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Organising by Value or for Events but not around Resources or Functions

As we move steadily into understanding that Technologies of Web 2.0, and some others are going to have a profound impact on ‘how’ we are all working and managing there is beginning to be more and more material around on business architecture http://en.wikipedia.org/wiki/Business_architecture the noble art of understanding how a business is organised in terms of its functions and business flow. The first half of the title, organising for value was used in the McKinsey Quarterly Review and published online in July 2008 http://www.mckinseyquarterly.com/Corporate_Finance/Organizing_for_value_2171_abstract . The piece recommends challenging the conventional decision making structure on the grounds that local operational measures, i.e. the current budget, often act to ensure strategic or value producing actions are frustrated.

An entirely different approach around a business structure of ‘Value Cells’ is proposed which interestingly ties in with some of my past observations around how to do this on the Business Technology side under the title of Mesh Collaboration http://www.meshcollaboration.com/ . Put simply the concept is that if companies are in a constant state of change then the fixed procedural organisation structures can’t keep up with change, and a flexible cellular approach is required enabled by technology.

The reason for this post came to me in a session with one of the major technology vendors in a discussion about their launching a focus on Enterprise 2.0 at their fall customer event. The big point that they had to make was how to tie together four pieces; what they term Web Presence, with Social Communities and Collaboration; then Content Management with Composite Applications. The challenge was that each of these four had an internal and external aspect, and success would be gained not by making these formal pre-prepared hard wired close coupled links, but event driven loose coupled links to suit the circumstances.

It was a good discussion and gave me a kind of moment of epiphany, i.e. a flash of inspiration! Current organisational structures are based around ‘resources’ or ‘assets’, meaning products, factories, departments, locations, etc. In both the McKinsey ‘Value Cells’ and in the discussion we were developing the organising force was ‘events’ and people were linked to events by the value could bring. Sort of like seeing the stars awarded for ‘value’ on YouTube clips if you like. These use ‘wisdom of the crowds’ to offer guidance based on actual user experiences of the value that the clip provided.

Is it feasible? Well yes, and in fact its really what is happening informally today as individuals struggle to find others who can help them handle events for which the structure has no ready made answer; the curse of email if you like! This is the route that is bringing Web 2.0 social technologies into organisations, people want them as they help them to function. There has been one huge BUT in all of this, and that’s how do you measure / manage success, and to me that’s what is seems the McKinsey piece is adding. Technology and Web 2.0 is giving us the capabilities but Enterprise 2.0 is about figuring out how to manage these capabilities for real applied value.

The real challenge is that citizens’ see their government in terms of responsiveness to either Events or their percieved Value, where as Government departments are organised around Resources and Functions. It is a fundermental disconnect that becomes more of an issue as the citizen makes the comparison with ‘services’ provided by the private sector in competition with other players in their market. Is a new younger and apparently refomring president going to grasp this issue? who knows but with the increasing involvement of the state in the banking sector at least some things are already changing.!

I just have to end with a quote from one of my personal favourite sources to watch for enlightened comment on Enterprise 2.0, Professor Andrew McAfee of Harvard. His words to an audience of CEOs sum this up perfectly in my humble opinion. http://blog.hbs.edu/faculty/amcafee/index.php/faculty_amcafee_v3/entry/sorry_was_that_an_aphorism/

“You cannot greatly influence Web 2.0.
You can greatly influence Enterprise 2.0”

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Hugh Davidson

Great post thanks!
I agree there is a worrying disconnect between citizens and government. As government becomes more complex to deal with more complex environments more appropriately, citizens are left with little help to conceptualize and adopt an informed position. I think that an informed public is the heart of an informed government.
Current organizational structures could be considered a recipe for dis-empowerment in this light and not just for citizens but persisting throughout public organizations also.

In terms of organizational cognition it’s a big change but I like the perspective you have on it.

andy mulholland

Thanks Hugh

In the private sector currently the view is that a recessionary market will be the forcing element of change as companies have to fight for new markets in new ways much of which will depend on the use of technology for intimacy with their customers. This, together with the costs in running their current busienss model will start the process of radical change just as the 1991/3 recession ushered in BPR and Matrix working around client server architecture using PCs and Networks in a cohesive manner.

BTW i am deliverying a presentation to open a section of the European Union annual conference on ICT (information communications technology) in a couple of weeks time on the need to understand mass particpation in terms of the impacts on government. The most frigthening aspect is that the technology is there and citizens are using it the obvious explosion of the consequences must follow unless this is recognised and channeled.