Agile Elephant making sense of digital transformation
innovation | digital transformation | value creation | (r)evoloution
Here’s a Storify summary of impressions, tweetable slides and key messages from the 22 Oct 2015, Enterprise Digital Summit London event, selected from the #EntDigi tweet stream and flickr photos.
As I explained in my “setting the scene” post, this is the very first TED Talk that I saw back in November 2006 (although it was filmed in February 2006). Titled “Do schools kill creativity?”, it has become the most most viewed TED Talk of all time – 35 million views and counting! Sir Ken Robinson has been an advisor to the UK government on educational matters, and is a thought leader on creativity and innovation in both education and business. This talk covers ground that you will find in his book Out Of Our Minds, and I would also recommend his more recent book The Element which presents the case for finding what you really enjoy doing, and then turning that activity in to your job. This talk, delivered without PowerPoint slides, visual aids or props, demonstrates what a great speaker and story teller Ken is, as well as showing he has the timing of a stand-up comedian.
Ken talks about our education system and the future. Nobody can predict what is going to happen in 5 years, yet we need to be educating our children for way beyond that horizon. All kids start with tremendous talent and we squander it. In our schools creativity should be as important as literacy – it should be treated with the same status, but today it isn’t. Through as series of great personal stories and anecdotes Ken highlights how children will take a chance because they’re not frightened of being wrong – if you aren’t prepared to be wrong how can you come up with something original? But actually in our schools, and then in the companies that we go on to work at, we have systems and processes in place that stigmatise mistakes. He goes on to explain how the education system in the UK and most other countries around the world were designed in the 19th century for an industrial age with a specific set of priorities, a hierarchy that put mathematics and languages at the top, then the humanities, with the arts at the bottom. Even within the arts music has higher status than dance. Maths is important, but so is dance. He asks what is education for, and worries that the whole set up is designed to produce university professors – is that right?
One of the best stories explains how Gillian Lynne, at school in the 1930s, was believed to have a learning disorder because she couldn’t concentrate and was always fidgeting. Her mother took her to a specialist who recognised immediately what she was, and sent her in a completely different direction. Watch the talk and you’ll find that you know of her work.
Ken’s talk is a plea to change the way we educate our children in the 21st century and reprioritise our thinking so that ideas, innovation and creativity are brought to the fore. I’ll use Ken’s own words of conclusion:
“What TED celebrates is the gift of human imagination. We have to be careful now that we use this gift wisely and that we alert some of the scenarios that we’ve talked about. And the only way we’ll do it is by seeing our creative capacities for the richness they are and seeing our children for the hope that they are. And our task is to educate their whole being, so they can face the future.”
If you want to understand more of our Agile Elpehant thinking, check the rest of our blog material and take a look at the Enterprise Digital Summit London in October. We’d love to hear your comments or suggestions or to see you in London next month.
On Wednesday night we occupied under the arches of the ICA’s cafe bar for one of our regular Combined Social Business Sessions London meetups. Our main speaker was Euan Semple (@Euan on Twitter), well known keynote speaker on social business and collaboration as well as the author of Organisations Don’t Tweet, People Do. Eaun probably wouldn’t mind being described as a catalyst for change – he’s been talking around his topic (which he would say is really just common sense, but covers everything from knowledge management through to digital transformation) with organisations large and small for around 14 years. Wednesday’s meetup was slightly different to our normal format as we didn’t have a projector and screen – no PowerPoints and just talk, which made for a more intimate session with some enthusiastic, top quaity group discussion.
Euan’s talk was based around 3 of his recent blog posts and was of (corporate) dinosaurs and Lipstick on a Pig – a phrase I love and use often. Euan related stories from his recent camping trip to Exmoor wondering what Tess of the d’Urbervilles would make of modern farming or watching the corporate types normally hunched over their laptops now hunched over their steering wheels fighting through the holiday traffic to get away from their SAP or other corporate systems to the tranquility of Devon. Like the farm workers of Tess’s time, todays firms and office workers are facing immense changes with jobs under threat from automation and all manner of disruption of the digital kind. Euan talked about his experiences with Senior Management in these big corporates and sees a shift happening. The older demographic who were maintaining the status quo, marking time until retirement are now recognising change is happening on their watch and maybe they need to do something about it. However, he worries if there is a desire for real change when actually the reaction is usually to start some initiative for employee engagement or developing leadership potential. Are these programmes put in place with a desire for real outcomes or just there to demonstrate being “busy”. That’s where the term “Lipstick on a Pig” comes in – are these social collaboration projects just for show, without enough commitment to make real change that helps the bottom line and changes the firm for the better. Euan’s worried that he’s spending his career trying to resuscitate dinosaurs. But those are his darker moments – as I said he’s been at it for 14 years and counting, and he’s still enthusiastic about making change happen. Actually he believes it will happen from “small acts of disobedience”. He prefers not to talk about top down or bottom up change management programmes, but more about people and their behaviours and encouraging the individual to take small steps, little and often.
His talk flowed in to some lively discussion with the whole group joining in. Those of us in the thick of new ways of working, the adoption of social tools inside business (as well as for external communication), or talking digital in its various forms are always expecting change to happen more quickly than it actually does. We’re in the middle of a shift as significant as Johannes Gutenberg and the printing press triggering the Renaissance, the Reformation, and the Age of Enlightenment. Actually we’ve been talking digital for 20 years, and you add to that the current level of connectivity and how many of us now have smart phones. We also need to remember the importance of more basic mobile phones and cellular networks facilitating banking and doing business in the third world. In discussing smart phones, somebody raised the importance of good design, shifting these devices from expert and geek use, to mainstream and easy, so that now over 3/4 of the UK’s adult population has them and uses them day in day out for internet access, apps, access to social networks (and occasionally phone calls). We talked about Facebook and social networks. We talked about the way things have developed from last decade when social media and social networks were more like villages, to their current urban sprawl and focus on content marketing with all of the associated noise. Euan talked of his kids commenting on the nature of his online friends, but changing their view when they met them “for real” and face to face, maybe on a transatlantic holiday trip. We talked of the value of these social media friendships and networks that we create, although we also talked of the importance of face to face contact and the extra triggers and understanding you get from more conventional networking and meetings.
Adam Tinworth (@adders on Twitter) live blogged from the event and took some great photos, and he’ll be doing the same at our Enterprise Digital Summit London next month. Also in the run up to the Summit we plan to have another Meetup on 7 October – the atmosphere under the arches was so great, we will probably be back next month for the same style as this one.
Riding the Digital Enterprise Wave
Your business model is under threat from what we call the Digital Enterprise Wave. Are you going to ride it or go under?
Take a look at these slides and let me explain how the business landscape is changing. It’s driven by significant changes in infrastructure and things that we already know about. There are Global economic pressures where access to low wage costs in Asia, Eastern Europe, or South America are facilitating outsourcing and offshoring, all supported by the connectivity provided by the Internet, extended by the huge rise in Wi-Fi access, 3G and 4G so that we now live in an “always on” World. Those things have dramatically lowered the costs and barrier to entry for any business start-up idea. It’s fostering an explosion in entrepreneurship. It’s enabling crowd-sourcing of expertise from Wikipedia to Waze. It’s giving us a new generation of Millennials who have grown up digital so that they think differently, communicate and multi-task in ways that are changing the expectations of the (digital) workplace forever. These are the factors that underpin the ideas in Thomas L. Friedman’s The World is Flat, or that facilitate the access to niche markets behind Chris Anderson’s The Long Tail, or give us Clay Shirky’s Here Comes Everybody. These factors form the foundation of the wave.
Next we have the Big Shift. For the last 50 years Moore’s Law has driven change and innovation in technology. Every 5-10 years we’ve had a major technology disruption that has changed the way we do business, created new companies, and seen the demise of others. We moved from the mainframe to the minicomputer, and then to the advent of the IBM PC back in 1981. We’ve networked computers and created the era of client/server applications and then seen the start of the Internet, web 1.0 and the Dot-com boom and bust. Then things started to get interactive with Web 2.0. However, we’ve never had more than one technology disruption happening at once, until now. Now we have three major technology disruptions happening simultaneously, and that’s never happened before. The shift to the Cloud and web apps is happening at the same time as the shift to social media where all markets are conversations, and that’s happening at the same time as the shift to mobile – smart-phones and tablets mean that most of us are carrying around the Internet in our hands. That Big Shift is the next layer of the wave.
Then on top of that there are emerging technologies like the Internet of Things, Big Data & Analytics, Artificial Intelligence and 3D Printing. Each one of these has the potential for an even more profound effect on the World economy, the global supply chain and the way business works. Today’s marketplace has more demanding customers, faster changing technology and more competition than ever before, and the rate of change is getting faster. These emerging technologies form the top of the wave. Whatever business you are in your business model is under threat by a smarter, nimbler competitor who will be using technology to skip past you in to a new field of play.
The problem is that most companies are too focused on the day to day. They think business as usual. They have legacy business systems, with tired old style user interfaces – systems of record that keep score for the business. There is often a lack of integration. Where social media initiatives or communities have been started, using the new web tools, they slide over the top of existing systems rather than connect properly. They’re alternatives to email for communication instead of changing the game. They are point solutions or provide siloed information, when you need to think in a holistic way about the business. Business as usual will get swamped by the wave.
To ride the wave we need think differently. We need to think “digitally”. We need design thinking and business model innovation. We need to create systems of engagement which connect and engage with our customers and partners. We need to think in terms of using digital and social tools outside, but more importantly inside our businesses to create the connected digital workplace and a new way of working. Digital thinking will help you ride the wave, but it has to be applied to the whole business. We use the McKinsey 7 “S” framework to look at every aspect of the business – it doesn’t matter so much which framework and approach you use, as long as you think beyond just “putting lipstick on a pig” with a dash of digital and social sitting on top of your “business as usual”.
We’re now moving to an “Everything as a Service” World where companies like AirBnB are changing the hotel industry, Uber is changing the taxi business and Apple is about to change the card payment industry. As I said before, I don’t care who you are and what business you are in, your business model is under threat and you need to be using tools like the Business Model Canvas and the Value Proposition Canvas to rethink and refocus what it is that you do.
We are talking Digital Transformation – what is that?
You will have noticed that companies that have been talking social media in business, or enterprise 2.0 or social business have just started to talk digital instead. Social collaboration tools and platforms are an important component that you might use in your evolution or transformation to doing better business. By using the term digital we are highlighting that you need to think further than just adding social and mobile technologies on top of your legacy systems. You have to harness your existing technology, those systems of record, and make them work better. You have to think of using technology to help you go to market faster with new offerings and to reach your customers in new ways. You have to re-evaluate your business and your value proposition and stop thinking business as usual. You have to start thinking “digitally” for your business and an entire new generation of technologies as well as looking at the culture of the way your company communicates and interacts. You don’t have to change your company structure, but you do have to recognise that we now live in a networked World where every person in your organisation can be involved and engaged in the same way that they connect with brands in their personal lives. Smart companies can evolve a digital strategy. Business as usual will get left behind. If you are behind the curve like a Kodak or Blockbuster or even a Phones 4U, you have to think in terms of a more significant digital transformation. But going digital to survive is a given.
Sounds quite interesting, but why bother?
If this still sounds nice to have as an add-on rather than vital, the most important thing is that it works! Take a look at these survey results from Capgemini Consulting and MIT Sloan Management from their report “How digital leaders outperform their peers in every industry“. They split the surveyed organisations in to 4 categories, with the most digitally savvy being called the “Digirati”. Companies in that most advanced category generate 9% more revenue, create 26% more profit and have 12% higher market valuation than the rest. Going Digital makes a direct contribution to the bottom line.
This post was first published on diginomica.com as Riding the Digital Enterprise Wave
Why do we need a Manifesto?
We’ve been talking about applying social tools inside business since 2006 or before and we are no where near realising the potential for real social collaboration to make business more effective. We need a roadmap to set us on the right course, we need to think differently and to change culture. The Agile Elephant Manifesto encapsulates our blueprint for making Social Business work in thirteen theses. This post is the second in a sequence of 13 which explains each thesis in sequence.
Why Social Business?
We don’t mean the Professor Muhammad Yunus definition of a business which has a social rather than financial objective. We do mean a business adopting social tools and a different, more open and collaborative approach. We’ve been using terms like Web 2.0, Office 2.0, Collaboration, Knowledge Management, Enterprise 2.0, Social Enterprise or Social Business. Social Business is probably the best term currently, but the language is of minor importance compared to the real objective of changing business culture to add value.
2 of 13 – Business has become a social object
It’s our belief that although business has always been social, it is now becoming a social object and we need to foster and facilitate those networks to add both tangible and intangible value.
Business as a Social Object: Social networks are acting as platforms for individuals to coordinate all the activities businesses used to do. The collaborative economy is now making headlines. Companies like Airbnb and Uber which rely on trusted parties are completely bypassing traditional hierarchical capitalist business models. Airbnb has risen in 6 years from a concept (dreamt up by 2 people when they rented out their apartment floor for the night) to a social platform which will potentially become the world’s largest hotelier within the next year. We believe that many – even all – markets could become just nodes in this social mesh – business is becoming a social object.
World as a Social Market: Social networks will allow any capacity to find any demand. Transaction costs will be minimised between buyers, sellers and information holders as the cost of bringing buyer and seller together falls to insignificant numbers. Ronald Coase predicted this in the 1930’s. The size of the firm in the case of a supplier to Airbnb is nothing more than your spare room and an internet connection.
Trust and transparency: We foresee that trust and transparency will be maximized. Any business which tries to limit transparency and remain opaque or tries to create arbitrage where there is none will find it difficult to compete and maintain their strategic position.
Regulation: The social mesh will become part of the infrastructure – just like the Internet itself has become part of the infrastructure. Over time, this mesh will be regulated – infrastructures always do. Regulation will be complex and we need to ensure that the regulations introduced have society’s best interests at heart.
You control your network: The sheer scale of the mesh will be vast and we will need tools to navigate it. Some tools will come from the infrastructure but we imagine that some will come from yourself. Think VRM , the concept of tools being created for individuals to manage and control their own data, allowing access only to those to whom they give permission. We imagine that we could all own our own smart systems with data controlled by ourselves – like owning an electric appliance which you plug into the mesh. It could source the relevant data, barter the deal and present the options in order of importance, then automatically make all the necessary arrangements for you. The opportunity for profiteering in these transactions would be minimal.
Utopian dream?: May be. It would rely very much on total trust and could go very wrong in bad hands. Be prepared for the shadows.
“The Future is here, it’s just not evenly distributed” – William Gibson, 1993
You can find the full Manifesto here, and contact us if you want to find out more.
“Could business become nothing more than a social object, with individuals collaborating via social networks, doing what businesses used to do?”
I put out this idea last September at our Patchwork Elephant Conference about what the future could hold for Social Business. Our first conference was hosted 4 years ago when the term ‘Social Business’ hadn’t really been coined – how rapidly things can change.
With this in mind I talked about the possible future of social + business and how, if you take an idea that can seem totally unthinkable and unacceptable, it can become thinkable given the right ‘window’ of time. This is based on the Overton Window theory that there is a narrow ‘window’ when a range of ideas will be accepted by the public. If you take a ‘way out there’ idea which appears completely unthinkable, then push it as far as you possibly can then sometimes, given the right ‘window’, that idea eventually becomes thinkable and acceptable.
Here are 2 concepts which could be possible in 40 years time. They may seem pretty unthinkable – but can they become truly thinkable if pushed to their extremes?
“What if businesses became nothing more than a social object – that’s to say that social networks would be used simply to coordinate all activities that businesses used to do?”
“Nanotechnology will destroy the present social and economic system – because it will become pointless” (James Burke on Radio 4 PM, August 2013)
James Burke was a famous BBC reporter on Tomorrow’s World in the 1970’s and chief presenter for the BBC’s coverage of the first moon landing in 1969. In 1973 he was asked to predict what life would be like in 20 years time – that’s 1993. Back in 1973 the only computers around filled floors and there were very few. There was no internet, no email, no mobile phones.
He predicted that:
There were in fact 146 million computers by 2000 so his timescales were a bit inaccurate but he did well. Yet in 1973 most people viewed these predictions as totally unthinkable.
So when Burke last year suggested on Radio 4 PM that in 40 years time “Nanotechnology will destroy the present social and economic system – because it will become pointless” this may sound unthinkable, but it’s probably worth thinking about…
Burke believes that it may be possible that in 40 years time we could all own personal nanofactories which could reproduce stuff on a molecular level. It should be possible to make virtually anything – for virtually nothing. All we would need, he says, is air, water, dirt, and acetylene gas (for carbon) and we could manufacture virtually everything – from gold, food, our utilities or even a house.
We could, he suggests, become entirely autonomous!
This does sound really unthinkable – but perhaps this isn’t quite so far out there as it sounds. Take the current trends of everything becoming smaller, cheaper and networked – like 3d printing and the internet of things and push this out over 40 years… Machines are already working at the molecular level – the University of Manchester has recently built one which they’re planning to modify to build penicillin.
The Endgame: Radical Abundance
So what’s the endgame with all this? Radical Abundance! The latest new new thing that’s just about to hit us and is being pushed not just by Burke but by others like Eric Drexler too.
So assuming that we could produce everything we needed, what could this mean for business? Here’s a possible snapshot:
Is this all becoming thinkable to you yet? Or at least more thinkable than before you started reading?
So let’s now return to my original concept:
“Could business become a social object with social networks acting as platforms for individuals to coordinate all the activities businesses used to do?”
Following on from Burke’s predictions perhaps now this idea doesn’t seem so far fetched. We only have to look at the current and quite sudden rise of the collaborative economy (another term which wasn’t really known 4 years ago) to see how companies in this space such as Airbnb and Uber are seriously challenging traditional business models.
Here are the beginnings of business models being redefined with individuals collaborating via social networks and relying on trusted parties, bypassing traditional hierarchical capitalist models. Platforms are being used by crowds to do what businesses used to do.
“The Future is here, it’s just not evenly distributed yet”
William Gibson‘s “The future is here, it’s just not evenly distributed yet” now springs to mind. Let’s take the social platform Airbnb to illustrate what we mean. Founded in 2008 by Brian Chesky and his roommate when they charged visitiors to sleep on their apartment floor, Airbnb has risen within 6 years to arrange 10m stays in 550 000 rooms in 34,000 cities and is likely to become the world’s largest hotelier within the next year.
As the collaborative economy expands, it’s clear that it will impact various markets, potentially reshaping them as integral parts of the social networks we engage with daily. Social networks are poised to streamline the way capacity meets demand, across the spectrum. Functions once novel, like Airbnb, Uber, and Lyft, are now foundational, much like how AOL was once a gateway to the web experience, which has since become part of our ubiquitous digital infrastructure. Similarly, online markets are evolving, with rating services becoming essential. Top rated property brands, along with other businesses, may find it inevitable to integrate as nodes within this sprawling social mesh—becoming, in essence, social objects that are inherently connected through user interactions and reputations.
The World as a Social Market
Trust and transparency will be maximised, transaction costs will be minimised. The whole trend of these social infrastructures is to drop transaction costs between buyers, sellers and information holders so the cost of bringing buyer and seller together will fall to insignificant numbers. Ronald Coase predicted this in the 1930’s. He foresaw that the inevitable outcome is that whenever possible the size of the firm will be reduced to a minimum size rather than keep all the extra functions it needs today like finance and sales etc. The size of the firm in the case of a supplier to Airbnb is nothing more than your spare room and an internet connection. Ebay was a forerunner to this – but it’s becoming clearer that eventually all the world will become a social market. Any business which tries to limit transparency and remain opaque or is trying to create arbitrage where there is none will find it difficult to compete and maintain their strategic position.
Over time, this mesh will become regulated – infrastructures always do. Electricity, water, telephony all ended up as part of the utility infrastructure and this will be no different. The main problem for the individual will be the sheer scale of the mesh – we will need tools to navigate it. Some tools will come from the infrastructure itself but we imagine that some tools will come from yourself. This ties in closely with the VRM concept of tools being created for individuals to manage and control their own data, allowing access only to those to whom they give permission. We could imagine us all owning our own smart systems with data controlled by ourselves – a bit like owning an electric appliance which you plug into the mesh – that could source the relevant data, barter the deal and present the options in order of importance, then automatically make all the necessary arrangements for you. The opportunity for profiteering in these transactions would be minimal – regulation would be complex.
Yet this is a utopian view of the world. It would rely very much on total trust and could go very wrong in bad hands. In my next post we’ll look more deeply into the shadows of a potential future for Business as a Social Object.