The topic of the moment seems to be where Google is going, with many touting it as a Microsoft-killer. (See Robert Cringely’s recent article as an interesting take on this and broader issues…). Given my interests, it is particulary interesting to see that Google is buying Dodgeball. This very interesting social software company came out of a class run by Clay Shirky at New York University. Clay’s take on the deal is here. In short, Dodgeball is a mobile service that allows friends and friends of friends to meet up at bars and parties on the move, finding where the action is at any particular time. Google has already tried its hand in the social software space with Orkut. Now it is moving into the mobile social software (sometimes called MoSoSo) space, which is absolutely a step beyond its web-based core. On one level, Google clearly is not averse to picking up lots of interesting companies and ideas and seeing what happens with them, and Dodgeball is hardly a big acquisition for them. However if Google continues to develop these strands of its business, then its increasing propensity to social software and networks could represent the emergence of what may be something far beyond a glorified search engine
In one of those cases in which there is a whole world of implications behind a seemingly small news item, an article in the Financial Times recently stated that banks are in danger of insider trading by sharing information inside the bank on credit derivatives. Trading in credit default swaps (which are essentially financial instruments that represent the credit risk of corporate borrowers) has always being done based on the privileged knowledge that banks have of their clients. Now banks are being told that if they want to trade these instruments, the parts of the bank that know their corporate debt clients well, can’t talk to the parts of the bank that trade these instruments. In the first instance, given that this development represents a broad, long-term trend to regulation on similar issues, this suggests that diversified financial institutions – which are based substantially on sharing knowledge between their operating divisions – may have far less justification for existence than in the past.
In the context of the issues addressed by the Collaboration in Financial Services Europe conference I am chairing in London this June, this has crystallized some of my thinking about the future of collaboration. In a nutshell… Every organization is experiencing the imperative of collaboration. To survive, we must enable information flows and collaborative work. At the same time, there are many ways in which we must disable communication and information flows, inside and outside the company. This is particularly pointed in financial services, with old and new regulations constraining who can share information, from investment banking and research, to lending and trading. However similar dynamics apply to companies in every industry in that they both have to actively share information, and also have constraints from intellectual property, privacy, regulation etc., in how they work both internally, as well as with suppliers, clients, and other external partners. This tension between encouraging and constraining collaboration and information flows will be central to the evolution of organizations over the next years and decades. More on the Collaboration in Financial Services conference soon – this will be drilling down into detail on some of the leading initiatives in collaboration the financial services sector in Europe – there are some very exciting developments.
Continuing the live conference blog…Valdis Krebs of Inflow talked about the many types of real-life networks that can be analyzed, including studying cow disease contagion by which cows tend to hang out together as they eat, and the vast array of companies that Apple has brought together to create the iPod. His colleague Eszter Hargittai has researched liberal and conservative blogs in the US, and found – unsurprisingly – that they are as deeply divided as the US population seems to be. I then ran a Living Networks Forum, in which I first presented the ideas of the living networks, how we participate in the emerging global brain, and how collaborative filtering is enabling us to access the most stimulating, top-of-mind information and ideas of our collective consciousness. We then used a live Wiki, so everyone in the audience could contribute to the screen what they wanted to discuss with others at the conference. This led onto us selecting four topics – finding expertise, collaboration, identity and mobility, and network science – that groups gathered to discuss, explore, and create valuable connections between people and ideas. This is being followed by a conversation (as I write) between Esther Dyson, Edward Vielmetti of SocialText on social networks, looking at Flickr, which allows us to share photos with our friends, and many other spaces. A key theme being discussed is the evolving nature of personal networks. Esther believes that the technology is reducing friction in our relationships with our friends. However it also reduces friction in our relationships with those who are not our friends, so we need to create new conventions to contain our online relationships. This is a critical aspect of how our identities will evolve as social software enables us to relate more richly with those we choose to.
Some live impressions as I sit in the extremely interesting MeshForum 2005, blogging on the local WiFi network. Currently watching a video by the founder of the Yellow Arrow Project – an extremely cool global project that is a kind of collaborative filtering – people use yellow arrows to point out what’s worth looking at, and the arrows have codes that allow people to share their comments via mobile networks. Counts Media, the company behind the project, among many other interesting things does “mixed reality” gaming, which brings together real-life and online worlds. The conference kicked off with Dr Anna Nagurney, who works at UMass on Supernetworks, which is the science of how different types of networks relate at a higher level. An example is the choices that people make on telecommuting or physical commuting, that bring together both communication networks and transportation networks. These approaches are being applied across digital, transport, social, financial, migration and many other kinds of networks.
When I wrote Living Networks in 2002, opening with a description of how Macromedia was using blogs to disseminate information, blogging was to many a curiosity. Today almost everyone has heard of it, and it truly has become mainstream. Business Development Institute is running a Blogging Goes Mainstream conference in New York on May 3, featuring Microsoft star blogger Robert Scoble as keynote. I’ll be running a session at the conference on blogging and knowledge management.
As part of the whole shift to recognizing networks as central to everything, MeshForum is shaping up as a fantastic conference in Chicago this May 1-4. Shannon Clark is the driving force behind this, and he and his colleagues have brought together a fabulous array of content including social, business and biological networks. I’ll be running a Living Networks Forum session at lunch on May 2, just before a session on social networks run by Esther Dyson
Rob Cross of University of Virginia, author of The Hidden Power of Social Networks, has formed the Network Roundtable, a consortium of at last count 40 leading organizations that are applying network approaches in areas including leadership, innovation, and client relationships. The kick-off meeting will be on April 27 in Boston. I will be presenting on our research project on enhancing client relationship teams. Applying network analysis promises to be one of the most powerful approaches to improving cross-selling capabilities and driving deeper, broader, more profitable client relationships. I am also beginning to delve into other applications of social networks, including industry associations, professional networks, and global industry networks. A lot more on this anon.
The second edition of Developing Knowledge Based Client Relationships will be launched in New York in June. Below is the preface to the second edition, which gives a good overview of what the book is about… Click on “Read more” below to see the full text.
Two chapters from the book will be posted on my website for free download shortly.
“As I write these words it is almost exactly five and a half years since I finished writing the first edition of this book. The release of the book in January 2000 helped launch a powerful wave of interest in the topic. Immediately after its release, the book was ranked #1 on Amazon.com from Australia for over two months, and since then has spent time on a range of Amazon.com bestseller lists, including the Deloitte & Touche bestseller list for over two years. Not long ago the book went into its fifth printing. The concept of knowledge-based relationships has now become a broadly acknowledged aspect of leading business thinking and practice. Many other threads came together to create this momentum, however I hope the detailed treatment of the topic in the first edition of this book helped to crystallize this emerging domain.
Much has happened since the first edition came out, certainly in terms of changes in the business environment, notably in the professional services landscape, and in how communication technologies are changing business relationships. However during that period, my thinking has evolved even more. Over many years of putting the ideas into practice…
…helping leading organizations to implement knowledge-based relationships, running workshops all over the world for some of the smartest people around, and speaking widely, I have learned a great deal on what works and doesn’t work. I also recognized that I needed to broaden the ambit of my work from the core concept of knowledge-based client relationships to everything that a professional firm must do to be successful in its client relationships.
The first key lesson is that even if you are brilliant at engaging in knowledge-based relationships with your clients, that doesn’t help you if your clients don’t recognize the value you can create for them through this deeper level of engagement. Professionals must lead their clients into knowledge-based relationships by demonstrating the value of collaboration. On every front, the future success of professional services firms will depend absolutely on the leadership capabilities within the firm. They must lead their clients into new ways of working, they must lead their professionals into combining their expertise collaboratively, and they must lead their industries by showing that new business models and approaches to value creation are possible and desirable. Thus the new subtitle of this book: “Leadership in Professional Services.” The subtitle of the original edition, “The Future of Professional Services,” still applies, as knowledge-based relationships are indeed the future of the professions. However the essence of this second edition is how to develop the leadership that will brings these kinds of professional relationships to reality.
One of the major shifts in the second edition is to focus far more on the immediate issues of professional services firms than on the broader issues of knowledge in business. The first edition brought many of the lessons of knowledge management into professional services and organizational relationships, in a way combining the domains. However the real value of the book is in its relevance to its core readership of practicing professionals. It is intended to help them enhance their client relationships, and build practices and firms that will prosper enormously in our burgeoning knowledge economy.
Since writing this book I have written a quite different book, Living Networks, on the implications for business of the connected economy. My work today falls into two domains. I am a specialist in professional services client relationships. And I am a generalist in helping executives understand how to create success in our swiftly-evolving global network economy. These two seemingly disparate themes in fact mesh together into a perfect unity. A networked world is nothing more than a set of relationships. In an intensely commoditized global economy, value creation will be increasingly concentrated in trusting, collaborative, knowledge-based relationships. Professional services, as the quintessential knowledge business, provides a perfect template and model for developing and implementing these kinds of relationships on a broad scale.
The changes to this second edition have resulted in a book that is almost half new material. In some ways I would have liked to have changed more, almost rewritten the entire book, however I also wanted to maintain the integrity of a book that has clearly struck a chord, and has sold consistently very well for five years. With two entirely new chapters, and half the remainder of the book heavily reworked, this second edition has truly been brought up to date and will be of great value to professional services and knowledge practitioners in a rapidly-evolving business environment. There are certainly many challenges ahead for every professional. But looking through the lens of knowledge-based relationships, I believe there are massive opportunities for those that can successfully implement deep, collaborative approaches to value-creation with their clients. I wish you all success on that path.”
Apologies! It has been far too long since I’ve blogged. Hardly the dynamic stuff of the living networks… I’m sure anyone who has maintained a blog will have experienced the tug between the present urgency of demands like client work, and the broader importance of capturing and communicating a rich flow of ideas. For a while now immediate pressures have kept me below the surface, making my work less visible, but I intend to rekindle my blogging endeavors. Among the very interesting work so far this year, I’ve been working with some colleagues to take the top executives of a mid-tier financial institution through a scenario planning process to examine the company’s long-term future, and working with some of the leading client relationship teams of a global top 10 law firm to enhance their capabilities and approaches. All good stuff, but I want my ideas to flow more broadly…
To this end, I will be relaunching my blog and newsletter in May, including relocating the blog. Watch this space. In the meantime I’ll start to make this more dynamic.
On other fronts, coming up this June is the launch of the second edition of my first book, Developing Knowledge Based Client Relationships. I’ll post the preface to the second edition here shortly. I have also recently established a US corporation to enable me to better serve the US market. More on other projects, including new frames on social network analysis, coming soon.
The BDI Collaboration in Financial Services conference in New York went extremely well, so much so that we intend to run it in London in late spring next year as well as in New York again exactly one year later on September 29, 2005. The conference review describes what happened on the day. Taking a few quick top-of-mind reflections from the event…
The success of the event shows that collaboration and collaboration technologies are recognized as critical issues across financial services. In an industry driven by information flows and deep expertise, allowing professionals in financial institutions and their clients to integrate their work and thinking is clearly the way things are heading. We began to touch on some of the implications for bank strategy and value-creation in the industry in the event; this theme will play a bigger role in our future conferences. However a dominant issue on the day was the regulatory compliance framework as blocking collaboration efforts. For many reasons this is the context within which financial institutions are currently working. In addition to regulators ensuring they are not blocking innovation in financial markets, banks must not allow the regime to put them off implementing approaches that will differentiate them in the eyes of their clients.
I was delighted that we had Steve Wallman as our lunch keynote speaker. I have long admired Steve’s work since when he was SEC Commissioner in 1994-97. This article in Forbes magazine from 1997 shows some of his deeply insightful thinking on intellectual capital, which is still integral to my perspectives on the future of intellectual capital reporting. At lunch the day before the conference someone told me Steve was the best speaker he’d ever seen. I used that anecdote when I introduced him, setting high expectations from the audience, but ones that he definitely met. See the conference review for a few more details on what he covered.