Management Ideas 3: Web 2.0 for business?

McKinsey did a survey on the uses of the new collaborative (so called Web 2.0) applications like blogs, podcasts, and wiki’s. Here is a quick overview of their findings, and some comments from us.

Business uses for Web2.0 applications.

There are all sorts of things happening on the internet, and many companies do not quite know how to exploit those new tools. This is not so surprising, because they‛re quite different from the previous generation of applications, like ERP (enterprise resource planning), SCM (supply-chain management), and CRM (customer relationship management) packages.

What are we talking about? New, so called Web 2.0 applications like:

  • blogs
  • wikis
  • podcasts
  • information tagging
  • prediction markets
  • social networks

What are the differences with the previous generation of business applications?

  • unlike ERM, SCM, and CRM packages, the new technologies are rather simple to employ. No business processes have to be redesigned. No complex middleware, no years of organizational and technologically daunting implementation (or even failed projects), especially ERP projects were rather complex. Normally, no overhaul of infrastructure is required for implementing the new generation of applications
  • bottom-up, rather than top-down, requiring broad and active participation, rather than passive transaction execution or standard information processing required by the older generation applications
  • because of that bottom up driving force, these technologies could ultimately have a more far-reaching organizational impact than the older technologies
  • unlike the older generation of applications which automated things employees were already doing, the new technologies are often viewed as separate activities.

The benefits
The main benefit is tapping into and activating underused human potential. Differences in collaboration is correlated with large differences in corporate performance.

Six management imperatives

1) Transformation to a bottom-up culture needs help from the top. Just making the applications available is often not enough, management has to become role models, blogging themselves, for instance.

2) The best uses come from users, but they require help to scale. Unlike the previous generation of technologies which came with predictable uses and efficiency improvements, the new collaborative Web 2.0 applications ofen evolve in unexpected ways, at least for management. Efforts to dictate use are often counterproductive. The best strategy is to see what works, and scale it up, through awareness creation and assistance.

3) Because the Web 2.0 are often seen as separate activities, the risk is that they get marginalized. To increase success, they should be integrated into the user‛s daily workflow. It is difficult, but Google has pulled this off. It‛s employees use blogs and wikis as core tools for reporting on the progress of their work.

4) Traditional management incentives (management by objectives, bonuses) are often not very useful, this is because they usually only engender perfunctory cooperation, not consummate cooperation. If performance reviews include people‛s contributions to message boards, it usually leads to high quantity, low quality posting, which benefits no one. Working with web ethos, like recognition and bolstering reputations usually work better. That‛s also the way the scientific community works.

5) It‛s difficult to select the users who will help drive a self-sustaining effort. More often than not, these are not the people management think they are. The ‛official‛ organization might not be the best place to start looking. Often high-ranking employees are not the first ones workers turn to for advice.

6) It‛s difficult to balance freedom and control. Lack of control can lead to inappropriate, or even damaging postings, but too much control kills off the project. Work with legal, HR and IT security to establish reasonable policies (like prohibiting anonymous postings)

Our comment
All these shiny new technologies and applications are cool, but what really matters is the collaboration they enable. Don‛t focus on the technology, focus on enabling collaboration and sharing knowledge.

Early adopters of knowledge management spurred by vendors with new and fashionable software applications in the field, often made the mistake of taking the technology way too seriously, seing it almost as and end in itself, rather than a means to an end, losing sight of that what really matters.

The relationships and social capital behind the technologies are really much more important. One key concept here is “community of practice”, and see the collaborative technologies as a way to enable these.

Communities of practice are more or less voluntary communities spanning (internal, and even external) organizational boundaries based on some kind of domain, like a profession, a discipline, a discourse, job role, etc.

We might have more to say on that in one of the following installments of this series.

2 thoughts on “Management Ideas 3: Web 2.0 for business?”

  1. Excellent post STP. As chance would have it, this is a topic that has come up recently at my place of business.

    Due to the quality, I forwarded this to my colleagues.


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