Enterprise 2.0 Vs Diffusion of Innovation

After reading the excellent Andrew McAfee Enterprise 2.0 book, I was wondering if there was any point for Hypertextual to publish yet another review. There already are plenty around with Venkatesh Rao’s on Enterprise 2.0 blog and Gil Yehuda’s probably being the most interesting ones.

It might be more valuable to offer a perspective focussing on the Adoption part of the book. By and large, the adoption topic has been the one sparking off  most of the conversations and thinking on the Enterprise 2.0 topic. The idea is to confront McAfee work with a reference on the topic of adoption of innovation : Diffusion of Innovation : by Everett Rogers.

In all fairness, I haven’t read Diffusion of Innovation. I only know it through Scott Berkun presentation on innovation (already mentioned in Hypertextual post on the subject). Scott quotes Everett Rogers work :

The diffusion of innovation is based more on sociology and psychology than on technology. Here are the things technologists hate : whenever they come with innovation, the main forces against the innovation adoption are sociological ones : ego, envy, fear, pride, politics, security etc …

These are the factors according to E. Rodgers to evaluate how likely your solution is bound to be adopted :

  • Relative advantage : what value does it bring ?
  • Compatibility : how much effort to transition to this innovation ?
  • Complexity : how much learning is required to apply it ?
  • Triability : How easy is it to try the innovation ?
  • Observability : How visible are the results ?

Enterprise 2.0 represents innovative ways to communicate, collaborate and share knowledge among distributed teams in the organizations. So let’s see how Mc Afee writings answer these questions …

Relative advantage : What value does it bring ?

Andrew Mc Afee mentions Bob Kaplan who co-authored Converting Intangible Assets Into Tangible Outcomes. In this book, Kaplan argues that

None of these intangible assets (human, organizational and informational capital – i.e databases, Information systems, networks, technology infrastructure) has value that can be measured separately or independently.

Baseline : you just can’t build a regular business case for IT with Enterprise 2.0.

Mc Afee still recommend to build some kind of business case with the following elements :

  1. Costs and time lines : if benefits can’t be estimated, effort should be put in place to have some cost estimates. How long the project will lasts, what are the milestones, number of people involved. Even though one knows that these estimates must be considered very carefully. Remember General Eisenhower quote : plans are useless, but planning is indispensable
  2. Expected benefits : Here McAfee recommends to include short cases studies or example. A great one could be Cisco Economics of Collaboration, reporting a whopping $US691M of operating savings and 4.9% of productivity increase in 2008 thanks to the introduction of Web 2.0 tools into the enterprise.
  3. Technology footprint : the scale of a technology reach from geographical, organisational and functional perspectives. Enterprise Social Networks are like e-mail : they are supposed to be used all over the company. So their technological footprint is quite large.

Hypertextual Comment

Mc Kinsey have published a comprehensive report on How companies can benefit from Web 2.0 . This could be a good entry point to provide some visibility of Enterprise 2.0 benefits.

Compatibility : How much effort to transition to this innovation ?

McAfee refers to Harvard Business School Marketing professor John Gourville and his article in Harvard Business Review “Eager Sellers and Stony Buyers“. Gourville looked into research on behavioral economics and reported the three principles of people solutions evaluation :

  1. People make relative evaluations
  2. Reference point is status quo
  3. People are loss-adverse : a prospective loss of X is 3 times more painful that a gain of X is pleasurable.

These elements lead to the fact that we value what we have far more highly that what we could have instead. The result is what Gourville calls the 9x effect : people rate what they have 3 times more than their actual value and prospective items three times less than what they’re actually worth. A new item must therefore be at least 9 times better to justify the (perceived) effort required for the adoption.

Here, the risk is to overvalue prospective new tools (Wikis, Blogs, Twitter-like, Professional Profiles) in a view to increase or chance the reach the 9x threshold.  Gourville thinks this may have disastrous consequences.

As a result, McAfee quotes Gourville and recommends not to oversell the collaborative platform and make it clear that the adoption will be a long phase.

Hypertextual Comment

I also think the overselling approach is not good but for other reasons : this might alter the perception of our speech (buzzword, vaporware, consultants concepts etc …) and have opposite effects within our audience.

Instead, I am a firm believer that we should help knowledge workers rationalize their perceived value of the collaboration and communication tools they’ve been using for the last 15 years : MS Office, e-mails, Network File Repositories, Intranet etc …

Not by telling them these tools are not appropriate but rather by asking them painful questions. The objectives is to help them realize that these tools are the root cause of many of their daily work frustrations.

Once this frustration has surfaced and has been clearly described by the people, it will be natural for them to decrease the perceived value of these enterprise 1.0 tools. Therefore the value threshold Enterprise 2.0 tools need to meet to reach the 9 times value will decrease accordingly. And the effort to transition to E20 as well.

The Five Elevator Pitches suggests some of these painful questions to help rationalizing the perceived value of today’s enterprise tools.

Then you can ask what they are doing about these communication/organizational / knowledge sharing problems or what are they planning to do. Are they giving up despite all the new communication tools available ? Then you can talk about how Enterprise 2.0 can foster knowledge management, innovation, collaboration and productivity.

Complexity : How much learning is required to apply it ?

This is one of the main advantages of Enterprise 2.0 in terms of adoption. These tools are dead easy to use. This is the first of the three trends that yield better tools according to McAfee. It also is the A (Authorship) part of the S.L.A.T.E definition : ensuring every worker has easy access to enterprise 2.0 platforms.

Wiki, blogs, FAQ, Real Time Web, Personal Profile. Their universal adoption on the internet is a solid proof of how easy these platforms are.

Trialability : How easy is it to try the innovation ?

Again : it is extremely easy to test these tools. You can install main Enterprise 2.0 software solutions for free for 30 days and have people try the solution.

McAfee describes the case of Serena Software using public platforms (Facebook) with appropriate security settings as enterprise platform. If your company is happy with this approach, the trial can even be easier.

Hypertextual comment

The concern with 30 days trial is that on such a small time frame, network effect won’t have the time to foster full benefits. These systems become more valuable as the number of users and the volume of injected data grows.

So a 30 days trial might not be enough to see the full benefits of such solutions. However it can still proves how easy it is to use them.

Observability : How visible are the results ?

A good strategy to make the results visible is to locate some teams of social networks enthusiasts (IT or HR departments might be a first good guess). And start to deploy the solution on such narrow teams.

Andrew McAfee recommends to measure the progress (number of blog posts, comments, wiki pages, personal profiles etc …) rather than the ROI. Besides, McAfee strongly encourages leadership in the form of valueing the people that enrich the platforms.

Hypertextual Comment

In a transparency and observability purpose, it might be a good idea to monitor the knowledge workers perceived value of their tools and measure the progress. Preparing a questionnaire with a set of questions around the subject of collaboration, innovation, productivity and knowledge management could be a good starting point.

Organization employees could then answer these questions before and after the launch of the E20 solution and then on a regular basis. This could be a good solution to see if E20 solution helps in reducing the frustration of knowledge workers in their daily work.

The final score

The end result is that McAffe book is the perfect entry point to set up a corporate Enterprise 2.0 strategy. It describes clearly and perfectly the tools, the context in which they were born and how appropriate they are within knowledge workers organizations, via some real life examples.

In terms of diffusion, McAfee provides all the principles and examples required to answer most of Everett Rogers questions.

What would you recommend to help diffuse Enterprise 2.0 ?

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12 comments

  1. Hi Cecil,
    great post as usual. I just wanted to comment on an aspect you overlooked a bit: complexity and learning.

    Yes, those tools are deadly simple. Lethally simple, would have I said. The problem isn’t about how to use them, but what they can be used for. What I see day after day around me is people clueless about the use of a wiki, since every applicable document will end up as a ppt of pdf file; top-down managed communities, where no discussion takes place. Thought leaders blogs where posts are so definitive assesments that nobody would ever dare to comment.

    To be able to use these lethally simple tools as business tools, we will need A LOT of social and informal learning to occur, just to trigger enough imagination to make people find enough confidence to use them for their own advantage. Children can find hundreds of creative usages to a simple wood stick, but “ordinary” people cannot see beyond the tool. This requires storytelling and unlearning.

    Plus, the inherent complexity of social-empowered enterprise drives us into the realm of emergence, where there is no best practices and good usage. Facebook, for exmaple, is now a game platform (8 of the top 10 most popular applications are games http://wp.erikbuchanan.com/?p=16 ). Who would have guessed that?

    Dealing with complexity, is the main challenge of Enterprise 2.0, not the tools. We only can pave the way brick after brick, behavior after behavior, impulse learning at every stage, until the day when anyone is able to follow the yellow brick lane.

    Regards,
    Thierry

  2. Hi Thierry,

    Thanks for this comment. I understand your point whereby if these tools are easy, it may be complex to have them used in a business environment.

    Broadly speaking I always am very suspicious towards complexity. I share Scott Berkun’s viewpoint that there are 2 types of people complexifiers and simplifiers.

    Working in IT, I have been suffering many times from the (often artificial) complexity injected by the astronaut architects as Joel Spolski puts it.

    I actually had a bit of an argument with Paula Thornton on that very issue.

    I understand you mention complexity science, the issue of emergence of patterns in networked organisation etc …

    I guess that to use these tools you need basic principles and guidelines. Putting them “in the flow” (i.e in the day to day way of working) as Andrew McAfee put it is a good thing and does not sound too complicated for me.

    In my company we put in practise the Sameer Patel recommendation that for instance all general information (meeting minutes, announcements etc …) should be posted on the department blog rather than sent via mail.

    We have all internal and technical documents in Wiki. Only official ones that are supposed to be sent to the customer are in word format.

    Just putting basic principles in place will help having these tools in the flow. But we don’t have the social part of it (Sharepoint 2007 – no profile nor tag supported).

    As far as the emergence part of ESSP is concerned, I guess only time will tell. Complexity science will probably help in understanding them afterwards but I’m not sure it will beforehand. And to be perfectly honnest, I’m not even convinced that there is a need to.

  3. I won’t take on Paula’s view, she argues much better than me 🙂

    Of course we are both here to drive adoption, reduce email clutter, facilitate sharing, etc. But beyond tools lies human interaction (I don’t say conversation, as this is one more trapped word, and there are enough misinterpretations and approximations to deal with in the E2.0 realm). And interaction is quite a messy (if any) process, whichever basic principles we try to put in place.

    Complexity… Read for instance this paper from Eric Bonnabau I came along on Twitter today which pretty well explains the scope of emergent phenomena http://www.psych.lse.ac.uk/complexity/PDFiles/publication/hbr_unpredictable.pdf . Putting the tools “in the flow” won’t save us from a lot of watching, learning, and storytelling.

  4. Great post. Its a pity you haven’t read Diffusion of Innovation, but in a way you might like to side step it and look at James Carlopio instead – some of his work has a heritage in Rogers:

    * Carlopio, J., 1998, ‘Implementing Innovation and Technical Change’, Training and Development Australia, Feb. 1998, pp.9-10 (this builds directly on Rogers’ innovation cycle)
    * Carlopio, J. (1998), Implementation: Making Workplace Innovation and Technical Change Happen, McGraw-Hill, Sydney
    * James Carlopio. Changing gears: The strategic implementation of technology. London: Palgrave Macmillan, 2003

    Also see http://www.implementer.com/

  5. Hi James > Thanks for the links and the book recommendations. Never of James Carlopio before. I might try one out of the three. Which one would you recommend ? I alm currently into Change Management reading so when I’m back to Innovation i’ll be glad to pick one of them.

    Christophe > hello. thanks for the comment and the 9 figure redundancy. Great stuff I’ll check it out.

    Thierry > Any new IT solution requires training and business contextualization (see Christophe comment above). I’ve spent the last 15 years trying to harness IT developers geekery to align it on the product strategy. So I’m not really scared with the prospect on aligning people social media usage and interaction with business purposes.

    I guess the key thing is to clearly identify the enterprise goals in the implementaion of Enterprise Social Network solution. But again, this is not new and this is a standard requirement in any IT enterprise solution project implementation.

    Agree interactions and networks implications implies organisational complexity throughout the whole company. I have been working on PLM solutions for the last 2 and a half year. PLM are dead complex solutions. Having people adopting a very complex solution from both functional and technical perspectives is a real challenge. No disrespect but ESN in comprison sounds like a walk in the park to me.

    I guess the main issue (again) is a cultural one and, as Anthony Poncier said, it’s how to foster Managers enthusiasm towards these tools to ease adoption.

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