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.

I’ve had the luxury of some time off these past weeks, spending time with my family, blessed by the weather and the environment. And I thank God for giving me that time; I needed it, and it was fantastic. Blue skies, great company, great food, peace and quiet.

While I’d been “largely offline”, I was able to catch up on my reading and on my thinking, and I’ve been able to share some of that thinking with you. You may have noticed there was a brief flurry of activity on the “curation in the enterprise” front this past week.

That activity will continue.

This post may not be about what you expect it to be about. It is about clouds. And it is about disruption on a large scale. But not about the clouds you were thinking of. At least not initially.

I’d like to bring to your attention the CLOUD experiment at CERN: details of the original proposals can be found here.

More importantly, I’d like to bring to your attention the first results from their experiment “designed to study the effect of cosmic rays on the formation of atmospheric aerosols – tiny liquid or solid particles suspended in the atmosphere – under controlled laboratory conditions”.

The details have been published in Nature, issue 476, pages 429-433.

In summary, the findings of the experiment are as follows (my words, so blame me if you don’t like the construction): Cloud droplets form around seeds. It used to be thought that atmospheric aerosols, formed from trace vapours of sulphuric acid, water and ammonia, were responsible for the bulk of the seeds. Now they’re not so sure, on at least two fronts. One, the data suggests that other vapours must be involved, vapours other than sulphuric acid, ammonia and water. Two, the data also suggests that cosmic rays enhance droplet formation by tenfold or more.

It’s early days. Of course we should not read too much into the data right now, it’s early days. But it’s real data, not conjecture, and it is data based on carefully designed, controlled tests.

I’m excited, very excited, for a number of reasons.

Firstly, if the findings prove well-based, it could mean a shift from strongly anthropogenic views on climate change to a more heliocentric view. To some people, this will probably be as intense a shift as the last time human beings had to exchange a human- and geocentric viewpoint for a heliocentric one. And this time, given the wonders and marvels of modern media, people like you and I will be able to participate, even if only to kibitz. It’s not every day one gets to witness, or for that matter to participate, albeit vicariously, in such a debate. So I’m excited.

Secondly, as a result of that shift, it is possible that we may actually come closer to understanding what makes our climate tick, and what we can do to help. We may have to change our views on what causes climate change, we may have to change our views on what steps we have to take as a result, but what we shouldn’t do is change our views on the principle, that of being good stewards of this earth and this universe. As we learn more, it looks more possible that the generations to follow will actually have a future worth looking forward to. So I’m excited.

Thirdly, the way the scientific community deals with this will itself be of extreme interest to me. I was at TED Global some years ago when Elaine Morgan spoke about her passion for nearly half a century, the aquatic ape. What really struck me about her hypothesis was not the hypothesis itself, but the mere suggestion that the scientific community had, to a greater or lesser extent, closed ranks about the debate. That worried me. I’ve seen it happen with IT folk when it came to PCs, to open source, and more recently to cloud services (the other cloud). The power of incumbent inertia-bound expertise is immense and, ultimately, self-destructive. So I will watch this particular situation with a great deal of interest, since there are many in the scientific community whose passions, interests and even livelihoods rely on an anthropogenic view of climate change. So I’m excited.

Anyone who has spent time inventing or innovating knows something about the self-destruct power of incumbent inertia-bound expertise. The world does not lack for problems that need urgent solving, in terms of food, water, nutrition, dignity, health and wellbeing. What we learn from this particular experiment, in terms of how we deal with it, will help us in many more things. It will, for one thing, tell us whether we are really able to question the status quo, and to change it, while being in it. It will tell us whether modern technology, particularly in the open, social and mobile contexts, lives up to its promise as an active participant in this debate or not. It will even help tell us whether “all of us are smarter than some of us” or whether we’re getting dumber as a result of the collaborative social world we’re entering.

Where I work, being willing to take a fresh look at what we do and being willing to make changes as a result is pretty much business as usual. That’s why Marc Benioff is on the cover of Forbes and why Salesforce is ranked #1 in innovation worldwide by Forbes. Large-scale disruptions are caused when visionary people can spot the need to move from one core set of assumptions to another, and then execute in time for that disruption.

Making such deep-seated changes is not easy. I have been less than impressed with the attitude of the IT industry, over the past 30 years, to the arrival of the PC, to the arrival of the web, to the arrival of opensource/community, to the arrival of the cloud, and to the arrival of mobile. The scientific community has been unusually violent in its debates about climate change over the same period, with some signs that the historical capacity for open debate has been weakened.

I shall watch with a lot of excitement. Some trepidation. And I will live in hope not despair.

[T]here are known knowns; there are things we know we know.
We also know there are known unknowns; that is to say we know there are some things we do not know.
But there are also unknown unknowns – the ones we don’t know we don’t know.

—Former United States Secretary of Defense Donald Rumsfeld, as quoted in Wikipedia

The first time I was exposed to the idea of things we know we know, things we know we don’t know, and things we don’t know we don’t know, I’d never heard of Donald Rumsfeld. I believe I read it in some papers by Michael Polanyi, and anyway it was in the early 1980s, long before Rumsfeld had his moments of quotation glory.

Maybe it doesn’t matter who said it first, maybe it does. But that’s not the point of this post.

The point of this post is simple. Don’t write things off just because you don’t understand how value is to be derived from them.

Take Photoshop. A tool to touch photographs up, to amend and alter them. Useful but perhaps not seen as world-changing. Apparently most useful to narcissists and to those bent on airbrushing their way to amending history, usually the preserve of politicians.

Take social networks. A tool to connect people and allow them to share social objects and comment on them, to support and augment relationships, to communicate. Apparently most useful to people who want to poke people, throw things at others, run farms. All virtually and for the most past virtuously.

Take cognitive surplus. Apparently a luxury, available only to the out-of-work and the ne’er-do-well, people who have nothing better to do than fight over the treatment of subjects in wikipedia.

Photoshop. Social networks. Cognitive surplus. Three things that still have a number of doubters, that still have a number of people questioning whether these things have any redeeming value, people who believe life would carry on perfectly fine if these things hadn’t been invented.

And then…..

And then you have something truly tragic like the earthquake in Japan.

Tragic for the loss of life and limb. Tragic for the loss of lifestyle and livelihood.

And tragic for the loss of precious memories, the loss of thousands of photographs damaged by earthquake and flood.

Except….

Except suddenly, there is an ability to take these three apparently useless things and bring them together. Project Tohoku Photo Rescue http://hands.org/2011/08/19/project-tohoku-photo-program/

People painstakingly giving of their time and their skill, using photoshopping techniques to restore water-damaged photographs.

People painstakingly giving of their time and their skill to help restore memories.

Memories. Try calling them useless. Try convincing yourself that what they’re doing is a waste of time.

And once you’ve failed to convince yourself, go vote for the project on the link provided. They deserve your vote at the very least, if not your admiration and your support.

This is curation at its best in a social context, the application of human passion to a digital tool-rich environment.

And this is what the social enterprise has in wait for us. When the power of connected people is unleashed into environments we can’t see to solve problems we can’t foresee using tools that are emergent.

Sound too futuristic for you? Remember the William Gibson adage about the future. It’s here, just unevenly distributed.

Google, Amazon and Salesforce were building businesses on the cloud while most companies were still debating service-oriented architectures and WAP.

The social enterprise is here; yet we have this weird situation where companies have Facebook strategies to market their products and services, perhaps even try their hand at actually engaging with customers in social networks, while continuing to ban access to social networks from the workplace.

The social enterprise is a radical departure from the past, and we are only in the early stages of discovering the immense value that is being generated by this phenomenon.

As with most radical departures from the past, there’s a continuum when it comes to adoption. Some early adopters. Some fast followers. Some late adopters. And some defunct companies.

The social enterprise is a true game changer. Which means the number of defunct companies will probably be surprisingly high. Which is why Clayton Christenson’s Innovator’s Dilemma will probably need reprinting. [and which, incidentally, is the reason I’m so happy to have joined Salesforce, formally measured as the world’s #1 company when it comes to innovation, by Forbes recently].

As the Tohoku Photo Rescue program shows, human ingenuity knows no bounds. Give people the right tools to work together, they can change the world. And given the choice, people tend to concentrate on things that matter. Which is why the social enterprise is such a powerful proposition.

[note: Part 5 will concentrate on tools, something I’d intended to do in part 4. Patience. Please.]