Business 2.0

typewriter-in-officeAs organisations become more transparent, more open, more prepared to share we are seeing more and more intellectual capital being given away “free”. There is the over-quoted example of Goldmine giving away its geological data, Sun Microsystems and IBM giving away software, and pharmaceutical companies collaborating openly on the human genome project.

These organisations haven’t suddenly found a corporate conscience, they are still aggressive, quarterly driven, often American companies with shareholders to answer to. This is part of a deliberate strategy to compete in the modern world. The idea is that if you give away something that your competitors see as core business, you destabilise the market, and make what you charge for more valuable.

Sun giving away Solaris, and IBM supporting Linux, destabilises Microsoft as it devalues and commoditises Microsoft’s core offering, whilst moving the differentiation toward hardware and services.

Open sourcing geological data moves the mining industry away from hoarding data to focusing on how you execute against that data, an area in which Goldmine believes it has a competitive advantage.

Pharmaceuticals can stop spending money on the leg-work of research, and compete instead on the execution of delivering quality products to market at affordable prices as quickly as possible.

This trend, should it continue, is going to effect a profound change in the nature of the workplace and the type of people companies will look to employ. Organisations will differentiate and compete on adding intellectual capital above and beyond what is publicly available, rather than try to milk a trade secret or cash-cow such as the Coca-Cola recipe. This will require more and more “knowledge workers” – people who don’t follow an administrative business process to do their jobs but rely on their experiences, professionalism and networks to add value to their organisations – or, as recently described by Thomas A Stewart,  “someone who gets to decide what he does each morning..” (thanks to Jessica Twentyman for finding me the source!)

Organisations need to trust these professionals, they will not be in the office from 9-5 every day. These are exactly the sorts of people who thrive on their personal networks, they are the people who you go to when you need to know what’s going on. Social software brings the same level of productivity increases for these people as type-writers and then word processors did for a previous generation of workers. It takes their natural propensity to connect, to share, to add value and extends it in the same way the internet extends our access to information.

It won’t be enough to hire knowledge workers to survive and thrive in this recession. Organisations will have to change their business practices to take advantage of their abilities, and provide them with the tools to be effective. Word, Outlook and even Sharepoint won’t cut it. They will need custom built social platforms, or products such as Confluence, Jive, Socialtext and Lotus Connections.

This is not a technology driven change. These tools are a response to a new way of organising and operating companies, breaking free from 1950s management theory and production lines to treating people as individuals who get things done by independently and autonomously adding value through their networks. Organisations need to embrace the business change first, and look at the software second. Otherwise the competition will gain a significant competitive edge, whilst you’re worrying about the ROI of the investment in the latest “it’s like Facebook, but…” product.

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5 Responses to Business 2.0

  1. Larry Hawes says:

    Spot on, as usual, Jon! Your post illustrates why the Enterprise 2.0 movement will quietly fade away in the end; most businesses will not make the change from centralized to decentralized management. Without that shift, E2.0 will ultimately fail.

  2. I disagree Larry. Whilst the ‘Enterprise2.0′ movement will certainly fade away, it will be because it has succeeded to such an extent that the technologies and associated cultural changes will have become so embedded in organisations that it becomes second nature.

    Just as telecommuting, email and mobile phones are part of almost any business today, so will social tools be in 5 years time.

    Great post, Jon.

  3. Yet again a great post.

  4. I agree with Stuart – and you, Jon – in that “Business 2.0″ is the only way to go.

    The reason companies will change is because those who are truly networked and collaborative will prove to be more successful and enduring than those who aren’t.

    We are still in the midst of this change, which is why some of us “can’t see the woods for the trees”.

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