Introducing the LOTUS enterprise

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For some time now I have been working on developing a framework for the Agile Enterprise – recognizing how the emerging enterprise is more than just Social or Open, or driven by purely a temporal innovation in technology. So, here are my thoughts on how this all comes together. I will elaborate more as I go forward, so consider this a high-level introduction, and of course, would love to engage you in a conversation too.

Enduring advantage is the result of enduring capability – it is an outcome of something more fundamental. I believe that such enduring capabilities do not result from emulating the ‘best practices’ of others, captured in prescriptive/normative checklists. In that spirit my answers here are guiding principles only.

The fundamental characteristic of such an enterprise is Adaptability – which results from three critical abilities:

Cognitive Excellence,
Collaborative Excellence, and,
Learning Excellence.
The first two capabilities, give an enterprise the ability to sense and respond appropriately to the context in which they find themselves.

Cognitive excellence gives it strategic foresight, the ability to anticipate and discern patterns and discover opportunities – to give a few examples. Collaborative excellence is the foundation of the open, creative enterprise at all levels.

Excellence is the result of Practice, and organizations that practice these two disciplines, a concept that is embedded in the notion of Learning Excellence, will be able to remain agile. They usually do so by establishing explicit or implicit Centers-of-Excellence.

An Agile enterprise, has utmost clarity in its Strategic Architecture – it is clear in its Purpose, Mission and has a set of Design/Guiding Principles which it refines through Learning as necessary. Most importantly, it exists to serve, and thereby is focused on its clients.

An Agile enterprise in the ever increasing complex environment of the future, is what I call a L.O.T.U.S enterprise:

Living – modeled on organic principles
Open – an in with flexible boundaries, open, diverse and inclusive, usually an extended enterprise – It expands its ‘value spaces’ – creating and capitalizing on cognitive and collaborative surpluses.
Technological – More than just an efficient user of technology, it is a master at embedding technology in its being. It co-evolves with technology.
Ubiquitous – It is increasingly present widely in space and time, global, mobile and dispersed
Social – It recognizes that all enterprises, value producing and consuming systems are essentially human and social.
Finally, an Agile enterprise has mastered the fine art of living on the edge as well as having a stable core. It knows how to walk the tightrope of Exploration and Exploitation, not considering it a dilemma, but moving effortlessly between the two with a fine sense of timing. Those organizations that focus on Exploitation Excellence invest in disciplines such as 6-Sigma. Those that are Exploration focused think of things such as Open Innovation.

The Agile Enterprise is also a master in creating innovative value – through its products and services and through its Business Models.

Sustained Excellence and Enduring Strategic Advantage are the privilege of those who invest for advantage over time, rather than just the here and now.

Developing a Social Business Strategy

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The term strategy in the context of Social Media or Social Business has different connotations. I distinguish between three types of ‘strategies’

Business Strategy – or rather a Social Business Innovation Strategy
Execution Strategy, and an
Operations Strategy
I will describe here what you need for a ‘social media’ Business Strategy.

Once you have the foundational stuff in place, namely a good understanding of how social media works (viral mechanisms, influence etc), where the opportunities are, what is happening in your industry, your markets, in particular customers etc, and you also understand the implications for executing such a strategy and what it will mean to operationalize your new solution/s – you are ready to develop a Social Business Strategy. These foundational exercises are in the nature of an Exploration or Discovery. They help you get a sense of the overall landscape and what the opportunity looks like.

Even though one could describe the process of developing a business strategy in several steps, here are three high-level steps one goes through in its development.

Step 1: Identify the opportunities and align with your strategic priorities:

You have to identify the specific opportunities for your enterprise: It is very important to base your strategy in your own context and align it with your strategic priorities.

So one of the first steps is to identify all the possible ways in which you could use Social Media – whether it is in Marketing, Customer Service or Product Development. (I am focusing here on the external perspective, since you are using the term ‘social media’).

If you are thinking broadly, then perhaps you would also want to consider Enterprise-internal opportunities. In fact, in order to be successful with any of the externally-oriented opportunities, you will necessarily have to think systemically, and include internal functions as well.

Develop a framework for assessing value – often it is more than just economic. In any case you will need this to justify some kind of a ‘ROI’ – at least in order to systematically assess what you should or should not pursue.

Step 2: Assess your readiness to address the identified opportunities

Based on your work in Step 1, there might be several opportunities you could potentially pursue, however, you have to pick those that you are likely to succeed at.

You should assess your organization’s prior experience with introducing similar change – particularly if you have no prior history of working with “social technologies”.

There are a number of new concepts and competencies involved when working with social media. Assess therefore whether you have the necessary competencies.

All your stakeholders might not be comfortable with the implied changes. Assess the changes and impacts that the opportunities could have on your organization and who and what that might affect.

In particular you need to assess if your customers would be willing to adopt the new solutions and what would motivate them.

In the assessment exercise, do include technological readiness. Some of the detailed implications of technology might not be apparent till you get to the design stage though.

Step 3: Developing a Strategy and a Road Map

Now that you have a good understanding of the opportunities, the value they will create for your business, and the ability of your organization to execute successfully, you have a prioritized shorter list of what you can successfully pursue.

Identify those from this list that provide the most value and are easiest to implement for your first forays, and develop a road-map to implement the rest over time.

It is also very critical to develop a set of design principles – design not being limited to technology, but all aspects of the new solution.

Establish metrics for success and put in place a good governance strategy to guide and lead the program.

You now have enough substance to build a strategy, and to mobilize all the stakeholders to back you.

Finally, strategy is an iterative process – things will change as you deploy and learn, so be open to revisit and change – quickly!

Innovation, Collaboration and Design – together for a distinct Future

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2014

There is an article in CoDesign (Fastcompany) on the topic of Innovation, Collaboration and Design, terms which are used together very frequently in business literature these days.

Innovation and Collaboration have been around for a while I think. Design is the newcomer to the lexicon, even though the concept itself is not new. The article does a good job of placing the concepts in an easy-to-understand framework.

To quote:

Innovation is about finding a new way forward. Collaboration is the way to get to innovation. And design is about mapping out a distinct future.

In the context of an enterprise, innovation is necessarily a collective effort. Non-trivial innovation usually requires contribution from diverse entities, who therefore need to collaborate for success.

Much has been written about how to create the conditions for collaboration, but when they do exist, proximity in action spaces and ‘friction’ lead to creativity and in turn innovation.

One aspect of design is indeed mapping a distinct future as the author mentions. However, design, just as in the case of innovation and collaboration is a practice. It is an approach to how one builds solutions, whether they be products, services or businesses. It is something you hone and get better at over time. It alone does not create a distinct future. It is the combination of all three practices that result in a distinct future.

Design in my mind then is the process that is woven into the innovation and collaboration efforts, indistinguishable once mastered. Like they say in Jazz about drumming – you may not hear it, but you can feel its presence.

Innovation – factors in Medicine and Engineering

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I was reading an article in Co-design – “How one surgeon is reinventing the female breast”. The article talks about how a doctor in Sugarland, TX is re-inventing breast surgery and weight-loss therapy using ideas from engineering.

Gary Horndeski, went to medical school in order to avoid military service according to the article, but continues to draw upon his prior background in Engineering in his surgical practice.

The article illustrates one of the key concepts of innovation – that diversity is a great source for ideas and should be deliberately practiced.

Gary also talks about how the regulatory or governing environment within the field of practice, affects innovation:

Medical procedures in America change slowly because of the fear of malpractice lawsuits. “The medical establishment here wants small, not radical changes,” Horndeski says. “But in engineering, you design what you want to build to work, without the same fear of being sued. That’s why there’s more innovation in medicine happening overseas, where it’s less litigious.”

There are reasons why the regulatory environment in medicine is the way it is, but it is also interesting to note how, the lack of such inhibitors in other countries might enable them to leap forward in terms of innovation. Clearly there are implications for ethics here. Would we consider using innovations from sources where they might have used questionable practices?

One last observation has to do with the fact that it took ten years of experimentation and slow improvements in techniques for him to bring his approach to a reasonable level of satisfaction. Would this development have accelerated if it had been practiced by a group of doctors or several doctors in different places? Should engineering education be included in surgical training? Should engineers be a part of surgical staffs in hospitals?

The Discipline of Innovation – Choosing an Approach

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There was the following question on Quora today:

Many Innovation strategies could prove effective, including Producer Innovation, Open Innovation, [Lead] End-User Innovation, Employee-Driven Innovation, Combinatorial Innovation, Accidental Innovation, and even Imitation. How does one optimize the innovation mix?

Here was my response:

Indeed there are many approaches to Innovation such as you have listed here, but I can safely say, that they were not all successful for those who tried them (the failures are never documented), and there is no mention of the context in which they were successful.

If you are looking to develop an Innovation Strategy, I would suggest you spend considerable time and energy on understanding your own context well. I will not elaborate here on what understanding your context means, other than looking at internal and external factors that prevail and determine your strategic priorities.

What is the nature of innovation that is appropriate for you? Do you need to consider Business Model Innovation, Service/Product Innovation or, Process Innovation – which aspect of your enterprise are you focused on or needs attention. I am assuming you are not looking to create conditions and wait for emergent innovation to happen, but a deliberate approach to addressing strategic priorities.

Social Business and P&L

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A Business Enterprise is always interested in building a healthy P&L. As circumstances change, internally or externally, it looks for new ways to reinvent itself and its offerings.

Social Interventions, or rather, as I like to refer to them, ‘Open/Social/Digital’ interventions can contribute to a much higher sophistication and complexity of designs, both in terms of its value offerings, such as services and the design of its own structure and systems, becoming more agile and responsive in the process.

These interventions therefore are something organizations must look at and examine whether they are applicable to their context, and in particular, whether they can help them with their P&L objectives. I suggest they examine broader models of defining value, but that is another story.

Leading the discussion with a presumed intervention as a solution would be, just as an illustration, similar to asking – “We now have CAT-scan technology – what would it take to get every human to use it”?

If we engage our business leaders in discussions that lead with where it is in their business they have reached an impasse, when they cannot compete effectively, they are losing market share, suffering from a high-turnover, or are not able to attract the appropriate workforce – then it becomes easier to relate that to the P&L, and eventually to how O/S/D could help.

It does not only have to do with critical challenges, the opportunity could also have to do with growth and innovation, which in my opinion is the exciting part of what is happening!

If none of these conditions exist, one will not be able to sell any new paradigm, and perhaps it is not even required.

On the other hand, if you believe that Social Business approaches could help, then I would suggest something in the nature of Education to begin with, if people do not already see the value.

Innovative Capability and Cognitive Excellence

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Innovation is on everyone’s mind these days, and there are just as many opinions on how to become innovative. I was just reading an article on the Technology Review Blog – Four Principles for crafting your Innovation Strategy.

The four principles attributed to Joseph Schumpeter, author of the concept of Creative Destruction, are:

“Think big, start small, fail quickly, scale fast”,

The article goes on to describe the experience of the Netflix founder and CEO Reed Hastings, about how he experimented with a number of business models early on, killing those that were not effective, always guided by a ‘grand vision’ of what he envisages was possible. The article also comments that enterprises do not have a good process to emulate what Hastings did.

That comment got me thinking, easier said than done. What exactly is the capability that can discern what is a worthwhile trail to follow, and, when it does conduct experiments, which of those to ‘nip in the bud’ and which ones to encourage.

The example of Hastings as an innovator, while remarkable, is still the story of one brilliant mind. A lot has been written about the attributes of an individual innovator – the curiosity, the vision, the ability to take risk, the persistence and so on. Most of these processes in an enterprise are collectively managed. The challenge enterprises face is to replicate these very capabilities as a collective entity. And, it is there I believe that it falters.

On the one hand, the enterprise needs a well-honed ability to quickly spot important emerging trends and in particular the confluence of trends that will likely have a significant and interesting impact on its own business models and trajectory. Such an ability would in some cases lead to the ‘grand vision’ that Hastings enjoyed. If it is shared widely enough, it could become the conviction and generate the commitment to provide consistent guidance in the course of its experimentation and initial faltering steps. I see this competence as “Cognitive Excellence”.

Of course, we know that it is not enough to have insight and vision, but an organization then needs the ‘character’, the gumption to take risks and the persistence to work on the idea till it can make it work, and once again, ‘cognitive excellence’, to recognize when a pursuit needs to be abandoned.

So while we admire the abilities of people like Hastings, the urgent work in front of us as enterprises, is to practice and develop a keen sense to identify the big opportunity and to spot early when ones experiments are not on track to lead to the vision.

So what exactly is “Social Business”?

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2013

As the term “Social Business” become more prevalent, there is naturally some confusion about what the term exactly means. In my opinion, the term only has a temporary meaning, since business in my opinion has always been and always will be ‘social’. However, we are now at a juncture where there are some interesting innovations happening in the Enterprise, in Business Value Models and in the way we design functional processes using ‘social’ concepts, that are further accentuated by developments in technology.

There are a number of interpretations of the descriptor “Social Business” in current practice. There is the one that puts emphasis on the ‘social’ aspect of business, as in one whose main aim or purpose is to serve some ‘social’, and perhaps ‘non-commercial’ objective.

There is another context in which the term is also used quite often – that is in the context of for-profit businesses and enterprises. That usage has to do with leveraging the ‘social’ dimensions of an enterprise in order to further its purpose.

The ‘social’ dimension of an enterprise, as the term suggests, recognizes that enterprises are constituted of humans and therefore are social in nature, just as the customers they serve are members of society and therefore social too.

Recognizing the human and social characteristics of the enterprise ecosystem, allow us to better understand customers and the way they behave, are influenced, make decisions, and can act in concert and learn together. These aspects have a bearing on how an enterprise can get their message across by leveraging social networks, use the power of crowds to make better decisions, create a community that is loyal to its brand, etc.

Recognizing the human and social aspects of the members of the enterprise, enables enterprises to engage their employees better, thus enabling them to become more collaborative and therefore in turn enable better sharing and flow of intangible assets and knowledge. Such enterprises can also respond to situations by creating flexible structures rapidly and therefore become more agile.

When enterprise leverage such concepts to create more value for their customers or to become agile and smart, they are using ‘social business’ concepts. Since these are not ideas that are used in isolation, it is hard to say, that an organization that leverages these ideas is ‘social’, since it could also be more ‘digital’ for example.

There are now a number information technologies, that enable the ‘socialization’ of the enterprise. The term ‘social media’ is loosely used as an umbrella term to describe these tools and applications. Enterprises that use those technologies might be referred to as ‘social businesses’.

In any case, the practices I describe above, that leverage the understanding of “social physics” inside and outside the enterprise, whether commercial or non-commercial are also termed “social business”

Is Community Inevitable

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2013

When the topic of discussion is Social Business, it is almost inevitable that the term ‘Community’ will also be mentioned. There was a time when the terms were almost used synonymously. You see people breaking away from the ‘community’ pack now, increasingly talking about ‘social business’ instead.

I was wondering why the term ‘community’ became so popular in the first place. I believe the credit goes to the marketing function/discipline, which has been one of the most pioneering and widespread users of social technologies in the enterprise. Most of their efforts are of course directed externally, to the customer base and markets, whether to drive marketing messages or to create loyalty and retention.

Communities are notoriously difficult to build. Sometimes they already exist and the challenge is mostly to move them to an online environment and then make the transition significantly more interesting and valuable. In other cases, there is no extant community and one must seed, nurture and grow one online.

Since customer communities in most cases are sponsored by an interested enterprise, it must necessarily design them and intervene in their life in order to ensure that they meet the enterprise’s purpose, in other words, exercise some form of control.

The criticality of the role of “Community Managers” follows from this strategic objective, and is linked to the achievement of the stated purpose. However, even though customers do not come in a single form, external customer communities, to a large extent can be considered homogenous, at least in the sense of the enterprise’s objectives, and the role of a Community Manager becomes quite apparent.

The internal perspective is however completely different. If an enterprise has been around for a while, it probably already has a community even though there might not exactly be a prevailing sense of community – two different connotations of the term. The use of social technologies can go a long way in encouraging and fostering this desired sense at a broader and more pervasive level.

However the challenges of implementing social initiatives inside the enterprise are totally different than those dealing with external entities.

An enterprise uses a number of different social forms in the accomplishment of its business purpose. These include teams, groups, communities of practice, communities of interest and so on. Some of these forms are formal while others are informal.

Social business initiatives should not necessarily presume the social form, such as ‘community’. The appropriate form should be the outcome of design, or emerge from the fulfillment of a bottom-up need. Each design, with whatever social form it uses, should be accountable to its business purpose. And, this accountability cannot be delegated to some ‘community manager’ somewhere. It is integral to the management of the business function, just as it was when hierarchical structures were the norm. ( Hierarchies are still an appropriate social form to use in some cases, as are matrices etc!).

So, what does the term Enterprise Community Manager really mean – Is this person then someone who is responsible for driving a new initiative across the enterprise? Perhaps the role then is of a Product Manager and a facilitator. Perhaps this person is more appropriately the fountainhead of a “Center-of-Excellence”. Each definition brings with it a different perspective on what is expected of this role – A driver of Innovation, a Creator of Capabilities or a Program Manager. Sometimes it is the creation of a Community. I have always believed, that calling things appropriately is very important to the realization of purpose and the fostering of a Practice.

I believe today is “Community Manager” day. It would be nice to reflect on what it means and build a larger community of Social Business Champions.

Is being Social conditional?

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2013

On Quora there was a question that was phrased rather interestingly – to paraphrase – “Given that the world’s systems are becoming more intelligent – how should an enterprise become a social business”?

My answer follows:

I would have to start by asking which “world systems” you mean, since there are so many kinds of systems that enterprises deal with or are a part of. Traffic systems, Healthcare Systems, Communication Systems – you can see how ‘systems’ is quite a broad term.

As long as my statement about enterprises being social is true, then their need to be a part of such systems is due to the fact that their being ‘social’ adds value.

Even though there is a significant increase in the amount of information available to systems, and perhaps also there being much more automated ‘intelligence’, there is still a need for humans to be involved.

Such enterprises therefore must necessarily also excel at being social. A ‘Social Enterprise’ performs several activities as part of a system – It makes sense of information, takes decisions, innovates, develops solutions/designs and interventions, acts, often collaboratively or at least cooperatively and learns from its experience. Most importantly it produces value – value that is consumed by other social beings.

As long as this remains true, and I would say that will be the case for a long time to come, all enterprises and businesses must aspire to be socially competent/excellent.

The answer to how enterprise/business should become social has been extensively written about. Where an enterprise starts its efforts depends on its specific strategic context and needs.

It depends on the nature of your enterprise and where the opportunities happen to be. In general if you look at what is happening, the marketing function and its activities are a good place to start, though Customer Services and other support functions are also good candidates.

Others start with various attempts at creating capabilities and becoming a Collaborative Enterprise, with initiatives ranging from Knowledge Management, Product Development, Accelerating Learning etc. Eventually a social business leverages the power of ‘sociality’ pervasively in all aspects of its business, though the extent and degree might differ.

If the enterprise does not have experience with introducing such initiatives, since there are new competencies involved and quite a paradigmatic shift, it is of course best to start small, do a pilot and then learn and scale rapidly.

As maturity increases, the enterprise can take on wider ranging and more complex transformation challenges.As long as their is human activity, there will be Social Enterprises – whether or not this current interest wanes in the near future, the need to be social will remain. And, yes, we will increasingly included online/virtual sociality in the design of our enterprises.