Thoughts on the 2011 MIT Sloan CIO Symposium

This entry was cross-posted from Meanders: The Dow Brook Blog

The annual MIT Sloan CIO Symposium was held earlier this week. I live-tweeted heavily from the event, but also wanted to share some thoughts in this more structured blog post.

CIOs are, as a whole, a conservative group. They are attuned to identifying and minimizing risk in their organizations’ information environments. Most CIOs experiment with emerging information technologies while observing what other, more progressive, organizations do with those same tools. Once the majority of CIOs in large companies are comfortable embracing a new technology, the market for it rapidly expands.

Speaking with and listening to a number of CIOs attending the MIT Symposium made one thing clear — markets for technologies enabling more agile business decision making at a lower cost are about to explode. Most of the CIOs in attendance agreed that they must implement cloud, mobile, social, and analytics technologies now to support rapidly evolving strategic imperatives in their organizations. The mantra “do more faster and at lower cost” surfaced in nearly every session I attended.

What does this mean for enterprise software providers? First, their offerings must be architected and include functionality to support multi-tenant cloud hosting and delivery, mobile access, social interaction, and the identification of patterns resident in large data sets. These capabilities are quickly becoming table stakes necessary to successfully compete in the enterprise software market.

Second, we are about to see a new, large wave of investment in enterprise software. The combination of the business imperatives noted above and pent-up demand from the last few years of recessionary cost-cutting focus within enterprise IT departments has led CIOs to declare that now is the time to retool, if it isn’t already too late. Hubspot’s CEO, Brian Halligan, noted during the opening keynote panel that cloud and mobile “are not the future”; they are technologies we all should have adopted two years ago.

Comments from various CIOs attending the event underscored the limited ability that enterprise software providers have to enable signifiant, beneficial transformation in the way their customers run their businesses. Many panelists noted that they already have helpful technical tools in-hand, but that they aren’t being used to optimal advantage because of existing cultural and leadership roadblocks in their organizations. On the subject of leveraging big data, Rob Stefanic, CIO at Sensata, presented supporting examples from work they’ve done with their customers. Many organizations they’ve worked with collect voluminous amounts of data, but do little to make sense of it, much less adjust the business accordingly. He also spoke of one customer that had a handful of employees doing potentially meaningful analysis of operating data, but no one else in the organization was aware of their efforts or the insights generated. Stefanic neatly made the point that pattern mining and recognition is a big shift for his organization and it’s customers, which will require changing from a reactionary culture to one that values the ability to predict the future with reasonable accuracy.

In the end, there were few new ideas presented at the 2011 MIT Sloan CIO Symposium. Instead, I left the event with a sense that there will soon be a large increase in spending on next-generation enterprise software, but that investment will be largely wasted, because the buyers won’t be able to make the systemic cultural and organizational changes necessary for the new tools to make a measurable difference. The missing piece for success is experienced management consultants that can help organizations review and revise their core beliefs, behaviors, and policies to really transform how they operate. Until that void is filled, vendors will sell more software, but organizations will continue to realize minimal benefits from investments in those tools. Even if normally conservative CIOs support their use.

Social Business Transformation: Focus on Small, Not Sweeping, Change

“…transformation happens less by arguing cogently for something new than by generating active, ongoing practices that shift a culture’s experience of the basis for reality.” — Roz and Ben Zander, The Art of Possibility

The recent debates, at the Enterprise 2.0 Conference and in the blogosphere, about E2.0 and Social Business have made one thing clear to me. Too many of us dwell on the transformative aspects of social business. Myself included.

This is likely so because most organizations value other things more highly than their people and act accordingly. Their behaviors cry out for transformation to those who envision a better way of doing business.

However, achieving sweeping transformation of the way that people are considered and treated is the wrong goal for most organizations.

It is important to remember that not all companies wish to transform themselves into social businesses, much less anything else. In fact, most begrudgingly embrace transformation only when they are forced to do so by changes occurring around them.

Instead of concentrating on “big bang” transformation, we should seek to make a series of small changes to a business’s people practices and systems. In other words, leave the organization alone. Do not focus social change efforts directly on organizational structure or culture.

It is more effective to address specific policy, process, and technology problems at the individual or role level. Let those snowflakes of change add up on top of each other to create a snowball that, when put in motion, will continue to grow until it becomes an unstoppable force. Measure impact in the same additive manner instead of seeking the big, single instance of benefit favored by traditional ROI analysis.

Wondering where to start introducing social practices and technologies in your organization? Look around. What specific challenges are customers, employees, and partners turning to each other to overcome? How are they finding someone who can help, and how are they interacting once they have identified that person? How is what they have learned shared with others?

Now imagine and investigate ways that your organization can help all of its constituents work together to solve those problems faster and less expensively. Be sure to consider technology that enables this, but do not forget to examine policy and process changes that could help too.

That is the way to improve your organization while recognizing and supporting its existing, inherent social nature. Forget about large-scale transformation. Focus instead on using people power to solve specific problems and challenges that, while small by themselves, add up to a significant gain for the business when addressed and overcome.

What Exactly is a Social Business?

In March, Jive Software created a new market category — Social Business Software (see my post on the announcement.) Jive published a manifesto that contains their definition of Social Business.

“The Social Business allows and rewards open conversation between colleagues, partners and customers. It relies on the power of social connections to shape new products and services, and to propel new revenue and earnings growth. It embraces Web 2.0 technology in the form of Social Business Software to enable this critical change.”

Jive’s definition is a good start, but ultimately does not go far enough. It implies organizational, cultural, and technology elements, but does not explicitly invoke all of those terms. Also, there is no mention of business process in the definition.

In June, partners at the Dachis Group began publicly touting Social Business Design as a new category of professional services. The volume was turned up on the concept last week, when Dachis acquired Headshift. Even I noticed the forward momentum, in this post, saying that “It would be difficult to overstate the importance of this action, as it instantly legitimizes social business as a management discipline on a global scale.”

While the Social Business Software and Social Business Design labels have gained increased usage, there is a problem with the common, core component of those phrases — Social Business. A Google query of the term produces a well-established definition that does not even apply to social computing:

Social business is a cause-driven business. In a social business, the investors/owners can gradually recoup the money invested, but cannot take any dividend beyond that point. Purpose of the investment is purely to achieve one or more social objectives through the operation of the company, no personal gain is desired by the investors. The company must cover all costs and make profit, at the same time achieve the social objective, such as, healthcare for the poor, housing for the poor, financial services for the poor, nutrition for malnourished children, providing safe drinking water, introducing renewable energy, etc. in a business way. The impact of the business on people or environment, rather the amount of profit made in a given period measures the success of social business. Sustainability of the company indicates that it is running as a business. The objective of the company is to achieve social goal/s.

If Enterprise 2.0 and Social Media advocates are going to try to hijack the phrase Social Business, there must be a clear, consensus definition in place. Since an adequate definition is currently lacking, despite Jive’s good attempt, I thought I would write one and start a communal process of building something we can all use moving forward.

My working definition of Social Business appears below. Please comment extensively on this, even at the level of specific word changes. Also feel free to invite others to read the definition and comment (directly on the blog please). I will gather and consider all comments, then revise the definition and re-post. Thanks in advance for your feedback!

Social Business: A business philosophy that emphasizes employee trust and autonomy as an alternative to hierarchical command-and-control management. Additionally, the philosophy views customers and business partners as trusted components of the organization, not as external constituents. The philosophy should be supported by appropriate organizational design, culture, business process, and technology strategies and investments. Like any other business philosophy, Social Business produces results consistent with accepted definitions of a viable, on-going business.