IBM Drives Enterprise Adoption of Social Networks with New Enterprise Adaptability Practice offers reportage on the launch of IBM’s enterprise adaptability practice
Shades of Web 3.0—The Googlization of Knowledge Management—Resetting the Adoption Clocks
Tuesday IBM announced a new services practice, “Enterprise Adaptability” services, which aims to help global companies realize a quantum leap in workforce agility and collaboration by facilitating their adoption of social networks and Web 2.0. As predicted in the Year in Review—2007, social networks and Web 2.0 are being embraced in the enterprise B2B arena this year, and this announcement shows that adoption is right on ahead of schedule. Enterprise 2.0 is reaching the mainstream, and companies that do not aggressively adopt enterprise 2.0 will experience serious competitive threats within three years.
IBM’s announcement validates enterprise social networking, but more significant is their rationale for launching the practice: their clients are struggling with adjusting to the Knowledge Economy, globalization and decreasing margins, and Enterprise Adaptability prescribes collaboration and innovation to cure legendary agility gaps. As explained below, Enterprise Adaptability smells like breakthrough, although it’s barely out of the oven. To look behind the curtain, I caught up with Scott Smith, a lead Partner in IBM’s Human Capital Management practice as well as Christa Degnan Manning, Research Director, AMR Research and Derek Smith, Research Director, Kennedy Information. After briefing you on the Enterprise Adaptability practice, I will dive deeper into its market significance and consider prospects for success.
Enterprise Adaptability—Delivering Enterprise Social Networks
At first I thought IBM was wrapping social networking around existing technology, but it’s more than that. – Derek Smith, Director of Research, Kennedy Information
IBM’s Enterprise Adaptability practice addresses critical globalization-related pressures that increasingly assail enterprises: the need to accommodate unprecedented volatility in all aspects of their businesses. They face chronic overcapacity, wide shifts in demand and the increasing difficulty in creating profit through efficiency and cost reduction. In most industries, the mantra is to drive top-line growth through innovation, but most enterprises have traditionally been poor innovators: the same silos that produce efficiency stifle innovation, which is inherently cross-boundary. Cross-boundary yet efficient collaboration is arguably the lifeblood of innovation.
Enterprise Adaptability integrates several recognized IBM competencies:
- Enterprise-class Web 3.0ish social software via SmallBlue/IBM Atlas—this software analyzes IM (instant messaging), email and other digital knowledge artifacts to create synthetic profiles and social web models among people. By mashing up artifacts (profiles people create, papers, other deliverables) and triangulating with digital communications enables SmallBlue to automatically generate and manage a much clearer picture of a person’s expertise and relate it to other people’s. It generates enterprise social network maps in days and does not rely on SNA-type interview processes.
- Real-time Infrastructure—the quintessential enterprise infrastructure provider, IBM has aggressively used its own IM client, Lotus Sametime, to provide presence and instant communication for years. I have experienced this as a recent IBM partner; it is easy to arrange instant meetings due its presence and instant communication capability. IBM has also used its own social networking tools, blogs, wikis and tagging for several years. It has learned to integrate these with enterprise infrastructure. This means knowing everyone’s information and status at every instant, globally. Combining SmallBlue with real-time infrastructure gets very interesting.
- Industry-specific business solutions via IBM Global Business Services—IBM has done early client work in financial services, healthcare and other industries. They have learned how to integrate real-time collaboration into the work stream. Enterprise Adaptability (EA) leverages its methodology to facilitate fast adoption of social technologies through its three-phase progress: Planning, Adoption and Implementation.
Discussion with Scott Smith, Lead Partner, IBM Human Capital Management
Scott has been a leader in IBM’s knowledge management, portals and human capital management consulting for over fifteen years. He is passionate about the challenges faced by today’s enterprise and what EA can deliver. According to IBM’s 2008 Global Human Capital Study, which surveyed 400 executives in 40 countries, developing an organization that is adaptable to change is critical; however, only 11 percent of responding organizations believed they were highly adaptable, meaning they have the ability to predict future skills, effectively locate experts and effectively collaborate within and outside the enterprise. As I wrote in Transformation: from Self-contained Company to Networked Global Organization, the Industrial Economy’s siloed organization was created to maximize efficiency. In the Knowledge Economy, efficiency is taken for granted, and value is created through innovation and collaboration.
As organizations have already gone global (and become more complex), they want to drive innovation, and innovation comes down to people and collaboration. They have to connect those people and make the world small. They need to find the right people at the right time. – Scott J. Smith, Partner, Human Capital Management
What’s Different Now—The Googlization of Knowledge Management
Enterprise Adaptiveness provides tools, processes and enabling services to significantly boost the ability to collaborate and innovate. Here are some examples of pioneering work in financial services and healthcare:
(Wall Street) investment bank. Investment banks create value by inventing new ways to package financial risk management products. When trading desks want to put on complex baskets of trades, it is critical that they identify and consult compliance and risk management specialists in real-time. Obviously, the value of the proposed trading scheme changes very quickly, so, in practice, the trading desk is faced with a trade-off: losing profitability while they search for the appropriate risk management specialist, or putting on the trade with minimal consultation, risking fines or worse. IBM implemented EA services at the investment bank, and results have been very promising. The software automatically creates expert profiles with no extra work from employees. Moreover, its algorithms create connections based on real workstream interactions, enabling people to find appropriate experts in real-time.
IBM has also developed Web 2.0 reward systems that allow people to rate knowledge artifacts, but SmallBlue can track how often an artifact is downloaded and written and chatted about as well. The fact that software algorithms track real interactions of digital communication is different because workers do not have to follow a discrete process to create knowledge; SmallBlue reuses artifacts that are byproducts of their real jobs. Moreover, IBM’s expertise with enterprise infrastructure has enabled them to package and deliver relevant experts seamlessly, within the workstream.
SmallBlue googlizes knowledge management, effectively putting KM on a new S curve: as Google’s search algorithms analyze the number and quality of page links to improve search results, SmallBlue creates expertise profiles based on workstream communications and digital artifacts. It vanquishes the bête noire of knowledge management, the necessity for humans to organically create and manage metadata around themselves and their work. – Christopher S. Rollyson
Here are two other examples:
Medical Equipment OEM. IBM worked with a major OEM to integrate EA into the software that runs its radiology workstations. Picture this: a radiologist in Glasgow is using a radiology workstation to look at radiographs of a rare case of cancer, and he would like to consult other specialists. IBM integrated presence and SmallBlue into the workstation’s software, so the radiologist can immediately locate experts who are available for consultation right now. It’s neither sneakernet, nor a separate machine, nor email. It’s now, right in the same machine, within the existing workstream. The “experts” have not been self-identified or merely reported as in traditional KM; SmallBlue has selected them based on their real interactions.
IBM’s experience. IBM has been using its own enterprise as laboratory for several years. In fact, global professional services firms are huge knowledge enterprises, and they know the pain of having immense talent that could be much better utilized by identifying and accessing experts on demand. Scott shared the story of IBM’s Jams, which they discovered by using technology to engage IBM’s 300,000-member workforce in 2001. Jams take place on a global digital platform (imagine moderated discussion forums). The first one was the World Jam. We aren’t talking about collaboration 1.0, sending group emails to people and asking them to read the same memos. IBM wanted people to collaborate with each other, so they created an event in which people could “jam” (in a jazz sense) and collaborate digitally. Jams incorporate synchronous events, with their sense of excitement and mission, with digital asynchronous technology.
It is groundbreaking when you put it all together. Since communication is largely digital, and (now) supported by SmallBlue and real-time messaging, the value is far more tangible than something like an analog conference where thousands of thought leaders gather for a defined time, and most of the value dissipates because people can’t find each other or connect at the appropriate time and on the right subject to create the value that is top of mind for them. IBM asked employees to jam on the company’s critical issues, and subsequent jams have tackled company values; pragmatic solutions for growth and new market opportunities to leverage IBM’s R&D capabilities. Now IBM organizes jams for clients. For more on this, see Value 2.0: Eight new rules for capturing value from innovative technologies.
By the way, I first heard about Jams last year when IBM CEO Sam Palmisano explained their role in helping IBM transition from a multinational corporation to a globally integrated enterprise (GIE). To learn about the significance of transitioning to a GIE, see Leadership, Trust and the Globally Integrated Enterprise.
The Enterprise Adaptability Practice: Likely Positioning
As readers know, I deeply appreciate the insight and strategic vision on which EA is based. IBM is early to market, and they have assembled a unique mix of capabilities that will be difficult for competitors to match. As a pioneer, IBM faces the challenge of confronting jaded CEOs and CIOs with their (dis)beliefs, and who could blame them for skepticism? They have heard about the promise of KM and collaboration for years, but ROI has largely fallen below expectations. IBM needs to develop a compelling message to show that its new EA practice changes the rules (in fewer words than I have used here ,^)
Based on my conversations with Scott, Christa and Derek as well as subsequent research, I conclude that the EA practice can be a formidable asset to early adopters, and any CEO who is frustrated by his/her company’s innovation track record should look seriously at EA. If the enterprise has a collaborative culture, EA can focus on the tipping point of lackluster collaboration: the low quality and inconsistency of knowledge, and the practical unavailability of experts.
In The Knowledge Economy: The Ultimate Context for Understanding the Future, I predicted that the Industrial Economy would largely be subsumed into the Knowledge Economy, in much the same way that the Agrarian Economy faded in significance during industrialization. Efficiency, with ever rarer exceptions, is not the way to produce breakthrough value; it’s an implementation detail. How do companies create value with knowledge? My bet is with extensive collaboration with customers.
If I were part of the EA practice, I would pursue mass customer collaboration jams. In Rebooting Kraft, I outlined a vision for bringing customers inside the enterprise: “As an increasing portion of consumers interact with Web 2.0 tools, CPG companies can engage them in conversations about their experience, not necessarily about products and services. Often, the most useful types of conversations take place among consumers, not between consumers and companies, because consumers are customer experience-focused. As IBM discovered with its experience with Jams, people love to give of themselves if you can inspire them with a sense of mission and make it easy for them to contribute. IBM’s EA offering goes a long way in making this possible. Today.
The Apple Effect
IBM is also poised to be a very strong player for cultural reasons. Palmisano was very focused on trust, and that shows that he understands the root of collaboration (and innovation). People who don’t trust each other will not collaborate because collaboration is about sharing and collective risk taking. Innovation is a practical approach to channeling creativity, and the most efficient innovation entails cross-boundary collaboration. You’re stalking surprise and taking risks and making mistakes. That won’t happen if the enterprise culture doesn’t prize trust and discontinuous risk-taking. The EA practice removes tremendous barriers to breakthrough collaboration, but Scott and I didn’t have time to do a deep dive into how EA addresses culture change (increasing trust).
IBM EA has two main types of possible competitors: enterprise solutions (software) firms and other consultancies. Of course, Oracle, Microsoft, SAP et al are trying to enable collaboration through enterprise software, and they have service partners (including IBM) with collaboration, KM and strategic change consulting capabilities. Services competitors like Accenture have deep process and technology expertise but lack the capability in enterprise infrastructure, although they can partner that in.
However, pulling off large scale collaboration requires more than the sum of the parts of the “solution.” This is more a hunch than anything, but I believe that IBM will enjoy “the Apple effect” because their point of view is holistic and their experience rich. For years, pundits scoffed at Apple because the company insisted in keeping hardware, software and design in-house. As I argued in Reading between the Lines: Apple’s New Business Strategy, the je ne said quoi of Apple’s success is its multifaceted creativity that stems from a holistic view of all parts of the customer experience. Similarly, IBM has deep and broad experience in real-time infrastructure, software design, management consulting in process redesign, deep industry experience and experience with instilling and deepening trust to inviting widespread sharing. All of these things are valuable in themselves, but in concert they can create rare results. Here is Christa Degnan Manning’s take:
IBM is ahead of the curve in acknowledging and facilitating corporate social networking. IBM’s strengths as a systems integrator and developing and integrating industry-specific systems, combined with infrastructure and technology assets and R&D activity really position them to solve serious problems. – Christa Degnan Manning, Research Director, AMR Research
Parting Shots
- Increased modes, scope, breadth and speed of communication are driving adoption rates of all novelty to accelerate—and the consumption of novelty as well. Early adopters are very far ahead of laggards. Most enterprises barely understand the sea change that social networks and Web 2.0 represent (I call it Consumer Empowerment), and IBM has fielded an offering to make enterprise scale social networking a reality. Many companies won’t be ready for a decade.
- CIOs still struggle with “Business/IT alignment,” but it will pale in comparison with what CMOs will face imminently: customer-company misalignment. Web 2.0 is the age of collaboration; people pay more attention when companies solicit and act on their input. Brand value will be increasingly driven by how well the brand inspires and participates in customer relationships and experience. Too many companies still see themselves as producers and customers as consumers. Of course, this is literally true, but the value of the underlying good continues to drop, and Web 2.0 enables people to create value via scalable digital relationships. For more on this, see Consumer Empowerment—Rare Innovation Opportunity.
- The cultural aspect of collaboration will be the toughest nut to crack—and cross-cultural innovation.
- Here is some excellent IBM thought leadership, including their Enterprise Adaptability release.
Very interesting post and directly related to my dissertation research. Were that I be working for IBM so as to get de-identified data! That would be data on the contribution of social networking and social media to building trust and knowledge sharing. There may be a virtuous circle between social media use and trust, etc.
But a couple of things above raise questions. Are we not talking about building social capital rather than human capital? The conventional distinction is that human capital comes from education but social capital comes from relationships. I can get you connected with experts and that may trigger enough learning to increase human capital, i.e. my own expertise.
On the subject of Apple, there is also the “Apple Paradox” in that they reportedly don’t do much technology-aided social networking yet are good at innovation. That’s in contrast with such firms as Microsoft, Sun, and of course IBM.
Aloha,
Dan
Chris, I like your enthusiasm here for Web 2.0/3.0 but have some comments. From your comment it appears that the social networking connecting to experts is “blind.” If so that differentiates it clearly from jams and other open collaboration where building social capital and community peer pressure and accountability would all be motivators. The difference is important only because the trust issues are bigger than they appear here. The trust (aka culture) is more about the nature of the collaboration than just having people who will trust each other out of the goodness of their hearts. In the radiology and investment bank examples the people are motivated somehow to be found by the software for it to really work. I have real life experience with a very similar tool where people otherwise like to help each other and unless the incentives are tied in (not always $) then it doesn’t work well. That’s why it’s very cool that it’s the human capital group that’s implementing this new offering for IBM. It’s a puzzle that isn’t often considered before people sink 100s of thousands of dollars into tools that will identify experts via email, IMs, content, etc. This community collaboration space relative to people and process is where I live lately and ponder a lot, so had to respond as this seemed to oversimplify it a bit. I know it wasn’t intended as an in-depth study, but also wanted to just say “hi.” I’d love any other thought provoking articles related to the incentives and motivations aspect of collaboration.
Lisa, thanks for your insights. You are spot on with your suggestion that there are many elements that have to come together in order for repeatable, scalable collaboration to happen. The Enterprise Adaptability practice is new, and case studies are emerging. I am very interested in how the practice addresses culture and trust, as these things have very little to do with technology or software. Two things that IBM is doing right: Palmisano clearly understands the importance of trust, and only people on the ground could tell you whether IBM is successful in translating that vision into reality, but understanding it profoundly as they do is a huge first step. Second, the software really takes a lot of the M off the plate of KM. Thanks for pointing out that I didn’t address the whole picture, as that wasn’t the intent. I plan to delve some more into some of IBM’s specific approaches for dealing with the culture aspects. Cheers-
Dan, thanks for writing. I love your deliniation between social capital and human capital! I’ll have to ponder that, but it seems like a very fruitful contrast to make. Within the context of this article, I think you need to increase them in tandem to create world-beating collaboration. Where enterprises are struggling is that they need to allow employees to function like a free market and pursue the people (expertise) they need to succeed, even if that’s outside the enterprise, and then IP concerns rightly surface. That said, I think you can maximize the efficiency of the enterprise within, even though the upside of that will be far more limited than sourcing the most appropriate experts outside or in. WRT Apple, I agree with you, as I’ve written, that Apple isn’t collaborative (i.e. the current Wired cover), and I think that’s a risk for them. Cheers-
Clarification: The way that SmallBlue works is analogous to how amazon.com and other e-commerce sites function: they assess participant data, but they ignore identity. I didn’t focus on this in the interviews, but here is my understanding of how it works: SmallBlue establishes expertise based on many factors, how many people contact a person about a topic authorship of artifacts and external references, but it doesn’t keep track of who contacted whom and when. Therefore, it can increase expertise based on “mentions,” but it doesn’t retain who those mentions came from. If I buy Cecilia Bartoli’s Vivaldi Album, Django Rheinhardt’s Djangology and Chet Baker in Paris, Amazon will recommend other things based on buying patterns of other customers, but it doesn’t attach those patterns to individual people. IBM knows that people would not opt into a system that was invading privacy!