This week’s issue of BusinessWeek features a great article on organizational network analyis (ONA) called The Office Chart That Really Counts, showing that the discipline is really beginning to hit the mainstream (following BusinessWeek’s piece last October on related work). The article focuses on the work being done by organizations such as IBM, Accenture, Merck, Lehman Brothers, Capital One, Procter & Gamble, and others such as Goldman Sachs, McKinsey & Co., and Microsoft of the 53 companies that are members of the Network Roundtable. Rob Cross of the McIntire School of Commerce at the University of Virginia set up the Network Roundtable 18 months ago so that leading organizations could share what they are learning in applying network analysis to enhance performance, and thus accelerate the development of this immensely valuable discipline. Some of the key areas being addressed by roundtable members include developing talent and leadership, enhancing innovation, facilitating mergers and major reorganizations, and building superior client, supplier and partner relationships. I am the research leader for this last category of external connectivity work at the Network Roundtable, though I apply ONA across a broader range of areas with my clients.
Social network analysis is not new – it has been done since the 1930s to understand communication and relationship patterns in society. Organizational network analysis has developed over the last ten years to apply these early ideas to enhancing organizational performance. Many managers have been intrigued by the ideas, however found it difficult to get buy-in in their organizations to pursue what is perceived to be highly conceptual, to get to the highly pragmatic results. Cross has been instrumental in taking the discipline through this challenging stage, to where the tangible and immensely powerful outcomes of well-executed ONA are evident. The discipline is just starting to go beyond the pioneers into the mainstream. From here, expect to see the hype pick up, the vendors to jump on board, for possibly much ONA work to be done poorly which will impact on the discipline’s reputation, and so on in the usual management trend cycle. However that is only because this is indeed one of the most powerful – and relevant in the current economy – management interventions available today, and it is very much in a state of emergence.
I am currently working through the analysis of a network study I’m doing of the communication among the top 100 executives of a $3 billion diversified professional firm. The insights from the study into the company’s drivers of success are extraordinary, and when we workshop this with the top executive team, there is no question that it will significantly influence what action the company takes to move to the next level of success. The same issue of BusinessWeek also features an interview with Kate Ehrlich of IBM, who has been at the center of IBM’s work in applying ONA across the organization, including in innovation and sales effectiveness. Ehrlich, Cross, and I are currently working on a journal article that brings together some of our work and perspectives. More on this and other very tangible outcomes from the ONA work being done globally coming soon on this blog. This is an enormouly exciting space to be involved in.
Seven MegaTrends of Professional Services – #7 Commoditization
By Ross DawsonDownload the complete White Paper: The Seven MegaTrends of Professional Services
Continued from Globalization. Full table of contents below.
MegaTrend Seven: Commoditization
A commodity is quite simply a product or service for which the customer sees only one significant difference between what’s on offer: the price. The drive towards commoditization is perhaps the most powerful force in business today. The reality is that we live in a desperate “me-too” economy, in which most companies, apparently entirely deficient in any creative instinct, look at what other companies are offering, and imitate them. The true innovators are in the minority. Today, the MegaTrend of Transparency means that their innovations are seen by and copied by competitors almost as soon as they get to market, or even before. Unfortunately, the imitators find no way to differentiate their offering other than price. The MegaTrend of Globalization means those competitors can emerge from anywhere.
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Organizational network analysis goes mainstream
By Ross DawsonThis week’s issue of BusinessWeek features a great article on organizational network analyis (ONA) called The Office Chart That Really Counts, showing that the discipline is really beginning to hit the mainstream (following BusinessWeek’s piece last October on related work). The article focuses on the work being done by organizations such as IBM, Accenture, Merck, Lehman Brothers, Capital One, Procter & Gamble, and others such as Goldman Sachs, McKinsey & Co., and Microsoft of the 53 companies that are members of the Network Roundtable. Rob Cross of the McIntire School of Commerce at the University of Virginia set up the Network Roundtable 18 months ago so that leading organizations could share what they are learning in applying network analysis to enhance performance, and thus accelerate the development of this immensely valuable discipline. Some of the key areas being addressed by roundtable members include developing talent and leadership, enhancing innovation, facilitating mergers and major reorganizations, and building superior client, supplier and partner relationships. I am the research leader for this last category of external connectivity work at the Network Roundtable, though I apply ONA across a broader range of areas with my clients.
Social network analysis is not new – it has been done since the 1930s to understand communication and relationship patterns in society. Organizational network analysis has developed over the last ten years to apply these early ideas to enhancing organizational performance. Many managers have been intrigued by the ideas, however found it difficult to get buy-in in their organizations to pursue what is perceived to be highly conceptual, to get to the highly pragmatic results. Cross has been instrumental in taking the discipline through this challenging stage, to where the tangible and immensely powerful outcomes of well-executed ONA are evident. The discipline is just starting to go beyond the pioneers into the mainstream. From here, expect to see the hype pick up, the vendors to jump on board, for possibly much ONA work to be done poorly which will impact on the discipline’s reputation, and so on in the usual management trend cycle. However that is only because this is indeed one of the most powerful – and relevant in the current economy – management interventions available today, and it is very much in a state of emergence.
I am currently working through the analysis of a network study I’m doing of the communication among the top 100 executives of a $3 billion diversified professional firm. The insights from the study into the company’s drivers of success are extraordinary, and when we workshop this with the top executive team, there is no question that it will significantly influence what action the company takes to move to the next level of success. The same issue of BusinessWeek also features an interview with Kate Ehrlich of IBM, who has been at the center of IBM’s work in applying ONA across the organization, including in innovation and sales effectiveness. Ehrlich, Cross, and I are currently working on a journal article that brings together some of our work and perspectives. More on this and other very tangible outcomes from the ONA work being done globally coming soon on this blog. This is an enormouly exciting space to be involved in.
Seven MegaTrends of Professional Services – #6 Globalization
By Ross DawsonDownload the complete White Paper: The Seven MegaTrends of Professional Services
Continued from #5 Modularization. Full table of contents below.
MegaTrend Six: Globalization
Across the board, boundaries and borders are blurring almost into non-existence. It is no longer possible to ignore the fact that the economy is global. A pointed example is eLance, the world’s largest online services exchange. eLance allows organizations to specify the services they require, whether they be web development, graphic design, writing, adminstration or whatever else they need done. Service providers bid for the jobs posted, and the client can choose the best provider with the lowest bid. Over 40% of the services are provided across country borders. You may run a one-person show in Missouri, but you too can outsource services to bright, eager, highly-educated professionals in India, Eastern Europe, and other low-cost centers.
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A conversation with my newsagent
By Ross DawsonI’ve just had a very interesting conversation with my local newsagent, sparked off when I remarked on the launch of a new celebrity magazine, Famous, which he says has sold out its first issue. To touch on just a few of the most interesting things we chatted about… He says that newsagencies are a great business, and his shop is going the best it has in the nine years he’s been running it. He doesn’t believe that the Internet is taking sales away from newspapers, despite all the reports – he thinks newspapers have been selling steady all the way. However magazines sales are getting better all the time. This reminded me of remarks made last week by Bill Emmott on leaving The Economist after 13 years as editor. The magazine’s sales have more than doubled under his tenure to over one million globally. Emmott remarked that the demand for the kind of analysis that The Economist produces becomes even more important in a world of digital overload. People may prefer to get news from the Internet rather than newspapers, but they also want a review and big-picture analysis of what’s important, just as they have for decades with the major newsweeklies. Incidentally, the newsagent reports that celebrity press is the best sector of all in magazines, hardly a surprise, though it is interesting to consider what drives this in contemporary society. He also said that he was looking into selling his agency, and that standard prices are 2.3-2.7 times pretax earnings. Not bad for the buyer if it’s a solid and growing business. Would you want to buy a newsagency? An interesting question to consider. We won’t become fully digital in that much of a hurry.
Seven MegaTrends of Professional Services – #5 Modularization
By Ross DawsonDownload the complete White Paper: The Seven MegaTrends of Professional Services
Continued from #4 Transparency. Full table of contents below.
MegaTrend Five: Modularization
One of the most important, yet least visible, implications of the current phase of information technology is the ability to break down business processes and activities into their components. Web services is a standard for how computer applications—or parts of them—can be integrated. For example, Microsoft’s .NET framework, which it launched with its $200 million “one degree of separation” campaign to emphasize how it enables different organizations to mesh their business processes together, is founded on web services.
The implications for professional services firms are profound. Services can now easily be “unbundled,” or broken down into their components. This allows clients to pick and choose which of these elements they prefer to do themselves, if they have the resources and expertise available. They can then allocate the other elements to different service providers, based on which one can do the best job at the lowest price. Technology now makes it straightforward to integrate these different elements into a single business process that results in the desired outcome.
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The future of blogging
By Ross DawsonThe latest issue of BusinessWeek has an interesting interview with Mena Trott of Six Apart, the company that provides the software on which this blog is based, on the future of the blog. Some of the interesting issues raised include how blogging has brought a more personal tone to mainstream journalism, images, audio, and video being integrated into blogs, and introducing filters for readers and authors to select views into the blog. On another note, Six Apart is rumored to have recently raised $12 million in a highly bid C-round fund raising, with investors said to include Intel, giving a pre-money valuation of the company of around $100 million. Blogging is hot. Robert Scoble of Microsoft comments: “Well done Mena! We all forget just how bad things were for geeks five years ago.” Indeed, the massive front-page success of blogging is one of the centerpieces of the technology revival. I often find myself boggling at how transformational blogging and related technologies really are. We’ve only just scratched the surface here. Tradtional boundaries between content creators and consumers will dissolve. Assessment of the authority and integrity of any content will entirely change. Blogging is strongly accelerating the already powerful shift towards transparency, which impacts every domain of society and business. Email may begin to play a quite different role in our communication than it has over the last years. There are many other implications that are just unfolding. Very exciting times ahead.
Seven MegaTrends of Professional Services – #4 Transparency
By Ross DawsonDownload the complete White Paper: The Seven MegaTrends of Professional Services
Continued from Connectivity. Full table of contents below.
MegaTrend Four: Transparency
On October 25, 2004, the board of directors of financial services conglomerate Marsh & McLennan announced “significant reforms to the business model… which will be rooted in transparency.” The controversy on the payments its Marsh insurance brokerage arm was making to insurers, unbeknownst to its clients, resulted in a settlement of $850 million to policyholders. While this tale relates to another MegaTrend—that of Governance—the result is greater transparency. Transparency to clients, to the market, to regulators, and often even to competitors.
Transparency is in fact one of the most powerful trends across all of business and society, hardly just professional services. One of the early catch-cries of the digital revolution was “information wants to be free.” In a world of email and the Internet, it’s certainly very easy for it to escape. The Internal Memos website claims to be the Internet’s largest collection of corporate documents and internal communication, providing a home for any company documents that may have been liberated by disgruntled employees. Clients and competitors can login and have a peek if they wish. At a broader social level, the presence of cameras—often video cameras—in many mobile phones today means that incidents, accidents, and misbehavior can be seen by all, whether or not a television crew is there to capture the moment.
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Doing microfinance well
By Ross DawsonFollowing on from my story from last November, Microcredit gains momentum, the leading Indian microfinance institution SKS India has launched a great new website, driven by Chris Turillo, who is in Hyderabad after acting as business development manager for my US partner organization Business Development Institute. The website provides details on the lending methodology SKS India uses, which is based on the community joint liability model originally developed by Grameen Bank. It describes how they select villages, form sangyam (centers) and do financial transactions. In addition it has case studies that help to bring the microfinance concept to life. SKS India has lent to over 150,000 women clients in some of the poorest parts of India, and aims to reach 1,000,000 clients by 2010. It is important to recognize that this is a financial institution, onlending from banks such as ABN AMRO, Citibank, and HSBC, yet using models that allow cost-effective, high repayment small loans that help lift people out of poverty.
Seven MegaTrends of Professional Services – #3 Connectivity
By Ross DawsonDownload the complete White Paper: The Seven MegaTrends of Professional Services
Continued from #2 Governance. Full table of contents below.
MegaTrend Three: Connectivity
As we bustle about with Blackberries, mobile phones, WiFi laptops, and for the novelty seekers sometimes an entire armful of devices, we can now consider ourselves connected. Aside from when they’re out hiking in vast expanses, airplanes are for most businesspeople the last space where they’re more than minutes from a broadband connection. Not for much longer.
For knowledge workers, most of whose daily working material can be zipped about the globe in seconds, this is indeed a different world from when phone, letter, and fax were the primary ways of communicating. Certainly the first implication is clients’ expectation of faster responses. But it goes far beyond this. For example instant messaging, which allows you to see whether your counterpart is present and to rapidly exchange brief missives, is the antithesis of ponderous, formal communication. Thirty-six percent of over 400 professionals who participated in a webcast I did last year indicated they use instant messaging with their clients. This is just the beginning. These new forms of interaction start to change the entire client-professional relationship. The use of informal, highly interactive communication throughout a professional engagement means that clients feel they are part of the process. Increasingly, they are. Professional work is becoming visible, and the path towards client participation has begun.
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Mashups and Edgeio give power to the edge
By Ross DawsonIn web parlance, a “mashup” is a computer application that brings together elements of other applications. One of the key concepts behind it is that of APIs (application program interfaces), a term that is increasingly hard to avoid seeing. An API basically defines how other programmers can access a particular application. When Google first published its APIs, it was big news, as it allowed people to take specific data from Google and use it in their own applications. This helped set a trend, and now the whole much vaunted “Web 2.0” phenomenon is based on most new web applications having APIs that others can use to create new applications. For example MashupFeed compiles all the new mashups, that are appearing at a rate of around 2.5 per day. The just completed Mashup Camp conference was centered on mashups, including the economic models as well as the technology and emerging applications. Arguably the majority of the innovation and creative intent on the Internet now centers in this space.
One of the hottest applications in this space is the soon-to-be launched Edgeio (which comes from “edge” – where all the interesting activity happens on the web, and “input/ output”). In a nutshell, it allows people to post classifieds listings on their own blog, and for these to be taken and presented in one place, with links back to that person’s blog. It can also be used for any other content. In principle, this could challenge eBay and other classifieds giants – instead of posting a listing to sell something on eBay, you put the relevant information on your own blog or website, and anyone else can find it and compare it to all other offerings on the Internet. A good overview is given by the very first report on Edgeio on BusinessWeek’s tech blog. Some worry that Edgeio is too cognitively complex for people to understand. However I think the basic concept isn’t too hard. If you have a blog, you have power. You can do what you want there, and automatically participate in the collective space of all interactions. Why work by the rules others create?