Six New Game Strategies for Forward-Thinking Organisations
An edited version of this article appeared in CIO Connect magazine, Spring 2009.
We could be at a historical turning point for business. Amid global economic, environmental and political crises, many traditional institutions are foundering, unable to move fast enough to adapt to the changing world. Obama’s election is the result of a wider public clamour for political and social change, which many see as a fundamental generational shift. At the same time, technology has evolved to the point where it is now feasible to structure our organisations in a fundamentally different way – as truly networked, collaborative and responsive to the needs of employees, customers, partners, communities and society at large.
As leading business thinkers and practitioners have been pressing home for years, if companies are to survive in an increasingly fast-moving, competitive, connected world, then the ability to anticipate and respond rapidly to change must inform their organisational strategy. If it doesn’t, then sooner or later they will be usurped by nimbler competitors who “get it”. In recent years many large companies have undergone vast business transformation programmes in an attempt to become less hierarchical, more collaborative and more agile – with varying degrees of success. Yet nearly all need to go further, many a lot further. As recession deepens, some will inevitably wither and die. And those that emerge the strongest are likely to be very different beasts to the corporate leviathans of the past.
Pointing the way forward are a thriving ecosystem of high-tech start-ups unencumbered by legacy and free to experiment with new business models, processes and practices. Then there are a handful of forward-thinking corporates, both in the high-tech sector (e.g. Google, Cisco) and outside it (e.g. Proctor & Gamble, GE). Recession and the survival instinct is forcing many others to reevaluate priorities and make sweeping organisational changes. But what truly bold strategies should organisations be employing, or working towards, if they want to emerge from recession not as battered survivors, but at the forefront of a new wave of business?
Below are brief outlines of six New Game strategies that could put your organisation in the vanguard. Most require vast shifts in organisational culture and thinking, and few will be effective in isolation. Like the emerging business landscape, they are all connected and co-dependent. All require an overarching acceptance that the rules of the game are changing, as must our organisations. Making such changes stick will be no mean feat, but those unwilling or unable to be bold won’t be tomorrow’s winners. As social media consultant and former BBC technology chief Euan Semple says: “As we’ve seen with the troubles in the financial sector, so much of the apparent stability and invulnaribility of businesses is illusory. You can go under at a moment’s notice, and if you don’t keep up with the others who are engaging with people and sharing as fast as they can then you’re going to look as if you’re dying.”
Strategy 1: Know what people think of you – and respond quickly
Many businesses talk about being ‘customer centric’ and ‘committed to values’, but if you truly value your customers, and the wider communities among which you operate, you should listen continually to what people have to say about your organisation, engage them in open discussion and act quickly where appropriate. If someone is unhappy with something your business has done, they are increasingly unlikely to hang on your customer care line and make a formal complaint, especially when experience tells them they will be put on hold for prolonged periods, passed from pillar to post and finally fobbed off with a glib corporate pronouncement read from a computer screen. Instead, people are increasingly going online, blogging, posting on web forums or talking on social networks. Such conversations can escalate, causing reputational damage if left unchecked or handled in the wrong way. The right way, as many high-tech start-ups are finding, is to talk to customers with understanding, fairness and honesty. If you converse with them on a human level, they respond positively. Equally, online conversations might be generating useful ideas about how you could improve aspects of your products or services, ideas you may never hear or consider otherwise. Such conversations are becoming increasingly visible, as information and conversations become ever more straightforward to track/navigate and faster to propagate among online communities. As Richard Moross, CEO and founder of online printing company Moo.com, says: “On the Internet, it’s very easy to monitor what people are saying about you. For instance, we look at every blog post that ever references Moo, which is tremendously insightful. It helps with product development, with customer service and with understanding the opportunities out there. If someone is happy, unhappy or has an idea for a new product why wouldn’t you want to know that?” But Moo and their ilk go further, engaging with customers online and building real relationships with them through email newsletters, blogs, and on social networks like Twitter, Flickr and Facebook. Building a system to track online conversations about your company or aspects of its operations, and then route those conversations to people in your organisation best placed to respond, is a relatively simple task. But you won’t see any benefits unless you have a culture where the right people can and do respond quickly.
Strategy 2: Encourage open social networking inside and outside the company
Many companies have been reluctant to encourage social networking among employees on public networks. Some have banned it altogether. Others are investigating closed tools that only allow networking within the corporate firewall. While you will probably want some closed, internal social networking and media tools for discussions that need to remain inside the business, you should also be engaging with a diverse range of people outside the firewall. To innovate at the speed necessary in future, organisations will need access to a ready pool of know-how, ideas, talent and ability. Collaboration is the name of the game. For particular projects organisations will need to bring on board individuals or form partnerships with other organisations very quickly. If your people already have a diverse range of external contacts they know and trust through existing social networks (which will increasingly be formed and maintained online), that will be an asset to your business. If relationships are already well-established, it’s easier to form ad hoc partnerships, both inside and outside the company. Organisations therefore need to give people the capacity to build and maintain these networks. Again, the technology is not particularly complex, but how can IT help promote the concept as valuable to the business, particularly when many people’s only exposure to social networking to date is limited to Facebook? Semple says: “If you’ve got a CEO that’s up for this, it will help immensely. But if you don’t, you might have to promote it by finding and joining up advocates in order to help it happen by itself.”
Strategy 3: Embrace open IP (and open APIs)
In a world where collaboration is key, agility is greatly enhanced if everyone has access to a shared pool of resources such as media, software components and data that can be accessed, used and reused freely. This is evidenced by the growth of open source software and Creative Commons licensing. When you’re working on projects that need to be low-cost and quick-to-market, the last thing you want is the threat of legal action because you’ve unwittingly infringed someone’s intellectual property (IP). In its 2009 predictions for the technology industry, Deloitte warns the downturn could spur the growth of a new breed of ‘digital ambulance chasers’. “In 2009, there may be…claims of billions of dollars for copyright abuse for media, software and other forms of content,” the consultant predicts. That makes the need for a ‘commercial commons’ even more vital. And embracing the concept means you must also play an active part in contributing resources, as well as taking from the pool. Opening up Web-based application programming interfaces (APIs) is another key to agile collaboration, since this enables the easy creation of mashups, online applications that pull together various resources to create something new of value. For example, micro-blogging service Twitter’s open API has led to myriad third parties creating new interfaces and applications for the system, which has in large part helped fuel its growth and success. Peter Hinssen, programme director for Realising Business Performance Through IT at the London Business School and author of the book “Business/IT Fusion”, says: “The old concept of IP is eroding very quickly. Those companies willing to accept that if they share they’ll get more in return are going to benefit. Companies can accelerate in the market much faster by teaming up with people who are complementary than by trying to do everything themselves – and I think that concept of the corporate mashup is going to be very powerful. But this takes a lot of guts and visionary leadership, especially when the automatic reaction of many in a downturn will be to lock up IP as much as possible.”
Strategy 4: Give away things of value
As well as contributing to a shared pool of resources such as software components and media, another radical strategy that can pay off in a digital economy is to give things of value away for free – applications, services, media, products, etc. While this may have seemed counter-intuitive a few years ago, an increasing number of companies are realising it can bring other benefits - such as building their brand or reputation, generating business for premium products and services, making advertising revenue or creating valuable communities of users and customers. The strategy is already common in the high-tech sector, from a raft of start-ups to giants like Google, Yahoo and Microsoft. In a Wired cover story last year, headlined “Free! Why $0.00 Is the Future of Business”, editor Chris Anderson noted: “The huge psychological gap between ‘almost zero’ and ‘zero’ is why micropayments failed. It’s why Google doesn’t show up on your credit card. It’s why modern Web companies don’t charge their users anything. And it’s why Yahoo gives away disk drive space…The winners made their stuff free first.” And the trend is being driven by the new economics of the digital economy, he thinks. “Two of the main scarcity functions of traditional economics — the marginal costs of manufacturing and distribution — are rushing headlong to zip. It’s as if the restaurant suddenly didn’t have to pay any food or labor costs for that lunch,” he says. Anderson’s forthcoming book “Free: The Future of a Radical Price”, which promises to explore the idea in more detail, will be out in June.
Strategy 5: Eliminate traditional functions and departments
While all of the radical strategies identified here are enabled by technology, as with everything it’s people that make them work. And if you want people to work together across boundaries, why maintain those boundaries at all? The idea of flatter, non-hierarchical organisations and the elimination of silos is not new. It has been advocated by some of the foremost business thinkers of the past quarter-century, most notably by Peter Drucker. Many leading businesses have been moving steadily in this direction, with more cross-functional team-working and projects now common. But to attain true agility, should firms go further and forget traditional hierarchies completely? Cisco CEO John Chambers seems to think so. In a recent presentation on Enterprise 2.0, he said: “We have completely restructured. I now reward entirely on cross-functional success. We run the company on social networking groups…working across corporate functions towards a common goal. Once you get people used to working cross-functionally the decisions these groups make are much better than the decisions an operating committee makes because they are closer to the action. But you have to train them on the process and the interfaces. This means organisations are going to be turned on their head – flatter organisations, more reward and accountability for collaboration and teamwork, moving from hierarchical to truly networked.”
Strategy 6: Revolutionise employee relationships
Much has been made of the need for organisations to attract and retain the most talented people. As former GE chairman Jack Welch famously said: “The team with the best players wins.” Often, however, the best people don’t want a full-time corporate role. They may have their own side businesses and projects, they may be juggling a portfolio career and/or family commitments, they may be seeking looser ties with a number of different employers, they may work for one of your suppliers or strategic partners, or they may be half way across the world. The fact is organisations need to source talent from wherever they can, and diverse people have diverse motivations and needs. Fixed terms, standard roles/contracts and a blinkered approach to recruitment won’t suffice any longer. Just as our organisations need to be flexible about meeting customers’ needs, so we must be equally flexible about meeting the needs of the best people. As Semple, himself a freelance, notes: “A lot of organisations are still stuck in the old ways. For example, many companies just can’t get the fact that I want a relationship with them. I want to be active on their behalf all the time, but many only want to pay me on the basis of the time I spend in their offices.” In addition, many people want or need the flexibility to work on their own computers and devices, in any location, as well as the freedom to manage their own time. Clearly IT can (and is) doing much to enable such flexibility, but until HR policy catches up, companies won’t reap all the benefits. One way an organisation can reach out to talented people is by forgetting “office time” completely and measuring purely on their outputs. But what about the talented people you absolutely need to be working at specific times or in specific locations? Even here, it makes sense to be as flexible as possible to get the right people. And there are very few, if any, positions that cannot be made considerably more flexible if the will is there. Another way to attract people is by proving you share their values and aspirations. It should be no surprise most people want to work for organisations that are making a valuable and positive contribution to wider society – ones engaging with the communities in and among which they operate, and acting to address global issues that affect us all, such as sustainability. Enlightened organisations are realising that ‘corporate social responsibility’ needs to be at the heart of what they do, not just a glib marketing message. Companies’ actions are becoming increasingly visible to increasing numbers of people – and that includes those talented people they’re hoping to woo.