Collaboration in Financial Services conference in NYC

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Collaboration – technological and otherwise – is central to the future of the financial services. In order to address these issues, in conjunction with Business Development Institute and Michael Ross Associates, I am designing and co-organizing a one-day conference in New York on September 29 on Collaboration in Financial Services. Full details are at https://www.bdionline.com/cfs.

We have got a tremendous response to the event. The current key sponsors are Intralinks, I-Deal, Microsoft, Interactive Data Corp, Vignette, Broadvision, and FaceTime, together covering the key technologies that support collaboration in institutional financial services, including real-time collaboration such as IM in a trading environment, document collaboration in deal-making including M&A and syndication, and internal collaboration systems. Many of the leading investment banks, including Goldman Sachs, Merrill Lynch, Deutsche Bank, CSFB, Bank of America etc. etc. are involved. Banks now see collaboration as a key driver both internally, and externally with clients. While there are significant compliance and security issues in the short-term especially, the core issues are first technological, and then process, organizational, cultural, and strategic. Banks are recognizing these will be major shifts, and there is lots to do in gearing themselves up to address these issues.

The reality is that we are far from achieving the potential of collaboration technologies in the financial services industry. Much of the reason is standards battles have at times dramatically slowed progress. A classic example is instant messaging, which is already at the core of communication in many of the financial markets such as bond trading, but the reluctance of AOL, Yahoo, and MSN to enable interoperability between their instant messaging systems has placed severe constraints on how banks can implement these technologies. Many similar issues remain in other domains, including establishing collaborative workspaces for M&A and other complex deal-making.

Part of my vision for the conference is to contribute to the industry – comprising both banks and vendors – acknowledging and beginning to address some of these standards issues. The last high-level panel session of the day will focus specifically on creating an industry roadmap to enable greater benefit from collaborative technologies in the near future. This conference will be run annually, and we may also establish some kind of working committees to help further these agendas on an ongoing basis.

Hope to see you there!

The Future of Knowledge Management

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I recently wrote an article on The Future of Knowledge Management for the Australian Financial Review which has attracted substantial attention. It also been slightly adapted to be published in the current edition of the leading knowledge management journal, KM Review, as “The Five Key Frames for the Future of KM”, and once I get a moment free (!) will also adapt it for some other publications that have requested it.

The basic theme is that “knowledge management” is no longer the most useful name to apply to much of the work that has flourished in this broad domain. It’s always been too unwieldy a term and concept, and today we have a number of emerging frames that are more relevant and practical to today’s business challenges. The term “knowledge management” still has a long, solid future, however several of the more focused disciplines it has spawned offer more traction for business. One leading practitioner said that he is finding that companies are referring less and less to KM, with one of the terms succeeding it being “organizational effectiveness”. Indeed, that’s a central objective, and more focused thinking is more likely to get us there.

In October I’ll be speaking at KMWorld in Silicon Valley and ActKM – a leading government KM community and conference – in Canberra. During the late 1990s I was strongly associated with KM, and it’s around five years now that I’ve been endeavoring to move beyond that. It’s interesting that I’m being drawn back a little into that domain. Despite my misgivings on the terminology, there is much in KM that will continue to be immensely valuable in what absolutely is a knowledge-based economy.

The Future of Customer Relationships

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I’ve just posted a new article on Creating the Future of Customer Relationships on my Advanced Human Technologies company website. The article supports the keynote speech I delivered recently at Customer Contact World 2004.

The article examines how to integrate the entire spectrum of relationship channels available in order to build true “knowledge-based” customer relationships. This is founded on understanding – and accentuating – the difference between what technology can do and people can do. Fast Company magazine’s blog wrote about and linked to the article, which has resulted in lots of attention and traffic for this.

The Metaweb

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Nova Spivack, the grandson of Peter Drucker, has a vision of the connected future that aligns very strongly with mine. He describes the emerging “Metaweb” as the result of the rapid increase in both information connectivity and social connectivity, leading to the emergence of the global brain. A diagram and overview is provided on his website – well worth a look. I agree wholeheartedly this is the way we’re going.

Living Networks Forum debrief

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The Living Networks Forum in New York the other day was great fun and went extremely well. Both anecdotal and formal feedback was excellent. The official commentary on the event is here. When you’re trying something new, you never know quite how it will work until it happens, but the reality was a very good match with my original vision. The core concept was creating connections between people and ideas at the event, and that’s exactly what happened in a very rich fashion. In the end the way in which we created serendipitous connections at this event was more based on innovative facilitation processes than technology, however in future events the technology will gradually be integrated to take this “enhanced serendipity” to the next levels.

The major sectors respresented at the Forum—because of the location and the representation of both my and Business Development Institute’s core communities—were professional services, financial services, and technology. All these sectors are grappling with similar issues in the event’s core themes of developing client relationships, enhancing collaboration, and creating partnerships, so the cross-pollination was invaluable for participants. We began the session with a space-based facilitation process, in which people position themselves in a room according to their relative interests in key themes, enabling immediate connections with people with similar profiles. For each of the themes we had a brief presentation of core material, and then demonstrations, syndicate group discussions, and break-out exercises. All of the groups for both syndicate discussions and exploring potential partnerships were carefully designed around participants’ profiles. In this way the connections were not “engineered,” but facilitated. Before lunch we played a game between teams based on game theory, which was used to explore some of the dynamics of trust development over time. Much hilarity and some confusion here—it went well but perhaps a little redesign required for next time.

The overriding theme of how technology can enhance personal and organizational networks drove much of the very tangible excitement at the event. While by this time most attendees had come across the concept of social software and some of its implications, being able to see and experience the technologies helped to bring to life how these can be applied in business. Earlier in the week I’d been to the Christmas party of SDForum—the leading Silicon Valley technology networking organization—where the interest in social software was immense.

The social software space is hot, Hot, HOT! I frame what is currently happening as phase two. Phase one began with the now defunct sixdegrees.com and a couple of similar initiatives. After a lull and some nascent initiatives last year, this year has seen the space take off big time. Living Networks Forum gold sponsor Spoke Software has recently secured another $11.7 million in funding. Business is waking up to the fact that not only is this a new technology sector with strong promise—because of its ability to create value—but also that these technologies could transform how businesspeople communicate, form relationships, and develop trust. I’ll be writing a lot more about this later—this is a seriously important topic.

Perhaps not surprisingly, both Business Development Institute and myself have had numerous enquiries since the Forum about designing and running innovative events. There is an increasing recognition that it really is possible to create conferences and events that are far more valuable to participants than what we usually experience, by carefully designing for rich sharing of knowledge and ideas and forming connections in valuable ways, fully integrated with novel and useful content. We’ll probably run at least one other public Living Networks Forum somewhere in the US next year, however it seems as if more of the demand will be for creating similar events for professional associations, user groups, vendors, and inside organizations that need to create richer connections and exchanges between divisions and locations.

Experience the Living Networks in New York!

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Since I wrote Living Networks, I’ve dreamed of creating an event that would literally bring the book to life, to allow people to experience personally the power of the networks and the implications for business. The first of what I hope will be a whole series of events – the BDI Living Networks Forum – will be held in New York City on December 4th, 2003. I have the perfect partner for this – the Business Development Institute, which combines a fantastic network of network-minded individuals and organizations with innovative business development services.

In the agenda you’ll see that the event is focused on creating interaction and what I call “enhanced serendipity” between participants. Using Spoke Software we will show participants their “relationship path strength” with all other attendees, and with any other individual, who they know in common. Litéra collaboration software will be used as a platform for showing participants how to implement collaboration effectively in and across organizations.

We have some great supporters, and there’ll be some awesome people along. Nothing like this has been done before, so I’ll let you know some of what we learn at the event. Or of course would be fantastic to meet you there!

I believe that events that use emerging social network technologies and effective design of participant interaction will over time become the norm. Hopefully “talking-head” conferences will die a natural death very soon. Events that apply living networks ideas will create immense value in bringing the right people together to create and share knowlege, ideas, and relationships. Be there at the birth of something big!

Creating the infrastructure for the trusted networks

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I had lunch earlier this week with Stuart Henshall in San Francisco, and we had a delightful wide-ranging discussion on topics of common interest. We’ve known each other for a good few years through scenario planning, and have a similar vision for the future of personal online networks. Stuart focuses on—among many other very interesting issues including consumer rights—trust in building networks. His vision is of a world in which everyone has their profile online, and shares both their profile and their personal connections selectively with trusted contacts. Sixdegrees.com was the first major online player in this space. I intended to write about it in Living Networks, but it went the way of all things in January 2001. The current top players in this space are Ryze.com and ecademy. However effective trust systems are essential for these public online networks to work. In the first instance we need to be able to create layers around how much of the information about our personal contacts we want to share. Intermediating software can help, for example by identifying in a secure system the contacts we share. For example, Stuart and I estimated we would share 20-30 people in our email address books, but we don’t know who all of those people are. On the next level, if we can create software that enables people to draw on their personal contacts’ perception of others’ trustworthiness, this will enable us to more readily expand our own personal networks in useful ways. These kinds of systems can be implemented either in a global context, or inside or across organisations.

One of the key issues which comes up for me is how we are going to get there. Creating a highly functional system that enables us to see and expand our global personal networks is a fabulous vision, which I dearly hope will come to fruition, but it is likely to take a long time and there is a risk it will never happen. In the first instance, as I write in Living Networks, people need to build evolutionary business models, that can make money in creating the first steps of this vision, and easily morph into new models as the context moves on. The other key issue is standards. As in many domains, whoever “controls” this extraordinarly valuable space of personal connections can create—and extract—enormous value, and thus there will be plenty of competition to be the winner. If there are standard information definitions and interfaces between competing systems, this fragmentation can be avoided. Ultimately, if the vision is realized, it will most likely be driven by an open source initiative, which means there is usually less commercial value to be extracted. There’s a long way to go yet in creating a system that will allow everyone to see exactly how they are connected in the global networks. I’ll try keep you posted along the way.

The changing world of librarians

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I’m at the Information Online conference in Sydney, where I gave a keynote this morning. The conference is primarily populated by librarians. In sitting in on some of the sessions and speaking to attendees, one of the interesting dynamics emerging is how the democratization of information searching – through Google and more – means librarians must shift up in how they add value. Many spend much of their time using specialist databases (with 110 exhibitors pusing their wares here), and clearly can play an important role in finding, filtering, and customising information, but they find it difficult to sell their importance to their senior business or government bosses.

Layoffs are rife in business libraries and information centers, with these kinds of services easy targets in cost-cutting. One of my key messages to this community was how they can and must contribute to creating a global information architecture that enables collaborative filtering. The vast majority of Internet users only look, and don’t contribute. If information professionals and others can make it easy for people to input what they find valuable, and for others to tap into that consolidated input, this will help support the emergence of the “global brain” in which we can draw on each others’ perspectives, rather than face the information jungle alone. Blogs are critical in the creation of this infrastructure. The simple act of providing a link changes the shape of the Internet, influences Google and Blogdex results, and allows others to find more easily what you think is worthwhile. We all must participate, not just observe.

Creating the transparent corporation

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Aaargh! Being on the road means I’m getting stimulated by lots of very interesting stuff, but it’s hard to find a moment free to blog it. I’ll try to get a few things down… Last week I got dragged in at the last moment as a pinch-hitter to speak at the KMWorld (Knowledge Management) conference, the largest in the field in the US, in San Jose. It was in the “ROI and Measuring Value” stream, which is not what I spent most of my time on, so I decided to title my talk “A Financial Markets Perspective on Intellectual Capital”. The KM crowd don’t tend to get exposed to finanial markets thinking much, so it’s worth giving some insight into how investors view non-financial or intangible indicators. The story in a nutshell is that it has become increasingly obvious that non-financial indicators are vital in getting an accurate picture of the value of a company. Employee turnover and changes in customer loyalty are just two examples of a myriad of things that investors would very likely want to know, but don’t get told.

Over the last 10 years many have attempted to build models that take into account these intangible indicators. After spending a lot of time several years ago looking closely at these issues, and talking with the top people in the field, I came to the conclusion that there was no simple answer. The heart of the issue is that investors use different valuation models—that is they assess the value of intangibles differently. That’s what makes a market. Steven Wallman, who was then SEC commissioner and now runs the very interesting customized mutual fund service foliofn, stated it clearly. Currently financial reports aggregate all of the vast amount of information inside a company. What is required is a shift to disaggregation of that information, so it is all available to everyone, who can then choose to aggregate it into the financial models of their choice. We have yet to see whether companies, large investors, or regulators will drive this shift, but 10 years is the sort of timeframe we have to expect for it to happen. What could help accelerate this dramatically is XBRL (eXtensible Business Reporting Language), which is an XML-based standard for financial reporting that I discuss in Living Networks. This makes it very easy for analysts to take financial information into their own models. A recent study showed that analysts accounted for stock options in reports more accurately if they were presented in XBRL format rather than in a PDF. The beauty of XBRL is that it is extensible, so it can easily be used to report on non-financial indicators as well as financial ones. XBRL offers the promise of disaggregating information flows in company reporting. Investors will be far better informed, and be able to make decisions based on what is actually happening in the company. Earlier this week I met the executives at the American Institute of CPAs who are driving XBRL. They believe it will be far harder for the Enrons of this world to get away with what they did in an XBRL world. Companies will be far more transparent. And a little further down the track, we will shift to real-time reporting, when you can see what is happening in a company as it happens rather than two months after the end of the quarter. It’s hard to exaggerate the potential impact on how business is done. I will post my slides from my KMWorld presentation in the next couple of weeks, with a link from this article.