Category: Four pillars

I’ve been wanting to write this post for some months now, ever since I gave a talk on gamification in the enterprise in New York sometime in June. You can see the video of the talk here.

Yet I didn’t write it. Because I didn’t particularly want to add to the hype, or for that matter participate in the heightened and emotional debate surrounding the use of the term. In fact, a few days before the talk, I was seriously considering not giving it (or at least mutating it) as a result of all the hype around the term, and the risks that such hype could cause serious, lasting damage.

And then things got worse.

I was on my way to Foo Camp, and, via Twitter, learnt that someone I had a lot of time for, Kathy Sierra, had broken her self-imposed silence, and written something via the blog of another good friend, Hugh MacLeod. She’d chosen to write on the very subject I was wrestling with, the over-use of the term “gamification”, and the serious risks it entailed. Do read what she has to say, it’s important.

So as I got to Sebastopol, I was more than just concerned.

And then serendipity intervened, in the form of Tim and Sara and the sorcery they perform to make Foo Camp such an unusual and compelling event. I got out of the car, registered, wandered towards the nearest tent. And bumped into Kathy.

I had the opportunity to spend some decent one-to-one time with her on the subject, and she was very supportive of the line I wanted to take; she’d also put the discussion up as a potential agenda item at the camp, and I went along to that session as well. And so by the time I left there, my fears were allayed, I had a sense of peace that what I wanted to talk about was worth talking about.

The talk I gave in New York received quite a bit of coverage on Twitter and in the blogosphere, so much so that my instincts reverted to staying quiet. Even though I wanted to share what I felt on the subject more broadly. And stay quiet I did.

Until now. Not because I’ve changed my mind about this. But because I’m due to fly out to Japan in a week’s time, and it appears that quite a few of the people I’m intending to see want to hear from me about gamification in the enterprise.

Now normally I try not to use Powerpoint or other slideware; I prefer to talk freely and without notes. Occasionally, I convince myself that the audience could do with some signalling, roadmaps and aides-memoire; in such cases I tend to use pictures rather than words, or single words and phrases.

There are times I deviate from this rule, and provide the audience with words to follow what I’m saying. This usually happens when the event is in a country where English is not the mother tongue, and especially where the Roman alphabet is not in use. In such cases, I try and provide the organisers with a script that can be translated into the local language.

Which, in some form or shape, is what I’m doing here. Writing that script. Sharing what I think about the enterprise and gamification. As succinctly as I can.

The enterprise and gamification: Some thoughts

Why? And why now?

Work is changing. As we’ve shifted from the agricultural and industrial economies to knowledge-based economies, what we do has changed. The tools and processes of those ages are no longer fit for purpose. Knowledge work is inherently lumpy and unpredictable and “non-linear”. The sequential, repeatable processes of past paradigms are less and less effective in today’s workplace: too often, we spend time exception-handling as the squarenesses of the pegs that come our way, stoutly and solidly resist our ability to place them in the roundnesses of the process holes we built to receive them.

Firms are changing; the purpose of a firm is to reduce transaction costs, and vertical integration is no longer the best way to achieve this. Partnering, alliances and outsourcing are ways that the boundaries of the firm are altering, and multidisciplinary teamwork, both within as well as beyond the firm, has become an imperative.

Organisations are changing; firms “organised” in order to reduce transaction costs in doing four things: setting priorities, allocating resources, dealing with conflict and monitoring progress. So for time immemorial we’ve had hierarchies of product and customer along with “overheads”. Hierarchical structures were the most efficient way of getting things done: deciding what’s to be done, allocating the tasks to people, giving them the resources needed, sending and receiving the “orders”, aggregating news of progress, dealing with the “conflict” of change, monitoring progress, intervening as required. This is not the same for knowledge workers; often, such decisions are better taken by domain experts closer to the “coalface”. Overall vision and strategy still tend to get set by leaders and leadership teams, but these are leaders, not managers, with the responsibility to do just that: lead.

The technology is changing: now, with ubiquitously connected smart devices, people are able to share information with each other more quickly and more effectively, making the decision process easier. The prevalence of activity streams in many of the social networks has had the effect of making information more “real-time” and often more “actionable”, once the appropriate levels of filter have been designed in.

Customers are changing, they’re more participative, more demanding, more active. They have greater power, both personal as well as social. They spend more time in social networks than in traditional media, using mobile smart devices; they’re more likely to be digital residents rather than digital visitors. And they communicate via the social networks rather than via email.

Business, however, has not changed. As Peter Drucker memorably said, the purpose of business is to create customers.

So that’s the why and the why now.

New problems need new solutions

As a result of these trends, there are new demands on the enterprise. Knowledge workers need smarter ways to discover what needs to be done, the context in which to do it, the tools available, past learning. They need smarter ways to discover potential team members, people with the right mix of skills to carry out the tasks. They need better dashboards to tell them about their operating environment, external and internal stimuli and feedback loops. They need more effective ways to train for all this, to learn the patterns rather than the processes, so that they can apply their personal and collective intelligence to solve the problems they face.

An environment where nonlinearity is pretty much a fundamental design pattern. Lateral, often bottom-up, task and team selection. Sandboxes to train in. Quick, effective ways to understand skill and mastery levels in oneself and in teammates. Dashboards that simplify discovery of the environment and operating conditions. Easy-to-understand, visible feedback loops.

Any of this ring a bell?

That’s why learning from video games is important, because the designer of video games began to solve many of these problems well before the people who design enterprise software.

That’s why badges are important, so that the discovery of mastery and skill is simplified. Where that mastery is earned formally, the badge is earned. Where that mastery is self-asserted, the badge can only be earned through peer endorsement. Doctors and surgeons use badges on their walls, called diplomas, to declare their earned mastery. Qualified first-aiders wear the badge of armband or jacket while at work, to ease recognition and access.

That’s why dashboards are important, so that plans and routes can be adapted to changing information. And in today’s world those changes are getting more and more rapid and confusing, so the right filters and visualisation techniques help. People search for things in order to do things, as Esther Dyson said.

That’s why points and completion bars are important, part of the way progress (or lack of it) can be visualised and assimilated, so that action can be taken.

Much of this is not new to the workplace; what is new is the bottom-up everyone-empowered state of the worker, what is new is the non-linearity and lumpiness of knowledge work. So we need tools that are fit for purpose. And the gaming industry appears to have some.

For some sections of the workforce, leaderboards can inform, motivate, even excite. But this has to be done with care, given the depth and quality of research available that suggests the negative, often destructive, impact of extrinsic rewards. Leaderboards must therefore be something we take great care in designing and deploying in the workplace. [The possibility that they may be used in environments like education and healthcare is extremely concerning because of the research.]

Even newer classes of problem will need even newer approaches

It is possible, even likely, that gaming techniques can be used to solve problems that appear insoluble using traditional techniques. Over time, we will find that enterprises use formal and scientific game theory and “gaming” techniques to deal with complex business issues. ranging from auction bidding to protein structure analysis. A recent article in the Economist dealt with some of this. And, more recently, we learnt about this collective-intelligence-meets-gaming success in solving protein structure problems.

Conclusion

The changes taking place in the nature of work and of the enterprise need to be reflected in the tools we build for the enterprise. Game designers, particularly video game designers, have been solving some of the problems the enterprise faces. It makes sense to look at the tools and techniques they use.

When I speak of the enterprise and gamification, that’s what I mean.

…. And it’s only the giving/that makes you/what you are

Jethro Tull, Wond’ring Aloud (Ian Anderson). From the album Aqualung

[Note: this is a continuation from my post a couple of days ago, linked to here. I began that post with the first line of the song, it is only fitting that I begin this one with the last. I’ve heard many theories as to what the song means, and whether I can even talk about the likely meaning before the watershed. I happen to like the song, the music, the melody, everything about it, rather than just concentrating on the debate about the meaning of the lyrics].

Before I launch into the post…. in the unlikely event you’re a Tull fan, go take a look at their official web site. Listen to their internet radio. Follow them on Twitter. And, if you’re like me, get tickets to see them on tour!

And now for something completely different. Oh yes, the post. Thinking about stacks and ecosystems and architectures and complexity. You’ve been a wonderful community, you’ve RTed the post, linked to it, commented on it, and the comments have given me some really rich material to digest and consider. I really appreciate it. It’s what blogging was invented for, the ability to share what Doc Searls called “provisional thoughts”, nascent, inchoate. To have those thoughts shared, commented on by peers and superiors, letting me learn. And letting me share that learning so that others may do the same. Thank you.

In like vein I want to take the debate further. Bring in two further streams of investigation, and broaden the discussion somewhat. Ambitious perhaps, but I have to try it.

Ever since I first heard John Hagel and John Seely Brown talk about it,  I’ve been thinking hard about the Big Shift, which they worked on in conjunction with Lang Davison. John H’s “succinct” post, which I link to, summarises the Big Shift as exhibiting the following characteristics:

• from knowledge stocks to knowledge flows
• from knowledge transfer to knowledge creation
• from explicit knowledge to tacit knowledge
• from transactions to relationships
• from zero sum to positive mindsets
• from institutions driven by scalable efficiency to institutions driven by scalable peer learning
• from stable environments to dynamic environments

When I first looked at it, I was tempted to add “from scarcity to abundance” and “from back office to front office” and “from hierarchy to network”; but then I decided I could fold any and all those additions into the original list without much effort. I’m still thinking through the implications of that list, “I haven’t finished reading it yet”.

[An aside, to explain that allusion. A few weeks ago, the Economist reminded me of Harold Pinter’s delightful poetic tribute to cricketer Len Hutton “I saw Len Hutton in his prime/Another time/another time.” In last week’s issue, Kaushik Basu, the Chief Economic Adviser, Ministry of Finance, Delhi, wrote in to remind us of “Simon Gray’s response, when, a few days after sending him the poem, Pinter phoned Gray to check if he had received it. He replied he had, but “I haven’t finished reading it yet”.” Thank you Mr Basu, thank you Economist!”]

Influenced by the research behind Big Shift, I began to see the possibility that we could start proving the value of collaboration in demonstrable ROI, something that hasn’t always been easy. Which took me down the route of trying to find sensible ways of valuing relationships and capabilities, the 21st century assets that underpin the core characteristics of the shift.

And while I was deep into this, I was given the opportunity to kibitz-without-saying-anything on a long online discussion, on Gordon Cook’s amazing list (you must subscribe to the Cook Report if you’re interested in internet economics)  on some of the assertions made by Geoffrey West over at Santa Fe. I had the opportunity to spend some time mano a mano with West at TED Global this year, and obviously heard him speak about what he’s been learning re “the surprising math of cities and corporations”.

What particularly intrigued me was West’s introduction of the superlinear/sublinear construct into his ideas, empirically proven. As a long-term devotee of Jane Jacobs, Christopher Alexander and Stewart Brand from a buildings and cities perspective, and influenced heavily by Howard Rheingold in how I viewed all this in digital space, it was not hard to convince me that cities were living breathing spaces, complex organisms well worth studying. I was also comfortable with seeing companies in similar vein, now moving into Tainter territory again, looking at the collapse of complex societies, something I referred to in my previous post.

So what’s been going through my mind is this: when you look at large organisations, what superlinear phenomena do they exhibit? What sublinear phenomena? Can the superlinear/sublinear argument help us understand what Hagel and Seely Brown and Davison found about Return On Assets in USA Inc over half a century of published data?

As a result, soon after TED, I’ve been trying to formulate a similar argument about superlinearity and sublinearity from a systems perspective: which costs scale up faster than the rate at which a system “grows”, and which costs scale down faster? How do we measure system “growth”? Like West and his team found in the relationships between city populations and many other city measures, is there an equivalent for complex systems?

Most importantly, what is the role of collaboration in all this? How does all this tie up with the Jane Jacobs view of neighbourhoods and sidewalks and boulevards and parks? What does that mean for our understanding of stacks and ecosystems? Of course I have anchors and frames, I know what I want these answers to be, but I want to be able to prove them. Scientifically. Because the data in the research by people like Hagel, Seely Brown and West has some fascinating pointers.

The links and references that you provided me in the comments on my previous post will go a long way towards helping me figure that out. And if one or more of you figure it out first, then that’s wonderful…..as long as you share it back with all of us, in whatever way you choose.

[And now, after reading a post like this one, you know why this blog is called Confused of Calcutta. You must remember I’m a big fan of Francis Bacon, who said:

If a man will begin with certainties, he shall end in doubts; but if he will be content to begin with doubts he shall end in certainties. 

Excerpt from the Times, 20th November 1997:

An elderly couple drove nearly 100 miles from Portsmouth to BBC Thames Valley Radio in Caversham, Berkshire, to visit their local web site. They had seen an advert inviting them to visit the BBC web site, and had imagined it was a building.

That was fourteen years ago, and the story stuck in my head as a classic example of how different generations view and experience things differently. [Incidentally, I tried to get to the original article in order to get the quote verbatim. Easier said than done. But I did find it quoted elsewhere.]

In The Medium is the Massage (sic), McLuhan wrote:

Our official culture is striving to force the new media to do the work of the old. These are difficult times because we are witnessing a clash of cataclysmic proportions between two great technologies. We approach the new with the psychological conditioning and sensory responses to the old. This clash naturally occurs in transitional periods.

One of the places where such clashes occur is the world inhabited by terms and metaphors, particularly when it comes to “transitional periods”. That’s probably why we get “bridging” terms like horseless carriage and wireless telegraph, somehow trying to define the new in the context of the old.

The Internet has been rife with strife in this regards: above and beyond the execrable series of tubes, the number of different metaphors used to describe the internet itself probably exceeds the population of China by now. The importance of metaphor was impressed on me by Doc Searls, who introduced me to the work of George Lakoff in this context; I had also had the opportunity to think harder about anchors and frames: an erstwhile colleague, James Montier, wrote often about these things from a behavioural finance and investment perspective; I’d also read Barry Schwartz’s The Paradox of Choice early on, which brought these ideas into the popular domain.

Yet, despite appreciating the importance of metaphor, one particular controversy I have kept away from is that concerning the use of the terms “digital immigrant” and “digital native”. I was born a foreigner; such things don’t bother me any more.

That controversy, however, flared into life in a different shape in the latest issue of First Monday, a journal I have enjoyed reading since its inception. This article on the subject of visitors and residents, by David White and Alison Le Cornu, is well worth reading. Why did I find it useful? I’d never really been comfortable with the idea that “being digital” was somehow a function of your date of birth; I’d met too many digital Peter Pans for that to make sense. So the work by White and Le Cornu to fashion terms that were agnostic to age and background, while focusing on skill, motivation and context, made sense to me.

Which brings me back on to the subject of the social enterprise. The first time I read Cluetrain, page by page I found myself nodding like a car accessory, only worse: after all, I’m Indian — I nod for yes and I nod for no, with just a subtle change of nodding axis :-)

The images that Cluetrain evoked for me was that most enterprises were walled gardens, sometimes even fortresses, keeping everyone out: consultants, trading partners, supply chain, the lot…. and, most importantly, the customer. Companies had stopped conversing with customers, preferring to broadcast to them instead; relationships and conversations had fallen by the wayside while the focus on transactions grew. There were walls between the companies and their customers, and these walls would come down as the internet really took hold and created a class of empowered customer.

That was the promise.

But the reality didn’t live up to it. As firms migrated to the Web, they opted for the sledgehammer route when dealing with cyber security: fortress firewall was the order of the day, erected around the perimeter of the enterprise. Citizens were empowered by the web, two-way communications were available to all: but the enterprises didn’t want to play. The Web had apparently accelerated and enhanced the evils that Cluetrain focused on.

The consequences were predictable. Customers weren’t able to talk to companies, were denied the ability to form meaningful two-way relationships with those they traded with. Yet they had the tools to do so, they just didn’t have anyone to tango with.

So they did the only thing they could. They started talking to each other. And leaving the companies out of the conversation. (Now this was not because they wanted to leave the companies out of the conversation; rather, it was because the companies didn’t want to talk to them.)

These conversations were taking place where the customers congregated: the social networks. These conversations traversed the companies, their brands, their reputations, their products and services. They just didn’t include the companies as participants in the dialogue.

Things were therefore at a pretty pass, where, to stretch a point, you could imagine customers to be visitors in corporate cyberspace, while living in the social networks. If you look at the data that tells you where customers spend their time, it’s in the social networks. If you look at the data that tells you where the volume of conversations takes place (for example, comparing email volume to social network volume), it’s in the social networks. If you look at the tools and apps customers use on their mobile devices, it’s in the social networks.

Mountains and Mahomet time. So it made sense for companies to go to where the customers resided. Except now there was a big difference: this time, it was the companies who were the visitors, not the customers.

More to follow.

 

Wond’ring aloud/how we feel/today

Jethro Tull, Wond’ring Aloud (Ian Anderson). From the album Aqualung.

Photo courtesy Patryk Pigeon

From late 2005 on, there was a very interesting discussion about Web 2.0 and SOA. John Hagel, Nicholas Carr, Andrew McAfee and Dion Hinchcliffe were involved, amongst others. To refresh your memory (or to make it easier for you in the event you hadn’t actually come across the debate, here are some of the key links:

Web 2.0 for the enterprise?

SOA versus Web 2.0?

Enterprise 2.0: The dawn of emergent collaboration

The web services schism

I was Global CIO at Dresdner Kleinwort at the time, and found the debate both timely as well as very relevant to the challenges we faced. Across the industry, the promise of high cohesion and loose coupling propounded by the web services revolution and SOA seemed to be somewhat remote, more standards-wars than design-principles in character; the expectation of a small-pieces-loosely-joined outcome seemed more and more unlikely to be met as a result, as work backlogs grew; those organisations that had implemented enterprise buses seemed to be affected less than those that hadn’t, but it still wasn’t pretty; everywhere we looked, there were variants of vertically integrated stacks, benighted in the belief that transaction costs would actually tumble as a result. While we were using a number of Web 2.0 technologies at the bank, they were not integrated with the transactional side of the bank, in terms of research and trading, and still some distance away from the back office operations.

It was around that time that we were learning more about how open multisided platforms could work, piggybacking on what the opensource community were doing, and, despite Stallman’s warnings to take care with the term, people started talking about software ecosystems. And that got me thinking more about the transaction costs aspect of these architectures.

Over time, what appeared to be happening was that SOA dominated the traditional “back office” and “transaction processing” worlds, while “Web 2.0” approaches were used to deal with customer-facing applications. Now this was just anecdotal evidence, nothing deeply scientific about it…. but the schisms spoken of by Hagel and Carr and Hinchcliffe et al were becoming more visible. I’d already nailed my colours to the mast, by proposing that search, subscription, conversation and fulfilment were the “four pillars” of enterprise software around that time, so I was comfortable with what was happening. But I was still keen on understanding more about why, and wanted to do this in the context of transaction costs.

For some years, I had been playing with models for managing systems estate change; I was particularly keen on a principle I called “Spectrum”, where I could visualise the firm’s architecture as a series of loosely coupled layers, at one extreme touching the customer, and at the other touching the darkest denizens of back office operations. The idea was to colour-code clusters of systems using the visible spectrum, while declaring what happened on customer desktops “ultraviolet” and what happened at exchanges and payment mechanisms “infrared”. In between, “violet” represented apps that touched the customer, a layer exhibiting rapid change, and “red” represented accounting apps, a layer exhibiting glacial change. And everything in between to cover pre-trade, trading, post-trade, risk and settlement. The idea behind “Spectrum” was that an app could only be changed at the pace consistent with the layer it inhabited; it could ask for change in layers “above” it, layers that exhibited faster propensity to change, but had no right to request speedy changes to apps in layers “below” it; apps in each layer had to respect the rate of change associated with apps in slower layers. As a consequence, in my then utopian style, I had hoped to minimise the regression-testing logjam of enterprise architecture; we’d already avoided Spaghetti Junction by going for a bus architecture rather than point to point interfaces.

What I’d established in my own mind was a growing belief that the issue was to do with rates of change and costs of change. Vertical integration paid off when the rate of change was low. Networked small-pieces approaches paid off when the rate of change was high.

And then the time came to move on from the bank, and the challenges I faced were different. Telcos were very much about stacks rather than ecosystems; enterprise buses were rare; and open multisided platforms too outrageous to consider (though we did!). But the debate of integrated stack and SOA versus ecosystem and Web 2.0 continued to intrigue me. [Now I know that’s an oversimplification, that SOA should really be about a set of design principles rather than explicit technical implementations and reference architecture, but what I saw was largely less of the former and more of the latter.]

Fast forward to a couple of years ago, and Clay Shirky. Clay (like John, Nick and Dion, someone I read regularly) wrote something about the collapse of complex companies, and referred to the work of Joseph Tainter in the process. While I’d heard of Tainter, I hadn’t read his work in depth, and I proceeded to dig into The Collapse of Complex Societies. [It was a subject I’d been mesmerised by since youth].

That led on to my finding other pieces by Tainter, including the diagrams below:

The first, above, looks at productivity of the US Healthcare system between 1930 and 1982. (They define productivity index as life expectancy divided by the ratio of health expenditure to GDP). [I must admit I was reminded of this chart when I came across the Hagel/Seely Brown/Davison Big Shift thinking a year or two ago.]

The second, which actually occurs earlier in Tainter’s paper, seeks to model diminishing returns to increasing complexity. Both diagrams are taken from Tainter’s Complexity, Problem Solving and Sustainable Societies, 1996.

And so to today. Development backlogs are endemic, as the sheer complexity of the grown-like-Topsy stack slows the process of change and makes it considerably more expensive to change. The stack has begun to fossilise, just at the time when businesses are hungrier for growth, when the need to deliver customer-facing, often customer-touching, applications is an imperative.

Which makes me wonder. What Tainter wrote about societies,  what Shirky wrote about companies, are we about to witness something analogous in the systems world? A collapse of a monolith, consumed by its own growth and complexity? As against the simpler, fractal approach of ecosystems?

Just wond’ring. I will probably start taking a deeper look at this; if any of you knows of references worth looking into, please let me know.

[Disclaimer: As most of you know, I work for salesforce.com, and have been doing so since October 2010; you will also know that it is not my style to write corporate plugs on this blog, and I’m not going to start with this one. I’ve written it for two reasons. One, if you’re interested in enterprise software, I think you will gain from reading it. And two, if you’re interested in enterprise software, I will gain from your comments, observations and links.]

I’ve just come back from Dreamforce, where Marc Benioff revealed his vision for the Social Enterprise. It’s an amazing vision, and well worth spending time on. If you couldn’t make it and still want to take a look at what happened, the keynotes are available here (the Day One keynote), here(the Day Two keynote) and here(the keynote session with Google Chairman Dr Eric Schmidt).

People find it hard to describe Dreamforce. Last year, one of the journalists present (I believe it was Victoria Barret of Forbes) compared the event to a political convention; President Clinton spoke last year, and European Digital Agenda Commissioner Neelie Kroes was there this year. With all the musicians present (over the last two years Neil Young, Stevie Wonder, Will.i.am, MC Hammer and Metallica have been there; in addition, Joanna Newsom, Neil Young and Alanis Morissette played at the UCSF Benioff Children’s Hospital Benefit Concert during the week) some people liken it to a rock festival. And this year, with over 45,000 registered, it became the world’s largest enterprise tech conference.

I think it’s all of the above, a watershed for the enterprise software industry. If it was just about salesforce.com making a few announcements, I would not write about it on this blog; my readers don’t expect it. If it was about the future of enterprise software, I would write about it: a significant proportion of the posts I’ve written here over the last six or seven years are on that topic.

Now, having come back from Dreamforce, and having had the opportunity to speak to customers on the way back, and having had time to rest and reflect, I think it’s about more than that.

I think Marc Benioff’s vision for the Social Enterprise is about more than just enterprise software, it is about changing the way customers deal with companies. Transforming it. Irrevocably.

 

“The major advances in civilisation are processes that all but wreck the societies in which they occur”

That quote is something I treasure, one that I found in Marshall McLuhan’s absolutely brilliant book The Medium Is The Massage, which he co-authored with Quentin Fiore. It’s a fantastic book, incredibly prescient. Just like The Cluetrain Manifesto, written decades later, whence comes another of my favourite quotes:

 

[Disclaimer: I count the authors of the Cluetrain Manifesto amongst my friends, and had the opportunity to contribute a chapter to the 10th Anniversary Edition of their bestselling book].

There’s a third quote to bring to your attention. This comes from Dr Eric Schmidt, Chairman, Google, while in conversation with Marc Benioff at Dreamforce. I may not have the words verbatim, but I’m sure I captured the sense of what he said:

 

Microsoft organised itself around the structure of the industry; Apple organised itself around the customer. You have to organise around the customer.

I think these quotations are at the heart of the Social Enterprise. We’re at a point of advance in at least a part of “civilisation”, how consumers engage with businesses. This advance is based on three big learnings:

• learning that the customer has always had a voice, but businesses haven’t always had the tools to hear
• learning that the customer is now using that voice, with mobile devices and in social networks, to engage with businesses
• learning that those conversations are, too often,  characterised by the absence of the businesses they’re about

Ten years ago, the Cluetrain authors were reminding us that customers had a voice, and that ignoring them was futile; more recently, Eric Schmidt was reminding us that the only valid response for any business is to organise around the customer; and, over 40 years ago, Marshall McLuhan et al were warning us that the changes would have a significant impact on life as we knew it.

All this in itself may not sound like something new: we’ve been talking about organising around the customer for a long time, customer-centricity is a decades-old term. But, as you look more closely at the Benioff vision of the Social Enterprise, you will find that there are some radical shifts away from the past:

• We’re now talking about real customers engaging directly with real businesses, in “real time”, a level of engagement hitherto unseen. No more “thinking a reflection of the moon in the pond is the sun” proxy approaches, no more focus groups, no more control samples. Actual customers. Saying what they think, about you, your products and services, their wants and needs.
• We’re now talking about real customers doing this in full view of other customers, a level of transparency hitherto unseen. No more price and contract obscurity, no more “what they don’t know won’t hurt us”.
• We’re now talking about real customers doing this with multiple businesses at the same time, a level of maturity hitherto unseen in retail market models. Not just across one company’s supply chain or distribution network, but “organised around the customer”.

Because you know something? That’s what customers would do, given the chance. Organise around themselves, their needs, their preferences, their perspectives.

And it so happens they now have the chance. And they’re taking it.

The Social Enterprise, as Burberry CEO Angela Ahrendts stated during the conference, is not optional. “You have to do this. You have to be social. Otherwise I don’t know what your business model is in five years”.

We ain’t seen nothin’ yet.

Customers are already in the process of organising businesses around them; to be around in five years, businesses will have to get better at letting customers do this.

• Understanding what the customer is about, and letting them understand what your business is about, is the first step
• Customers and businesses becoming part of the same networks,  with the ability to speak as well as to listen, is the second step
• Rebuilding markets the way customers would build them is the third step

Those of you familiar with Doc Searls and his works will know that he’s been banging on about this for at least a decade, most recently via VRM. Markets are conversations. Those conversations are conducted by customers. They decide.

That’s what I believe Marc Benioff has been talking about, a vision that transforms the way customers engage with businesses.

The Social Enterprise vision is about rebuilding markets the way customers would build them in the first place.

That vision needs an enabling platform, a platform modelled around ecosystems rather than vertically integrated stacks, open rather than proprietary, actively engaging the customer and engaged by the customer.

That in turn requires an approach of federation rather than competition, federation with organisations that have similar principles, prepared to be built around the customer at the behest of the customer.

Salesforce.com has lined up with that vision and consequently has been executing to it for some time now. As one organisation.

There will be others. There must be others. Others who are prepared to be organised around the customer, by the customer.

Peter Drucker famously said:

What the customer buys and considers value is never a product. It is always utility – that is, what a product does for him.

 

He also said:

 

People make shoes, not money.

 

And, for my last quote, again from Drucker:

 

The purpose of business is to create a customer.

 

Put those three together and you begin to see the social enterprise.

It’s still early days. As customers begin to reorganise businesses around themselves, there will be many problems to solve, problems of federation and interoperability and portability. Problems that have been obfuscated in the past by incumbents with vested interests. Problems that will be solved by the Social Enterprise.

The Social Enterprise is here. Customers have seen it and won’t let go.

The businesses that will succeed are those that go where the customer has gone.