The Conversation Group

Watch this TED talk video of David Logan on tribal leadership and then look around your own organization. What stage are you and your co-workers operating at? Stage 2 where you hate the world? Or “stabilizing at Stage four“, like Zappos? Or are you at Stage 5 and changing the world? And what can you do to move your organization up this ladder?

Tribes are a critical organizational model that we naturally adopt, whether explicitly or implicitly, in our interactions with others. Understanding tribal behavior and working more directly on improving our tribes is key to developing high performance organizations. And if David Logan is right, it might also be the key to changing the world.

My Sunday mornings are currently spent catching  up on John Hagel and John Seely Brown’s Shift Index work. Though this concept is not directly in their work I would like to air it – the ambivalent purpose of social networks in business. To all the people I am linked to in LinkedIn, at least for a while, I used to say, so how can we help each other? How can I help you? What will you do for me? I never got a constructive response to those questions.

Here is why organisations are better than networks.

First, in passing this morning I read JSB and JH’s comments on the large organisation:

Only 20% of people are passionate about their work, and the least passionate are likely to be working in large organisations.

The fear is large organisations end up staffed by people who really don’t care.

My feeling about large organisations is their future lies in being platforms that organise people in any way that leads to sustainable revenue. JSB and JH see it slightly differently:

“We believe big institutions will become more relevant than ever-once they focus not just on efficiency but on providing platforms for individuals to systematically experiment, learn, and innovate. As scalable learning replaces scalable efficiency big institutions will become more appealing to talented individuals.”

I like the idealism in that statement but as a knowledge worker I educate myself, by and large. It gives me advantages to do it that way. And I am increasingly inclined towards greater degrees of individualism.

And yet, I like organisations. I like them for this reason:

“….the second reason we believe that large-scale corporations will remain a prominent feature of our professional landscape: because they will be best positioned to develop and support scalable, long-term, trust-based relationships. Think about it. Even the most accomplished networker supported by social networks like Facebook can develop only a limited number of trust-based relationships. On the other hand, a large institution could scale these kinds of relationships far more rapidly and broadly than any individual could.”

Yes, this is what makes me an organisation man. The fact that they provide a short cut to trusted relationships. And relationships where a revenue purpose might emerge without ambivalence. Ambivalent purpose is one of the big snags with social networks like LinkedIn and Facebook – really guys I want to be linked to you not because I admire that profile but for business purposes and that is both enough and worth while.

Clive Thompson in a 2008 NY Times Magazine article reported on how “ambient awareness” is enriching our social lives as we have instant access to more and more real time information about our friends and colleagues I’m so Digitally Close to You). The rapid increase in the number of information sources, the speed new information is being generated, and the quantity of information available is equally impacting business processes from product development to marketing to customer service. In my consulting work this is one of the key technology shifts that I see companies struggling with as they re-examine how data is gathered to support decision making. Redesigning business processes to incorporate business intelligence from ambient sources will be a key part of redesigning companies over the next decade.

(This blog post is an excerpt from a long white paper that I am currently writing which I will post in its entirety when complete)

The term ambient intelligence (or AmI) was, according to Wikipedia, first used by Brian Epstein of Palo Alto Ventures in 1998 in a workshop for Philips on the future of consumer electronics. The world they and others began to describe had a set of key technology trends that together created a fundamental shift in the way we interact with the physical world including miniaturization, wireless communications, software platforms for distributed systems, improved human-computer interfaces, the general robustness of autonomous systems and a continuing reduction in cost for the deployment and maintenance of such systems

These researchers envisioned a world that by 2020 thoroughly connected people with their environments as sensors, transmitters and other devices became increasingly inexpensive to deploy, easier to program, and more connected. Ambient information systems can be generalized as following this common pattern: (1) the translation of the inherent information in our environment, such as the speed of passing traffic, into digital information via a sensor; (2) the transmission of this data through a computer network; (3) use and presentation of this data by a human or machine process (for example, traffic statistics super-imposed over an online map). I’ll use the term “lens” to denote any system which is aggregating, analyzing, and presenting this data.

A simple example of this can be seen in the automated toll systems now in use in many western countries. A small transmitter placed in an automobile uniquely identifies the vehicle to a toll sensor, allowing the driver to be automatically charged a use fee as he drives past some fixed point on the roadway. In this case the lens is a machine process designed to associate the location of a specific vehicle with a financial transaction to be processed against a specific driver’s account.

Augmented reality systems currently in their first consumer deployments through mobile phones also offer a glimpse at the human side of this coming world of ubiquitous information-rich interactions. The combination of a set of sensors including a digital camera, GPS, and a compass into a portable device with Internet connectivity allows information about an individual’s environment to be retrieved as he moves from one place to another. Here the lens is a visual human-computer interface made possible through the video display of the digital device.

In just the same way that the physical world can be instrumented, detected, and thus better understood we can also instrument the virtual environments in which we are now increasingly communicating and conducting business. As Thompson points out, the innovation of Facebook’s “news feed” in 2006 was not in the creation of new information but in the way that information was surfaced to Facebook users.

Facebook had already created a system in which inherent information about people’s activities (“Tim and Lisa broke up”) was being captured through the human sensor network of its users. The news feed suddenly provided a lens through which one could consume all of this information easily, providing users with a tool for comprehending larger quantities of data and presumable making decisions (I guess I should call Tim or Lisa…) and, as Thompson reports, startling and upsetting people who hadn’t thought through the implications of putting this information online.

In the same way the inherent information in our business environments is increasingly being collected and stored online. Past Amazon CTO Andreas Weigend enjoys pointing out to clients that “more information will be created and stored this year than in every prior year in human history.” Businesses must implement the right sensors for collecting and transmitting and the right lenses for aggregating, analyzing, and presenting this information.

For example, for a B2B client we recently added online social profiles to the set of information that sales people have about prospects as they try to follow up on initial product inquiries. Having more information available about that particular individual measurably increases the likelihood that the sales person can reach a prospect and have a meaningful conversation. But almost as important is how this information is informing the process of deciding who to contact in the first place.

Sophisticated sales organizations have long implemented “scoring” mechanisms for trying to decide who their most interesting potential prospects are within a given list. A weakness in these systems is that much of the information used for such scores is self-reported by the prospects (size of company, title, industry group, etc). Thus the ambient intelligence about these prospects — the data they are creating all of the time as the use various online services — can be significantly more useful in assessing the relative value of one prospect versus another.

Another example, marketing organizations are increasingly aware of the vast number of customers talking about their companies and products. Communications teams are establishing “listening posts” (sensor networks) to aggregate this information. Too often this information stops at an evaluation of “influencers” who can then be targeted for media campaigns. We have helped organizations recognize that key product insights, support issues, and other business processes can be informed by the collection of this ambient intelligence from the marketplace.

These are a set of ideas which we are only just beginning to understand about how business will change over the coming decade. When researchers began to define ambient intelligence a decade ago, they envisioned “…a world in 2020 where user-friendly devices support ubiquitous information, communication and entertainment.” We can now see that the same technology trends impacting consumer products will also radically transform business processes and decision making. The most advanced companies have already begun using sensors to collect relevant information from their environments and are developing lenses to use this information in their activities. The development of these systems will be critical to competitiveness in the 21st century.

John Seeley Brown is the writer that converted me to digital sociology and digital economics. The Social Life of Information is the classic social technology text, written prior to anyone talking about social technologies. Lately Brown, along with John Hagel, has been writing about asset returns:

“Corporate returns are under pressure from far more than the recession. The patterns we’ve uncovered span decades and deeply affect even the highest performing companies, with the single greatest driver of these challenges, and indeed future opportunities, being our underlying digital infrastructure. Regardless of when the economy shifts back to an upturn, the long-term implications for continued erosion of return-on-assets will continue.”

And worrying abut their decline in the USA

Among the key findings, U.S. companies’ return-on-assets (ROA) have progressively dropped 75 percent from their 1965 level despite rising labor productivity. Even the highest performing companies are struggling to maintain their ROA rates and increasingly losing market leadership positions.

The point to where Seeley Brown and Hagel’s thoughts are leading is a kind of vanishing point. Radical innovation on a scale and of a type we can’t imagine. I know, I know. they quote things like the impact of innovation in China and India on the west – blowback innovation. But I value more this sense that we can’t imagine or anticipate the radical changes we are due after 40 yea of relatively lethargic inactivity disguised as growth.

I see the problem slightly differently – as a gradual desertion of conventional demand and supply economics for social and moral reasons – because it increasingly failed to deliver fairness. That’s the subject of a paper I’ve written which I hope will be presented soon in Stockholm but if not Memphis in December.

UPDATE: Meanwhile…. isn’t the RoA paradox partly resolved if we look at the contribution of intangible assets to corporate reporting? I can’t believe JSB and JH would have overlooked this so I offer the explanation tentatively. If companies are adding ingtagile assets in (patent rights, brand valuations) then their RoA will apepar to be down because their asset base will suddenly increase?

Continuing our occasional coverage of the evolution of the web as an information market, Joe Wilcox had a great article recently that picked apart the story around the iPhone.

We’ve been reviewing iPhone coverage here and here oh and here as well. Here is the tail end of Joe Wilcox’s article. the whole is well worth a read as are the comments.

“Many of my journalist peers are themselves obsessed about iPhone and App Store. The number of blogs in any given week just dedicated to new App Store applications is evidence enough. There is informational obsession with the device that defies reality.

IDC’s Ryan Reith agrees. “The view about American journalist obsession with the iPhone couldn’t be more true,” he said.

It’s that misguided obsession as expressed in two separate blog entries posted yesterday that prompted my writing about iPhone. At the Apple 2.0 blog, reporter Philip Elmer-DeWitt asserts that “iPhone’s share of the smartphone market hits a record 40 percent.” Really? In what alternate universe? He writes:

Apple now has a substantial — if not the largest — share of the smartphone market in every region of the world except Asia and Africa, according to a report issued Wednesday by AdMob. Overall, the iPhone’s worldwide share grew to 40 percent from 33 perent over the last six months. In North America, its share of the smartphone market is 52 percent, as measured by hits on AdMob’s ads.

This data — based on advertising measurements — doesn’t even remotely jive with Gartner or IDC smartphone unit shipments, nor even Apple’s figures. According to Gartner, Nokia has 45 percent smartphone marketshare in the United States. But the data makes sense perhaps looking at AdMob’s share on different handsets. This kind of persistent reporting makes iPhone appear larger than what it really is. It’s wonderful for Apple’s Stock price.”