Enterprise 2.0: Finding success on the frontiers of social business

My recent exploration of the potential causes of Enterprise 2.0 failures here on ZDNet sparked a critical discussion in the blogosphere of enterprise social computing and its overall appropriateness, motivations, and benefits to business. In particular, well-known contrarian Dennis Howlett weighed in last week with fairly severe criticism of Enterprise 2.0 which ultimately resulted in a direct response from Andrew McAfee, coiner of the term.I recap the facts and the latest discussion and explain why social tools in the workplace, if history is any guide, are almost certainly inevitable.
Written by Dion Hinchcliffe, Contributor

It's entirely possible something may cause social tools to abruptly stop their broad movement into the workplace, but history tells us that it's just not likely. Success is in the eye of the beholder and with it often spawns a growing body of followers, adherents, acolytes, as well as nay-sayers that won't be convinced until it's an inescapable conclusion. In this very manner, at least so far, seems to go Enterprise 2.0, a moniker for corporate social software that has been inspired by widely popular online Web 2.0 tools such as blogs, wikis, social networks, and other social software.

As we'll see, this is an intriguing case of a nascent business, social, and technology movement that seems to -- despite some claims to the contrary -- actually have had a rather humble and unheralded ascent while making surprisingly deep inroads in business including some higher profile successes. Make no mistake however, despite the apparent numbers, this is a movement that's in its early days yet and which has years -- if not a decade or more -- before it has its largest impact.

What exactly the impact of Enterprise 2.0 will be however, has been the subject of an active and lively debate online over the last couple of weeks.

Uptake moving faster than absorption

My recent exploration of the potential causes of Enterprise 2.0 failures here on ZDNet managed to spark quite a discussion in the blogosphere about enterprise social computing and its overall appropriateness, motivations, and benefits to business. In particular, well-known contrarian Dennis Howlett weighed in last week with fairly severe criticism of Enterprise 2.0 which ultimately resulted in a direct response from Andrew McAfee today (who described it originally). For those wanting to follow the rest of the conversation, Paula Thornton probably did the best round-up of the discussion. The range of responses shows a wide variety of opinion reflecting both the scope and timeliness of this subject.

For my part, I would observe that the points that Dennis makes, while resounding with business importance (and being a bit disingenuous since I believe Dennis knows better given the information available), almost completely ignores the discussion and experiences with Enterprise 2.0 up to this point. This includes both the extensive efforts taking place in companies around the world right now as well as the already widespread nature of these tools. Far from being a solution waiting for some kind of business problem, at present Enterprise 2.0 describes a new way of working together that is already being used by millions of workers every day.

Figure 1: Stats, Adopters, and Motivation

That not every Enterprise 2.0 effort will benefit the business is also certainly true, as it's occasionally misapplied and overused, like any new business or technology idea. However, the many people finding value in these tools today or who are working hard to make them successful are poorly served by broad generalizations, that for some reason, Enterprise 2.0 "is a crock." That it's not a well-known term is certainly true; most people using social tools at work are just doing it and not giving it a name. This does not distract from the numerous stories of success that have emerged over the last few years.

As JP Rangaswami pointed out recently, social computing is increasingly moving beyond the perception of being "interesting, but of no commercial value" and into a place where it's thought to provide a range of bottom-line business results for most that apply it.

In working with and examining the results of many early Enterprise 2.0 efforts, I've been forced to come to the conclusion through repeated example that there is something fundamentally unique and powerful about social computing. Though not all uses of social tools result in rapid adoption or instant results, those that establish an early network effect can and do push existing IT systems (often ECM, knowledge management, and communication tools) into rapid irrelevance or completely upend and replace older, less dynamic databases or information repositories in surprisingly short amounts of time. That this almost always happens with just minor disruption is fascinating to me. And as we'll see below, despite Dennis' skepticism, these emergent tools have a rich and wide set of use cases. In the end, senior managers that may not "give a damn" about the emergent nature of the enterprise do in fact care about better ways of running their businesses.

That there is such a wide range of positions about Enterprise 2.0 from highly experienced people inside the worlds of technology and business is intriguing but probably inevitable due to the early stages of these changes and their rapid onset. In large part, I believe this is because of the distributed and muted nature of the information about what's happening with social computing inside the workplace (this is in contrast with B2C-style corporate social media, which is still getting the lion's share of buzz and attention right now.) Many projects are also adopting early advice and aren't heralding the massive change that these tools may bring, are flying under the radar, and setting expectations low in a business world that is fatigued with the failures of big-bang IT. That adoption is happening as fast as is apparent today is intriguing given the warning that McAfee himself makes about expecting too much change from all of this:

[C]ertain E2.0 enthusiasts adopt the language of revolutionaries. They rail against the old corporate order and proclaim that they’re working for its downfall. They portray hierarchy, standardization, and management as enemies of innovation, creativity, and value creation. And they maintain that E2.0 is an unstoppable force that will only gain power as Millennials enter the workforce and that resistance to it is, ultimately, futile.

McAfee does point out that he indeed believes that those organizations without these tools will eventually fall behind, but he notes it generally won't happen that quickly.

So while revolution is almost invariably not taking place in organizations adopting social computing tools, the pace of uptake has actually been quite impressive given the rate at which enterprises typically adopt new technologies (translation: usually with glacial pace compared to the consumer world). The numbers and profiles tell the story as you can see in the State of Enterprise 2.0 visual above. While a "disruptive revolution" is not what's happening, and Enterprise 2.0 is certainly not inevitable for most organizations (yet), the adoption of the tools has in fact been taking place at what some would call near-revolutionary velocity, including the number of companies reporting they are consciously engaging in it as some level.

Although I've been following Enterprise 2.0 closely since 2006 and I'm generally known as an advocate, I should be clear that I've also tried very hard to be impartial and balanced (hence, for example, my Enterprise 2.0 failures post). No one is served by unrestrained hype. As much as possible, I have gathered data and examined the trends to see if indeed 1) the tools of Web 2.0 have begun to move into the enterprise and 2) improve business results. The first is now virtually a foregone conclusion; we are clearly beyond the "early adoption" phase. The second is still less certain for now, though in the last year enough evidence has accumulated for me that I presently believe that for most organizations that try Enterprise 2.0, rewards are to be had.

Enterprise 2.0: Trouble in a name?

Before I address the latest data around Enterprise 2.0's increasingly rapid adoption rates, the apparent use cases and motivations over existing enterprise applications, and the significant and growing number of early adopters in the Fortune 500, it's worth briefly revisiting why we call this emerging phenomenon "Enterprise 2.0".

As I originally covered three years ago, the term was coined by professor Andrew McAfee as he attempted to put a label on the use of consumer software like blogs and wikis for business purposes. Web 2.0 had already ushered in the suffix for the consumer equivalent a couple of years before and the rest is now history. And other than some recent quibbles about it (you can read an updated discussion of them here on Andrew McAfee's blog), the term has stood the test of time. These days a great deal -- though certainly not all -- of the serious discussion around enterprise social computing is done in this name.

Read about Five ways to avoid Enterprise 2.0 failure.

Why has this turned out to be such an appropriate term? Although some find that it can leave out those who aren't in the know, preferring just to use the term social media or to use the names of the tools instead, prefixed with "enterprise" such as enterprise wiki, enterprise blog, enterprise social network, the reality is that there is a greater, more encompassing understanding and description of these as social environments that encourage emergent behavior in ways that have benefits that previous business strategies and technology solutions didn't.

These naming difficulties have made Enterprise 2.0 a useful catchphrase that is both tool and technology neutral (tools are vital prerequisites of course, but not the focus of the story) while allowing appropriate room for the often more significant cultural and business aspects that are entailed. Social media is often perceived as a marketing or consumer term and so it is often not used in this context. Enterprise social computing is another term, which I use often here, but does not have widespread use. In the end, lacking a better alternative or consensus, Enterprise 2.0 has the best and more cohesive story and community behind it from an enterprise standpoint.

In fact, for a business approach to using technology, Enterprise 2.0 is really quite an orphan, just a descriptive term for something that seems to be happening in organizations today. Enterprise 2.0 was not created nor driven by large software companies or services firms, mandated by law, promulgated by standards organizations or industry consortiums, or invented a priori by a university professor as the way we "should" do things. Rather, like what's happened on the Internet the last few years with Web 2.0, it describes a way of using social tools over our communication networks to accomplish our business goals in an adaptive and self-organizing way that's both more human and natural.

Read the Ten Top Trends in Enterprise Social Computing.

However, despite all of this and the advent of social software into so many places, misconceptions about Enterprise 2.0 are still abound as it becomes more mainstream. These are the most common that I find:

Five Common Enterprise 2.0 Misconceptions

  1. It will take a long time for organizations to figure out how to adopt Enterprise 2.0, if they ever decide to. This might have been true two years ago, but is no longer the case. The adoption story will vary for every business, but grassroots adoption is most common in organizations today with formal adoption somewhat behind. Uptake, while often uneven within individual organizations, has actually been both swift and steady with employees using both "blessed" and "guerrilla" social tools as well as personal services such as Facebook and Twitter in their daily work. A combination of grassroots and formal adoption is resulting in about 1/3 to half of all organizations using Enterprise 2.0 tools today.
  2. Enterprise 2.0 is harmful or will disrupt corporate hierarchy and management structures. This also just does not seem to be happening, even if a few people are predicting it still. Dozens of Fortune 500 companies are formally using Enterprise 2.0 tools today and are not reporting this. They are however reporting better productivity, improved communications, the ability to find information, and cost reductions. But not the collapse of corporate structure. What is true is that additional lines of communication are opened including channels to weak ties and other broader influences. The traditional org chart, never a very good measure of what people actually do at work other than identifying who does their performance reviews, is being augmented by the social graph, not replaced.
  3. Enterprise 2.0 is about helping workers socialize, not achieving specific business goals. While adding a social or community dimension to the workplace is indeed something that Enterprise 2.0 will enable, the open and persistent nature of work inside Enterprise 2.0 environments ensures that they are often a better tool for achieving communication or collaboration-based work. Enterprise 2.0 environments leave information behind for later discovery and reuse, they are asynchronous (not interruptive of workflow), scale better to a larger audience, and let the right organization and structure emerge naturally. That they are social means through which networked activities can be tied to a worker's identity facilitates expertise location, social reputations, and trust in social sharing and contributions to build up. But the most important aspect is that these tools are freeform, meaning they can be applied to a wide range of business problems including project management, information management, hiring, contracts, status reports, meeting notes, business process management, gathering innovation (brainstorming), internal communication, problem tracking, or any of a hundred other major business activities including even end-user software development and mashups.
  4. The use cases of Enterprise 2.0 aren't understood. While many are yet to be discovered, the known use cases of Enterprise 2.0 are many and varied. In addition to the general business activities given in the previous point, there are more specific ones including creating company "pedias" that contain up-to-date knowledge bases about company-specific knowledge, project wikis where all the information and knowledge of a project is kept as open, in-process, and dynamic artifacts, and blogs that allows departments to communicate with the rest of the organization about timely issues without the the lengthy publishing cycle of the intranet team, and which harness collective intelligence in their comments and replies from the rest of the company. Social CRM is another area where Enterprise 2.0 is coming into the fore. Many other use cases are known.
  5. Executives and senior managers don't "get" Enterprise 2.0 or view it as a threat or distraction. While they may not always use the term, social computing and Web 2.0 is frequently of great interest to most business leaders that I talk to. The changes in society ushered in by pervasive social tools has not escaped them and figuring out if it's relevant to the ways they run their business is a key, if sometimes still unanswered question. That these tools are not perceived as a magic bullet that will cure all the ills of their organization is probably a very good thing. Given that the case studies that have reported ROI numbers have generally reported promising results, you can expect more executives and managers to investigate. And while they may not know all the nuances, most people are using social tools in their lives can extrapolate what that means to how much better communication and collaboration at work can be.

While I certainly don't believe that Enterprise 2.0 advocates should run a victory lap any time in the near future, the trends are that social tools should be present in the majority of organizations by 2010. While some studies have shown that as many as a quarter of all workers will actually resist/avoid Enterprise 2.0 tools, the same thing happened with the transition from postal mail to telephone, accounting pads to spreadsheets, mainframes to PCs, memos to e-mail, sneakernet to local area networks, and many other famous transitions in the history of business.

While it's entirely possible something may cause social tools to abruptly stop their broad movement into the workplace, history tells us that it's just not likely. While the inroads the tools are making are almost certainly outpacing true absorption right now, we are truly witnessing the beginning of a transition to a more open and social business environment, whether we call it Enterprise 2.0, social computing, or whatever it ends up being referred to. And what it's certainly not, is a crock.

Are social tools being used in your workplace, either officially or below-the-radar? Why or why not?

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