The following article is published through pharmaphorum and is the second in a series about Enterprise 2.0.
The digital revolution has changed the world we live in. During the first wave of the revolution, back in the nineties, we gained access to an incredible amount of information. During the second wave, which started in the early 2000’s, we were able to add information ourselves - our experiences, opinions, thoughts, comments, ratings and reviews about products and services. Today, the digital revolution has become mobile, where we hold the internet in the palm of our hand with smart-phones and iPads.
Many companies, especially B2C, jumped on the bandwagon of interactive communication, where they saw great opportunities for their marketing activities. But, as discussed in part one of this series, it’s more than just the additional marketing channel that makes the revolution. It has an impact on the way we are organised as a business, and this goes as deep as our blueprint, our DNA and our identity. This revolution is cultural.
Looking more closely at the changes around us we can identify six trends. These trends reveal the need for companies to prepare themselves for a major change: to reorganise themselves from Enterprise 1.0 to Enterprise 2.0. Let’s take a closer look at these six trends.
“…it’s more than just the additional marketing channel that makes the revolution.”
1. Information overload
As a result of the digital revolution, the amount of information that we have to manage is increasing at an almost daily level. Information that frequently is difficult to find on our intranets. In addition, managing our email is a continuous struggle for many. Who doesn’t have a sort of love-hate relationship with their inbox? The amount of energy wasted within companies with data management is enormous. Although interactions costs (e.g. real life meetings) go down, the volume of interactions is headed towards infinity, leading to unproductive complexity, frustration within the workforce, increased bureaucracy and unmanageable communication (Fig 1, electronic survey McKinsey Quarterly 2005).
Fig 1: Struggle with communication complexity (based on survey McKinsey Quarterly, July 2005)
*80% of those reporting “communication unmanageable” admit having difficulty fulfilling their key responsibilities.
2. Limited access to interactive technologies
At home, we are used to fast internet connections, enabling us to upload, download and consume video, connect to our friends and family through social networks and talk real-time with each other via Skype. Coming to work, many of us still experience something different: websites such as YouTube and Facebook are blocked as non-productive sites, Flash videos cannot be viewed as the flash player cannot be installed and if you’re lucky to access online video, then frequently bandwidth is the limiting factor of a smooth experience. And that’s not all, the hardware available to the average workforce (computers, mobile phones) are very often seen as costly devices pressing on the annual budgets, rather than devices that improve people’s performance. Back home, the workforce emits sighs of relief, setting themselves behind their brand new and beloved iMac.
More and more services are offered through ‘the Cloud’, which means that databases, file services, email and applications are available through external online servers. No software is required to be installed on the user’s computer, other than a web-browser. Examples of Cloud applications are Hotmail, Google Docs and Salesforce.com. Advantages of cloud computing are that the applications are accessible anywhere at anytime from any platform (desktop, laptop, smartphone) with the latest versions of the software available. Moving from the comfortable, ‘behind the firewall’ applications to cloud services that are out in the ‘big bad world’ is a tough choice to make for many organisations. Again, the loss of control is bothersome to them, while it may serve the employee’s productivity and in the end can lead to significant cost savings on license fees and service contracts.
“As a result of the digital revolution, the amount of information that we have to manage is increasing at an almost daily level.”
4. Generation gap
As a result of the digital revolution we can divide the current population into two generations: digital immigrants and digital natives. A digital native is someone who is born after the introduction of digital technologies, let’s say around 1980. A digital immigrant is someone born before the introduction of digital technology. The difference between these two groups is the way they adopt these technologies and integrate them in their lives. With the speed of technological developments increasing, more and more digital immigrants struggle keeping up, leading to conflicts between managers and supervisors (DI’s) and the younger workforce (DN’s).
5. Social, social, social
Social networking has surpassed email both in number of users and in time spent (Morgan Stanley, Internet Trends, June 2010). This means that people prefer social interaction through online networks over the rather one-dimensional and more impersonal email. But a Facebook group or a Twitter account is no guarantee for successful participation in the communities of your customers. To achieve that you need to do more. “You need to socialise”, according to Brian Solis, Principal at Futureworks and one of the prominent thought leaders in social media.“As a company or as a brand you need to participate in the conversations in such a manner that you’re not only of added value, but that you also involve your customers in your marketing and service activities.” Because of that social media will have an enormous impact in the organisational structure of a company. “Any division within an organisation that is effected by outside influence is going to have to socialise”. Eventually social media instruments will become as mainstream as email is today, but before that organisations will need to go through a process of cultural change.
Modern society is in a process of becoming a network society. Through the internet we’re constantly connected and becoming less dependent on face to face communication. It’s as Jan van Dijk describes in his book The Network Society that the internet brings interpersonal, organisational and mass communication together. This means we’re moving from centrally and hierarchically organised companies (e.g. Sony, Microsoft, Shell) to true network organisations (e.g. Facebook, Google, Amazon). The main difference between the two extremes is that in the latter the user is more in control and wants to be involved and engaged. This is illustrated by the development in the music industry over the last decade. Music is booming, and artists and consumers have taken over control from big corporations.
These six trends are disruptive to any industry, including pharma. These trends scare CEO’s and management teams. Losing control over their employees and the way they work gives them nightmares. But is that justified? Can we allow ourselves to perform ‘ostrich politics’ by sticking our heads in the sand, hoping it will all pass in a few years? Or is now the time to pick up the challenge and start redesigning our organisations?
“…the volume of interactions is headed towards infinity, leading to unproductive complexity, frustration within the workforce, increasedbureaucracy and unmanageable communication”
Most companies still have an organisational structure designed for the 20th century: hierarchical, directive, silo-structured and sales-driven (aka Enterprise 1.0). Especially in our ‘knowledge-intensive companies’ we need to mobilize the minds of our workforce in such way that we offer them freedom to do their jobs, give them access to information, provide them with a network that enables them to connect with peers and the likeminded and stimulate collaboration and co-creation (aka Enterprise 2.0). Not only will such company create an environment that motivates people and retains talent, it also will lead to an increase in net income per employee.
So the challenge is the organisational redesign of our companies. Moving from Enterprise 1.0 to Enterprise 2.0. The key is the employee. Because, as with the music artist and the music lover, that’s where the power is. Create an environment where your employees can excel, where they feel empowered and acknowledged. Give them autonomy to reach (and surpass) their goals, allow them to master their skills and give purpose to what they do. With that you’ll give your workforce the drive to get up in the morning and go to work, motivated.
What do you think is key to establishing Enterprise 2.0?