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The new leadership style of enterprise 2.0

Andrew McAfee
Andrew McAfee is a principal research scientist at the Center for Digital Business at MIT. He is the author of Enterprise 2.0: New Collaborative Tools for Your Organizations Toughest Challenges, published by Harvard Business Press.

Last year I joined a group of prominent business thinkers brought together by Gary Hamel for two days to discuss the future of management. We found consensus on two broad points. First, that the practices of managing large organizations have evolved relatively little over the past 75 years and second, that these practices are poorly suited for today's dynamic and turbulent environment.

We participants were asked to suggest solutions, and I was struck by how consistent most of them were. We stressed that organizations needed to become less rigidly hierarchical, better equipped to handle exceptions to business as usual, and more able to tap into all available sources of knowledge and expertise. There was also widespread agreement that managers themselves would do well to abandon command-and-control mindsets and concentrate instead on finding ways to get the most out of their people.

I study IT's impact on businesses and business as a whole, and I pointed out that the technology toolkit available to help accomplish those changes has gone from lousy to fantastic in just a few years. "Web 2.0" is not a meaningless buzzphrase; it's useful shorthand for the profound changes that have taken place on the Internet recently. Web 2.0 resources like Wikipedia, Facebook, YouTube, and Twitter have become some of the most popular online, and they all share a few basic characteristics. They welcome contributions from everyone, they treat all contributors equally, and they remain easy to use, search, and navigate even as they get huge.

I use the phrase Enterprise 2.0 to describe organizations' use of Web 2.0-style tools and approaches to accomplish their goals. Examples of Enterprise 2.0 include employee blogs, corporate wikis, personnel directories that look and feel like social networking software, and internal Twitter-style "microblogging" tools.

Enterprise 2.0 technologies have no inherent sense of existing boundaries and hierarchies; they're indifferent to the org chart. They also don't care much about standard operating procedures.

This makes them sound like a recipe for chaos and disaster, but they're not. They don't lead to chaos because like Web 2.0's resources they have the wonderful property of emergence -- the appearance of patterns and structure over time in an initially free-form environment. Emergence is the reason that the huge public Internet is easier to search and navigate than almost all organizations' Intranets; it occurs when lots of people generate online content and link to each others' work.

Enterprise 2.0 doesn't lead to disaster because people know what constitutes acceptable behavior in the workplace, and so use the new tools in appropriate ways. Good behavior is reinforced by the fact contributions can typically be traced back to their author. After four years of looking and asking around, my collection of Enterprise 2.0 horror stories is essentially nil.

It's not surprising that start-ups and high-tech companies are embracing Enterprise 2.0, but the phenomenon is not limited to these sectors. A variety of large industrial-age organizations, including Procter and Gamble, Booz Allen, Lockheed Martin, and the U.S. intelligence community, have deployed the new technologies of emergent collaboration, and are reaping benefits from them.

Recent studies reveal how large these benefits can be. Respondents to a survey on Enterprise 2.0 conducted this year by McKinsey, for example, reported improvements in critical areas such as access to knowledge and expertise, customer and employee satisfaction, and rates of innovation. And gains in these areas were not marginal, ranging from 20-45%. How many other corporate initiatives could yield such large improvements?

A wealth of evidence is coming together to reveal that Enterprise 2.0, when done right, yields substantial rewards without substantially increasing risks. The new tools have demonstrated their ability to quickly collect and spread knowledge, to connect people who would otherwise have remained unaware of each other, to let the "best" content become the most prominent, and to harness collective intelligence.

In short, they've shown that they can help organizations and their leaders meet the challenges they're now facing, and do so in a way that engages individuals rather than alienating them.

The biggest impediment I've seen to the success with Enterprise 2.0 is an old fashioned command-and-control mindset throughout the ranks of management. If managers don't trust their people to behave appropriately and be good colleagues, if they want to act as the sole proper channel for information entering and leaving their area, or if they don't see the problem with an industrial-age organizational model, then they're likely to be hostile to the new tools and approaches.

If on the other hand they believe what they've been saying about empowerment, agility, innovation, and people as the most important asset they'll take a long look at Enterprise 2.0. I predict they'll be pleasantly surprised at what they learn, and come to see it as part of the remedy for what's ailing.

By Andrew McAfee

 |  December 3, 2009; 4:25 PM ET |  Category:  Technology Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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I suggest you not be bedazzled by newer technology. Improvements that you attribute to 2.0 seem disproportional to common growth or gains. In otherwords, I am not impressed nor am I convinced the system works by a few statistics alone.

Have been around management long enough to have first hand expeerience transitioning from from theory X, Y to Z. Theory Z was all the rage at one time.

Getting too personal may create liabilities or distract from productivity objectives. Besides the book on Management was written one-thousand years ago and it is often forgotten.

By the way, did you know that a moose hunting skills does not neccesarily make an Executive ? Or that Dick Cheney was really a corporate flunky ? Or that knoweledge of itself is not power ? Knoweledge applied is power, false knoweledge applied is therefore weakness or W=F x D. And that constantly banging on a keyboard ain't work to me.

Posted by: truthhurts | December 5, 2009 5:06 AM

Web 2.0 and Enterprise 2.0 will have to wait for the next generation who will grow up with these tools, and feel comfortable with them. In the mid 1980s computers were available, increased productivity with Word Processors, Databases, etc. It took about 15 years before those tools made their way into offices in a real way. The internet is 40 years old this week yet we've only really started using it about 10 years ago in the office environment.

Web 2.0 has a lot of potential but if people cannot understand it you won't see it used well. Facebook as a corporate tool is a challenge to those manageing web resources. Wikis are alien, blogs make little sense to people currently managing offices. Technology moves fast and history shows we must wait for the next generation to use them. Keep teaching and developing them but don't get frustrated at those who ignore them. Technology has been ignored before with the next generation bringing them into use as though they were a no-brainer. Web 2.0 will catch on everywhere around 2015 and we'll wonder why it wasn't used earlier.

Posted by: Fate1 | December 4, 2009 11:10 PM

Great analysis on the "why" of our recent corporate failure in the US. I recall submitting a new concept about 10 years ago when I was a mid-manager at Citigroup-Smith Barney. My idea was rejected with a vengeance and criticism heaped on my head for doing an "end-run" around my immediate manager--not to mention, I am female. We can now see where Citi ended 7 years later...justified, I'm afraid. Cavemen reigned in the 90's in most large corps.

Posted by: redbarrique | December 4, 2009 4:50 PM

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