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In reading Influencer: The Power to Change Anything, authored by multiple authors (more detailed comments from the book coming soon - definitely a good and recommended read), I came across this interesting set of studies that look at the impact of the “conspiracy of silence” that reigns in many organizations.

One study focused on hospitals, and looked at how the conspiracy of silence held in place powerful norms that kept people from speaking up when colleagues violated hygiene, safety or any other protocol - leading to unnecessary deaths. Take those numbers - 84% of doctors have seen co-workers taking shortcuts that could be dangerous to patients, yet fewer than 10% of physicians, nurses and other clinical staff directly confront their colleagues about their concerns. The main drivers leading to this type of culture in hospitals are the risks of lawsuit and infamy. You can find more on that study at www.silencekills.com.

Another study looked at other industries and found that the same code of silence sustains unhealthy behavior across the board. The vast majority of product launches, reorganizations, mergers and improvement initiatives fail or dissapoint because of it. In fact, the researchers found that 91% of all large scale corporate projects collapse because people fail to speak up and be heard. They argue that a deadly form of corporate silence lies at the root of all failed projects. Project problems are in fact people problems. For more information about that project and to download the findings of the study, go to www.silencefails.com.

Most of us have been in organizations where it is politically unacceptable to speak openly about what is going wrong - only to see projects fail because of weak sponsorship, unreasonable constraints, unmotivated team members, or plain old politics. It is sort of ironic that while not speaking up will eventually kill the organization in which you work and thus your current job prospect - it is job preservation that drives this behavior.

What most organizations do not realize is that this is not based on individual behavior, but rather on social behavior. Fixing this problem will not happen by focusing on changing individual behavior first, but instead by changing the social norms that drive the social behavior - and that is not a trivial task.

I had the pleasure to meet JP Rangaswami in person last week, who I had invited to speak as a keynote speaker at the FASTForward ‘08 conference. He spoke of the three main forces that are causing a powershift towards the individuals within the enterprise.

The first one is that of youth versus expertise. In this day and age, expertise is no longer connected to age, and while that is causing a fair amount of friction between the geeks and the geezers, it is an inevitable force that is driving change.

The second one is the democratization of participation. No longer is participation elitist, no longer do you need to ask for permission - the amateur hour has arrived.

The last one is that FAST is the new GOOD. Releasing alpha software, having perennial betas is the new way of doing business.

While there is major resistance to all those forces, combined they will cause a massive transformation within the enterprise. Combined with the powershift which already took place between companies and their customers, they could very well alter the way we think of firms forever.

That is the new way of working at Best Buy, which was written up in both Business Week and the New York Times.

Imagine this - not getting rewarded for face-time in the office but instead for getting projects done, all meetings are optional, work from the beach, work while hunting, work from the road, you chose - as long as your projects get done!

This new work environment at Best Buy is called Results-Only Work Environment, or ROWE. By next March, 75% of all Best Buy corporate employees will be on the program. A modified version of the program is also under development for people who work in stores - although it is a little harder to imagine how face time will be eliminated in those customer-facing positions.

Sure, there are a lot of companies that have gone virtual over the years, including pioneer HP, IBM and Sun Microsystems. But no company of this scale has ever taken it to this level - allowing for a great deal of employee self-organization.

Interestingly enough the program did not come from the top down but instead began as a covert guerrilla action that spread quickly and eventually became a revolution within the company. The top brass at Best Buy really needs to be commended for embracing this change instead of killing it. These practices have been tried in many start-ups, only to be killed when VC’s bring in the “professional” or “seasoned” “senior” managers.

Come to think of it, many innovative things get killed or never see the daylight when those “guys” move in…

[Tags: virtual office face time future of work self organization]

In a recent interview for the BBC, Tony Blair’s outgoing strategy advisor brings up a few good points on how the Internet is fueling a crisis between politicians and its citizenry. Many of his points are actually valid for the world of business as well.

Too often he says, the web is “used to encourage the “shrill discourse of demands”.” What he would rather see is “more needs to be done by the web community in general to encourage people to use the Internet to “solve problems” rather than simply abuse politicians or make “incommensurate” demands on them.” Talking about the immaturity of the whole environment he said “”We have a citizenry which can be caricatured as being increasingly unwilling to be governed but not yet capable of self-government,” and further comparing the citizenry to teenagers he said “Like “teenagers”, people were demanding, but “conflicted” about what they actually wanted, he argued.”

Social media empowers people to “speak up” and “make demands.” It can also be used to leverage collective intelligence to “solve problems.” Yet the tendency at this stage is for people to whine more than to collaborate on constructive problem solving. This can perhaps be explained by the fact that the dominating tool in the new social media toolkit is the blog, which works better as a single person or small group mouth/shout piece than as a true collaborative environment. Sure, blogs are well suited for conversations or raging debates, but that is not how one typically solves problems. Wiki’s are more appropriate, but still limited to a very small segment of the population - too insignificant to truly act as an empowering environment for community based problem solving and self-governance.

So maybe that is what we could expect from social media 2.0 - a set of rich and intuitive collaborative environments that enables groups of people to spontaneously congregate and collaborate on helping others to solve problems, whether they’d be socio-political problems or problems related to their favorite brands.

Some interesting experiments in developing collective problem solving environments are already underway - such as the Community Wiki, where Keith Hopper discussed the same BBC interview and suggests a few actual projects projects to tackle as a group.

[Tags: collective intelligence social media self governance self organization]

The most recent Harvard Business Review reports on a study (requires subscription) that was done on the impact of customer communities on customer behavior at eBay in Germany (disclosure - I have an active interest in this topic as I have agreed to chair a conference on the business of communities - Community 2.0 - but more on that later).

The numbers are quite interesting. The experiment involved 140,120 eBay customers who had bought or sold on eBay but who had not participated in the eBay customer communities before. 79.242 were invited to join the online customer community, while the remaining 60,878 were used as a control group. Of the people who were asked to join the community, 3,299 became active participants and 11,242 became lurkers. Over the course of a year they compared the behavior of the active participants and lurkers to that of the control group and found that:

• Lurkers and active participants won up to 25% more auctions
• Lurkers and participants paid prices that were as much as 24% higher
• Lurkers and participants spent up to 54% more money in total
• Active participants listed up to 4 times as many items
• Active participants earned up up 6 times as much monthly sales revenue
• For first time sellers who were lurkers and participants, 10 times as many of them started selling on eBay after joining the community

All in all the activities of the lurkers and participants resulted in 56% more sales during the year of the study - bringing in millions of additional dollars into eBay’s bottom line.

So can the results of this experiment be replicated in more traditional businesses?

Some people clearly think so, while others who used to be very enthusiastic about the business of communities are starting to become very skeptical.

Communities require a certain critical mass to get going - and not all companies have a large enough customer base to get to that point. They also require a lot more work and resources than most companies are willing to invest - to set up the infrastructure, to nurture the communities, to acquire content, etc.

Active communities of employees, customers and partners are clearly powerful management instruments that can dramatically improve core business processes like innovation, product development and marketing & sales. They can also backfire and have very negative impact if they are not managed properly, or set up wrongly. Before embarking on this path, companies have to truly understand the dynamics as well as the pros and cons of communities. They also need to find out if they have the resources and wherewithal to create their own communities or whether they should play in someone else’s sandbox.

Unfortunately, many will start the process by throwing technology at the problem - let’s just hope that those ignorants won’t destroy the market for the rest of us like email spammers destroyed email marketing and (un)ethical zealots are slowly destroying word of mouth marketing.

[Tags: community management customer community community marketing wom word of mouth marketing]

Jim Lavoie and his partner Joe Marino from Rite Solutions presented at the Business Innovation Factory’s second annual meeting today (which is being live blogged on the Corante Innovation Hub)and talked about how they were able to create a corporate environment which is totally project-based and where leadership “authority” is based on employees’ “sphere of influence” at any point in time during a given project rather than on the results of more traditional “pyramid” based games.

To make new employees comfortable with the fact that pyramid-based schemes of career advancement are not the way to go and to constantly remind existing employees of that fact, both periodically put on skids to make fun of the more traditional antics of command and control/hierarchical organizations.

They performed one of their songs at the event and keep a web site - called tombtunes - with all their current executive musical productions. The first song is supposed to go up tomorrow - it’s a an absolute “must hear” for everyone with experiences in corporate life, especially for those who might have become “unemployable” because they got disgusted with the way those corporate games work. If you are a “company-man,” you will not enjoy it!

Note that both those guys acknowledged being really good at playing the pyramid game
[Tags: business models organizational structure hierarchy hr bif business innovation factory]

Fortune’s most recent issue has a number of articles on the increasing chaos in markets, technologies customer behavior, and products. Business models that sustained companies for decades no longer work. Companies can now enter and leave markets at a moment’s notice. Market disruptions happen faster and faster.

According to the article, the way to manage chaos is not by retraining managers, it’s by changing people’s mindset and assumptions about business, management, and most economic principles we grew up with. Successful companies are meeting the challenges of a chaotic environment with chaos - by loosening controls, getting rid of hierarchies & titles, providing full transparency into all aspects of the business and more.

What causes all this change? For starters, the fact that companies can now operate free of physical assets makes them both more flexible and vulnerable at the same time. Next is the fact that with the advent of the Internet we have witnessed a dramatic power-shift towards the consumer. Information about products and services, which used to be controlled by the seller - giving them an unfair advantage - is not only widely available, it is complemented with free flowing consumer generated content that gives the consumer the upper hand in the power play.

And the chaos is here to stay. As the article points out “the forecast for most companies is continued chaos with a chance of disaster.”

The only way to survive is to allow your company to operate at the edge of chaos - something that nature knows all to well how to do. Perhaps the best training for company executives and employees will not come from business schools but from science departments who are studying complexity theory and how self-organized systems can thrive in nature -even in the worst of circumstances.

If you are starting a new company it may be easy for you to inject that right kind of culture in your company’s DNA. For existing companies the only answer is change, dramatic change that is - and as scientists have found, change hurts, and people naturally resist it.

So should we get ready to see many corporate icons dissapear in the near future?

[Tags: business models chaos complexity theory edge of chaos]

Doc Searls has an interesting, albeit provocative, article in the Linux Journal, tiled “Markets without Marketing” (via Horse:Pig:Cow, which has a great follow-up post on it, as does Hugh, who also disagrees).

The article has a number of sweeping market observations, predictions and recommendations - many of which are fairly controversial :

• One of the biggest problems with marketing is that it all too often focuses on “capturing and holding customers, rather than “finding and satisfying customer needs”.
• As markets are becoming truly free, we do not have much, if any, need for marketing. Marketing should get out of the way and let engineers talk directly with the customers who will be using the product.
• Advertising is going to die and PR is already dead
• Markets have evolved from conversations to relationships - which will require new skills and will get supported by the new tools
• Marketing needs to get out of the website construction business - it should all get replaced with wikis, blogs, and other direct linkage between information about the products and the customer
• Trade shows can be useful, but please do not send marketing folks
• Nothing is worse that vaporware and yet that is what marketing pushes
• Marketing does not know how you make money with technology or products - but engineering does. And besides, the real question is to understand how you will make money “because” of the technology… not “with” it.

Wow - Doc must have been seriously hit over the head by an old-school marketing spin-meister

It is true that many marketers are clueless and deserve the bad rap that they are getting. But more often than not, that behavior comes from the very top - with CEO’s, CFO’s and other VP’s expecting marketing folks to do unnatural acts, and getting rid of them if they do not deliver the same old stuff.

Of course, marketing needs to get out of the way. It cannot be a bureaucratic wall between the customer and the company. But there is a huge gap between hearing what the customer says, and building successful products. Engineering has to have first line of communications with the customer. But while that may bring many advantages - ranging from a better understanding of customer needs by the people who are actually building the product, to better morale in the engineering team - this by itself will not lead to great product plans! You need very special skills and training to be able to turn market opportunities into successful product strategies.

And of course, we need to get rid of no-value web sites and replace them with linkages to the information sources that matter and enhance them with tools to enable various people inside and outside the company to talk and communicate with one another. But shouldn’t you have someone in charge of that? Or do you believe that a free-for-all environment will result in an infrastructure where the customer will find what they need in a timely fashion?

And yes - marketing is too often focused on “capturing and holding customers, rather than “finding and satisfying customer needs”.” As John Hagel says, they need to move from the 3I’s (intercept, insulate, and inhibit) to the 3 A’s (attract, assist, and affiliate) - no question about it! But shouldn’t you have someone take the lead in that?

Look, you can argue that you do not really need a marketing department - and for practical reasons, I think you do. But you cannot argue that a company should have no marketing. Marketing is what a company should do. Everyone within the company should wear a marketing hat!

And yes, neo was right - “the problem is choice!”

[Tags: marketing marketing department marketing strategy marketing role]

In a recent Harvard Business Review forethought (here - requires subscription or can be purchased separately), Prof. Nitin Nohria from the Harvard Business School asks which of the following organizational structures would have a higher likelihood of surviving a pandemic or other disaster:

organization 1:

• hierarchical
• centralized leadership
• tightly coupled
• concentrated workforce
• specialists
• policy and procedure driven

organization 2::

• networked
• distributed leadership
• loosely coupled
• dispersed workforce
• cross-trained generalists
• guided by simple yet flexible rules

Which company would you bet your money on?

It does not require an advanced degree to realize that there are some fundamental lessons to be learned from mother nature…

[Tags: crisis management self organization pandemic]

A fascinating article in the most recent issue of Strategy + Business from Booz Allen & Hamilton, The Neuroscience of Leadership, describes how change hurts, how the carrot and stick approach to management does not work, and how people who focus on different things have physiological differences that prevent them from seeing the world the same way.

It’s no secret that people resist change - even when their life depends on it! New advances in neuroscience found that the brain relegates routine tasks to a part of the brain that requires little energy - freeing up the more conscious part of the brain, and also the more energy-intensive part, to process new things. So say you have been driving a car for awhile, you will probably do it “without thinking,” but if you get into a country where they drive on the other side of the road, that same activity will now become a very intensive and tiring experience. The same is true with organizational change. After a while people will sell ideas, go to meetings, and manage others unconsciously - and trying to change their routine will be tiring and uncomfortable.

But that is not all - there is another force at work in the brain that resists change. The brain is very much wired to detect “errors” in its environment - perceived differences between expectations and actuality. When an error is detected, it triggers the fear circuitry in our brain, which is one of the most primitive parts of our brain, and which basically hijacks our thinking. We become emotional and start acting impulsively - our animal instincts take over.

So try changing someones behavior and their brain will start sending powerful messages that something is wrong, thus decreasing their capacity for higher thought. Change results in discomfort and stress…

Another interesting finding of the study is that by focusing attention on something - a particular problem or process -, a person will develop new neural connections which if reinforced enough will become part of their subconscious. This has some interesting consequences. The first one is that if a person starts focusing on a “problem”, he or she will start developing new connections (also known as reasons) for why the problem occurs. While they may be true, they will do little in support of change. That also means that the “carrot and stick” approach to changing people’s behavior is flawed, as it focuses the person’s attention to the problems that are causing the behavior that we want changed instead of the solutions.

Another consequence of this finding is that people who tend to specialize in certain fields - marketing, sales, finance, etc. - tend to develop brain connections to handle their job with the least amount of energy possible. That means that a long term finance person and an old engineering hacker have their brains wired differently - and they will never see the world the same way, even if the rest of their worldview were the same!

So what are we to do if we want to foster change? The study also found that if the brain has a “moment of insight” coming from within (coming to a solution/conclusion by yourself), that moment is associated with a sudden adrenaline-like burst of high energy that is conducive to creating new links (change) in the brain. So if you want to instill change, you have to focus people on solutions instead of problems, let them come to their own answers, and keep them focused on their insights. That simple!

Oh - and the next time you get in a argument with the finance guy - remember, his brain is wired differently than yours!!

[Tags: neuroscience change change management hr leadership]