vogue. But these are necessary but not sufficient to drive a sea change in most organizations.

Instead, successful leaders will get their priorities for change in order and use effective new models for managing strategic transformation that are beginning to emerge from the short list of success stories of recent years. Will this be easy, no, but it is essential and enlightened leaders will add these approaches to their arsenal and experiment more quickly and radically while there is still white space in a number of industries.

Additional Reading

How Leaders Can Address the Challenges of Digital Transformation | On Web Strategy

Businesses have digitized but not transformed | ZDNet

Defining the Next Generation Enterprise | On Web Strategy

Posted by Dion Hinchcliffe.

Another year is upon us, even as many of us still seek to complete our digital priorities from 2014. For most CEOs and COOs — and especially CIOs/CDOs — 2015 will be a particularly interesting one as it’s largely a transition year for enterprise tech, making it challenging to jump to the next wave of innovations, often without yet being able to declare success with the previous ones. However, technology change waits for no company, and the pace of evolution continues to pick up.

For many of us, this means realization of the last major round of must-have enterprise technology priorities is still underway, yet well beyond the starting point in our organizations. However, despite the next generation of technology advances being rather immature (examples: Internet of Things, the Collaborative Economy, next-gen AI, wearables, and other emerging enterprise tech) they have also become increasingly difficult to ignore, as the latest technologies are often even more filled with business potential, and yes, disruption too.

This means mobile, social (internal and external), BYOT, digital lines of business, and data-driven business processes ala big data now have strong presence as major initiatives in most organizations, but largely are still in the process of finding their way in terms of delivering their value and impact.

Digital Priorities for the C-Suite (CEO, CIO, COO, CDO) for 2015

Seeking Better Strategies for Digital Adoption

In our discussions with senior business and technology leaders in the last year, it has become clear that digital change in most companies is simply happening too slowly. Many are actually falling behind. There is now a growing focus to find more effective models for adoption and transformation to digital and its numerous supporting business models. Even as the traditional model of IT has delivered great value to our organizations over the last decade, it’s also obvious to the casual observer that it’s now struggling under the strain of pervasive tech change. Other causes include changing demographics and market expectations of organizations who now broadly seek to a faster move to new technology than the typical IT department can presently support.

This mismatch of demand and supply in internal IT ecosystems has therefore become one of the top issues facing executive teams today. Even worse, despite demand, IT budgets are not growing nearly fast enough to support the pace that business units currently seek. Even were the budgets were made available, it’s fairly evident that IT organizations would apply the resources in the same manner that’s often failing to keep up with demand.

So what’s the core issue here? Specifically, it’s that the traditional model of IT imposes far too high a burden on acquiring and supporting new technology compared to newer models (the old model nearly doubles TCO according to data, while not taking into account longer times to market too) and it’s under active disruption by the cloud and consumer technology both. Fortunately, senior leaders are one of the few in an actual position to address this as a top-line imperative. The data also shows where they think the future is as they increasingly putting tech spending outside of the traditional IT purview.

The C-Suite Must Create Conditions for Successful Digital Transition

In 2015 we see that organizations, while continuing to sustain investment on the existing rounds of digital initiatives, will also be seeking new structures and processes for better adapting themselves to the digital future. In recent years, this has meant adopting agile methods in both business and software development, new collaborative technologies, and more recently with shifts to devops and the rise of the eponymous Center of Excellence model, tactically and strategically to improve collaboration, knowledge sharing, speed, and velocity within the very process of tech adoption itself.

So while the emerging technology maps for the large enterprise are fairly well-understood and straightforward, with typical examples from Gartner or our view, what’s increasingly sought out are the specific changes we must make to the way we assimilate and metabolize new technologies, supporting skills, and perhaps most importantly, their underlying mindsets. This latter point cannot be taken too lightly: Many of today’s most powerful technologies have relatively modest value if the organization doesn’t have the lens through which to understand them or the necessary inclinations of behavior to take advantage of them.

Recent “revolutionary” advances such as social business, which are equally tied to both technology and corporate culture, are particularly profound in terms of the results they produce, but only for a much smaller subset of organizations that are able to successfully address both the technology and human dimensions of change. Does this mean organizations are going to make another major reinvestment in change management in 2015? Not likely, as large strategic initiatives remain generally out of favor.

Instead of traditional change programs, we now see organizations actively experimenting with much closer and more integrated relationships with their technology stakeholders. Case example: Houghton-Mifflin-Harcourt’s CIO Brook Colangelo did exactly this to turn the IT department around and meet internal needs through better stakeholder-centric engagement.

We would note that today’s stakeholder engagement is different than just listening to customer. The specific approach emerging is one where digital possibilities are emphasized, and obstacles lined up to be overcome, through a process of co-creation. Leading organizations are moving from a stance of technology constraint (the proverbial “Dr. No”) to one of broad enablement. Leaders here are now designing new vehicles for identifying, piloting, and incorporating technology in the organization that are intended to a) result in fewer silos and shorter project backlogs, b) solutions that fit better to local business needs, and c) reduce support and other overhead from central IT resources while still staying secure and compliant. In other words going beyond ‘bolt-on’ digital transformation.

This then is the real digital mandate for 2015 for C-level executives: Reconcile the rate of tech change happening outside the organization to the rate of change inside.

This is becoming the largest impedance to success for a growing number of companies, and research increasingly shows addressing this gap has become a matter of corporate survival, not just the achievement of more optimal business results.

What’s more, an emphasis on the biggest obstacle to digital improvement and transformation gives senior leaders a powerful and broad enough perspective that sets free technology managers and lines of business to focus on the specific digital opportunities in the context of the business, while letting C-level leaders focus overall on creating a more effective and responsive environment for digital change enterprise-wide. From a leadership standpoint, spending precious executive time on fostering an enabling digital change environment — such as shifting some corporate hierarchies over to more network-based models — is likely to produce the most results by unblocking bottlenecks in scale and creating the conditions for deep, more sustained, and more impactful corporate evolution in the digital age.

Related: The Role of the CIO in Digital and Social Business Transformation

Four Digital Priorities for the C-Suite in 2015

So, besides the relevant new technologies themselves, what then should the C-Suite digital priorities be for 2015?

Opportunity plan & customer needs map over technology roadmap. Traditional IT is still often led by a technology roadmap instead of focusing most on business needs and newly emerged opportunities. Leaders still need both views to make sense of the way forward, but the most important roadmap C-level executives should be requesting is what digital opportunities and internal/external unmet needs exist, along with a specific roadmap to achieve them. The enterprise technology roadmap should then be cross-checked and adjusted to support these.

Cultivate business-led & customer-led change. Build communities of internal and external customers, engage them, listen to them, co-prioritize, and then actively enlist them in helping realize the changes. Put what’s learned on the roadmap. Repeat.

Experimentation with and selection of improved digital org structures and processes. Since tomorrow’s IT doesn’t appear to look a whole lot like today’s IT, leaders must find the updated models that work best for their organization. Never mind that technology is diffusing across many more roles (the CMO, CFO, CDO, CCO, etc.), for now, technology is still largely centralized. This means actively exploring digital incubators, devops, centers of excellence, or a fast emerging new model that we are calling the Network of Excellence, and which we’ll explore more shortly. This is where the rubber meets the road when it comes to finding ways to more rapidly create technical and cultural change widely across an organization. Senior leadership cannot miss the opportunity to find the way forward to adapting to today’s digital changes and dynamic rhythms.

The proactive scaling of digital enablement and support. In our explorations of what is beyond the CIO and CMO when it comes to technology enablement, one thing is clear: Now is the time to be a digital revolutionary. But only with the appropriate safety net. Digital enablement means making other people’s IT secure and compliant as automatically and cost-effectively as possible. With the number and profile of today’s IT security incidents reaching all time highs, cybersecurity has become a top priority in most organizations as the impact goes all the way up to the boardroom and global markets. But the lens of cybersecurity is relatively myopic, leading to focusing on risk instead of opportunity. Thus perhaps the top digital priority for C-level leadership this year is to balance security and risk with opportunity and change. Too much of one or the other can lead the truly harmful outcomes either way. Your technology leadership can broadly provide enablement services and tools (everything from app stores and open APIs to digital ambassador programs and customer communities), while cybersecurity teams must be given the mandate to support them in a highly integral fashion.

A Shift to Today’s Digital Power Values

The lesson of 2014 is that many exciting emerging technologies are coming in 2015, in fact too many, and the rate of tech change in the enterprise is too slow. 2015 will be the year that we begin redesigning our technology functions to be more decentralized, established higher transformation capacity through networks and emergence, be more responsive to stakeholder needs through engagement, and in general seek out and embody the new digital power values below (even though the old ones also won’t totally disappear.)

The New Digital Era Power Values

Additional Reading:

The CIO’s Guide to the Future of Work | ZDNet

Businesses have digitized but not transformed | ZDNet

Designing the New Enterprise: Issues and Strategies

Posted by Dion Hinchcliffe.

One of the most significant challenges with digital collaboration in today’s large organization is the sheer degree of tool proliferation and channel fragmentation that is taking place. If you combine this trend with the reality that many new ways of working together in digital spaces provide most of their value only when used in very different ways than our legacy tools, then you have a perfect storm of obstacles to forward progress.

Consequently, over the last couple of years, we’ve witnessed many organizations attempting to undertake large efforts to rationalize and bring order to the growing constellation of collaboration platforms, methods, apps, and their various vested stakeholders. Out of all these efforts, several key learnings have emerged:

  • There is no all-in-one enterprise collaboration platform. Despite the trend towards convergence into suites and unified communications platforms, collaboration tools and scenarios have become far too varied for any single solution to handle well. Neither are there dozens of platforms, at least not yet. But any enterprise collaboration strategy in the large must account for and reconcile a workable set of solutions into a more manageable and consistent portfolio, with lots of help from vested stakeholders on the ground.
  • Internal technology landscapes are becoming very hard to change, while tech change continues to accelerate. Deep integration across systems as well as the growing baggage of legacy applications are becoming the leading cause of drag in moving to the latest tools and platforms. This is now substantially impeding the move to new collaboration tools. New, sometimes radical, approaches are required to address.
  • Workplace skills are not keeping pace with what modern collaboration tools make possible. A collaboration solution is only as effective as those that use it. Not only do the latest tools often require a new mindset, they also require organizations that support and encourage new behaviors and cultural shifts in the workforce.
  • Conflicting modes and silos of collaboration are delaying organization-wide improvements. The tension between legacy collaboration tools, usually centered around either document and content management or older unified communications platforms is coming into direct opposition with newer approaches, often championed by different internal groups or departments, leading to various competing camps, with no clear winner and general state of paralysis.

Unfortunately, this state of affairs is common in many organizations, and makes it hard to discern — much less access — the tremendous untapped value in moving to new collaboration tools. Can this untapped value be quantified today? Yes, the most reliable data currently available says that failure to widely implement the latest collaboration tools is costing the average organization 25% across the board in productivity. That’s a competitively significant amount that can change the industry fate of an organization.

The good news is that it doesn’t have to be this way. However, moving forward and adapting does require consistent and overarching management of collaboration across the enterprise at least one level above which it’s been done today. Today’s approach has been either to look at collaboration through a technology lens (usually through an existing platform such as SharePoint or an enterprise social network) or consider it through a functional lens, such as corporate communications, HR, sales, or lines of business. Both of these lenses work well enough to not fail outright that often, but both also underperform by not accounting for the rapid advances of new collaborative technologies — and the need to adopt more of them to solve outstanding business needs, not less — as well as for the support of a collaboration strategy that is consistent, managed, skill-supported, effective, efficient, and enterprise-wide.

Additional Reading: Realizing Effective Digital Collaboration in the Enterprise

Modern Modes of Enterprise Collaboration

Sorting through Modern/Legacy Collaboration Tools

So, how can organizations move to a modern collaboration strategy that’s incorporates a rapidly evolving portfolio of tools, methods, and business needs across the organization?

First, it requires a clear view of what collaboration technology makes possible today and, for each advance, determining its place in the organization. In almost all categories, the state of the art continues to improve. The latest tools are adopting or supporting new models of working together (social business, lightweight collaboration) or new technologies (mobile/wearable interfaces, multi-point HD video, persistent chat, collaborative analytics, social business process support, etc.)

While technology is not typically the make-or-break factor in succeeding with digital collaboration (in general, that factor is successfully navigating the organization itself to adopt and use the tools effectively), it’s important to bring to bear the best available tool for a given business use case. That requires understanding the art of the possible with collaboration technology.

These days the modern enterprise must consider at least these major tools and styles of collaboration:

  • Videoconferencing. The widespread consumer adoption of platforms like Skype, Apple’s Facetime, and Google Hangouts has set increasingly high expectations for what workers can do in the workplace. Even though though the video sessions are often discarded and don’t create value afterwards, workers are now increasingly seeking out and adopting such tools in the workplace. Cisco Telepresence and Microsoft Lync are leaders in this space as well, but many organizations will still not have the network infrastructure to fully exploit their capabilities.
  • Virtual whiteboards. Still a niche solution, virtual whiteboards make it easy for workers to collaborate on ideas in a visual way. While many consumer or small business options exist, most organizations have limited penetration of enterprise-class tools like SMARTBoard or Promethean.
  • IM, SMS, MMS, and chat. There has been enormous growth in instant messaging, mobile device texting, and chat for tactical collaboration scenarios in the enterprise. These capabilities are simple, easy to adopt, and largely well-understood by the average worker. Persistent chat is also a key maturity feature to ensure tacit knowledge is captured and discoverable later for re-use.
  • VOIP. The shift to digital channels for voice calling and teleconferencing has been steady, and the blurring of voice on PCs, tablets, and phones has been a strong trend as well. However, audio collaboration tends to be a conduit for transient knowledge that disappears when the call is over, and so not considered high leverage, yet is a tool that businesses will need to support for the foreseeable future, often by embedding it where it most convenient in digitally-enabled business processes.
  • Simultaneous document editing. A few years ago, Google Docs showed what was possible when it comes to the next generation of document editing: Many users working on a document, live, all at the same time. The capabilities have been slow to move into traditional productivity applications, but it has long been considered a high value capability by organizations such as the Executive Board.
  • File sync and sharing. Tools like Dropbox have set the stage for extremely easy sharing of files across all devices. This has let to enterprise solutions like Box and others to overcome the increasingly severe limitations that older tools like e-mail have in file sizes they can support.
  • Screen sharing. Another tactical but highly useful capability, screen sharing services allow workers to collaborative work on any application together, provide support to each other and/or customers, and it increasingly being incorporated into existing collaboration platforms. Leading enterprise offerings include Adobe Connect, Fuze, and Gotoassist.
  • E-mail. E-mail is still the leading form of business communication, but the sheer competition from social and mobile technologies (and everything else on this list) means its days are almost certainly ultimately numbered as more effective ways of collaboration are adopted. Despite this, though some large companies are engaging in significant e-mail cessation efforts, it will likely be a key component of collaborative strategy for at least the next decade. In the medium term, e-mail is likely to fuse with unified communications, suites, and social networks as part of a ‘unified activity stream’ to centralize collaboration and control fragmentation.
  • Content and document management. While SharePoint is typically the 800-lb gorilla when it comes to document management in most organizations, it also cannot be considered a complete or modern collaboration tool, despite its vast feature set. Yet determining how it fits into collaboration strategy is essential, despite well-meaning SharePoint teams trying to bend what is an enormously powerful, yet complex legacy tool, into the shapes expected by today’s technology expectations. That said, there is a key connection that must be maintained between other conversational collaboration platforms and their outputs (very often documents) and CMS/DMS platforms. I sometimes see integration efforts that connect collaborative processes around documents to official document repositories, which is the right approach. In most organizations, however, properly reconciling content and document management with other collaboration platforms is neglected or underserved. As a result, most CIOs have their work cut out for them in reconciling SharePoint with everything else.
  • Unified communications. Creating a cohesive communications and collaboration environment is not a new idea, and unified communications (UC) was envisioned as a solution to this. Despite missing the social networking boat for far too long, unified comms as steadily made inroads as a way to ensure all collaboration channels are made first class citizens. Despite this, the cost and complexity of most UC solutions, and their slow adoption of new emerging channels, has made progress slow. Nevertheless, it must be a core plank in collaboration strategy. Personally, I see alternative models for integrating knowledge flows in organizations steadily emerge on the social networking side.
  • Collaboration suites. We also see major collaboration platforms today adding more and more features and integrations with other collaboration platforms. IBM Connections and Jive both have many different modes for working together, from social networks and activity streams, to forums, blogs, wikis, chat, and much more.
  • Social CRM. Too many collaboration tools still make it hard to collaborate with those outside of the firewall, particularly those most important to the organization, namely customers. Social CRM tools range the gamut from social support to entire customer enagement suites. This space is evolving so quickly, and crosses over so many other collaboration tools, that I recommend you track our industry colleague Paul Greenberg’s CRM Idol efforts closely for the latest advances and capabilities.
  • Corporate blogs. While blogging is not longer on the cutting edge communications and collaboration technology, it’s still an effective format that scales and is interactive, accumulating collective intelligence in comments and discussion. Blogs are particularly useful for executive communication to large audiences (internal or external) or for structured engagement efforts for large initiatives and projects. Despite this, recent evidence shows that corporate blogging may have plateaued, though growth in use of social channels by corporations is increasing overall.
  • Wikis. A workhorse of social collaboration, the humble wiki is found in most organizations today, and is often the one of the first next-generation collaborative tools that most enterprises originally adopted. Even though wikis have been subsumed into the larger collaborative suites to a large extent, they are still core content and collaboration repositories with a strong link ecosystem that is often the beginning of a true Web-oriented architecture.
  • Social intranet platforms. The effort to take intranets to the next level has been an ongoing discussion in IT circles for a decade, yet many — if not most — corporate intranets are static and little used other than for HR benefits and corporate office driving directions. Yet so much value is lost with intranets as the design of most of them prevent the knowledge of the organization from being fully harnessed, at least without tedious procedures. Yet there are now some compelling stories of social intranets. Probably the most forward looking work in this space is what Thoughtfarmer has been doing over the years to enable more successful intranets.
  • Social hiring. A particularly bright spot in collaboration has been in the hiring space, where employees can use social connections to find the strongest candidates. LinkedIn has created an entire industry around their networked hiring capabilities and some of the organization we’ve worked with have found social channels to be the strongest source of strategic hires. This is still a somewhat nascent space, but must be on the collaborative roadmap, as scaled talent management over networks is going to become one of the largest growth areas in organizations in coming years.
  • Enterprise social networks (ESNs). The adoption of social networks in the workplace has been one of the largest and most significant trends in collaboration over the last half decade, making it into nearly half of large organizations over that time period. However, given that social networks produce value in new and different ways with new methods such a Working Out Loud, mass open collaboration, crowd-enabled processes, and other techniques, the struggle has sometimes been to make the supporting changes to processes and skills within the organization. However, given that most organizations have internal social networks of some form, and estimates that the market for them will double over the next five years, and the ESN is going to be a staple of most companies’ collaboration strategy.
  • Crowdsourcing. Crowd-enabling business activities of every sort, from crowdfunding to crowdlabor has become big business and a key strategy to scale business processes and innovation with much less cost or effort. As one of the major forms of collaboration, crowds + global networks have led to the collaborative economy, one of the most important economic trends of the digital age. Companies need to be collaborating at scale with their customers and suppliers in new and highly innovative ways. Jeremiah Owyang has a tremendous summary of how this collaborative revolution is taking place today’s organizations.
  • Online customer/partner communities. Perhaps one of the most strategic investments organizations can make is in external communities of their key stakeholders, namely their customers and business partners. I’ve discussed how this is a zero sum game and how the window is already closing in some industries to build long-term sustainable relationships in collaborative digital environments to hold ones stakeholders close and drive strategic business outcome. You can read the latest The Community Roundtable’s latest State of Online Community Management report for 2014 for details on what makes a leader in this vital collaborative activity.

One of the most controversial questions right now is whether to try to reduce the number of collaboration tools to make them manageable, or increase them to best support the number of scenarios that large organizations typically have. More collaborative tech is harder to manage and more expensive. Less collaborative tech is likely to miss key opportunities that the right tools can bring to bear. In the end, in our opinion, organizations have to support a lot more collaborative technologies in general, which requires entirely new adoption, management, and governance strategies.

Additional Reading: The new digital workplace: How enterprises are preparing for the future of work

Yet Technology Isn’t Even the Hardest Aspect of Digital Collaboration

Sadly, even though I began this post with an exploration of digital tools, I only put them first because it’s important to get them out of the way. That’s because — and it cannot be stressed enough — the most difficult and critical aspect of improving collaboration is the people component. In the end, collaboration is fundamentally a human activity. It’s just plain hard work and can be enormously challenging even in the best of conditions. This means collaborative strategy has to reflect that the largest investment and most effort will be put into changing the expectations, mindset, habits, behavior, and culture of the people in the organization. This must be done in a way that directly and rapidly enables these powerful new ways of digital teamwork.

Fortunately, patterns for success have emerged in how organizations are driving the necessary non-technology changes. First and foremost, this is the readily availability of change champions.

Establishing and Effective and Modern Collaboration Strategy: Roadmap, Change Management, and Business Use Cases for Outcomes with Social Business and Other Methods of Digital Teamwork

As it turns out, almost every organization today has a decent pool of change champions who know about many of today’s new digital tools and already have ideas and use cases they can contribute, as well as resources, time, and precious political capital. The most successful collaboration strategies will find and tap into them. One key lesson in successful efforts has been in creating a champions program that can help craft the strategy, tailor it for local departments, divisions, and regional geographic sensibilities, and then help heavy lift the strategy into fruition.

Thus, the components of a modern collaboration strategy are increasingly understood and fairly straightforward:

  • Integrated collaboration platform strategy & roadmap. This sorts through and understands the place for each existing and planning piece of collaborative technology, a plan for evolving them and introducing new tools and methods, and a calendar-based plan for when they will be introduced.
  • Decentralized adoption & operations approach with process remodeling. As I’ve explored through the years, the capabilities for collaborative performance improvement and other new forms of IT must be much more decentralized. What’s more, business functions must be redesigned so that team-based processes are centered around the new collaboration tools as the way work gets done.
  • Workforce education, support, & skill building plan. Too often, the workforce does not have the right skills, knowledge, and collaborative literacy to drive adoption, much less effectiveness with new collaboration tools. Education programs for new hires and long-time employees, just-in-time training resources, and continuous, effective communication programs integrated with senior executive messaging are the most effective.
  • Staffing, budgeting, and resources. The results of a collaborative strategy are commensurate with the investment made, quality of staffing, and available committed resources in IT, HR, corporate comm, and other support functions.
  • Legacy and new use cases validated, mapped to business cases. Clear use cases that are captured from areas across the organization, detailed out, and for which at least back-of-the-envelope business cases are developed are essential to understanding the opportunities on the ground for better methods and tools for collaboration.
  • ROI and measurement process. Tragically, I see many collaboration initiatives struggle because they didn’t capture data to back up and explain what they accomplished in early phases. Don’t make this mistake. Invest in an effort to baseline existing KPIs and show at least correlation with new collaborative activities and their improvement.
  • Local change champion enablement program. No overly centralized collaboration initiative can make all the technology, process, and structural changes required. You’ll need a lot of help. Enlist help from others across the organization who have the knowledge on the ground and local resources to help define use cases, experiment, and find the right paths forward.
  • Change management playbook (18-36 months). Although heavy weight and formal change programs have lost favor, that doesn’t mean it’s acceptable to eschew orchestrating a more optimal and cogent route towards better collaboration. Find internal experts who are good at change, get them on board, and let them help you plan your collaborative improvements.

The Likely Outcomes Make the Sustained Effort Pay Off

While the work to get up a level on the digital collaboration pyramid and create a more mature capability will require sustained effort and serious commitment from your organization, the effort is clearly well worth it. To help better articulate the business motivations, we’ve compiled a compilation of the benefits of modern workforce collaboration from the most authoritative sources, and it makes a powerful case for improving the status quo. In short, everything from workforce learning (just-in-time training, and employee on-boarding), workforce engagement, knowledge retention, higher adoption, a better set of tool choices, and a whole host of operational improvements, from higher productivity and effectiveness, to lower travel costs, shorter time to market, and the list goes on.

But much of the reason to make collaboration such a top line investment is that, as Jive’s Elisa Steele observes, it just matters so much to how the modern organization functions. Teamwork, sharing of ideas, gaining enterprise-wide alignment around strategic and tactical ideas is vital to enable in its finest possible incarnation in today’s hypercompetitive marketplaces.

In the end, we find that most organizations are still falling behind the rapid pace of the marketplace. It’s only by scaling up and decentralizing collaboration strategy at the highest level in your organization, do you stand a chance of regaining a measure of positive control and a reasonable chance at the potential outcomes.

Additional Reading:

Workplace 2020: The Role of IT Leadership in Social Business Transformation

Collaborative Performance Improvement: The Second Wave of the Contemporary Workforce

Posted by Dion Hinchcliffe.

Research continues to show that one of the single most important activities that senior leaders can engage in — to drive real change and realize results with digital and social business — is to lead from the front. Of course, this shouldn’t come as a surprise to most business leaders. Yet we find it still needs to be emphasized, despite the growing shift away from hierarchies and towards communities to get work done in new and better ways. In fact, the value of executive leadership for digital/social has been confirmed again just recently by the Community Roundtable’s excellent 2014 report (slide 15).

However, the vital resource that also remains most scarce in the C-Suite is one that we’re all the most short of: time. The question then, is how can CIOs make the very most of their fundamentally limited leadership assets to drive broad technology transformation?

Most of us are now aware that organizations are facing one of the largest upheavals in business history, largely due to the transformational changes that high technology is having in virtually all aspects of our lives today. This has resulted in most business leaders being overwhelmed and unable to tackle the massive scale of the work at hand, despite an acute need to digitally transform existing and new products and services steadily over the next half decade to align with the market and stop falling further behind.

The theme we’re seeing in many businesses we work with is a focus on getting better organized — and maybe even catching up — in a year 2020 time frame or so. IT departments, HR teams, corporate strategists, and others are trying to assemble highly transformational roadmaps that will take the large organizations to a better place. Yet lack of leadership, low confidence in direction, and fear of failure is still holding too many companies back.

Business 2020: The CIO Role in Digital/Social Transformation: ERP, CRM, ESN, social business, collaborative economy, e-commerce, intranet, collaboration, marketing, community, mobile, IoT, clouds, open APIs

Despite this, it’s clear that an imperative to change is being widely felt in the corporate world. Many organizations are using whatever convenient temporal signpost they can muster to map out a plan for fundamental digital change in order to remain competitive, sustain the organization, modernize, and grow. The goal: Taking their legacy organizations and updating them right down to the core if necessary to revamp corporate structure and business processes and then remake them around a constellation of fast emerging technologies and new digital business models.

Doing so successfully, however, requires overcoming a number of very significant hurdles: Not invented here, the innovator’s dilemma, the challenge of changing a large organization rapidly without “blowing it up”, all while arranging a large-scale enterprise-wide switch in organizational competencies, and so on.

Part of the secret to successful digital transformation seems to be the emphasis and meaningful adoption of new organizational models. Whenever we look at companies that have been relatively successful in such transformations, they’ve built vibrant ecosystems around new network-centric models. As my friend and industry colleague Lee Bryant recently noted:

[We should start] with the realisation that hierarchy is just one of several dimensions of organisational design – others being communities, networks and small autonomous teams, for example – we can begin to see how some of the characteristics of new models such as Holacracy, Organising for Complexity, The Connected Company or Kotter’s Dual Organisation can be introduced without throwing away those aspects of the line organisation that are currently working well. The goal in doing this is to achieve the kind of Twenty-First Century company attributes that are necessary for real digital transformation to work.

So if we take these two issues as at or near the top of the list of what’s required to digitally transform: Leadership and new organizational models, what then does this mean for the putative top digital leader in most corporations today, the CIO? As I’ve observed before, there’s now a lot of internal jockeying for top-level technology leadership in the enterprise: The CFO wants to outsource to the cloud, the CMO wants to own market-facing engagement technology, and the new Chief Digital Officer is busy trying to take existing assets and build new digital businesses with P&L responsibility.

To further complicate matters, as technology adoption becomes more decentralized there are the heads of lines of business, many of which are attempting to control their own technology destiny locally, closer to where business actually gets done on the ground. This is a lot of competition. Yet the CIO remains better positioned than any single other entity in the organization: They have the largest budget, staff, and existing responsibility for digitally enabling the business.

The digital diaspora: A CIO/CDO challenge

So if the CIO previously had a mandate to digitize the old business, does the new CIO mandate mean that they should be the person most principally responsible to realize digital transformation? When I talk with top CIOs these days, there is a clear sense that IT is separating into two components: Infrastructure management and digital evolution. The former has always been the purview of the CIO, but the CDO is increasingly making a play for the latter.

What role then should CIO’s play in digital/social business transformation? Should CIOs step aside whenever it’s wise and there is a more motivated and skilled actor in the C-Suite? Or should CIOs take the leadership position in the transformation process? I explored this in detail recently in a keynote at CIO Perspectives in Virginia. While I think CIOs often have too much on their plate today, given their many responsibilities, this is the one area where they are 1) better positioned than anyone else in the organization and 2) afforded a once-in-a-career ownership opportunity to map out the very future and even enable the outright survival of the organization.

As we analyze companies making the transition, a few key behaviors come up again and again. These then seem to make the difference between organizations that can jump from the 20th century industrial model to a more pure-play digital model, at least in most industries:

  • Open leadership, especially via role modeling. It is very difficult to get C-Suite leaders directly involved in digital/social efforts, but if it’s done, it can drive change faster and more effectively than just about any other method. Charlene Li’s work on open leadership is good material to apply here.
  • Focus on culture shifting. The patterns of successful digital/social adoption are increasingly well-understood, but it helps to understand the current corporate culture, and then plan to change it in incremental steps. Successful efforts focus on adding the new organizational models into the business, and using their presence as an operational function to introduce and metabolize change at scale. These can be digital communities of practice or more traditional change initiatives using open leadership methods.
  • Organizational redesign for digital/social. This includes both processes and structure within the organization, and is part of an overall model for systemic and sustainable, renewable technology change built inherently into the business and its connected ecosystems. The CIO has control over the IT aspects, while having to work through a CEO (or similarly empowered leader) to have a mandate to change the rest of the organization. This can be a tall order and is fraught with political and bureaucratic obstacles, but is essential for anything more than short-term success.
  • Embracing and enabling change at the edge of the organization. And not constraining. IT can no longer be a constraining agent. Instead, the CIO must tap into the fuller resources in the entire organization to drive transformation. This means putting as many other parts of the organization in charge of local change, and is part of the fuller digital change toolkit to reach any kind of year 2020 roadmap.

Today’s CIO is living in an age of unprecedented change, but that also means there’s tremendous opportunity as well Unfortunately, IT leaders are sometimes unwilling to be as revolutionary as required by the times. Given the growing distance between where the technology world operates today and how legacy enterprises work, this is an increasingly untenable position. Fortunately, the solution seems to be spending precious time and resources in the activities most likely to create successful transition, namely the points given above.

Additional Reading:

Rethinking How We Transform Our Organizations for the Future

How Social Business Has Matured

What CIOs Should Focus on in Digital Business for 2014

Posted by Dion Hinchcliffe.

One of the scenarios we still see all too often these days is the broad — yet relatively unfocused — introduction of new general purpose collaboration tools to a largely unsuspecting enterprise workforce. Even though very few collaboration initiatives — social or otherwise — actually desire to pursue a “Field of Dreams” approach, this is in fact exactly what often ends up happening as new solutions are installed in the organization with anticipation that users will flock to them.

However, the long history of this trend has shown that even with proactive community management and highly engaging collaborative tools, it is surprisingly hard, long-term work to drive measurable business results.

If new digital methods of working together are so much better then, why exactly is this the case? Shouldn’t our workers rationally adopt new behaviors and tools if they are genuine improvements? Perhaps.

It turns out there are a few significant obstacles that we 1) often fail to recognize in our collaborative improvement efforts and 2) actually take the care to remove.

Related: The Strategic Benefits of Modern Workforce Collaboration

Key Elements of Successful Digital/Social Collaboration

While I’ve explored methods to get higher levels of performance from collaboration projects, the reality is that each technology solution that is applied must first go through an initial growth and adoption phase to reach critical mass. This requires the buy-in and alignment not only with the leadership of the organization, but those that actually will use the tools. This is where organizations often get it wrong with collaboration, by implicitly making this core assumption:

Users will take up new collaborative tools simply because that is the primary option put in front of them.

Unfortunately, this is just no longer the case. Even though most organizations understand that new collaboration tools — whether they are user-editable intranets, enterprise social networks, online communities, file sharing apps, or content/document management systems — are far more optional than say, e-mail, they typically fail to design their collaboration solutions with a clear sense that their customers do have a choice.

The reality is that the use of enterprise technology has changed dramatically in a relatively short time. With the wide prevalence of IT consumerization (essentially, a combination of shadow IT and bring-your-own-technology), enterprises can no longer afford to ignore usability. As Aaron Levie, CEO of Box, publicly observed to some acclaim this week:

20 years ago CIOs couldn’t care about user experience, 10 years ago they didn’t have to, and now it drives everything. Huge shift for all.

This has long been an issue with corporate IT, which tends to look at feature checklists and security capabilities well before user experience, even though data has consistently shown that every dollar invested on ease-of-use returns an order of magnitude or more in ROI. In fact, in our experience, usability is absolutely vital (though insufficient alone, more on this later) to the adoption and retention of any new collaborative solution. Yet the actual quality of user experience remains ruinously low on the priority list for most efforts, despite the overall intent to make it easier for people to work together.

Ironically, having good basic human factors isn’t even the biggest obstacle to improving collaborative performance. That’s because good UX is increasingly being solved by an onslaught of new consumer-oriented collaborative tools like Dropbox, Google Docs, Feedbag.io, and even enterprise solutions like Jive and Tibbr. All of these readily offer brilliant user interfaces and eminently useful, high value, low-friction feature sets that enterprises can build upon.

Instead the large enterprise has a problem of a higher order. By this I mean that although general purpose collaborative tools can be used for the broadest set of business activities, as the apps usually aren’t constrained to any given problem or solution, they’re usually only a small incremental improvement over legacy collaboration tools. It is precisely because they just don’t get deep enough into specific, local collaborative scenarios that they often fail to provide enough new value. Enabling improvement of these collaborative scenarios is the key to unlocking deeper business value and must be a primary objective.

Now, before you think this is premature optimization of the topic, let’s look at the issues.

Related: How to Improve Modern Workforce Collaboration

Usability as Foundation, Then Collaborative Design

Those of us in the collaboration industry are aware that you can’t effectively mandate collaboration amongst any group of people. You can’t even really specify which tools can be used or how they’re used. That’s because human engagement — of which meaningful collaboration is an key outcome — is a notoriously hard-to-control, nuanced, and fluid activity that naturally gravitates to the most enjoyable and satisfying venue it can find. People requires a receptive environment that’s well-suited to the conversation, and will inexorably seek it out. In this way, real collaboration can only be enabled and facilitated, it can’t be forced or contrived. And it tends only to happen amongst fully engaged employees.

That said, effective collaboration certainly can and does take place all the time in legacy and new channels such as e-mails, conference calls, enterprise social networks, and so on. But the issue is these are just a few of the dozens of great options most workers now have today. So the “right” venue for the given conversation is chosen by its participants, and it’s usually chosen precisely because includes just the right people, setting, context, and other inputs. The lesson: We should be creating more appealing and effective collaboration environments.

Lest we forget, the latest advances in collaboration, such as social tools or unified communications were supposed to be large improvements over older methods because they enabled powerful factors like improved scale, open participation, asynchronicity, and better knowledge retention. But collaboration projects often focus on these aspects of the new to the neglect of other essential aspects of collaboration. There must be balance.

We also used to talk about the classic 9x barrier when adopting new tools like social software. The 9x rule was the lesson that the replacement solutions for existing ways of working together can’t be just a little bit better. Instead, in order to provide motivation for people en masse to change habits and learn new ways of working, you have to offer something a lot better — nearly 10 times better the data says — than what they have today.

I find that the 9x lesson is often forgotten by the time a new collaborative initiative reaches its launch point: It was high bar that enterprises often don’t have the skill set or time to achieve anyway. And by the way, you can still get some business value even if you don’t reach it. So, despite lacking sufficient impact, the new solution launches anyway. However, it doesn’t have to be this way.

So, if top-flight user experiences alone are not enough to drive useful, widespread behavior change in collaboration (though I should be absolutely clear their contribution to reaching the 9x level is critical), what else is required?

Paying Down “Collaborative Debt”

From my experience, in addition to high impact and effective user experience, two additional elements are required to get us there:

First, in the IT world there is this concept of “technical debt”, which means the accumulated backlog of technology that needs overhauling, improvements, updates, and modernization.

It turns out there is exactly the same issue in the collaborative world: A growing set of changes to the business environment that have been needed — but for various reasons not made — to improve the likelihood of better workforce engagement. This includes shifting corporate culture to be more amenable to agile, open, and participative ways of working. Most organizations have non-trivial levels of collaborative debt they need to pay down but new collaborative tools that require what Richard Martin says — and we wholeheartedly agree — a new enlightened way of working that fully embodies the business requirements of today’s fast moving marketplace.

Second, and just as importantly, is what I call collaborative design thinking, which is really nothing more than the realization that collaboration solutions will benefit from considerably from design thinking, which is the process of solving a problem with deep understanding and empathy for the full underlying context.

What does using design thinking for rethinking the way we work mean in practical terms? First, it means that specific collaborative scenarios — typically the most common and/or the most impactful to the business — are considered first class citizens in the realization of the collaborative effort, rather than assuming the solution will address the actual business and technical needs of these vital scenarios. These scenarios are then rethought for an improved collaborative environment, for example, by making them more open and participative or perhaps more specific to the scenario. In addition, this design process ensures that supporting and high quality user experiences are deliberately thought through and validated with stakeholders.

Second, it means that common enterprise collaboration patterns — such as conversing in context about a document or piece of enterprise data — are applied in a way that maximizes their previously successful realizations across the industry. This is not something that has been talked about nearly enough in the collaboration industry and so I’ll be exploring it more in my next piece. The message here is that we have a wealth of experience on digital collaboration from the last 10 years that we can now leverage if we’re willing.

Examples of high-level patterns include both the positive, such as using social tools for project management at BASF, or the not-broadly-successful, such as the concept of the corporate intranet as a collaboration hub. These lessons must be rolled into our collaborative efforts going forward or we’ll keep re-inventing the wheel. In my work, I’ve seen these patterns emerge time and again, and while enterprise collaboration vendors have moved many of these into their offerings (especially document collaboration scenarios), we’re still well-behind where we should be in identifying common patterns across our organizations.

Take Away: UX + enablement + patterns of success = optimum results

So to sum up, there’s a high bar required to make any improved collaboration effort successful. However, by combining the high leverage of improved user experiences, paying down the biggest pieces of collaborative debt, applying design thinking to key collaborative scenarios, while taking as many of the lessons learned as possible from common collaboration patterns of those that were successful before you.

Admittedly, it is the latter item that is the hardest element to realize for now as there has been limited sharing of what works, though you can find my partial early list here. I believe however that we can together start capturing these in more detail to make our efforts more successful if only we have the willingness. More soon on many of these fronts as we dive into these issues.

Additional Reading: Rethinking How We Transform Our Organizations for the Future

Posted by Dion Hinchcliffe.

Over the last 10 years, enterprises have been inundated with an endless stream of new collaborative technologies. These have ranged from the high concept — enterprise social networks, co-created intranets, and related social business tools — to the merely incremental, such as unified communications, enterprise chat, improved content/document management systems, and now mobile collaboration.

That these have raised the bar and improved the way enterprises work — at least overall — there isn’t a great deal of doubt. However, the actual question is how much the additional complexity and fragmentation caused by new collaborative channels means there has been a net improvement.

The more prosaic reality is that most organizations are only reporting low incremental returns from their recent investments in collaboration, often in the single digits. While this is often enough to justify the expenditure, it’s still a far cry from the revolutionary outcomes many — including yours truly — realized were possible.

But for those with an IT background, this does not come as much of a surprise. Large IT projects frequently underperform initially for a variety of reasons, not the least which is that it takes time to absorb and metabolize major shifts in how we work. The truth is that IT is still struggling to reconcile new collaborative tools with the old ones. During this process, we’ve often forgot, ironically given that the focus is collaboration, that we must create collaborative solutions that are good fits both for the people that use them, as well as the urgent needs of the business itself.

Related: How To Improve Global Workforce Collaboration

Collaborative Performance Improvement with Enterprise Social Networks and Social Business

We at Adjuvi now believe that the influx of powerful new collaborative technologies has laid the groundwork for a second wave of modernization that will more deeply impact the business. We have good evidence that the strategic benefits of successful collaborative projects is considerable. But most organizations have barely rolled out the tools, often focused on a horizontal and largely laissez faire approach where employees were left to figure out the best way — and when and where — to use these new tools. Thus they are not receiving the benefits they could be and should be.

Aim modern collaboration at better business outcomes

While this is a perfectly acceptable — if suboptimal — way to start, and it will certainly produce some results, we believe this leaves most of the business value of modern collaboration off the table. When I studied dozens upon dozens of collaboration efforts when I wrote Social Business By Design, one fact leaped out when you look at the picture of those that have reported outsized returns versus those that haven’t:

Organizations that fundamentally restructure the way they work around improved collaborative methods see far higher business benefits.

That is, the more that the organization optimizes the business for the unique strengths and abilities of new methods of collaboration, the more likely they are to see significant returns. While this makes sense on its face, it’s also not what most organizations are doing today. Instead, they are either taking a ‘Field of Dreams’ approach (the proverbial creation of a new collaborative environment and the hope that users will come) or they are identifying a few high level scenarios and focusing on them, such as employee onboarding, project management, or sales support, but without rethinking the possibilities very deeply. In other words, paving the cow path instead of directly grappling with today’s significant challenges.

Esko Kilpi recently explained how today’s highly complex enterprise environments have to change because of today’s new operating environment:

An organization is not a whole consisting of parts. There is no inside and outside. An organization is a continuously developing or stagnating pattern in time. Industrial management was a particular pattern based on specific assumptions about causality and human agency.

The sciences of social complexity change our understanding of causality and recent developments in psychology/sociology have shown that human agency is not located or stored in an individual, contrary to mainstream economics. The individual mind arises continuously in communication between people.

The focus of industrial management was on division of labor and the design of vertical/horizontal communication channels. The focus should now be on cooperation and emergent interaction based on transparency, interdependence and responsiveness. Looking at communication, not through it, what we are making together.

Given this legacy, it’s perfectly understandable why organizations would take an incremental approach to improving collaboration, even though it’s increasingly well understood that the needle won’t move much initially. First, there is the perception of risk: The bigger the change made to the business, the more chance that things will go wrong. Second, it’s often poorly understood what makes new forms of collaboration particularly effective, and hence these aspects are not emphasized or optimized for.

So, while highly scaled and cost-effective open business processes and community-centric business models are now clearly the end-game when it comes to rethinking collaboration to ensure large organizations are competitive in today’s marketplace, most companies require at least several discrete steps to get there.

The Three Aspects of Collaborative Performance Improvement

We believe that a growing number of enterprises today — having now put down a solid foundation for new modes of collaboration — are ready for the second step. This next wave, which we call collaborative performance improvement and will create strategic (instead of tactical) business value, looks like the following:

  • The redesign and optimization of business processes across functions to employ the unique strengths of modern collaborative approaches. Organizations will go well beyond horizontal, general purpose collaboration and redesign functional process (marketing, sales, customer care, product development, operations, supply chain, support functions, etc.) around powerful new collaborative capabilities. One of the great examples of this was the rethinking of the supply chain using social tools by Teva Pharmaceuticals to shrink manufacturing cycle time by 40%, something which their traditional ERP system could not do.
  • Adoption of a simultaneously customer-centric and worker-centric model of collaboration. Collaborative outcomes today are often curtailed because they stops at the silo the worker is in or the particular business function the customer is interacting with. For instance, there’s often an artificial gap as the customer moves between marketing and sales, or sales and customer care, or operations and product development. It’s a legacy of our industrial age models and how they shaped our businesses. But in the network era, collaboration naturally flows across and includes all relevant stakeholders. The most successful business outcomes come with there are no unnecessary barriers between who needs to collaborate. Collaborative performance improvement will integrate key business scenarios across silos in a natural user experience.
  • A shift from collaboration as a support function to a business function. Most people think of collaboration as an activity carried out within teams that enables a specific business result, not the business result itself. This is certainly the case for legacy businesses today. But we’ve now learned that collaboration itself is also inherently a business function, as it can form the basis of both transactional and relationship-based value. In its simplest form, this is collaboration-as-a-service, akin to crowdsourcing, but adapted to the enterprise. Companies like Innocentive and others have offered this model for years. Now, however, we’re seeing with global solution networks and other forms of large-scale collaboration that take advantage of this realization. This is the strategic chessboard that must be of high interest to business leaders, as it is actually one of the largest avenues left open for enterprise growth. It’s also an ideal on ramp to digital business (namely, to get much more value via new modes of collaboration from corporate assets and the collective intelligence of the workforce.)

What does all this mean? How should organizations get started on the second wave? It means that for most companies, the collaborative journey has barely begun and will continue to be an exciting one. The contemporary models of collaboration offer tremendous business potential, if organizations are willing to start down the second wave and go beyond so-called “bolt-on” collaboration by rethinking their business processes — while shifting their culture a bit — to access the considerable benefits as they prepare more fully to modernize their business.

What will you do to drive collaborative improvement?

Lastly, part of the problem is that collaborative project teams today are often in support units — such as IT, corporate communications, or even HR (see visual above) — and consequently don’t have responsibility or control over other parts of the business. Thus the default is for low-impact horizontal usage at a distance, rather that impactful transformation within the business.

However, this is where senior leaders are urgently needed most to drive change. They can step in as sponsors and provide the vision, mandate, and required resources. As The Community Roundtable recently reported in their latest study, the single most effective action that businesses can take to improve community-based collaboration is secure close executive involvement. This then is the key mandate and requirement to start down the road of collaborative performance improvement.

Posted by Dion Hinchcliffe.

Most people would agree that the way we work together has changed quite a bit over the last few years. Or more accurately, how we can better collaborate has vastly improved, largely because of new digital tools, along with important new supporting concepts that they enable (see podularity, Holacracy, etc.)

But just because there are better ways of working, doesn’t mean that we’ll adopt them.

A large number of organizations even today are still attempting to understand the rationale for applying the latest collaborative tools and techniques to their organization. Along their journey towards modern collaboration, they have often encountered a range of structural and process-related barriers to success, from which we’ve learned many good lessons along the way.

A significant part of the issue, as I’ve noted in the past, is that some of the more effective new modes of collaboration — such as social media — were never designed for the business world to begin with. Thus, instead of a major potential boon, as the data consistently shows year after year, it’s often perceived as “a risky medium that we are forced to confront” to quote the useful and detailed Deloitte/MIT SMR study on the topic that I participated in last year. This approach has led to a variety of internal cultural obstacles in many organizations, putting aside the necessary changes to mindset, habits, and business processes required in order to access the benefits of these exciting but often challenging new forms of collaboration.

Related: How to Improve Global Workforce Collaboration

Strategic Benefits of Better Collaboration with Social Media and Technology

This brings us to the question of motivation and purpose. I generally urge collaboration initiatives to keep in mind — as they take the long journey to modernize the way they work — to maintain a focus on achieving the concrete, documented, and substantial benefits in doing so (see visual above.) This has to be the sustained objective of any well-designed collaborative improvement program.

What does such an program look like? It now generally means taking a highly social, digital, mobile, and multi-channel view of mass interaction and team cooperation in most organizations and using their unique capabilities to directly drive these better business outcomes.

The Measurable Value of Connectedness

Certainly, the improvement of human collaboration is much more of a journey than a destination. However, it can to a large extent — and often specifically because of the new technologies — be measured, managed, and optimized. Much of the conversation about modern collaboration today revolves (as it should) around the human factors, as in making our workplaces much more fit and appropriate places for today’s workers. However, this doesn’t mean we can eschew close management and measurement of the process of improvement. In fact, if you don’t, most of the results you encounter will largely be accidental. Thus, collaboration by design is the desired process to achieve specific business benefits (even though you’ll get many emergent outcomes as well.)

Over the years, I’ve been asked many times, how to measure ROI for new types of collaboration. Fortunately, the answer to this is actually fairly straightforward but requires some discipline and forethought. First, measuring ROI requires baselining the performance of the part of the organization being improved with new tools and techniques. Second, causal ties have to be identified between the improvements in key measures of performance — typically pre-existing and respected KPIs that are already being captured– with notable events in the the collaborative medium.

Identifying ‘notable events’ is the hard part in this equation, as you may not even be aware of them when they happen and are highly fluid in nature, making them frustrating to identify. These can involve a sudden temporal increase in collaborative messages in the new work environment (such as an enterprise social network or unified communications platform) or it could be the involvement of just the right person at the right time. The former is fairly easy to casually tie, the latter is more difficult. Either way, over time, by sustaining an active measurement and correlation process, the picture of what you are actually accomplishing begins to emerge.

But this kind of business analytics only verifies the benefits of designed or accidental collaboration improvements. It behooves us to understand what sort of benefits there are to be had and how can they best be accessed, so we know how to design for and then measure them. In the visual above, we summarize some of the latest research along with findings that have now been verified year-after-year, such as McKinsey’s excellent annual Web 2.0 surveys.

The Benefits of Improved Collaboration

The numbers on collaborative improvement speak for themselves, but most organizations won’t attain these levels right away. An organization that deliberately focuses on what makes the new collaboration tools and techniques more effective can reach — and even sometimes exceed — the benefits enumerated below, the yearly accrual of which can easily justify the typical collaborative improvement program.

  • Better collaboration provides a wide range of functional and non-functional rewards. This includes double-digit gains in speed of finding knowledge, expertise, customer retention, revenue, and profit growth. The same is true for overhead: Better collaboration can reduce travel cost and time to market.
  • It’s not just about doing the same work with higher performance, but also ensuring access to just as important less-tangible benefits. The less quantifiable outcomes of new forms of collaboration are by definition more difficult to measure, though they sometimes can be. Certainly better customer and worker satisfaction is fairly measurable and is actually a key benefit to better collaboration. Harder to measure but still quantifiable is the rate of successful innovations and ideas, better visibility into operations, and the connecting together and breaking down of silos. Better competitiveness results as well, according to many studies, including the Deloitte report cited above.

The good news: these numbers also show that considerable progress is being made today by many companies on their way towards a brighter collaborative future. Certainly, productivity and efficiency gains are usually the most interesting returns in the short term for many organizations. Often, demonstrating this is actually crucial to continuing the journey at all. I’ve encountered more than a few collaboration projects that have been stopped by failing to adequately describe the benefits they’ve delivered so far.

But it would be a major mistake to entirely enumerate the benefits of better collaboration as purely a numbers game, though it will always be that too. New modes of collaboration are changing the rules of business in terms of how things gets done and who does them. The implications are many and profound, but access to them is largely prevented until you’re willing to make the transformative changes required. But realization of them is, however, essential to the long-term survival of most of our organizations.

This then is the imperative for better collaboration, as it often means access to our very future.

Related: What is the future of work?