The Evolving Social Organization

Co-author: Thierry deBaillon@tdebaillon

Simplicity and the Enterprise

Most companies start simple, with a few people gathering together around an idea. For small companies, decision-making, task assignments and direct interaction with clients are rather straightforward.  With growth, the simplicity ends. As every entrepreneur knows, the initial growth of a company is often synonymous with efficiency drops and decreases in profits, since administrative tasks, indirect structural costs and middle-term forecasts add financial and human pressure on early growth.

Overcoming these obstacles is one of the main burdens of start-ups and young businesses. Innovation abounds in the early stages and knowledge capitalization is aided by a common vision of the business. Further growth equates to sustainable efficiencies and market share increases. For decades, organizational growth has been viewed as a positive development, but it has come at a cost.

Complication: the industrial disease

As organizations grow, the original simplicity gets harder to maintain. Current management wisdom – based on Robin Dunbar’s research; the size of military units through history; and the work of management experts such as Tom Peters – considers the ideal size of an organization to be around 150 people. Beyond this size, knowing everybody in person becomes impossible. Intermediate layers of power and delegation begin to develop above 150 people and companies then enter the realm of complication.

Most of today’s larger companies have a complicated structure. To enable growth and efficiencies, more processes are put in place. This is what management schools have been doing for over half a century.  To ensure reliable operations and risk mitigation, the core competencies of decision-making and innovation are moved to the periphery. The company’s vision, if there is one, is now supported at the board level but not the individual level. New layers of control and supervision continue to appear, silos are created, and knowledge acquisition is formalized in an attempt to gain efficiency through specialization.

As companies get even bigger, internal growth and innovation reach a tipping point, and companies rely on mergers and acquisitions to maintain the illusion of  growth. At some stage of complication, companies do not even create jobs anymore. In France, a study from INSEE showed that large organizations have a tendency to destroy internal jobs: by transferring jobs to subsidiaries, contractors and subcontractors. Large firms barely participate in job creation. Similar studies conducted in other countries show the same results. However, knowledge, and the acquisition of new knowledge, are still key factors for innovation and effectiveness. To compensate for its complicated processes, the enterprise attempts to shift to another paradigm, and tries to become a learning organization, putting significant effort into training.

Complexity and the new Enterprise

Today’s large, complicated organizations are now facing increasingly complex business environments that require agility in simultaneously learning and working. Typical strategies of optimizing existing business processes or cost reductions only marginally influence the organization’s effectiveness. Faster evolving markets challenge the organization’s ability to react to customer demand. Decision-making becomes paralyzed by process-based operations and chains of command and control; thereby decreasing agility. Training, as “the” solution to workplace learning needs, fails to deliver and then gets marginalized, often being the first department to have its budget cut.

Many organizations today are also facing significant demographic challenges. Baby boomers, once the lifeblood of business, are retiring, while Generation Y wants to communicate and interact in a completely different manner. There may be four generations in the modern workplace and each has its unique traits and demands. There is growing complexity both inside and outside the organization.

Organizations need to understand complexity, instead of simply increasing complication. This lack of understanding, as well as some existing, but minor, efficiency improvements in tweaking the old system, are the major barriers to adopting Enterprise 2.0 concepts and practices. Companies need to get a clearer view of the competitive advantages of Enterprise 2.0 before an organizational framework like wirearchy can co-exist with hierarchical structures and thinking.

Wirearchy: a dynamic two-flow of power and authority based on knowledge, trust, credibility and a focus on results enabled by people and technology.

Here are some key organizational changes during the journey from simplicity to complexity:

Simplicity
Complication
Complexity
Organizational Theory
Knowledge-Based View Learning Organization Value Networks
Attractors
Stakeholders (vision) Shareholders (wealth) Clients (service)
Growth Model
Internal Mergers & Acquisitions Ecosystem
Knowledge Acquisition
Formal Training Performance Support Social
Knowledge Capitalization
Best Practices Good Practices Emergent Practices

Let’s look at how social learning can support emergent practices in the enterprise:

Implementing Social Learning

Knowledge workers get things done by conversing with peers, customers and partners, as they solve the problems of the day. Learning from these social interactions is a key to business innovation. In a globally networked economy, based increasingly on intangible goods and services, constant innovation is necessary to stand out. Markets such as software, financial services, consulting and consumer goods have to continuously adapt their offers to keep up with changing demands and advances in technology.

Hyper-linked knowledge flows have made organizational walls permeable. Official channels are competing with an expanding number of informal communications. A collaborative enterprise is becoming  the optimal organization for such a networked economy, capitalizing on these expanding knowledge flows. To innovate, organizations need to collaborate internally and this is social. To participate in their markets, organizations, customers and suppliers need to understand each other and this too, is social. Social learning is how knowledge is created, internalized and shared. It is how knowledge work gets done.

In complex environments, learning is much more than just a matter of structured knowledge acquisition. However, that is all that training enables. Corporate training methods often consist of delivering content and perhaps providing drill and practice sometime prior to doing the task. There is often a gap between training and doing. Training alone cannot address the wide variety of informal learning needs of workers. Nor can it help to transfer the tacit knowledge on which many of us depend to do our jobs.

We know that informal learning happens all of the time but often the best answers or experts are not connected to the person with the problem. Social learning networks can address that issue by giving each worker a much larger group of people to help get work done.  Regularly publishing to our networks is how we can stay connected. Here is an approach to embed social learning into organization work flows. This is an iterative process that can be adapted to fit the context.

Listen & Create: Being open to self-education is the foundation of individual learning. Part of this is the development of habits of continuous sense-making by recording what we hear, read and observe; e.g. personal learning environments (PLE) & personal knowledge management (PKM).

Converse: Sharing is an act of learning and can be considered an individual’s responsibility for the greater social learning contract. Without sharing, there is no social learning. Through ongoing trusted conversations we can share tacit knowledge, even across organizational boundaries; e.g. social learning.

Co-create: Group performance enables the creation of new knowledge and is a source of innovation; e.g. collaborative work, customer experience.

Formalize & Share: Some informal knowledge can be made explicit and consolidated through the formalization and creation of new structured knowledge; e.g. taxonomies, document management, storytelling.

Enterprise social learning

Social learning consultant Jane Hart has created a comprehensive, and growing, list of social learning examples in the workplace. Companies listed here include British Telecom, Sun Microsystems, NASA, Nationwide Insurance, and SFR. The SFR case study, reported by Sue Weakes, shows how a younger workforce is demanding better access to social media.

French mobile phone company SFR implemented ActiveNetworker from Jobpartners to support its new social network. My SFR comprises a company blog, a central space for discussion, and the ability to build profiles that allow employees to share information on career progress, learning and development and aspirations. They can also join groups of interest … ActiveNetworker has been well received and SFR is averaging 80,000 visits per week from the 10,000 employees that are using it.

Dave Wilkins at Learn.com, describes the case at ACE Hardware in which the company set up a web-based social learning platform for its 4,600 independent hardware dealers to share and seek advice. They were able to look for new sales leads, find rarely used items through the community and share merchandising display strategies. This social learning community strategy resulted in a 500% return on investment in just six months.

Cristóbal Conde, CEO of SunGard, a software and IT services company, was recently interviewed in the New York Times. He discussed how he has flattened the company’s hierarchy as a way of dealing with the globalization of the company. One important social communication tool at SunGard is Yammer, a micro-blogging platform similar to Twitter but used internally. NYT: “What kind of things do you write on Yammer?”

I try to see a client every day, and because of my title I get to see more senior people. And so then they’ll tell me things — you know, what are their biggest problems, what are their biggest issues, what are their biggest bets. All this information is incredibly valuable. Now, what could I do with that? I’m not going to send that out in a broadcast voice mail to every employee. I’m not even going to write a long e-mail about it to every employee, because even that is almost too formal. But I can write five lines on Yammer, which is about all it takes.

A free flow of information is an incredible tool because I can tell people, “Look, this is one of our largest clients, and the C.E.O. just told me his top three priorities are X, Y and Z. Think about them.”

The Ford Motor Company has used social media for learning, beginning with SyncMyRide, and now integrating it as a way to connect customers and the company.

Ford’s intention is to consider how social media can inform the company as a whole, rather than judging its efforts by the criteria of one department and those “holistic” lessons filter up and down through the company, says Monty [head of social media]y. That includes the company’s executive board and goes as far as putting up senior execs for online Q&As through Twitter and on the corporate Facebook page. “There is a healthy respect for [social media] and how we participate in it. Two-way dialogue is healthy for a company like Ford, and we’ve grown as a result of having participated in it,” says Farley [Chief Communications Officer]. At some point, as executives grow in seniority, they tend to become “isolated from reality,” adds Monty. Making the Ford board aware of and engaged with social conversations counters that isolation. “When [CEO Alan Mulally] says we are making the cars people want, well, how do we know unless we are listening?” asks Monty.

A business imperative

Deloitte’s Shift Index of 2009 highlights the challenges facing several industries today, that of declining return on assets and the need for innovation. One recommendation is to enable knowledge flows, a key benefit of social learning:

Given the growing importance of knowledge flows, perhaps the most powerful form of innovation in this context may be institutional innovation –re-thinking roles and relationships across institutions to better enable them to create and participate in knowledge flows.

One of the great things about web social media is that they are for the most part free. Experimentation does not require an enterprise-wide software deployment strategy at the onset. As Seth Godin, marketing and branding expert, says:

You guessed it: new media is largely free. So why teach it in school as if it were a scary theory? Why encourage people to be afraid? Just do it. Build your own platform. Appear in the places that seem productive or interesting or challenging or fun. Experiment quietly, figure out what works, do it more. No need to be a dilettante, and certainly you shouldn’t spread yourself too thin or quit at the first sign of failure… but… quit waiting for the right answer.

Our social networks have a greater influence on us than we think. Nicholas Christakis & James Fowler explain the latest research in great detail in the book, Connected: The surprising power of our social networks and how they shape our lives (Little-Brown, 2009). Robin Hanson shows that we seldom change our behaviour based solely on getting new information. “People don’t believe something works until they’ve seen it work in something pretty close to their situation. A media story about something far away just doesn’t say much.” Again, social learning is about getting things done in networks.

Getting started

According to Rebecca Ferguson at The Open University, social learning can take place when people:

  • clarify their intention – learning rather than browsing
  • ground their learning – by defining their question or problem
  • engage in focused conversations – increasing their understanding of the available resources.

Following the process explained earlier:

Listen: The first step in social learning is paying attention and watching what others are doing. Finding trusted sources of information is very important. Hearing what others are doing and connecting to them with social media such as Twitter or blogs increases the chances of accidental and serendipitous learning. For example, one can follow conversations on Twitter by searching for “hashtags”. Typing “#PKM” shows current conversations on personal knowledge management.

Converse: By engaging in conversations and providing valuable information to others one becomes part of professional networks. Many experts are willing to help those new to the field but newcomers first must say what they don’t know.

Co-create: Over time one can engage more in co-operative activities, such as adding comments to a blog post or extending the thought in an article or discussion thread. For many people used to traditional work, working transparently in the open takes some time to get to used to.

Formalize & Share: Writing professional journals or lessons learnt can ingrain the important process of formalizing aspects of social learning. Sharing with others, internally or externally, over time becomes part of a normal daily work flow.

As our work environments become more complex due to the speed of information transmission via ubiquitous networks, we need to adopt more flexible and less mechanistic processes to get work done. Workers have many more connections, to information and people, than ever before. But the ability to deal with complexity lies in our minds, not our artificial organizational structures. In order to free our minds for complex work, we need to simplify our organizational structures. According to the authors of Getting to Maybe, in complex environments:

  • Rigid protocols are counter-productive
  • There is an uncertainty of outcomes in much of our work
  • We cannot separate parts from the whole
  • Success is not a fixed address

This is the basis of the evolving social organization.

Some additional thoughts on social learning

Learning Executives Discuss Social Learning at ASTD 2009 (video):

Mike McDermott (T Rowe Price): “I think the impact of social learning will dramatically increase in the future, in a number of ways, both internally with our associates and externally with our clients.”

Karie Willyerd (Sun Microsystems): “we see the death of newspapers … the same thing is going to happen with learning functions and training materials … if we don’t learn how to publish with social media … through social learning.”

Walt McFarland (Booz Allen Hamilton): “The environment is going to demand it [social learning]. The problems are just tougher and they’re too big for any one consultant or any consulting team”

Dave Pollard on bridging generational differences in the workplace:

Our job, as people who appreciate the value and perspective of both generations, and value diversity, is what Nancy White calls “building bridges” — translating Gen Y’s ideas and requests into language “the man” can understand (value creation and ROI), and translating the boss’ and IT’s restrictions into language that Gen Y’ers can understand (the risk of catastrophic financial loss, loss of business reputation, and insolvency). The best way to build these bridges is by telling stories — of history, of unexpected and astonishing success, and of unintended consequences.

Tony Karrer on measurement:

What’s interesting to me is that with eLearning 2.0 or social learning or more specifically with using social tools to do things like have interesting conversations – what I want to measure is really not at all what is learned. I want to measure whether the results produced are better. I am not sure I know what they should have learned at all.

9 Responses to “The Evolving Social Organization”

  1. Simon Bostock

    I find the first part of this piece especially persuasive. The evidence from the startling downward trend in ROA coupled with recent revelations (not sure if this is the right word, but the numbers are definitely startling) on how/where jobs are *really* created.

    My only comment is to that I think that the ‘industrial’ mindset is still applicable in certain circumstances. And that I suspect the compulsion to reduce everything to process is a human instinct which will be hard to overcome – it’s probably even useful in a yin-yang/dialectical kind of way.

    Great work with this.

  2. Amanda

    What a great description of the simple to complex evolution of companies (as I tweeted – it read like an obituary for today’s organizations). Then it turns to hope with the examples of how social learning can support emergent practices. The notes from Rebecca Ferguson reminded me of the idea of ‘helping people learn how to learn’ (which is likely very different than ‘learning how to get through high school and post secondary ed’).

    Where I was eager to read more was the info displayed in the table, and in particular “value networks, clients (service) and ecosystem”. I may have missed the unpacking of these descriptions in this post or your earlier work?

    Thanks for sharing this. I’ll be noodling on this one, letting it digest and rumble around, shaking out ghosts and elephants and probably causing some new ones. ;)

    @AmandaFenton

    • Harold Jarche

      Thanks, Beth. I remember reading Drucker’s Managing the Non-profit Organization and noting that there are not a lot of differences between non-profits, for profits & government organizations. They’re all about organizing people and processes. Just some differences in emphasis. Thanks for the link; lot’s of information to digest.

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