Pretzel Logic – Enterprise 2.0

This morning my favorite business journal, the Economist, has a good article on how the recession has had an impact on productivity and the differences in fall out in the United States vs. the European Union.

First an extremely interesting and arguably polarizing difference in how productivity is defined. The economist says:

Producing more by working less is the key to rising living standards, but in the short term there is a tension between efficiency and jobs.

Whether right or wrong, I don’t believe organizations at least in the United States consider this the goal. Here, its generally about get people to cram more work per hour so we can get more out of their eight hour day. Contrast that objective with them being able to go home early and have a life. But I digress.

On to the the central theme of the article:

Analysis by the Conference Board, a research firm, shows just how different the recession was on either side of the Atlantic. America’s economy shrank by around 2.5% last year but hours worked fell at twice that rate, so productivity (GDP per hour) rose by 2.5%. The average drop in GDP in the 15 countries that made up the European Union before its expansion in 2004 was larger, at 4.2%. But hours worked fell less sharply than in America and, as a result, EU productivity fell by 1.1% (see table). Workers that held on to jobs in America and Europe had their hours cut by similar amounts. The reason total hours worked fell by more in America was that there were more job losses there: employment fell by 3.6% last year, compared with a 1.9% fall in the EU.

Productivity has generally been one of the central themes when it comes to showing benefit from social and Enterprise 2.0 concepts. Often adopted from Knowledge Management. If you’ve read this blog since its inception about 15 months ago or you’re one of my clients, you’ll know that I have a fever-invoking aversion to casting productivity as goal of Enterprise 2.0 design (as opposed to an enabler). This, IMO, results in the colossal short sell of the promise of Enterprise 2.0. Its always been about performance acceleration here, where enterprise 2.0 concepts we know of today are enablers toward established performance goals.

Sticking with the productivity benefit argument since it is used a lot in the context of Enterprise 2.0, is it the case that Europe is seeing slower adoption of Enterprise 2.0 concepts because of the sheer people capacity that still exists in organizations? In other words, the need to do more with less is not as strong in Europe as compared to what’s seen in the United States? If people are the ultimate producers and you have an abundance of labor, being productive by finding experts faster, searching for data and content less, reducing time consuming meetings and email, etc etc don’t seem to be strong, budget-shifting value propositions.

What do our European management thinkers and product vendors think about this and what are you seeing on the ground?

Moving on to a stinging conclusion that should be a wake up call for us all in the Enterprise 2.0 space, whether in the United States or Europe, the Economist says:

Much of the expected slowdown reflects changes in technology, says Mr Jorgenson. The burst of strong growth in American productivity after 1995 was spurred by advances in the semiconductor industry, which led to sharp falls in the price of computing power. The technology is still improving but at a slower pace, and productivity trends will soon reflect that. The global outlook is brighter, because the benefits of IT are far from exhausted in big emerging economies, such as China and India. But that is no longer the case in America, says Robert Gordon of Northwestern University. “We’ve already picked the low-hanging fruit,” he says.

Wow. The benefits of IT are exhausted in America? I don’t buy the conclusion that we’ve wrung all the possible value out of productivity angle in the west. But being objective, if this is what the market perceives as the state of affairs with respect to productivity, those that continue to beat the productivity drum as end value better step up their game. Alternatively, lets stop playing defense, go after those fenced in processes policed by rigid ERP systems for decades and focus on how to accelerate performance by reducing cost, driving revenue and mitigating risk.

Not the IT case, the Business Case – for sales reps, product managers, marketers, support and service teams considering and debating the virtues of a SaaS enabled business platform.

Obviously it won’t make up for an allegedly ill-conceived product and Google Buzz is getting a lot of heat for being excessively social without consent.

That said, whether it’s a mode of operating your business or a way to sell software, THIS is agility.

DAY 1: Google Buzz is Announced (Feb 9th)

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DAY 2: Ferocious Customer and Media Backlash (Feb 10th)

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**DAY 5** Immediate Problems Addressed (Feb 13th)

‘nuff said.

p.s if you want the case study on how Google operational-zed this, Nicholas Carlson on Silicon Alley Insider has the lead story.

This post is not about what’s right and what’s wrong or whether we should or shouldn’t fight for using one or all of these concepts.  That said, each of these monikers need to be dealt with as they will become increasingly important as organizations begin to consider more efficient ways of interacting and transacting both on the social web as well as in the enterprise.

Here goes…

Transparent:

Transparent just got elevated to the top of the list. Most executives love the idea, just not the potential fall out that can come from transparency. As we saw with President Obama’s I’ll-broadcast-the-healthcare-debate-on-CSPAN unfulfilled promise, when you get into the politics at many large organizations, its as much about the lateral competition (in the case of the government, how the right and right wing media would interpret the open discussion) in the executive suite that worries more people about bringing transparency to their enterprises, as it is about top down / bottom up / emergent transparency.

Consider the recent fall out from Google Buzz. Personally I think its an excellent start to something very useful and promising. As I commented in a post by Alex Williams on  ReadWriteWeb:

The best thing about all of this for me is that Google has recognized and capitalized on the fact that email is the ultimate social network and they are aggregating- which is what they do best,” said Sameer Patel, a founding partner with the Sovos Group that consults about integrating social Web applications and collaborative technologies into the enterprise.

However, Google stepped on a banana peel when they misjuded the level of transparency that the general public would be ok with then it comes to sharing our email contacts.

Its clear that we as social networkers seem to be perfectly fine with transparency when its looking at someone else’s data and gestures. Just not when it comes to exposing our own.

Social <insert enterprise context here>

Clearly the most hotly debated moniker in the enterprise context. A President (not CIO) of one of the largest healthcare organizations that I met with threw me a new curveball a few weeks ago.  As prepared as I was to address the ‘Facebook is too social for us” argument with solid business context, the new one thrown my way was “my kids are leaving Facebook because of the new privacy concerns. If social networks are not good enough for them when all they do there is socialize, how can I bring this interaction metaphor to the office?”

Socialized <insert process context here> with the emphasis on business outcomes or activities seems to be far more palatable but to each his own.

Customer Community

Less contested depending on who you speak with. The problem is that the discussion around community and marketing is often short sold due to lack of depth and process knowledge around core marketing performance.  As I wrote a few months ago in a guest post:

Finally, with respect to marketing, most of the community focus today (especially B2B) is on brand awareness and engagement. Certainly, there’s value to be gained there, however, lead generation is the elephant in the room most don’t want to tackle or acknowledge. Regardless of the economic times, the closer your marketing activity is to generating revenue, the more strategic your program remains to your organization. That’s where customer communities need to go – fast.

Of course there are a few seasoned marketers that can take this on. Not to mention, community as an approach to effective awareness and engagement has benefit. But when it comes to community based marketing, few in the “social media consulting space” want to or even have the credentials to tackle the moolah question.

Second, very few are prepared to objectively say when Community is flat out the wrong approach to accelerating performance for your specific business objective. Here are 2 excellent posts by Gil Yehuda and Rachel Happe about not lazily intermingling different concepts that seem similar when in reality, are very different.

Real Time

Though I wrote a report on this topic, the idea of ‘real time’ is a meaningless discussion in and of itself without core performance context. Worse, it scares the living bejesus out of the seasoned CIO who still sport scars from the millions and millions sunk into integration to come anywhere close to near real time, a decade ago. It’s far cheaper and simpler now but real time for the sake of real time invokes instant eye rolling.

However, customers are intermingling in real time and they increasingly expect feedback in near real time. The reality is that the organization (not just support and marketing) need to have that infrastructure to be able to respond as fast as possible. That’s a very different approach than trying to rudderlessly tune the enterprise for real time and then chase/manufacture use cases to back fill value from the investment.

Enterprise 2.0

And finally, yes, Enterprise 2.0. I could leave you with a link to a Google Search Result to Dennis Hewlett’s Posts (its here by the way), but frankly, too often Enterprise 2.0 gets casted as a solution to a problem that doesn’t give the customer adequate heart burn to become a top priority. Until we see a Chief Sharing / Social / Email-sucks, Productivity Officer emerge (NOT!), lets focus on discrete objectives around leads, sales, innovation, product development and the like. It’s awesome to see a few vendors starting to come around to this in their marketing not just in the context of selling the benefit but also adoption and participation. See this excellent post by the very sharp Michael Idinopulos.

In closing, as I said above, I’m not hoping to start a war on whether we should or shouldn’t use this terms.  Transparency, social, open, relationships, collaborative IS the future of work.

If you have opinions on these or other monikers, chime away, below. But they need to know their place and the context.

Cristóbal Conde, president and C.E.O. of SunGard gave an excellent interview to Adam Bryant of the New York Times on the topic of flatter organizations.

I highly recommend reading the entire piece. On why the shift occurred, Mr. Conde opines:

I would say two things. One is just the massive information revolution. But equally important is the fact that before, while there were global companies, they were really just a collection of very local businesses operating independently from each other. Now a global company means a company composed of teams that are themselves dispersed. So every team can be global in many senses, not just the company.

But with the explosion of information, and flattening technologies starting with e-mail, I think that a C.E.O. needs to focus more on the platform that enables collaboration, because employees already have all the data. They have access to everything.

You have to work on the structure of collaboration. How do people get recognized? How do you establish a meritocracy in a highly dispersed environment?

The answer is to allow employees to develop a name for themselves that is irrespective of their organizational ranking or where they sit in the org chart. And it actually is not a question about monetary incentives. They do it because recognition from their peers is, I think, an extremely strong motivating factor, and something that is broadly unused in modern management.

What stood out most for me was his characterization of establishing a true meritocracy in the enterprise.

Meritocracy in the enterprise is something that most high performing leaders would love to see and institutionalize. But its difficult when layers of management can create barriers to transparency around who really was instrumental in getting the job done.

At most organizations, those at the very top are acutely aware that its very hard to have a handle on who truly are the best performers in the enterprise and as important how to infest the rest of enterprise with those smarts. The old model, that characterizes much of how this done at most companies today, would be to throw a lot of money and resources at actively identifying the best of the best via all sorts of creative performance reviews (peer, skip level, top down, etc etc). Then to actively “manage’ that talent pool downstream in the hope that it drives organizational performance.

Via the strategic use of social and collaborative tools, what SunGard has fostered is a more transparent, open enterprise where you move to a passive model of continuously allowing talent identification to happen in the flow of work, and in a way that fellow employees can identify, leverage and learn from the best. In turn, recognition, whether from fellow colleagues, industry peers and managers happens in the open and over and above subjective evaluation by managers. And there’s a lot more that comes with such collaborative and transparent structures in the areas of HR performance, Communications Performance and Line of Business Performance that I’ve written about in the past.

The most brilliant management thinking and execution planning at the top echelons of enterprises no doubt can get companies ahead within defined windows – monetizing a killer innovation breakthrough, riding a bull market, accessing untapped talent in an emerging market and the like. All require active execution by those at the top to ensure follow through. Sustainable advantage on the other hand, is a much much harder goal to achieve as scaling all that top down thinking quarter over quarter is not practical in active mode. And frankly the top heavy model is no guarantee of success as we’ve seen with the last financial crisis.

As much as many of us believe it, you just cant scale the “if you want it done right, do it yourself” mode of work. What socially powered enterprises get is the ability for the best minds, whether at the top, middle or bottom to see, participate and influence outcomes to drive overall organizational performance.  Passively….in the context of work.  I recently wrote about why Building IS Strategy – that’s the only model where the best ideas can be found as well as scaled. And socially tuned enterprises enable this mode of doing business where an open meritocracy around the best strategy and execution plan, against stated business objectives, can drive performance in a scalable way.

Stowe Boyd has some good thoughts on this in the context of social business on his blog that are certainly worth a read.

Update: MIT Professor Andrew McAfee has another good piece on this article, here. Also, I should mention that SunGard used Yammer to help enable this shift in their organization.

I recently contributed a report on the concept of Real Time in the Enterprise, published by my friends at GigaOM Pro – the research arm of the wildly popular GigaOM Blog Network.

The concept of the real time enterprise is going to be top of mind for many organizations over the next 24 months. Amongst other things, one primary driver will be organizations waking up to the fact that their customers and prospects expect to engage in real time, whether on public social networks such as Twitter and Facebook, or on company managed community forums. As a result, critical processes within enterprises need to be re-wired to be able to respond to real time customer inquiries whether that be order status, product knowhow or access to experts. Supporting the end customer is now everyone’s job and so-called “enterprise 2.0” solutions have the ability to let key people rally around the customer in more efficient ways.

We’re seeing it in our work already where this is not just some data problem that IT is interested in solving. Line of business executives are looking to understand the optimal information flow design in the context of discrete performance acceleration opportunities in the areas of customer service, channel distribution, sales and marketing collaboration and the supply chain. Whether its revenue or cost efficiency, all these executives all have a number on their head and are increasingly convinced that latency means cash left on the table.

Feel free to drop me a line if you’d like to learn more about the topic or the report, or if you’re interested in learning about what this means for your enterprise.

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The report is for GigaOm Pro subscribers but here’s the Executive Summary:

Real-time communication and collaboration in the enterprise represents a significant shift in how employees, partners and customers interact and collaborate to drive organizational performance. The growth and acceptance of so-called “Enterprise 2.0” platforms and applications promise to break down closed communication and collaboration loops by moving discussions and data access from email, content management and rigid process applications to activity streams, wikis and API-based data access.

Together, these new interaction formats enable real-time communication and access to information emanating from within these new collaboration suites as well as from external systems. The result is a real-time flow of information from the people and systems that are critical to business functions for each employee, all accessible from a central dashboard.

The widespread proliferation of real-time tools in the enterprise will, however, require concerted analysis of what process and information flows truly warrant real time access. The notion of “right time” vs. “real time” will become more important as organizations decide what consumption models work best for individual users and the tasks they are responsible for. The speed of “real time” also will be limited by how fast traditional applications in the enterprise are able to process and publish information. However, the existence of extensible APIs now make it easier than ever to tap into multiple systems to extract information as soon as it’s made available.

While the concept of real time has existed for more than a decade, a new crop of collaborative suites from vendors such as Jive Software, Socialtext and Socialcast provide this facility out-of-the-box. Traditional enterprise software vendors have also announced their intention to provide real time collaborative and data access capabilities. Notable mentions include Microsoft’s SharePoint 2010, Salesforce Chatter, Google Wave and IBM’s Lotus Connections.

In 2010, expect to see the concept of the real time enterprise ascend the hype cycle. Enterprises will begin to analyze how real-time access can help discrete business processes such as customer interaction, sales intelligence, lead generation, partner interaction and employee project collaboration, and they’ll begin to evaluate the switching cost of moving their systems and data to platforms that have real-time as part of their solution sets. Customers and prospects are interacting with each other and with enterprises in real-time making it imperative for the enterprise to structure its own internal and external processes to respond to customers as fast as possible. Expect this shift to be one of the primary drivers for considering a real-time architecture.

Read more: http://pro.gigaom.com/2010/01/report-the-real-time-enterprise/#ixzz0cJXzIFXn

Update: Reviews of the Report on:

• GigaOM (Startups Fight Giants for the Real-time Enterprise http://ow.ly/ViWw) 
• WebWorkerDaily (The Real-time Enterprise http://ow.ly/ViXU)

Tom Davenport (who holds the President’s Chair in Information Technology and Management at Babson College, my alma mater) has a post on Harvard Business Review where he makes the case that Knowledge Management may well have been the most palatable solution to preventing Underwear Bomber security breach that look the peace and joy out of Christmas Day, 2009.

Professor Davenport concludes:

There are, of course, some remedies to this problem. One would be a really nasty police state, with a lot of false positive detentions. Another would be an international data management agency. A third would be lots more money and intrusiveness spent on airport searches, behavioral screening, etc., a la Israel and El Al. All seem somewhat unlikely.

Perhaps the only palatable remedy would be an intelligence community that views high-quality information and knowledge management as its primary job. If I were Barack Obama, that’s the approach I would be viewing as the real solution to the "connect the dots" problem.

I’d contend that, in this case, knowledge was too managed. And that’s the crux of the problem – too much general purpose management of data, silos, content artifacts. And too little context around discrete tasks that in actuality is what should have been manage -Where data, content and people would wrap around the task to solve it.

There’s plenty of analysis on how the billions spent on information sharing post 9/11 failed. The New York Times writes:

Some government officials blamed the National Counterterrorism Center, created in 2004 to foster intelligence sharing and to serve as a clearinghouse for terrorism threats, as failing to piece together information about an impending attack.

Others defended the center, saying that analysts there did not have enough information at their disposal to prompt a broad investigation into Mr. Abdulmutallab. They pointed the finger at the C.I.A., which in November compiled biographical data about Mr. Abdulmutallab — including his plans to study Islamic law in Yemen — but did not broadly share the information with other security agencies.

KM is hardly the place to start to wrestle this challenge. The problem with KM is that it’s often (not always) measured by somewhat nebulous yardsticks such as amount of shared and reusable content, amount of contribution, lowered email use and number of docs stored on the network. All of this is done in closed networks. As a result, just like we see in the enterprise and its use of Content Management Systems, the government also suffers from ‘silo-ization’, poor findability, and poor analytics.  The fact is, no amount of closed loop information sharing is enough of an air tight strategy to prevent intelligence from falling through the cracks. There’s too many systems in place to let computer based intelligence automatically throw up red flags every single time.

The solution lies in putting people at the core of this difficult problem. The Social Computing Frameworks that we use, in contrast, consider the concept of ‘closed’ to be an exception rather than the rule. This allows those responsible to take ownership of the task but other unknown “experts” get to watch the flow and participate where they can enrichen the quality of the outcome or even better, as in this case, raise a big red flag. Once clear unified objectives are set across agencies, open up the execution so that the best known and unknown minds can chime in.

Whether Social Computing or traditional KM, the larger problem is with lack of objective setting to getting the right information to the right people. It’s about setting the right objectives upfront at the highest levels and identifying which of these objectives can in fact be addressed by information management solutions and frankly, which can’t. And whether the right incentive structures are in place for individuals and groups to collaborate towards a common goal. I’m willing to bet that the strategic and execution objectives laid out by the chiefs of each agency don’t line up in a way that can practically lead to a unified collaboration and intelligence discovery execution plan.

I’m afraid the crotch bomber event will result in hundreds of millions being thrown at "information/knowledge management” solutions that centers on better sharing, transparency as a strategy in and of itself,  as opposed to as an execution path towards defined strategic goals that everyone is firmly behind.

I hope I’m wrong.

As organizations begin to pick themselves up after the economic hammering they took in 2008-2009, there’s a choice to be made on how value is derived by the enterprise. Value in terms of internal efficiency, ecosystem growth, innovation, cost management, community contribution and customer centricity. Costs have been cut to the bone preparing for a near certain jobless recovery as organizations begin to shed off 24 months of paralytic business progress.

As we see momentum return, some organizations will put more muscle into older forms of governing in an attempt to do the same things, better. Others will start to become ‘builders’, as defined by Umair Haque in The Builders Manifesto – as a way to stand out in the market and to ultimately accelerate performance. During this transition, the essence of social computing / collaborative constructs and underlying technologies can play a significant role in executing that change – where change comes not only from the middle down or from the bottom up but from the core, out. That comes with executive buy in, cheerleading, leadership. but as important, participation in design and the ability to more seamlessly be engaged, downstream.

2010 likely won’t show trending data (or as Dennis Howlett says “2010 Prediction: nothing (much) will happen) but quietly, in the case of builders, traditional organizational structures where architecture happens on top and building is delegated down will begin to get re-casted into a model where participation in building happens on top as well. In turn, the rest of the organization is given the tools to play a role in architecting and design. Architecting and designing on how to engage with customers, optimize internal business processes, champion innovation and empower partners and suppliers.

Social computing constructs can drive a hole in that wall that separates strategy and execution – allowing managers to see, guide and participate in execution and follow through like never before. Those organizations looking to do more of what they did pre-crash will probably invest in more business intelligence (BI) and will no doubt end up with better reports. But like before, the insight will come when its too late to influence the outcome. Builders on the other hand will use, say, activity streams, real time in the flow notifications of critical triggers in the execution chain, or the “right time” herding of richer execution ideas and insight around process (examples highlighted in this post) to execute business strategy from opportunity definition all the way to the quarterly earnings call. Some of that efficiency in executing the best, most profitable ideas will come simply from increased/new forms of transparency for those organizations that welcome it and for others in the form of silo and org chart busting participation in strategy and follow though.

Social Computing as the Ultimate Building Enabler

One of the books that I’ve was very influenced by and one that guided a lot of my early approaches to accelerating performance was Execution – a set of compelling arguments around strategy and execution by Larry Bossidy and Ram Charan. Amongst other things, Execution is defined as: 

• “The gap between what a companies leaders want to achieve and the ability of the organization to achieve it”; 
• “A discipline for meshing strategy with reality, aligning people with goals, and achieving the results promised";
• “A discipline requiring a comprehensive understanding of a business, its people and its environment.”

More recently, in the wake of the financial disasters of 2008 and the happenings (or lack there of) in Washington, Umair Haque penned an excellent post on Harvard Business Review about “The Builders Manifesto”, making the case that those sitting atop governments and enterprises need to be builders, not just charismatic direction setters. He distinguishes between leaders and builders, opining:

Here’s the problem in a nutshell. What leaders "lead" are yesterday’s organizations. But yesterday’s organizations — from carmakers, to investment banks, to the healthcare system, to the energy industry, to the Senate itself — are broken. Today’s biggest human challenge isn’t leading broken organizations slightly better. It’s building better organizations in the first place. It isn’t about leadership: it’s about "buildership", or what I often refer to as Constructivism.

Leadership is the art of becoming, well, a leader. Constructivism, in contrast, is the art of becoming a builder — of new institutions. Like artistic Constructivism rejected "art for art’s sake," so economic Constructivism rejects leadership for the organization’s sake — instead of for society’s.

Builders forge better building blocks to construct economies, polities, and societies. They’re the true prime movers, the fundamental causes of prosperity. They build the institutions that create new kinds of leaders — as well as managers, workers, and customers.

Shifting the Core

Execution, as defined in Charan and Bossidys book was about managers and leaders considering execution to be a critical part of strategy planning. The next decade will afford a design where strategy comes from the top (as it traditionally has) but also emerges from the front lines – from those that are closest to customers, distribution partners and suppliers day in and day out. This overly spicy title not withstanding, Dells success with generating $8+ million in revenue from Twitter (as laid out by Manish Mehta) is one example of this. Whilst generating ~.01 % of revenue from social media is hardly going to result in an emergency board meeting to shift Dells sales model, what it presents is a solid example of allowing microcosms to flourish from strategy to execution within pockets in the enterprise. Once tested for scale and relative return on investment compared to existing programs (say email newsletter marketing in this case), the dollars shift, moving these initiatives to the core of the enterprise.

Don’t construe this to be an implication that some big change in power structures in the enterprise is required or is coming anytime soon – accountability to stakeholders, and arguably credit for success, will remain and be owned at the top for the most part – that’s primal and mahogany row political science 101. However, smart leaders will realize that allowing microcosms’ to flourish from strategy to execution within pockets in the enterprise (as Dell did), will offer new (and more certain) opportunities to own performance acceleration success. And that may be the ultimate carrot.

Umair’s post had much to do with government as well as commercial institutions. On the government side, this likely will happen from the outside – instigated by the likes of Anil Dash and his efforts with Expert Labs. On the commercial side, business leaders have the opportunity to foster these internally – the personal incentive being owning the scaling and ultimate ownership of the success of these efforts toward performance acceleration.

There’s very little clarity or even awareness about social computing constructs as a key weapon in this transformative process, not to mention differing views on naming and definition as expressed in this post and comments on Professor Andrew McAfee’s Blog. However, the pieces are there and its up to us to weave that social fabric for enterprises we lead, work for, sell products to, and offer advice to, as they hit the reset button in preparation for the next decade.

It’s hard work but its this opportunity that gets me excited about 2010. So bring it.

Marc Benioff unveiled what he described as Salesforces’ “biggest breakthrough” – an enterprise social networking platform dubbed Chatter.

Here’s a video interview, courtesy of Dennis Howlett, that provides insight into the drivers, challenges and opportunities for moving to more open constructs in the workplace, as Salesforce sees it:

VentureBeat has a straightforward run down of the proposed feature list. Some other good commentary as well:

Jeremiah Owyang chimes in with what, I sense, is on the minds of many right now:

Trying to grapple with understanding Salesforce’s Chatter, is it something *new* or just a *me too*? #DF09

I’ve seen all of these Chatter features (at least in parts) from Jive, Telligent, Lithium(client), Socialtext(client), Yammer, #DF09

Dennis Howlett’s skeptical:

Salesforce.com may well be the poster child for hip and cool apps that bring the consumer experience to the enterprise but it will likely find CXO’s baulk at the idea of Chatter as a useful addition to their Salesforce.com environment. Only time will tell whether Salesforce.com marketers have judged this correctly.

And Michael Krigsman concludes:

Regardless of where Salesforce decides to take Chatter, the announcement demonstrates that social computing space is reaching a tipping point, which I think is great.

I’m baffled by the name of this service but on the whole, my sense is that this is a huge development for the enterprise software business, as well as a definitive stamp of validation for Enterprise 2.0 constructs and technologies. Assuming of course that Salesforce.com gets this to market as promised.

Context Built In

Chatter is different. Its got the one thing baked in that other applications don’t – context. Built in from the ground up.

Back in February of this year, I wrote about how social computing constructs can make a difference to enterprise sales organizations. Based on our work with sales and marketing organizations at leading enterprise and voice of customer (sales reps) interviews with over 900 sales reps, I laid out a simplistic illustration of what makes a sales rep tick:

• Media watching is not a sport for sales reps. Feed them the good stuff and they’ll consume it.
• Data/Intelligence extraction over collaboration. “Give to Get” doesn’t fly with most sales reps.
• Good reps know exactly which 8.75 data types help them bust quotas. No more, no less.
• In spite of the above, don’t expect them to dig for it. They’d rather use the time to cold call a lead.
• Sales reps often ignore a lot of what marketing might offer or recommend.
• They don’t personalize portals & intranets.
• They rather search than browse; they want answers, not search results. (ok, who doesn’t!)
• CRM apps often morph into reporting mechanisms that sales reps are mandated to use.
• Pre-sales engineers (in the case of High Tech) often do most of labor intensive tasks in the sales cycle (assembling proposal components, finding SMEs and references, etc).

Super impose these characteristics on the features presented in the Chatter demo and I say we have a solid start. Chatter’s got context and intent built in for the sales organization given its close out of the box linkages to Salesforce.com’s flagship CRM application. Next, the activity stream/ feed metaphor was made for the sales rep: Why? Given how they prefer to work, it 1) enables them to pluck important nuggets out of the stream that support the sales process and 2) lets the best minds wrap around a task at hand (RFP, prospect inquiry, customer support issue and the like). It won’t all just happen out of the box but the application has the potential to make it a hell of a lot easier.

Process + Social

Last week I wrote a post called “Why Process Barfs on Social”. My central point was that unless we see a social + process in context, Enterprise 2.0 won’t realize its full potential. Whilst tools certainly won’t provide the solution alone, Chatter has the capability of being the first integrated showcase where social concepts are unleashed to enrichen discrete processes (in this case, closing and keeping customers) towards established performance goals.

There’s no question that some of the most important data that sales reps need reside outside of the confines of traditional CEM and sales applications. They sit in home grown contract registries, support agreement databases, 3rd part news and social media platforms, ERP systems and very important – the minds of known and unknown colleagues. Chatters’ platform capabilities enable access to these data sources and people. This, along with the ability to collaborate around an object ( a lead, a competitor, a customer, a topic) brings process + social closer than ever before.

One Part Offence, Two Parts Defense

Despite the very convincing assault on Microsoft SharePoint by Marc, my sense is that this is more defense than offence on Salesforces.com’s part. Taking on the installed base of SharePoint may be a longer term goal but for now SalesForce needs to make its existing applications useful to sales reps and move away from being a glorified reporting application for operational bean counters or (as Scott Schnaars suggests), a contact management system. Not to mention the rising interest in so-called “social CRM” services. Chatter gives reps a reason to stay within Salesforce.com a little while longer and amps up the sustained utility of the service.

Distribution

Whilst this is validation around the concept of social computing in the enterprise and pureplay vendors will see a rising tide effect, there’s a downside as well. Its tempting to say that pureplay vendors had these capabilities for a while and can hold their own. The reality is that feature shoot outs play but one role in enterprise purchase decision making. Salesforce brings its powerful distribution channel, out of the box process integration, and a now social marketplace in AppExchange – together providing a very compelling reason for enterprises to consider this as a company-wide social networking platform.

Customer Centricity

This, in my opinion, was the biggest lost opportunity in the launch of this service.

One of the reasons for Bloomberg LPs ungodly success is that every single employee’s bonus is tied to new sales and renewals. IT, Product, Marketing, Support, everyone. That means everyone prioritizes their work around revenue. That’s extremely difficult to do especially since only a chosen few at most companies have any control or even insight into the sales process. Now, with Chatter being seeded in the nucleus of managing customer relationships in the enterprise (i.e. CRM), there’s the opportunity, for the first time, to provide a universal lens into the process of courting, converting and servicing a customer. Everyone can see the sales and support process live and chime in with expertise, helping cradle the process to revenue and customer satisfaction. The big value proposition of the enterprise social web is improved customer centricity and there’s a unique opportunity for Chatter to make this a reality. I wish Salesforce had seized this opportunity to present a model that can transform how organizations and their partner ecosystems can be structured around the customer.

$50 bucks a user per month? Ouch!

Yes it’s a lot. But what strikes me as odd was that Salesforce did not offer some sort of basic/read-only access to Chatter for non Salesforce users at a given customer. What better way for others to see where their input is crucial to an ongoing project, RFP, discussion etc and make the case for purchasing that additional seat? That’s free marketing and a straight forward conversion strategy for Salesforce to move laterally, out side of sales and marketing. It’s still early so I won’t be surprised to see something similar to this.

Closing Thoughts

All up, this is excellent news for the Enterprise 2.0 space and I’m thrilled that a process facilitator such as Salesforce has dipped its toes in the social computing arena. Its about time Enterprise 2.0 grew up and started talking business. And Salesforce is one of the few companies that can lead that charge. It’s a separate post but pure plays will gain more than they will loose with increased awareness of the business association of social computing concepts. Good for the entire ecosystem.

For a detailed look at Chatter, see Marc Benioffs (very long) interview at TechCrunch’s Realtime Crunch Up Event.

I’m bullish.

Update: Great analysis on the infrastructure view point by Esteban Kolsky.

Oliver Marks and I are co-chairing the Enterprise 2.0 Strategy and Execution Planning Track at the Enterprise 2.0 Conference in San Francisco next week. Details on each session can be found here. The premise of this track is two-fold:

- help folks understand the conceiving, selling and planning phases of a transformation to social constructs in the context of enterprise performance.

- learn how to make the business case for using social constructs to improve specific line of business performance. For the San Francisco Event, we will focus on: Purpose Driven Collaboration and how to plan for Scale, Customer Support and Product Innovation.

Here’s a line up of our sessions.

Monday – Selling the Case for Accelerating Business Performance with Enterprise Collaboration and 2.0 Technologies #e2conf-3

~60% instructional led by Oliver and me. We will walk you through the process of getting the raw ingredients together, framing the discussion for executives, the pitch and finally the execution plan.

To add other credible voices to the conversation we have 2 panels built into the session. First, to help you be prepared for just about any question that can be thrown at you by the most skeptical executive, we’ve asked a few folks from the vendor community to join us and give us a taste of what they hear every day, out in the market. We’re thrilled to have the following folks join us:

Chris McGrath, ThoughtFarmer

Scott Schnaars, Socialtext

Tom Kuegler, PBWORKS

To help you with planning a successful launch, Bevin Hernandez from Penn State University will show us how they generated buzz and got folks jazzed about the launch of their collaborative intranet.

Tuesday: Collaboration at Scale

Alan Cohen, Vice President, Enterprise, Cisco Systems

Jon Pyke, Chief Strategy Officer, Cordys

Wednesday: Lowering Customer Support Costs via Social Tools

Lois Townsend, Director, Social Media Strategy and Operations, Hewlett Packard

R Wang, Partner, Altimeter Group

Steve Woods, Eloqua, CTO

Todd Shimizu, Director Communities, Juniper Networks

Treb Ryan, CEO, Opsource

Thursday: Launching winning products in the marketplace. How Social Software Improves your odds

Bill Truettner, Implementation Consultant, Imaginatik (Note: Bill will talk about his experiences in his previous role as an Innovation Manager for Hewlett Packard)

Jack Anderson, Innovation Specialist, Chevron

Patrick Asher, Innovation Leader, AT&T

This track is all about where the rubber meets the road. Our goal is to begin to move to discussion from tools and tactics, to accelerating performance via social computing constructs and software. Every one of these sessions focuses on practical approaches to social transformation in the enterprise. In turn, the esteemed group of folks that have been kind enough to join us have either (as executives themselves) led the charge to moving to social computing platforms to accelerate performance them selves, or as managers, have made convincing arguments to executives on the opportunity that social computing presents in the context of discrete business process.

We look forward to seeing you next week.

I just saw something go by by my tweet stream that brought back some old memories (thanks @rpolom) – the 2009 Gartner report on the horizontal Portal Vendor landscape. Here’s the Magic Quadrant:

Around 2001, I led a strategy and execution planning engagement for a then F500 Hi tech firm looking to recast how its 9,000 strong global sales force collaborated with the rest of the ~40,000 person organization. My teams charter was to identify breaks in the interaction process with sales engineers, global field marketing and sales operation and devise a plan to improve the ‘contact to revenue cycle’ for sales reps via new collaborative constructs and sales intelligence access.

As part of this we were also on the hook to put an execution and operational plan in place. That ended up including a technology solution from the portal marketplace – the sizzling hot technology that promised to provide a single homepage to data and information from scores of traditional ERP and custom built systems. My team looked at 27 vendors. Yes 27!  Here’s the list from one of the drafts that I dug up:

Thats a snapshot of where this Portal Market started. And look whats left based on the Gartner MQ above.

On to the Enterprise social software landscape:

Dion Hinchcliffe’s lays out the market in this vendor landscape diagram in this post “Assessing the Enterprise 2.0 marketplace” below thats a prettier E2.0 software equivalent to my table above.

The Enterprise 2.0 solution landscape may well track the portal market evolution. To be fair, Enterprise 2.0 software does a lot more than portals but there’s some parallels to be drawn. Portals brought it all together with personalization around data and unified system access. But no cognizance of context or behavioral design for each participant type. A good chunk of Enterprise 2.0 software also promises people interaction and activity stream access as a better option to static portals. But for the most part, out of the box, it’s still general purpose ‘build it and they will come’.

That said, there’s a difference this time around. I’m seeing more and more instances of process centric business challenges where social software can help tremendously. As a consulting practice, our focus is enterprise performance acceleration and so that’s validation. The good news is that customers seem to be pushing social software/ E2.0 technology vendors to fix business processes relatively early in the lifecycle of this technology category compared to portals. That’s great news for both technology and services vendors that have a solution set and credible experience to help customers respond to real business problems. In other words, sensible applicable of social constructs as opposed to social as the cure all.

As for the E2.0 upstart vendor and services marketplace, I expect that a handful of vendors will do very well based on a “replace your intranet” value proposition. Even out of the box, the social software stack is far better than static intranets but its becoming a commoditized business. The rest better start focusing on line of business performance if they don’t want to get left by the wayside. In fact, as I’ve stated earlier, I think the market is far larger for that anyway.

Using Dion’s diagram as the E2.0 equivalent of my portal landscape cut out, any bets on what which names we should expect to see on the Garter MQ for Social Software in 2-3 years?