New Tools, New Patterns, New Thoughts: the Great Dialogue

Part 4 of More than just eCoal, eSteam and ePower: The Modernizing Dynamics of Change

The growth of the Internet has allowed individuals and businesses easy access to vast amounts of data and information. In an age where customers and suppliers have a more accurate understanding of their purchasing and vending values a business model needs to yield value propositions that are compelling to customers, achieves advantageous cost and risk structures and enables significant value.

Production, enterprise, consumption and economic growth operates in virtuous loops, with each socio-technological cycle advancing this trend. Understanding why social business is important today requires understanding the tools and their functions. However, it is nothing without new and improved ideas, value sets and priorities to govern more efficient and effective organisational behaviour.

Similar to how technology and tools often emerge where economic need or opportunity is greatest, there is often a complimenting widening and expansion of the possibilities and applications regarding how societies and organisations conduct themselves. This is reinforced by the clustering nature of human nature, with areas experiencing technological and process advancements, golden ages even. Especially if wider discourse provides intellectual scale. Examining the greats of political economy this correlation becomes clearer.

Returning to the Industrial Age, The Scottish Enlightenment of the 18th Century provided an outpouring of intellectual and scientific accomplishments. Building on the nascent ideas of utilitarianism sparked by Thomas Hobbes mechanistic view of human beings and passions, in 1776 Adam Smith published The Wealth of Nations, crystallizing how the industrial revolution would irrevocably transform processes and actions. Such was the shift in thought, Smith was describing emerging functions prior to terms like economics or capitalism being in use, where the term corporation carried a regulating terminology and significantly whilst Europe was still dominated by feudalism. Although this impact clusters, two key Smith quotes highlight accelerating socio-technological dynamics, which still dominate executives’ thoughts regarding business models and strategy:

• “The greatest improvement in the productive powers of labour, and the greatest part of skill, dexterity, and judgment with which it is any where directed, or applied, seem to have been the effects of the division of labour.”¹
• “The establishment of any new manufacture, of any new branch of commerce, or any new practice in agriculture, is always a speculation, from which the projector promises himself extraordinary profits. These profits sometimes are very great, and sometimes, more frequently, perhaps, they are quite otherwise; but in general they bear no regular proportion to those of other older trades in the neighbourhood. If the project succeeds, they are commonly at first very high. When the trade or practice becomes thoroughly established and well known, the competition reduces them to the level of other trades.”²

Just like technology and process splintering into numerous strategies, 20th century analysis has evolved to become more specialised, both towards business, department and workflow areas. Porter argued that profitability in any industry is determined by five forces, including competition among existing players, the threat of new entrants, the power of supplier, the power of customers and the availability of substitute products. A company’s success was not determined by quality, innovation or products but by the logic of its strategy. At the same time organisations are faced with a groundswell of new improvements that raise not only their capacities but also rivals given the reducing time distance between a new innovation being used by earlier adopters and more successful/favoured tools becoming commonplace.Considering Smith’s second quote, it intriguing considering whether Nicholas Carr was blind to this quote when he penned his infamous essay Does IT Matter³, which proposed the decline of competitive advantage that IT provides organisations.

In terms of what is taking place with the massive explosion in volume and interconnectivity of desktop, laptop and mobile communications, organisations are unable to escape these economic laws. Just as the economic moved away as a norm from artisan modes of production and more generalist statuses of professionals to deal with local restrictions of their creation and distribution of activity, we should similarly expect a greater distinction between those who are generalists (who will be in decline as communications volumes increase in scale) and a growing body of actors performing specialised functions (to reflect the productive gains that understanding a craft, complementing it with at hand specialist tools and with a localised understanding of value networks).

For Brad Power, managers must speed the flow of information so that decisions can be made faster at all levels, from top to bottom:

For example, the executive team of Think Finance, a developer of financial products and one of the nation’s fastest-growing private companies, gets together every day to review performance. CEO Ken Rees wrote to me that, “in an environment that’s changing as quickly as ours, there are so many things to be worried about. The daily huddles and daily executive team review of the dashboards help us make sure we are raising and resolving any issues quickly while giving me comfort that everything is going smoothly and that I don’t need to intervene. There are a host of other things that we do with the goal of breaking down hierarchy and improving communication (both up and down) to start to get people used to constant change as a standard practice rather than an upsetting occurrence.”

This would appear to highlight a significant internal organisation social trend that middle managers may be an area of reduced ROI in workplaces in the future. It will be curious to see how such a trend creates differing impacts on already hierarchical and egalitarian framed organisations.

For department roles, aspects that were a source of effort will be replaced by automation. For example, analytics will remove a lot of guesswork and more strategy in marketing. By rewarding curiosity, building confidence, and ensuring accountability, analytics encourages innovation and makes a marketing program more creative and powerful.

If you consider these two traits in terms of the mass volumes, either within countries or between them for both physical and digital goods it increases the risk of failure for organisations irrespective of static successes for business models and/or strategies. Globalisation as a process for creating common worldwide and free market trading conditions represents one of the key features of modern enterprises. New global trading opportunities help drive surges in business model innovation. Today traditional balances between customers and suppliers have altered, following new informational, physical, digital, communal and psychological patterns and lower cost provision of information and customer solutions. Correspondingly business models have recalibrated significantly, with strategy taking new forms to deal with more complex parameters.

A fundamental aspect of these technologies is that it is no longer just the direct stakeholders who have access to significant amounts of data and knowledge, social technologies a democratising. For example, not only did the Democratic and Republican parties invest time and resources in pulling together and analysis data, anybody could with free tools. For businesses, irrespective of motivation, reason or logic certain individuals and groups may very conceivably know more about core or critical aspects of the organisation than its front line staff, managers or executives. For industries where customer relations are important or where feedback could become important there increasingly need to be policies put in place to cover not only specific affairs but provide rules of thumb for unknowns. Potentially worse, the accessibility of technology and app development means that even hobbyists can reverse engineer your processes to provide tools that may undermine your competitive advantage, turning a lost opportunity into a threat. Perhaps this i why Gartner are expecting the biggest Big Data investments to be social network analysis and content analytics, with 45% of new spending each year.

—————

1An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith, 1776, Book I, Chapter I, pg.7

2An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith, 1776, Book I, Chapter X, Part I, pg.136

3IT Doesn’t Matter – Nicholas Carr – Harvard Business School – 2003

————–

More than just eCoal, eSteam and ePower: The Modernizing Dynamics of Change also includes:

1. Introduction
2. Economic requirements: Catalyst for Invention, Innovation and Progress
3. Not Just Invention: Change Through The Desire to Innovate, Re-imagine and Expand
4. New Tools, New Patterns, New Thoughts: the Great Dialogue

————–

Other sections of Dialogue, Governance and Reform in the Web 2.0 Age series includes:

• Nobody Will Notice The Slow Death of Dissmeination, They Will Be Too Busy Listening
• The frictions of competition and cooperation to strategic thinking;
• The Hot and Cold Wars: Relationships and conflicts between big and small, propriety and open source.

————————–

Other blog posts in the Order From Chaos miniseries include:

1. Order From Chaos: Performance Management and Social Media Analytics in the Age of Big Data;
2. Abstraction, Perspective and Complexity: Social Media’s Canon of Proportions;
3. Logic, Computation and (f*(k?) Meming: On2logi+k,ing;
4. Transposition, Catalysts and Synthesis: Playing with iMacwells eDemon.

—————————

If you have any suggestions, relevant links or questions to add flavour to this series then please join the dialogue below or contact me via Twitter:

• social_informed, covering wiser social business themes;
• metr1c1de, covering benchmarking;
• secureitie, covering security;
• datam1n1ng, covering data and statistics;
• managechangeit, covering management, change and IT.