Loren Baker, over at Search Engine Journal, has posted an interesting article on Yahoo’s new RSS integration into email.

This is an interesting indication of how future Web Office integration could work. Not only will you use one interface (which is basically web email - like Zimbra) to write content for emails, blog posts and Wikis, but you will also be able to use that same interface to consume RSS based information.

Some people will use dash-boards. Some go straight to the enterprise blogs and Wikis. Others will prefer to increase the number of emails they have to read.

An Enterprise version of Digg, designed to help rank articles on internal blogs and wikis will revolutionize the way that most companies generate innovation.

Before they can take advantage of an Enterprise Digg, companies will have to start implementing Web Office Technology. Web Office technology represents the next generation of tools for knowledge workers. Microsoft’s version is called Office Live, but Microsoft is late to the party, with companies like Google, Flock and Zimbra giving a brief indication of what is possible with these new tools. ( For more examples, see this Web Office Directory. )

As with the introduction of all new technology, Web Office technology will radically alter the way that companies are managed. Or, put another way, to take full advantage of these new technologies, large organizations will have to alter the way that they approach designing their organizational hierarchies, incenting their employees, and, most importantly in today’s globally competitive environment, management will have to change the way they approach generating innovation.

Web Office technology will give every employee the power to communicate with everyone else in the organization in an efficient way. In my essay, “Turning Knowledge Workers into Innovation Creators”, I explain why most companies will eventually set up a series of Blog Types such as Bio Blogs, Client Logs, Product Blogs, Project Blogs, and Expert Page Blogs. In a company of 100,000 people, there will be 100,000 Bio Blogs. For every major Client, there will be a Client Log. For every major Product, a Product Blog.

In this environment, an Enterprise Digg would give employees a structured way to literally vote on good ideas.

In “Turning Knowledge Workers into Innovation Creators”, I have argued that in today’s hyper competitive environment, companies need to generate constant innovation. To accomplish this, I argue that companies need to change the way they treat knowledge workers, elevating their knowledge workers to the powerful roll of collaborators in common goal of generating constant innovation.

What is important to realize is that this requires a very flat organizational structure. No one person is formally in charge of driving the innovation. Instead, the company will have to rely on the spontaneous organization characteristic of any emergent system. The idea here is simple: when individual agents operate in an environment that encourages random interaction, these agents can, spontaneously, generate order. More specifically, these agents can generate predictable outcomes. The example most people are familiar with is the free market economy.

The best way to generate constant innovation is to rely on a self-organizing system, with no one person in charge. In other words, don’t manage people to produce innovation, instead, cultivate an environment where your innovation creators, your people with innovative ideas, can succeed when they try to turn their ideas into reality.

To many people this sounds like a ridiculous notion. Several senior executives have told me bluntly, “Well, that’ll just lead to chaos!”

These old-school managers are wrong. What’s more, in today’s environment of hyper-competition, if they stick to their current dictatorial, micro-management style, these old-school managers will loose on two fronts. First, they will not be able to keep up with competitors that rely on a more open approach to innovation. I’ll highlight proof of that in a minute. Second, these micro-managers will not be able to keep the highly talented people they have hired to work for them.

This second point requires some explanation. Today, more and more people are entering the work force with advanced degrees, such as MBAs, Masters’ Degrees and PhDs. Old-school managers need to realize that these new recruits are at least their intellectual equal. In addition, with tools like Google and Wikipedia, it will not take these young employees long to learn everything they need to complete any specific task. These recent grads have been trained as experts in just-in-time learning. They do not need 5 years of experience to get up the learning curve. Many of them can do it in 5 minutes. When you are managing highly capable people like this, if you are trying to innovate, you must treat them as equal partners. This means providing them with full information, and respecting their input.

Let’s return to the first assertion that old-school micro-managers will not be able to generate innovation at the same pace as companies that rely on a self-organizing systems, with no one person in charge.

Is this true?

Here are two examples to prove it.

The first is Google. Google relies on its engineers to generate innovation. Google even requires that their engineers spend 20% of their time on their own projects.

In a recent Business 2.0 article, Eric Schmidt, Google’s CEO described how Google comes up with new products this way:

Business 2.0 - Does Google have some kind of grand strategic plan for the new products it creates?

Eric Schmidt - Virtually everything new seems to come from the 20 percent of their time engineers here are expected to spend on side projects. They certainly don’t come out of the management team.

Google is a leading user of internal blogs and enterprise Wikis.

The second example is Toyota. It’s an example that Schmidt highlighted in the Business 2.0 article. Toyota’s production lines have a rip-cord. Anyone on the Toyota line can pull the ripcord, and stop production if they come across a problem.

This is a truly massive form of empowerment, and a total decentralization of power. Toyota uses that to decentralization to produce a consistent stream of the highest quality ratings in the automotive world.

Google’s massive grow, especially when compared with Microsoft, and Toyota’s massive growth, especially when compared with GM, are both great examples of innovative companies that are trouncing their competition.

Management of an emergent organization is tricky, because it is not direct management. Instead, manager only have access to oblique tools of control, rather than direct tools of control.

In the case of an Enterprise Digg, setting up categories which Digg categories are included, such as “Innovative Product Ideas” is one of the few oblique tools that management will have. I detail others in “Turning Knowledge Workers into Innovation Creators”, when I list the characteristics of an environment that fosters innovation creators.

Just as central bankers, like Allen Greenspan, are able to control and guide the growth of a whole economy, thorough bubbles and crises, it is important to for managers to realize that they can foster innovation using oblique controls.

And, using the free market as a continuing example, it is also important for managers to realize that too much control stifles growth and innovation.

That’s why most companies will eventually start to use internal enterprise blogs, enterprise Wikis and an enterprise Digg to generate innovation.

MTV launched with “Video Killed the Radio Star“. Today’s endless stream of instantly forgettable pop-divas and pre-fab boy bands is proof that MTV was right.

The death of the Word Processor is not being announced in such a blunt, self conscious fashion. But it is happening.

In my MovableType installation, when I write a blog entry, I have Bold, Italics, Underline, and HTML link. That’s all I need. Everything looks great. A long while ago, I built one cascading style sheet. If Innovation Creators was a company, I would not have even done that. Instead, the company would have pre-built a standard, branded look and feel.

Even with only Bold, Italics, Underline, and HTML link, the blog is vastly more powerful than anything I could create with Word. Here is a brief list of how the blog is better than a word processor:

• Content created in an internal blog is searchable by a broad audience.
• In an internal enterprise blog, users can set up structured access control.
• The blog provides a structured system for feedback, through comments.
• Tagging means that people can add value to content in ways the author did not first realize.
• Linking and track backs add further connectivity, not possible in word.
• Consistent enterprise wide look and feel / branding for memos and white papers.
• Storable revision history.
• Simple structure for efficiently sharing relevant content without flooding email inboxes. By linking to a post, you help your colleagues find relevant when they need it. Today, with word docs, your only alternative is to spam people with “hey this might be interesting to you…maybe…next year…perhaps”.

In a company with an AJAX powered email system, like Gmail or Zimbra, you can use the same UI to post to enterprise blogs and enterprise wikis. With Style sheets and plug-ins to MovableType, you can instantly turn your posts into word docs, or better yet, into PDF files.

At that point, why do you need a Word Processor any more? What on earth is it good for?

So the, the Buggles had a little hit with “Video killed the radio star”…. Too bad “AJAX killed the word processor” doesn’t have the same ring.

Great consulting firms are not great because they have teams of brilliant people, each of whom are independently capable of solving any problem that will ever arise during a client engagement. Great consulting firms are great because they have an established process for compensating when their teams lack all the skills they need.
I am currently lucky enough to work for a firm that has virtually perfected this process. (It’s nice to work with people who make you look good.)

The process has three phases.

First, before the engagement begins, the partner responsible for the engagement works to make sure that the manager or senior manager running the engagement is fully aware of the client’s requirements, the engagement’s goals and, perhaps most importantly, the firm’s work quality expectations.

Second, the reporting and monitoring goal is to identify where the team will need help. Usually, most of this is determined ahead of time.

Third, when support is required, the partner works with partners in other areas of the firm to bring in expert resources. During this phase, partners are able to gather the complete know how of the organization in a just-in-time fashion and focus it on solving a problem. A Financial Services Advisory team might need to pull in experts from Tax, Audit, Systems Risk Management, and other specialist teams within Financial Services Advisory.

The very structure of the partnership motivates other areas of the firm to help. Partners do not benefit solely from the engagements they are personally involved in selling and delivering. In other words, their personal compensation is based upon the success of the firm as a whole.

The exact approach is rebuilt every single time because each client engagement is unique, and each team has a unique combination of strengths and weaknesses. Who parachutes in to help a team solve a client problem when they do not have all the necessary expertise and how unique client problems are solved are reinvented with each engagement. There is constant innovation around “who” and the “how”. But, the process for making sure that the overall project succeeds and the incentive structure within the firm do not change.

Brian Jones, a program manager for Microsoft Office posted an interesting piece today on the new open Office XML Schema and Microsoft’s promise not to sue if you use their schema: Microsoft Covenant Regarding Office 2003 XML Reference Schemes.

The story was also picked up by the NT Times: Microsoft Plans to Ease Format Rules

What does this mean?

It means that, with very little effort, MovableType, WordPress and SocialText will be able to kick out MS Word Doc versions of their entries. Or even MS Word Doc versions of a whole collection of blog or Wiki entries.

This turns MS Word into something like an AJAX enhanced web page in a browser. Word simply becomes another rendering tool. Just a FireFox can render a web page, MS Word will have its own way of rendering that page.

This raises some interesting questions:

Why would be need MS Word anymore? If Flock builds a beautiful GUI for editing posts, and this is combined with all sorts of CSS based themes for document formats, then we wouldn’t need Word to create content. My guess is that most marketing departments would love to create one standardized look & feel for all corporate docs.

How important will integrated functions like access control be in this new world order? There is an interesting project on SourceForge called Firefox ADM. Here’s what they say: “FirefoxADM is a way of allowing centrally managed locked and/or default settings in Firefox via Group Policy and Administrative Templates in Active Directory”. Obviously, it’s easy to see that and form completion and access control features that MSWord could offer would be quickly available in Web Office solution.

This will ease the integration of Web Office tools into existing business work flows. The barriers to a Web Office world are falling rapidly.

Today, on BusinessInnovation2005, Douglas Rushkoff worte an article entitled “Work as Play” that focused on creating an innovative work environment.

Here’s some of what he said

Establishing a playful career or company isn’t as easy as it looks. It doesn’t require expensive consultants, trips to the woods, or the reinvention of a company’s culture based on some abstract ideal. But it does mean going against much of what we’ve been taught about competition and survival—not just in business school, but for the past five centuries! Still, just as people have stopped relating as individuals to their brands and opted instead to become members of brand cultures, producers in a renaissance era must come to think of their companies as collaborative mini-societies, whose underlying work ethic will ultimately be expressed in the culture they create for the world at large.”

Piers Young who writes Monkey Magic (thoughts on thinking) posted this on this site today:

“I feel with some passion that what we truly are is private, and almost infinitely complex, and ambiguous, and both external and internaland double- or triple- or multiply natured, and largely mysterious, even to ourselves; and furthermore that what we are is only part of us, because identity, unlike “identity” must include what we do. And I think that to find oneself and every aspect of this complexity reduced in the public mind to one property that apparently subsumes all the rest (”gay”, “black”, “Muslim”, whatever) is to be the victim of a piece of extraordinary intellectual vulgarity. Literally vulgar: from vulgus. It’s crowd-thought” - Source: Philip Pullman in the Guardian

Philip Pullman is taking a very eloquent stand against brand culture. It is also the beginnings of a recognition that part of a joyful culture and a playful culture is tolerance of diversity. This especially means tolerance for a diversity of ideas, approaches and even communication styles.

Out of that tolerance, that playful willingness to explore, ideas can take flight and become true innovations.

Can such a gentle, open-minded approach really succeed? Look at the diversity that powers open source software. Across languages, politics, even time zones, Linux and Firefox roar on. Why? Because it’s fun to be part of those teams. People volunteer their time because they enjoy it.

Douglas Rushkoff has touched upon a raw and critical nerve here. Innovation will not happen in an environment that isn’t fun.

Declan Mccullagh has written an interesting article entitled: The law of ’spontaneous order’, as part of CNet’s report: Taking back the Web: A new generation weaned online is using wikis, blogs, tagging and other new technologies to return the Internet to its social roots. You can get the pdf here

Declan begins by talking about the Internet’s roots in academics sharing and collaborating:

So to put this ostensibly new-world order in the proper perspective, it helps to recall the historic computing breakthroughs that made the modern Internet possible. Even if today’s technologies do usher in a new digital society, they may simply represent the culmination of many advances that have long been in existence but are finally coming together by serendipity if not design–an example of what late Austrian economist F.A. Hayek called “spontaneous order.”

Digg is an example of this spontaneous organization. Declan says “[t]he term refers to the marvel of complexity that happens every day in society when people work together and interact voluntarily, without a central authority dictating what happens.”

On a broader level, open source software in general and even Wikipedia are both great examples of emergent organizations - or spontaneous order, as I will be arguing as I post the rest of the Turning Knowledge Workers into Innovation Creators essay.

If a company wants to generate constant innovation, it needs to treat its knowledge workers, not as a cog in the machine, but instead as an equal partners in their quest to create new innovative products and services. As such, the whole company needs to be devoted to generating innovation. To make this innovation happen, all that is necessary is a structured platform for sharing information. Tangibly, that means a set of enterprise blogs, some Wikis and some other information sharing tools.

Delcan is right to hint that these technologies will radically alter the pace and shape of how the world works. That Google has forced Microsoft into announcing a sea-changing “Office Live” product is proof that companies run by teams of empowered innovation creators can easily take on giants and win.

This lesson will apply outside the world of software just as much as anywhere else. From GM and FORD,to all the major banks, to GE, to every mid and small company, all of them will have to deal with a new world order, propelled by competition that delivers constant innovation.

Last night, I asked the question Is Open Office going to be Flocked?.

I made the case that this might be a good idea. Just as flock is revolutionizing the web browser for a read/write Web 2.0 world, maybe it also makes sense to rethink office tools in the context of a networked world where any knowledge work can create an application that gathers, analyzes, and shares information using, for example, a new web powered spreadsheet application.

The alternative is try and jam all that functionality into AJAX powered browser based applications.

Which way are the big guys going to go?

Two things that I have come across recently make me thing that maybe the web based route is going to be the way things happen.

The first thing is Goowy. Goowy is AJAX on steroids. Maybe AJAX on speed. It’s crazy. Goowy is an entire AJAX powered desk-top. It’s proof that an AJAX office could probably work.

The second this is an article by Robert X. Cringely - Google-Mart -Sam Walton Taught Google More About How to Dominate the Internet Than Microsoft Ever Did.

Bob talks about how local data centers could be used in combination with AJAX Office to produce a user experience that was fast enough to users actually want to use AJAX Office.

I am still not convinced. I think it would be too much of a jump. I know from years of working at Wells Fargo and at one of the big 4 consulting firms that this kind of change would take years to be adopted by these companies. Adopting new technology that does entirely new things, such as adopting enterprise blogging tools, is very different from moving off Excel onto a new platform. For that reason, I think that Flocked Office applications will probably be the way that things transition.

Instead of a thin client tomorrow, it is more a thick client weight reduction plan.

Google is now working with Sun on Open Office.

Does this mean Open Office is going to be Flocked?

Flock is making a new browser, based on the FireFox code and the Mozilla engine. The new browser is designed to faciliate Web 2.0 interaction. In other words, Flock’s browser is designed to faciliiate contributing as much as consuming content.

The folks at Flock have realized that the browser has not evolved much in the last 5 years. There is significant room left for innovation.

I believe that the same is true for Office (be it MS Office, Open Office, Star Office, etc).

Susan Kuchinskas, over at Wired, wrote an interesting article about 6 weeks ago: Next Up: Google Office?.

Susan pointed out that an Office suite, based on standardized XML files could, when combined with Google search capabilities, provide for some very powerful results.

I think, that only begins to scratch the surface.

Here are some specific examples:

1. A Word processor that enables you to drop in surveys, and live lists, and then has a “blog this” button right next to the “save” button.
2. A presentation tool that, much like macromedia’s breeze, also you to create a simple, blogable, flash version of your presentation. What would you use this for? Check out this crazy pitch for software. It is so crude, but so brilliantly easy to put together. The perfect long tail example.
3. A spreadsheet that posts, shares and consumes live data. This is the most powerful of the bunch.

There are two important things to recognize about these ideas.

First, these Web Office tools are about extending the web into applications other than the browser. People who advocate thin clients might feel threatened by this. They should not. The same people that advocate thin clients can look at Flock, and see that Flock works with standards, and still changes the client. As long as a Web 2.0 compatible version of Open Office posts in XML, maybe there will be instances where building radically new XHTML interfaces is not necessary. For some things, like a word processor, maybe XHTML will work just fine. And even if it is limiting, maybe some structure in office documents is a good thing. Academics using LaTeX have had no trouble communicating earth changing ideas even though they are limited to Headings, Sub Headings, Sub subheading and the like. For other things, such as spreadsheets, it probably makes sense to have more power built directly into a fat client, just as Read/Write tools are built into Flock.

Second, the Flocked Office clients will not be designed to help knowledge workers create content. Instead, with Web Office/Flocked Office clients, knowledge workers are going to become innovation creators. They are going to use these new tools to build ad hoc solutions. These will be highly customized web applications for something that will solve the problems encountered by a very small group, or by team that is only working together for a short space in time.

The critical thing to realize, is that innovation creators are builders. They need Web Office tools that give them the power to develop applications.

Here are two examples.

My old fixed income derivatives trading desk had a spreadsheet that calculated swap rates. The version I built grabbed Eurodollar futures prices from Reuters, did a convexity adjustment for the difference between futures and forwards, based on swaption vols, and calculated the swap rates. The spreadsheet was a swap pricing application built in Excel. It consumed live data, and came up with live swap rates. That’s where the sexy stuff ends. To share the prices around the bank, I had about 6 people I had to call each morning to quote them the rate. Then, I emailed the spreadsheet to about 20 other people, who forwarded it on to another 1,000+ relationship managers. These people were all getting paid a lot of money to forward emails.

My old business partner was in the commercial mortgage lending business. They had a version of the JP Morgan commercial mortgage spreadsheet. It turns out that most banks (4 years ago) seemed to have a version of that spreadsheet. The spreadsheet was not that different from my swap calculator, only the numbers for things like square feet came from people, not from Bloomberg. The spreadsheet was a pricing application build by knowledge workers. The problem was the same. The sexy stuff quickly stopped, and all these MBAs spent their day emailing the spreadsheets back and forth, each updating a field here and there, a senior VP eventually giving her approval, after 3 previous approvals, and the deal was done. In a department of 30, a $2M customized solution wasn’t justifiable. And a customized solution would be out of date by the time it was finished, such was the pace of change in their business.

In both of these examples, the knowledge workers wanted to be innovation creators. They wanted to use an extended version of Excel to share information dynamically.

If Google works with Sun to Flock Open Office, and, perhaps more importantly, if Google, or builds this new Web Office with a vision for empowering knowledge workers to build and create innovation new mini solutions, with history, and access control, and XML, and meta data and real-time data distribution, then, they really will have something.

Bottom line - Flock Office!

BTW, I should mention that I started up a company based on spreadsheet idea 4 years ago. We worked for a year on an early version. The year was 2001, technology was more expensive, and 9/11 put an end to the start-up. Still, we managed to get signed purchase orders from 2 of the top 5 banks, and beta test agreements from 4 other large institutions. Today, it will be built differently, but the potential is still tremendous.

Automate someone’s process - you solve one problem

Give someone tools - they can solve many problems

Ross Mayfield’s recent post made me think about the difference between approaches to solving problems and creating innovation.

For example, I think of Excel as a development environment that knowledge workers use to code solutions for just about everything. Schedules, surveys, budgets, plans, lists of people to follow-up with. In my consulting work, we use Excel to build, sort and define risk controls, data requirements, to-do lists. In my previous life, as a derivatives trader, we used Excel to price financial instruments. The bond analysts sitting next to me, used it to build projections, and analyze investments.

Web 2.0, and specifically what I think of as Web Office, is about a new class of tools that empower knowledge workers in ways that make Excel look very clumsy and old.

Today, many software shops, and most IT departments, focus on building tools to automate an existing process.

Not surprisingly, most IT departments have a rigid process for building tools. Usually, the whole thing is driven by some professional nag, moron project manager. This rigid process begins by defining user requirements, then building something, testing it, and rolling it out. By which point, often, the business process that was being automated has changed, and the whole thing has to begin again.

In the mean time, most business work is still getting done by knowledge workers building ad hoc solutions in Excel, and then laboriously working to share that information via email and the phone.

There are two things that need to change:

1. The hyper rigid software development process needs to be dropped for a more interactive, cooperative and user centric approach
2. Software shops need to focus on building tools, not automating process

Just to be perfectly clear, by tools, I mean software that gives knowledge workers the ability to create their own customized solutions for gathering, analyzing and sharing information. Examples include the software I have listed in my Web Office directory.

So… bottom line. If you want to encourage innovation, build tools. If you want to stifle innovation, automate processes.