Technology and Organizations

Dan and Chip Heath, authors of Made to Stick, have a new book “to help you change things,” Switch. They build off University of Virginia psychologist Jonathan Haidt’s The Happiness Hypothesis with an analogy based on an elephant (our emotional side) and the elephant’s rider (our rational side). The rider on top tries to direct the elephant, but a 6-ton elephant can go wherever it wants. People may rationally want to change, but their emotions, habits, and instincts may have control. They’ve filled the book with clear examples (that stick!) and extend the elephant/rider analogy to note that while we can direct the rider and motivate the elephant, we also need to “shape the path” the rider and elephant follow by adjusting situations to provide clarity around the change. This acknowledgment of the need to manage all three factors at once is a demonstration of their systems savvy — their ability to weave together three separate strands to create a stronger and more effective outcome.

I generally talk about systems savvy in terms of technology tools, organization practice, and basic human attributes. Systems savvy is the vision to acknowledge options across each of a situation’s technology, organization, and people — and the wisdom to weave them together into new and powerful outcomes. Switch doesn’t speak to the general capability of systems savvy in these terms, but the Heath brothers provide us with many examples of people who are successful at influencing change because they have found a way to do this essential weaving. They provide us with a deeper understanding of how change is perceived and the related human motivations.

We’re building a powerful library: Switch helps us understand the people strand while the previously reviewed IT Savvy ties together technology and organizational practice. Do you have other suggestions for systems savvy reading?

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This is a continued response to my infrastructure audit: What activities does an innovation infrastructure for open innovation need to support? My prior short answer was that “innovation infrastructure must keep the project’s top goals… top of mind…” Here I provide the promised longer answer and point to both team and organizational activities. For the organizational activities, I focus on the new book, Robert’s Rules of Innovation.

Team Activities:

Gibson and Gibbs give us a summary of the innovation activities needed by innovation teams. They note:

The ability of teams to innovate depends on how well they generate, import, share, interpret, and apply technological and market knowledge, particularly of local markets, economies, and customers. That knowledge is a combination of information, experience, context, interpretation, and reflection (Davenport, De Long, and Beers, 1998). It must be openly shared across contexts through relationships and networks, and there must be confidence in the value of that knowledge for achieving the objectives of the collaboration (Kanter, 1988). Once these requirements have been met, innovation involves dissemination and application of the knowledge, including combining and integrating it to develop novel insights, solutions, processes, or products (Obstfeld, 2005).

Applying the above to an innovation infrastructure suggests that we need to apply systems savvy and weave together the technology, organizational practice, and human motivations. We need systems that allow for the wide part of the innovation funnel: a wide and diverse set of information ideas. At the same time, we need systems that then allow the innovation project to be effectively and efficiently managed. I suspect that a project dashboard (next post) that shows both current project status and has a variety of news and discussion streams is one way to both keep project goals in mind and support the wider ideation activities.

Organizational Activities:

Robert Brands (with Martin Kleinman) recently released Robert’s Rules of Innovation: A 10-Step Program for Corporate Survival. I’ve been following Robert (here and here) for a while. Now I have a one-stop opportunity for his insights. Speaking at the organization level (with specifics also related to teams), he notes the following as “the imperatives to deliver profitable growth through innovation”:

Robert’s Rules of Innovation helps you develop both energy and structure around organizational innovation activities. The presentation provides a broad set of examples: from how to create an innovation culture to a clear discussion of intellectual property issues. I was especially happy to see a discussion around the evidenced based management of innovation:

Observation, measurement, and tracking of NPD results are essential to optimal ROI. Create your baselines first, with initial observations and measurements. Then capture the time to each gate, the time spent inside each gate, and so on. (p. 36)

Building on the idea of a dashboard within our innovation infrastructure, we need ways to track our experiments. Brands asks, “Do you have a set of metrics to serve as an innovation dashboard and track your innovation activities?” (p. 43). These metrics may be general (applicable to all innovation efforts — participate in the Innovation Coach survey here), or they may be specific to the particular effort. We also have to be aware that how we expect an innovation to play out may not be what happens in the wild — thus our observations need to be openended.

Have you had success, or even surprise, in tracking an innovation? What did you do that put you in a position for effective tracking? Do you know of any summaries of surprising innovation outcomes? Comments and links appreciated below.

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Andrew McAfee defines Enterprise 2.0 as “the use of emergent social software platforms within companies, or between companies and their partners or customers.”

Piazzza provides E2.0 for interaction between fellow students and faculty. Interaction and emergence are at the heart of modern business, and ideally, modern teaching. I have used a threaded discussion approach for “course questions and comments” since 2000. Since 2001 I have been adamant that email is for health and personal grading issues only (for more on my thoughts on email, please see Kill Email). Questions and comments should be made where all can see, provide support, and gain value. My approach is an application of transparency for learning. Piazzza takes a big E2.0 step forward from a threaded-discussion list by being responsive to student needs and taking emergence to the next level.

Pooja Nath (ex-Facebook developer, current Stanford Graduate School of Business student) approached me this Summer about being a beta site for Piazzza. Immediately I could see the value Piazzza provides to the students both from its base design and via the control it provides the students in terms of how they each individually experience the tool and the contributed information.

In the threaded discussion approach (old form), students had one level of control — they could either subscribe to the posts, or not. No option for digests. No option to only follow a particular thread. The result could be 20+ fragmented emails, and then a search through the website to find the full stream. Even the full streams were disorganized as students didn’t always follow best practice in terms of sticking to a thread’s topic. This was a nightmare and drove some students to ignore the material, which likely cost them some points and connections to useful information.

Piazzza realizes that not all questions/discussion have the same value to each student. Piazzza allows students to make the subscription choice — but at a more granular level. Once you’ve opted in, you see just the initial question/comment via email. At that point you get to choose whether or not to “bookmark” the question/comment. Only if bookmarked do you receive notification of the rest of the stream. (Piazzza.com is always available to see/search the full set of comments/questions.)

All of us must be systems designers to be effective in our current environment. We must make our own choices about how to weave together technology, organization, and people dimensions of our work. I feel that Piazzza is giving my students greater opportunity to make the best design decisions for themselves. Neither the technology or our practices are silver bullets and Piazzza allows us to use the technology to design practice at the class level (how we promote particular uses in class) and at the level of the individual (how individuals choose to interact with the material). We are integrating the technology and the practice.

Designed by a student, for students. Clean interface. Anonymity when needed, credit for providing answers to question. Engagement through tracking speed to answer. Ability to give thanks for answers. I’m a fan and the feedback from the students is that they are fans as well. We are still working on the organization/people intersection (anonymity means that not all the questions are well considered; students forget to search to see if the answer is already available).

The students are also quick to add suggestions around the technical feature set — recall that we are beta testers. For example, they wanted, and received, more control over the email flow and the ability to answer a question anonymously (I’m not sure how I feel about that — but so far so good). They also wanted, and received, greater clarity around new items.

Pooja and her team are right on the mark with their product. They ask for feedback, follow the use patterns, and are quick to make improvements. I’m looking forward to using Piazzza in all my classes!

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Chris Anderson (Editor-in-Chief of Wired Magazine) presents a spectacular cover story on “The New Industrial Revolution.” The teaser reads:

The factory, the investors, the workers — obsolete. In the age of DIY manufacturing, all you need is a garage and a great idea.

He opens with an example of a crowdsourced car:

Local Motors will officially release the Rally Fighter, a $50,000 off-road (but street-legal) racer. The design was crowdsourced, as was the selection of mostly off-the-shelf components, and the final assembly will be done by the customers themselves in local assembly centers as part of a “build experience.” Several more designs are in the pipeline, and the company says it can take a new vehicle from sketch to market in 18 months, about the time it takes Detroit to change the specs on some door trim. Each design is released under a share-friendly Creative Commons license, and customers are encouraged to enhance the designs and produce their own components that they can sell to their peers.

The Rally Fighter is a great example and raises the possibility of crowdsourcing for complicated systems. …but then the article goes into overdrive:

Here’s the history of two decades in one sentence: If the past 10 years have been about discovering post-institutional social models on the Web, then the next 10 years will be about applying them to the real world.

This story is about the next 10 years.

Transformative change happens when industries democratize, when they’re ripped from the sole domain of companies, governments, and other institutions and handed over to regular folks. The Internet democratized publishing, broadcasting, and communications, and the consequence was a massive increase in the range of both participation and participants in everything digital — the long tail of bits.

The article is part economics lesson, part how-to. Chris includes his own story, describing the founding of DIY Drones, a community site focused on amateur Unmanned Aerial Vehicles (UAVs). Within the community, he met like-minded and skilled collaborators and now markets autopilots and other related products. He includes great detail throughout, including tools and production outsourcing links.

Wired Sidebar

We need to get our minds around the possibilities of this new industrial revolution. Chris Anderson and others have focused on D-I-Y (Do It Yourself), but I think it’s more than that. I see this new approach as D-I-O (Do It Ourselves). Each of his examples highlights the value of collaboration. These are not stories of lone inventors (except for his description of professor Bob Kearns’ invention of intermittent windshield wipers — but he apparently goes mad — so much for the lone inventor…).

My own interests are around how to support DIO organization through my teaching and research. In an earlier post, I claimed that “Recruiting, Knowledge, Evaluation, Tools, and Market seem to be five foundational ways Web 2.0 supports innovation.” Now I realize that DIO is more than about just innovation. DIO seems to be providing the foundations for what Anderson calls small batch entrepreneurship (with credit to blogger Jason Kottke). A new industrial revolution. I look forward to your comments as I think out loud.

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For a different take on the value of crowdsourcing, please see Sarah Cove’s (for Wired News) Interview of Douglas Rushkoff What Does Crowdsourcing Really Mean.

Soon: A review of Cory Doctorow’s Makers (free download):

Perry and Lester invent things—seashell robots that make toast, Boogie Woogie Elmo dolls that drive cars. They also invent entirely new economic systems, like the “New Work,” a New Deal for the technological era. Barefoot bankers cross the nation, microinvesting in high-tech communal mini-startups like Perry and Lester’s. Together, they transform the country, and Andrea Fleeks, a journo-turned-blogger, is there to document it.

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I’ve known Peter Weill, co-author of IT Savvy: What Top Executives Must Know to go from Pain to Gain, since our days on the faculty at the Melbourne Business School. I was a visitor during my summers, while Peter and his colleague Marianne Broadbent were full-timers and doing the top research focused on IT business value. Peter is now Chairman of the Center for Information Research at MIT. (I hope to follow up with Marianne soon!)

Of course the title of Weill & Ross’ new book, IT Savvy, jumped out at me given my colleagues’ and my work on Systems Savvy. I find IT Savvy to be a beautiful, more organizational-level, companion to Systems Savvy.

Systems Savvy: The human capability to grasp the possible functions of technology tools and organizational practices and how these might be meshed to best effect. People with SysSavvy understand that technologies and practices are intertwined and they know how to make design adjustments to both the technology and the practice to effectively weave them together. We see SysSavvy as distinct from expertise, but more on that when our data are in…. Systems Savvy is critical to the ability to practice TOP Management.

IT Savvy: “…a characteristic of firms and their managers reflected in the ability to use IT to consistently elevate firm performance. Like savoir faire, IT savvy looks effortless from the outside. But IT-savvy firms distinguish themselves from others by building and using a platform of digitized processes” (p. 23).

My reading of this is that IT Savvy firms have managers who themselves have Systems Savvy. While Systems Savvy can be used beyond strategic information technology — when focused on the strategic issues described by Weill & Ross, the benefits to the organization are clear.

Weill and Ross note that IT Savvy is a rarity:

IT-savvy firms are not necessarily high-tech firms. In our research we have encountered only a small number of IT-savvy firms. Without exception, these firms use IT to “wire in” core transactions, and they use the data from their core transactions to inform decision making. Our list of IT-savvy firms includes highly successful new-age e-businesses such as Amazon, eBay, and Google. But long-established brick-and-mortar firms can also become IT savvy. Take, for example, 7-Eleven Japan, United Parcel Service, and Procter & Gamble (p.24).

Though rare, IT Savvy matters:

Our research found that firms that are above average on both IT savvy and IT spending have margins 20 percent higher than industry average. In contrast, firms with less than average spending and savvy have margins 32 percent lower than their industry (p.121)

What does it take to become IT Savvy? A business transformation that includes:

• Fixing what’s broken about IT – broken accountability and decision making
• Building a digitized platform – a base that provides stable core operations
• Exploiting the platform for profitable growth – leading change and driving value from this new asset

IT Savvy is full of clear examples (many based on their own research) and steps to take. Weill & Ross provide an assessment tool and the ability to compare your own firm with others. I found myself drawn in by their ability to answer questions I’ve had for a while. For example, In February 2008 I wrote a post about Southwest Airlines’, then new, boarding process. I was impressed with the success of Southwest’s complex implementation of the required technology, organization, and people components (showing TOP Management) and noted, “I’d also love to hear how Southwest came to manage the process in the way they did. Do they have this social and technical focus for all of their changes?” IT Savvy gives me the answer: Yes, they do!

The top thirty leaders of the company each sit on two or more strategy teams so they can inform their colleagues of services and needs within their own functional area while learning about the operations of other functional areas. The teams propose enterprise IT projects, which are reviewed by the firm’s executive committee in establishing project priorities. Around 80 percent of Southwest’s technology projects are aligned with one of the strategy teams. pp. 87-89.

I used McAfee’s Enterprise 2.0 book in my Organizational Design course this term. I think IT Savvy is the perfect next step (rubber meeting the road) for those students who continue on to my Managing Technology & Innovation course. My highest praise: IT Savvy was the first professional book to make it to my B&N Nook.

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