The Disintermediation of Doing Good

Global NetworkThe headline of an article by a Harvard economist Edward L. Glaser in The New York Times, “Can Businesses Do Well and Do Good?,” had me wondering, “Can they do both? What is the answer?”

Before we get there, I first want to define “disintermediation.” You are reading it right now. When we remove the supply chain and make it a simple, straight line between supplier and customer, it is an example of disintermediation.

I write and publish these words (supplier), and you read them (customer). Ebooks coming directly from the author, online “phone” conversations happening without phone company’s involvement, email sent without the mailperson — almost everything is becoming disintermediated. Replaced by a direct connection between you and, in many cases, the once and former analog thing. From the conference room to the classroom, even places are being replaced.

Back to the question: What is the impact of disintermediation on doing good?

The piece in The New York Times focused on institutions, specifically, corporations. The premise was that doing well in a for-profit institution is about making money, either for the private owners or the more public shareholders. The “doing good” part is about the necessity to conduct business according to legal and ethical business practices. Not more, and not less. As the NYT article put it, “[…] just the minimum profit-maximizing level of ethical behavior.”

Since a corporation is legally viewed as an individual — one made of many other individuals — then doing good depends on the goodwill of the people running the corporation, the heads of the corporation in more ways than one. Doing good is, for the most part, left to the tax-exempt, nonprofit institutions. So we have two classes of institutions both tied together by the tax code. They formed the largest pipe through which flows the money for doing good.

In today’s disintermediated world, I think there is a new option. It is the non-institutional, less formal group of individuals connected by a social network who provide resources for doing good. Lots of people focused upon doing good without any institution defining what “good” means.

The future of doing good no longer depends on whether the money flows through an institutional for-profit or nonprofit pipeline. The connection will be a straight shot from point A to point B, from someone who can give to someone who needs the help. It will be a real collaboration in which people also give ideas and input. As for the institutions, following the money still works, it just means traveling in an entirely new cyber landscape.

Source: “Can Businesses Do Well and Do Good?,” The New York Times, 01/06/09

Blindfolded Employees: Cooperation or Collaboration?

Blind monks examining an elephant

This is a well-known parable worth repeating. Once upon a time, in the far eastern capital of a far eastern nation, the CEO of a large corporation, Mr. King, had an elephant brought into the vast marble and glass lobby. He invited nine blindfolded employees to come down from their offices and cubicles and identify the beast. They soon arrived, each individual from a different part of the company, each with their very own business card.

When the blindfolded employees had each felt only a part of the elephant, the CEO went to each of them individually and said, ‘Well, have you seen the elephant? Tell me, what sort of a thing is an elephant?”

Most of you know the ending. The blindfolded workers told Mr. King that the elephant is like one of the following:

  • Pot (forehead)
  • Basket (ear)
  • Plowshare (tusk)
  • Plow (trunk)
  • Granary (body)
  • Pillar (foot)
  • Mortar (back)
  • Pestle (tail)
  • Brush (tip of the tail)

Replace the elephant with the corporation and the blindfolded employees with people working in the Human Resources, Information Technology, Organization Development, Knowledge Management, Marketing, Communications, and Training & Development departments. Yes, they all cooperatebut do they collaborate?

It is not a simple distinction. Imagine all of these departments in separate buildings. They sometimes call or usually email one another to find out something. Folks from a few of the groups even occasionally get together for a meeting.

Yes, they cooperate. Now imagine that the departments were physically all merged into a big department called “The Whole Enchilada” department. People’s desks from all these groups and departments were all mixed and matched. Meetings posted questions as topics. Different organizations were invited to send someone who could help with the answer. Ad hoc networks were created to collaborate around the solutions. Can you see the difference?

When we cooperate, we work together with the problem at the periphery and our corporate identities at the center. When we collaborate, we work together with the problem at the center and our corporate identities at the periphery. Who solves the problem is less important than that the solution is found by the group.

When was the last time you reached across the departmental lines to really collaborate? When was the last time you were not blinded by your own group or departmental focus, and realized the answer was… an elephant?

Source: “Blind men and an elephant,” Wikipedia
Source: “What Does the Collaboration ‘Field’ Look Like?,” Groupaya, 08/16/12
Source: “The collaboration field needs to cooperate,” Harold Jarche: Life in Perpetual Beta, 08/20/12
Image by Hanabusa Itchō.

Riding the Rapids — All Aboard!

enterprisewideI recently wrote about a new report from The McKinsey Global Institute that forecast the value of the social economy. Among the highlights, it projected the following:

  • Crowdsourcing and co-creation technologies could improve knowledge worker productivity by as much as 25%.
  • The ROI of this investment would be between $900 billion and $1.3 trillion.

Salesforce.com has just helped companies in that worldwide social economy take one giant step towards realizing these numbers. The service, called Salesforce Communities, launched after a recently completed pilot program. It enables a company to create a secure, private enterprise-wide network that includes the entire value-chain, from suppliers to customers. This puts a new spin on CRM  and adds everyone to the relationships a company needs to manage.

Salesforce Communities is just one of many applications vying for a share of this relatively young enterprise-level collaboration marketplace. (For an example of how this far-reaching enterprise-level social media can be used, take a look at this Salesforce.com video.)

Forrester Research indicated that many of the companies are either already using or plan to use online collaboration software within the next two years. In response to this trend, Forrester Wave also published its first report containing an in-depth evaluation of Salesforce Communities as well as seven other providers of online social collaboration technologies.

These include the following:

  • Box
  • Google Drive
  • Microsoft’s Skydrive Pro
  • Cisco Systems Versly
  • Citrix Online ShareFile and Podio
  • IBM Connection SmartCloud
  • Yammer

The evaluation looked at a number of critical areas of concern about online social networks including security, privacy, cultural fit, provider experience, and stability.

In a recent ZDNet post, T.J.Keitt wrote the following for Forrester Research:

We felt that it was important to look across a range of collaboration software-as-a-service (SaaS) vendors to see how this nascent market was growing to meet these challenges. And it was essential that we do this now because this market is rapidly evolving into the collaborative backbone of mobile, distributed business ecosystems.

He went on to explain that, in addition to connecting employees into a social network to create the conversation, there is a growing need to establish “collaborative frameworks that include the rest of the business ecosystem in the conversation: channel partners, suppliers, and customers […] beyond the corporate firewall.”

The excellent report not only evaluated the eight currently leading providers in this rapidly evolving area, it also looked at what I believe are the more pressing questions: Are these providers helping drive what Forrester sees as a wave of online collaboration tool use, or are they moving too slowly away from the older on-site model in which email was the generally accepted central capability?

Are they enabling companies to create secure online conversations on specific topics? Does this collaboration reach across the entire value-chain and include all mobile devices from a simple, secure login? Or are the providers falling back on their email starting points and limiting the conversation to individuals who share a common email address? In the final analysis, are they driving this evolution or just taking a few steps forward from where they started?

I need your help answering a question: Is your company rafting along the rapids of online social collaboration, or are you still floating around in some safe and secure stillwater? I recommend listening in on the Forrester Research webinar on September 10hosted by John and Forrester for a more in-depth review of the Wave report.

Source: “The social economy: Unlocking value and productivity through social technologies,” McKinsey Global Institute, July 2012
Source: “The Forrester Wave: Cloud Strategies of Online Collaboration Software Vendors, Q3 2012,” Forrester Research, 08/16/12
Source: “Are online collaboration tools ready for your business?,” ZDNet, 08/17/12

Wow! Crowdsourcing Equals How Much?

RadiateHow do you measure the value of co-creation and crowdsourcing? That’s exactly what The McKinsey Global Institute did in its latest report, “The social economy: Unlocking value and productivity through social technologies.”

Here are the highlights:

  • Crowdsourcing and co-creation technologies could improve knowledge worker productivity by as much as 25%
  • The ROI of this investment would be between $900 billion and $1.3 trillion
  • The main benefit of crowdsourcing is in the area of new product development

This added revenue primarily benefits the following four industries:

  • Retail financial services
  • Advanced manufacturing
  • Consumer packaged goods
  • Professional services

The report carefully develops an interesting equation. The degree to which a company depends on influencing customers will impact on how much they expect to gain by using these collaborative and co-creation technologies.

If you are in any of the four industries mentioned in the report, I recommend downloading it and reading. If you still have any lingering doubts about the value of this approach, it should be erased by the projected increase in knowledge worker productivity alone. And if that does not do it, then the ROI, ranging from billions to trillions, will really open your eyes.

Source: “The social economy: Unlocking value and productivity through social technologies,” McKinsey Global Institute, July 2012
Source: “What is crowdsourcing’s ROI? McKinsey Global Institute reports,” Co-Creation Forum, 07/30/12

A Cautionary Tale

e-commerceTechnology companies are notorious for being self-centered rather than customer-centered. In most cases, if every problem was a nail, then every solution would be the technology they developed. This particular company took its top regional salesperson — we’ll call him Bob — and promoted him to VP, National Sales. Bob had a small habit that started to drive his salesforce crazy.

He always capitalized the “C” in customer.

So you might get the following email from Bob:

Please let me have your quarterly forecasts by no later than EOB today. I also would like to see any issues that your Customers had that required escalation. Thanks.

At first, people thought it was a test to see if they were reading his emails. So they would answer with an email that might look like this:

Forecasts are attached. No Customer issues to report.

Nothing happened until the first regional sales meeting. As the room filled, Bob was at the podium welcoming people, saying hello to the folks he knew until the meeting started. The lights dimmed and the first slide went up:

The Customer is always capitalized.

Bob opened with the fact that he knew his emails were making people wonder if his word processing software had a glitch. He told them that always writing “Customer” with an upper case “C” was a habit he developed the year before when he realized that he was doing more lecturing than listening, when he would find himself thinking about his vacation instead of thinking about the problem the customer was explaining. He said he was always ready to pounce in with the solution that his company had developed that would solve the problem, even if it did not exactly solve all the problems.

In one very memorable sales call, the prospect, who had been carefully qualified, abruptly ended the meeting, and before he left, went over to tell Bob that he was disappointed:

We really wanted to work with you folks, but I feel like you barely heard a word I said.

It turned out to be the best sale Bob never made.

In an effort to become more customer-focused, he made a small change and began to capitalize “Customer” to remind himself to really listen, and help Customers really solve their problems or even further define what the problem might be. Even if it did not result in an immediate sale.

You can guess the rest. The whole salesforce started capitalizing “Customer.” Every time they did, they had the fleeting thought that it meant something different needed to happen when they faced their Customers. They became partners, consultants, listeners, advisors, collaborators. Problem-solvers. And their close rates started to increase, and the deals, although fewer, became longer and larger.

Unfortunately, this tale does not have a happy ending. Bob did such a great job that he was scooped up by another company. His replacement, in his first email to “the troops” included the following:

From now on no more capital ‘c’ on customers. We know how to sell. Our numbers show that. We have the best products in the world. If we want to capitalize anything it will be our revenue numbers.

So they went back to business as usual. Selling their products. And they started to consistently lose sales to — can you guess? — Bob’s team who was still capitalizing “Customer” to help them stay Customer-focused.

Moral of this story: When you want to make big changes in your company and move from self-centered to Customer-centered, it helps to make a lot of little changes first.

When Crowds Collide

CTBT Intensive Policy CourseCrowdsourcing has become one of the buzz words in the collaboration and innovation lexicon. It seems useful when focusing a lot of minds on solving a problem or finding a particular piece of information. Yet when looking for opinions, reactions, and input to a product, it raises an important question: When is a crowd not a crowd?

According to recent cross-cultural studies by Dr. David Rand, a lecturer in psychology at Harvard University, and Dr. Benedikt Herrmann of Nottingham University in the U.K., a crowd is a crowd only when the people’s backgrounds and the crowd’s composition are relatively homogeneous.

To study the homogeneity of crowds, Dr. Rand used what has become known as the trolleyology experiment, a classic thought experiment in which subjects are faced with a life-and-death drama. The dilemma is simple — a trolley car with no brakes will ram into and kill a group of people crossing the tracks unless the person in the experiment chooses to throw a single individual under the trolley car to slow it down enough for the others to escape unharmed. Kill one to save many, or do nothing and everyone dies. A classically simple dilemma with an incredibly hard solution.

Using crowdsourcing as the basis for the experiment, the answers from one crowd to another should have been the same. Yet the answers depended on which crowd was chosen to participate. The answers from one crowd were very different than the answers from another. In the work done by Dr. Herrmann, the results from a crowd in the United States were very different than the answers from crowds in Asia, Eastern Europe, or a Middle Eastern crowd.

Why is this important? Crowdsourcing is becoming SOP (standard operating procedure) for many companies that want customer input to innovate or co-create new products. Crowdsourcing in this instance is often viewed as a focus-group on steroids. The difference is that focus groups are carefully selected and rigorously questioned. It is as much art as science. Crowds are, well, crowds, especially when the invitation goes out on an open social network.

The experiments conducted by Dr. Rand and others conclusively show that different cultures more than any other variable provide different crowds. Human behavior is not universal. The key is to know the source before you look for the crowd.

Source: “The Roar of the Crowd,” The Economist, 05/26/12

The Roar of the Customer

CrowdWe hear a lot about the voice of the customer. Not that the customer has been silent all these years and suddenly decided to speak up. Let’s time-travel for some perspective.

Go back to 1900, the turn of the 20th century. Mass production was at hand. The Industrial Economy was in full swing and manufacturing was the thing. When you owned the means of production you had no real need to listen to the customer. You cranked out relatively cheap products and people bought them. Mass production was married to mass consumption. Think Sears, Roebuck & Co. and the company catalog. Customers might have complained if they had more than one product to compare, or a better experience to remember. They did not, and their voice, as far as the manufacturers and retailers were concerned was a soft, almost silent, whisper.

Jump ahead 50 years. We were exploring space, and back here on Earth, we were exploring what it meant to be multinational, conducting business on a flatter planet, in a business climate that was heating up with fewer restrictions, regulations, and taxes. The name of the game went from “Made in America” to “Send to America.” There may have been some noise in the background, a low but insistent buzzing. Some of the customers were getting annoyed yet their voice was a restricted to the “Complaints Department.” Really. There was a “Complaints Department,” with a real person who listened to customers complain all day.

I bought my first personal computer in 1990 (still have it in storage — a Macintosh IIcx, 16 MHz 68030 processor, 1 MB RAM, 1.4 MB SuperDrive, and 40 MB running Microsoft Word 4.0 for the Macintosh). That was when the customer found a new voice, and it started with an unassuming “You’ve Got Mail!”

It was the start of what I call The Idea Economy, and the idea was disintermediation. Start by taking the monkey out of the middle (reference to a pre-digital game called “Monkey-in-the-Middle”), and the manufacturer and customer are suddenly directly connected. Web addresses, starting with “dub-dub-dub” appeared everywhere. The “@” became the cool new business address. Google was about to become a verb, and Amazon, eBay, Apple, Zappo’s, and others were all about The Customer Experience. You didn’t even need to buy anything as long as the experience was “insanely great.”

No need to look at your smartphone, it’s 2012. Manufacturers — and anyone else who serves the customer — time to listen up! The customers have found their voice. There’s only one way to stand out, survive, and thrive in the Idea Economy. The voice of the customer, suddenly amplified by technology, has gone from a whisper to the complaint department to the roar of the crowd.

Do you hear what I’m saying? That’s the idea…

Source: “Insanely Great: The Life and Times of Macintosh, the Computer that Changed Everything” by Stephen Levy, Amazon.com
Source: “Why Customer Experience Is The Only Thing That Matters,” Fast Company, 08/13/12

Improving Lives One Load at a Time

Most of you who are reading this wear clean clothes thanks to the invention of the modern washer and dryer. If you lived in Cerro Verde, a 30,000-person slum outside of Lima, Peru, cleaning clothes would be a major time commitment. Poverty has many causes, and one of them that we seem to overlook is time. Time spent on the things we do automatically, that are done for us, for which we have machines or an infrastructure built to serve our developed basic needs.

Back to Cerro Verde. Collaboration and co-invention were not on the minds of Alex Cabunoc and Ji A You, who were part of the Design Matters program at Art Center College of Design in California, a brilliant program that focuses on social innovation. (If you have not had a chance to look at that program, please stop now and find out more about what they are doing. They are a model of what innovation and collaboration can do when they focus on people in the developing world — the people most in need of that energy and creativity.)

Again, back to Cerro Verde. Cabunoc and You were shocked by how much time it took to collect water, water that was used for everything from drinking to cooking to washing clothes. “So much time, energy, and resources are used for basic water chores like cooking and cleaning,” remembers Cabunoc. “It leaves little time for other activities that might help one get out of poverty.”

In particular, they were struck by how much time is spent washing clothes. Between the physically demanding job of carrying heavy buckets of clean water, washing several loads by hand, wringing them out, or finding a way to dry them to avoid dampness and mold, the process can take up to six hours a day. Every day.

Collaboration and innovation often start with a simple question. Cabunoc and You wondered why a manually powered washer or dryer did not exist. Not the kind that existed before the electric washer and dryer, but something that could take advantage of modern engineering, materials, and know-how to solve a problem that had already been solved in the developed world with electricity and modern washers and dryers.

That’s one of the striking lessons from this story. While the developed world has charged ahead, nothing much has changed for the rest of the world’s Cerro Verdes.

So Cabunoc and You collaborated with the people there to see what was possible, and came up with a combination foot-powered washer and dryer they called GiraDora, roughly translated as “spinner” (see image below).

Innovative washer dryer

Their work was highlighted as a notable entry in Fast Company’s Innovation by Design 2012 Awards program. Here’s a description of the GiraDora from the program’s website:

GiraDora is a blue bucket that conceals a spinning mechanism that washes clothes and then partially dries them before hanging them up to finish drying, saving weeks of time over the course of a year. It’s operated by a foot pedal, while the user sits on the lid to stabilize the rapidly churning contents. Sitting alleviates lower-back pain associated with hand-washing clothes, and frees up the washer to pursue other tasks. It’s portable, so it can be placed nearby a water source or even inside on a rainy day. It reduces health risks like joint problems, skin irritation, and mold inhalation. Most importantly, it uses far less water and cleans clothes faster than conventional hand-washing. This equates to more free time, explains Cabunoc, and the opportunity to ‘break the cycle of poverty.’

Time to get out of poverty. We collaborate and innovate to provide ways to free up time, time to do the things people need to improve their lives. Even in the developing world, there are still only 24 hours in a day.

GiraDora. If Necessity is the mother of Invention, then her children are called Innovation and Collaboration.

Source: “How A Foot-Powered Washing Machine Could Change Millions Of Lives,” Fast Company, July 2012
Source: “Safe Agua Peru,” Designmatters, 2011

The Team Is the New Expert

Working Together Teamwork Puzzle ConceptMost of us are not yet fully aware of the implications, but learning as we knew it and experienced it has changed. What does it mean for collaboration?

According to the American Society of Training (ASTD), “The ‘half-life of knowledge’ is the time span from when knowledge is gained to when it becomes obsolete. Half of what is known today was not known 10 years ago. The amount of knowledge in the world has doubled in the past 10 years and is doubling every 18 months…” In many fields the half-life of knowledge is now measured in months and years.

Organizations have been forced to learn new ways of learning. According to George Siemens, the leading theorist in the areas of learning and education, here are some of these new approaches to learning:

  • Informal learning is a significant aspect of our learning experience. Formal education no longer comprises the majority of our learning. Learning now occurs in a variety of ways — through communities of practice, personal networks, and through completion of work-related tasks.
  • Learning is a continual process, lasting for a lifetime. Learning and work related activities are no longer separate. In many situations, they are the same.
  • The organization and the individual are both learning organisms. Increased attention to knowledge management highlights the need for a theory that attempts to explain the link between individual and organizational learning.

Most significantly, George adds the following idea:

Know-how and know-what is being supplemented with know-where (the understanding of where to find knowledge needed).

To sum it up, there was a time when we had time. Time to learn and learn more, take the time to get one degree after another and become, in time, an expert. That time is passing more rapidly than most people understand. The cycle of learning-unlearning-relearning has increased at an unprecedented rate and is continuing to increase every day. The upshot is that no one has the capacity to become an expert anymore.

What is the impact on organizations, and what does it mean to collaborate and innovate in this new environment of increasingly rapid relearning?

It means that the “Relentless Learner” has become the most important quality an individual can have. So important that “Relentless Learning” needs to become one of the new metrics against which an individual, a team and even a company is measured. So the team is the new expert, and since all the members are relentlessly learning all the time, the team’s expertise stays more current as a team than as any one member.

I never thought I would say this, but it turns out to be really important and true: Together Everyone Achieves More. And if the team is the new expert, then collaborating, and knowing how to successfully collaborate (more on that later), is the new key to success.

Prize-Based Innovation Challenges: Learning From Yester Era’s Giants, They Were There Before Us!

Longitude by Dava SobelWe live in a world of unabashed self-promotion. Politicians, academics, consultants, companies constantly in search of opportunities to unfurl their flag, looking for niches and coves they can invade, claim as their own. Not surprising, therefore, to find modern-day idea merchants claiming to be originators, pioneers, the first to have given birth to a concept or a way of thinking, without blushing or blinking.

But is it true? Are all the ideas and concepts that flood Fast Company, Wired, Fortune, BusinessWeek, and Harvard Business Review really new? If few create, and many emulate, as the sages constantly remind us, then we need a different coda. One that pays homage to those who have traveled before us on the very same paths we feel compelled to claim as our own.

Take the instance of prize-based innovation challenge. The juxtaposition of those four words gives the concept a distinctly modern ring. But words, no matter how cleverly paraded, are never enough to birth a phenomenon. They usually come after the achievement, when one has to explain what happened. Peter Diamandis is known for his X Prize Foundation, McKinsey has a white paper demonstrating the power of prize-based innovation competitions. But while Peter and McKinsey may have energized the concept, they most certainly didn’t create it.

One of the earliest examples of a prize-based innovation challenge, as we understand it today, can be found in the 18th century. Maybe not the first, but certainly one of the most consequential in transforming marine navigation, it’s the story of Longitude!

We all grew up hearing tales of seafarers, discoverers, and explorers. Those who landed and lived to tell their tale became household names — da Gama, Columbus, Cook. But a far greater number smashed against unnamed rocks and died, their stories silenced, all because they couldn’t figure out their longitude, their precise location at sea. And at sea, even small errors, a few degrees, can lead to fatal outcomes.

To overcome this intractable and embarrassingly costly problem in ships, cargo, and human lives, the British Parliament issued the Longitude Act in 1714 (following the recommendations of a committee, committees existed even then, headed by none other than the great Sir Isaac Newton). The Act urged Parliament to welcome potential solutions from all walks of life — science or art — from individuals, groups, corporations, and even countries — it did not favor British ingenuity over foreign, it just wanted a solution. Perhaps the most significant part was the recommendation to reward the solution that delivered what it promised handsomely, prizes ranging from £20,000 to £10,000 — millions of dollars in today’s currency.

The story of the Longitude has been told brilliantly elsewhere — in a variety of books and documentaries with eponymous titles (my favorite being Dava Sobel’s recounting), and is highly recommended for study for anyone even remotely connected with innovation — students, practitioners, prize-based innovation evangelists, and innovation gurus (yes, you heard me right, even modern-day innovation gurus can learn a lot from the classics, especially those they have not read).

The goal of the blog is not to retell but to provoke a realization that footprints of others exist where we think we are breaking ground. Everything that we consider cutting edge in the field of innovation today — open innovation, collaboration, silo busting, the dangers of fixed mindsets, welcoming failure, the value of experimentation, and a lot of what we have forgotten how to worship — the value of perseverance, diligence, self-education, and, most importantly, the value of backing ambitious projects with appropriate resources, notably expertise and time (because Rome was not built in a day then, and is still not built in a day), can be found in the story of the Longitude, and the prize established to specifically solve the riddle and develop an effectively scalable commercial solution.

It is at once enlightening and humbling, very humbling indeed to learn of how they missed nothing (or so little). How leading minds of that era were willing to give everything, their lives, their means (often meager), in the pursuit of unlocking the universe’s most sought-after secrets.

The two extremes, nothing is new under the sun, and everything is new, are not tenable, they are both partial truths. How then to resolve the new and yet not new paradox? There is a beautiful line in the TV documentary, “The American Triumvirate,” currently airing on the Golf Channel. It says Ben Hogan didn’t invent practice, he added several dimensions to it and raised it to a higher level.

Adding dimensions — we should take inspiration from that phrase and reframe our idea goals as adding dimensions, rather than discovering and invading white spaces. Those who reframe will by definition be more cognizant and respectful of the rich histories that have preceded us.

So, next time we are impressed by how tall we are (or appear) we may want to look down and see the shoulders of the giants we stand on. Very few things, if any, especially ideas, just materialize instantly, out of nowhere. They have ancestors, gradual accumulations of thought and experiences. To deny them would be tantamount to an amputation.