American business is facing a productivity crisis. Last year, U.S. productivity increased an anemic 1.6% – half the 3-4% annual rates of the previous decade, driven by technologies like business process automation and the Internet. Those technologies have reached saturation, and if the next tech wave doesn’t arrive soon, our economic growth and the quality-of-life improvements it affords will suffer.
This crisis is particularly acute in Houston, where the new energy boom has run up against a tight labor market, and talent constraints prevent companies from fully seizing new opportunities. The renewed focus is productivity: how can we get more out of our organization? Especially when it comes to what McKinsey calls “tacit interactions” – complex collaborative problem-solving – the type of work that has traditionally been resistant to productivity-increasing technological process automation like manufacturing and many services.
Almost everyone feels the primary symptom of this failure: email overload. Collaboration is more important than ever, but email is showing its inadequacy to the task, with overflowing inboxes, the spiraling “Cc: CYA” problem, out-of-sync file attachments, and the lack of any organized, up-to-date, persistent, transparent institutional memory or knowledgebase.
The technological answer is slowly migrating over from the consumer side of the Internet, collectively known as “Web 2.0”. If “Web 1.0” was static web sites, “Web 2.0” is all about interactivity and communities: blogs (short, frequent, easy publishing), tags (community-driven categorization of information), social networking (like MySpace, Facebook, or LinkedIn), and wikis (web-sites easily editable by anyone, such as Wikipedia, the rapidly growing global encyclopedia).
The application of these Web 2.0 technologies in businesses has been termed, naturally, “Enterprise 2.0”. Dr. Andrew McAfee of the Harvard Business School defines Enterprise 2.0 as “the use of emergent social software platforms within companies, or between companies and their partners or customers.” He further clarifies two key words in that definition:
- “Platforms are digital environments in which contributions and interactions are globally visible and persistent over time.” (as opposed to email)
- “Emergent means that the software is freeform, and that it contains mechanisms to let the patterns and structure inherent in people’s interactions become visible over time.” (like with tags or links; and freeform, as opposed to process-oriented workflow, traditional pre-structured knowledge management software, or narrow project-oriented groupware)
The benefits go beyond productivity, impacting areas like innovation, knowledge management, and telework.
In a globalizing economy of fierce competition, commoditization, and cost pressures, innovation has become the new mantra to stay ahead of China and India. And not just product innovation, but bottom-up innovation in processes, costs, service, quality, speed, sales, supply chains, and even business models. Enterprise 2.0 tools create the perfect incubator environment for ad hoc global teams to collaborate on innovative ideas.
In addition to increasing productivity and fostering innovation, Enterprise 2.0 tools are even reviving the field of knowledge management from a decade of high-profile failure (“Knowledge Management 2.0,” anyone?). The lack of incentives and rapidly stale information hobbled such efforts in the past, but because tools like blogs and wikis are integrated into daily work, they overcome these problems and emerge into the “collective intelligence” knowledgebase companies always knew they wanted, but couldn’t quite achieve.
Finally, Enterprise 2.0 software is a great enabler of telework by our newly virtual workforce, whether on the road “living out of a laptop” or working from home. Today companies like Sun and Agilent report that their virtual workforces are 60% less expensive while being 15% more productive. Some experts believe we are at a “tipping point” in the rise of this phenomena, and 40% of the workforce may work this way by 2012.
Collaboration. Productivity. Innovation. Knowledge management. Telework. The benefits of the Enterprise 2.0 movement are both broad and deep, enabling the flexible, adaptive corporation of the 21st century. Make sure yours doesn’t get left behind.