Enterprise 2.0 will be as big a deal for corporate performance and productivity. I believe this because I believe that the informal organization is as important as the formal one for getting work done and that we have historically had lousy technologies for supporting the work of the informal organization (especially outside our immediate circle of strong ties). With the arrival of ESSPs, the tools available to the informal/emergent organization have gone from lousy to excellent, just like commercial enterprise systems advanced the formal organization's toolkit from lousy to excellent.Linking this to the context of corporate performance and productivity, this brings me to the chapter on leadership and culture I read in my newly acquired The 80 Minute MBA . I needn't repeat the mantra that corporate culture is driving corporate performance but how does Enterprise 2.0 fit into the equation of the intangible assets of an organization. These non-monetary assets i.e. Information Capital, Human Capital and Organization Capital are now to be complemented with a fourth category namely Social Capital.
Social Capital stands for the strength of relationships and networks in the firm. According to our authors, this social capital is a key determinant of productivity. Frost and Sullivan already found that collaborative activities typically consume 70-80% of an information worker’s time. The relative gain of improving the performance of those activities is significantly higher than improving the performance of individual activities. Or as Aristotle would put it: "The whole is greater than the sum of the parts"... which is wholly supported by some more field research. In their study Meetings around the world: the impact of collaboration on Business Performance (Gofus et. al., 2006) the authors already found that collaboration counts for 36% of overall business performance.
By leveraging the firm's internal network and social relationships, highly valued expertise, knowledge and intelligence become explicit. Combining this with a culture of autonomy, solidarity and energy, and you can start to imagine how this builds the momentum for the informal organization. But improved productivity is only one of the trade-off effects of Enterprise 2.0. Companies with an open and collaborative culture also see a positive impact on customer satisfaction: The same study by Gofus et. al. confirms that collaboration accounts for a whopping 41% of the forces driving customer satisfaction and in turn can become a catalyst for growth.
So how come Enterprise 2.0 still ranks so low on the corporate agenda? Are CEOs too concerned with reducing costs? Are they still looking for the next silver bullet to boost customer sales? Or is it just a matter of lack in understanding and failing to see how new enterprise technologies can enable their business strategies? We all know it is hard to demonstrate the ROI on Enterprise 2.0, that there is a lot of confusion around the business value of social networking and that (change) communication remains the weakest link in strategy execution. And even if they are in tune with the new technology imperatives - they might still claim that "the organization's culture is not ready for it" but then again, it is you - Mr. CEO - who should lead the way. Do you feel it tingling now?