I was at Microsoft’s offices in Mountain View last Friday; the guest of Don Campbell, Microsoft’s Office 2007 Evangelist. I have to say that I was really impressed with what I saw.

Not all the news has been great for Microsoft recently. Microsoft is shuffling executives, and bloggers are even suggesting that Microsoft further delay Vista because of concerns of bugs.

When it comes to Web 2.0, there are some people counting Microsoft out.

That is simply crazy.

Here are 5 reasons why you have to take Microsoft’s Enterprise 2.0 Battle Plan seriously:

1. Microsoft has become a company that listens

   All the proof that I needed was the fact that Don invited me to come for a visit. But if you don’t believe me that they listen, send Don an email. My guess is that you will hear back from him.

   But the trend of Microsoft Listening is much broader than Don’s efforts. Check out Ray Ozzie’s blog and the buzz around the brilliant Live Clipboard initiative.

   Live Clipboard is Cut & Paste on steroids. Microsoft’s CTO, Ray Ozzie, invented it, and then opened the whole process up to public discussion.

   If you want to talk directly with the Live Clipboard team, contact Matt Augustine. Matt is a Software Design Engineer on the CTO Concept Development Team at Microsoft.

   All these people at Microsoft seem to have blogs. They are all accessible.

   Microsoft seems to have a new slogan: Be Nice.

   Be Nice asks a lot more of your people than Don’t be Evil.

2. 
   

   Excel Services

   Excel Server is the coolest thing I have seen in a very long while. The success of Web 2.0 and Enterprise 2.0 comes from a focus on finding simple ways to empower end users. If that is the criteria for success, then Excel Server is in a league of it’s own.

   With Excel Services, you can convert your Excel spreadsheets into a web based application at the push of a button.

   Start with a spreadsheet like this one:

   … press a few buttons, and you get a web page like this one:

   

   Now, anyone who can create a spreadsheet can create an interactive web based application.

   Why is this a big deal?

   In today’s enterprises, most IT projects never get built. The ROI on these small projects is simply too low. Or put another way, companies can’t justify bringing in developers and spending hundreds of thousands of dollars to solve small problems. This is a perfect example of the Chirs Anderson’s Long Tail.

   

   To address these problems, knowledge workers build work-arounds. Usually, super users build manual processes that generally involve Excel and a lot of manual cut and paste. The result is prone to operational risk and is inevitably inefficient.

   

   Excel Services radically changes the landscape. Now, those same super users are going to be capable of building their own solutions.

   The trick here is not to think of Excel as just a spreadsheet, but instead, to think of it as a development environment that is designed for business users. Gone is the need to translate between business users and IT engineers. Gone is the need to write specifications. Instead, systems can instantly “Get Real” based on working spreadsheets.

   

   There are a few interesting resources on Excel Services, including a blog entitled Microsoft Excel 2007 (nee Excel 12), which seems to be written mainly by David Gainer (though I am not 100% sure)

   One the entry that is certainly worth a read is Excel Services – Key Scenarios.

   David mentions 3 scenarios for Excel Services:

   1. Sharing spreadsheets through the browser
   2. Building business intelligence (BI) dashboards
   3. Reusing the logic encapsulated in Excel spreadsheets in custom applications

   I remain unconvinced on scenario #1 and #2 (do you really need a dashboard to do your job?)

   But, scenario #3 changes things substantially.

   Imagine being able to build interactive functionality directly into your blog posts, or your wiki posts. Sharepoint 2007 isn’t 100% there yet, but is is getting very close.
   



3. 
   

   My Site ( a bit like a People Page)

   Sharepoint’s idea of a “My Site” is similar to the People Pages I described in Real Enterprise Web 2.0 Scenarios - People.

   The My Site pages are a little over engineered - but it is always easier to take stuff out, rather than add stuff in.

   In most companies, I think that people simply need a standard way of describing themselves to all their colleagues. Despite differences in execution, Microsoft shares this vision.
   



4. 
   

   Word Blog via open API

   In Word 2007, you will be able to write a blog post to any kind of blog system via the MetaWeblog API

   You can find out more at Joe Friend: Microsoft Office Word.

   For yet another example of Microsoft’s openness check out this post: Word Blog HTML Quality. Obviously, the Microsoft Word 2007 is still hammering out some details, but they are happy to talk about it.

   The MetaWeblog API means that you can use Word to write to Movable Type, WordPress and Drupal.

   It is interesting to note that Google’s Blogger does not support this standard.



5. 
   

   Identity 2.0

   Don and I didn’t get a chance to spend too much time on this topic, but it was great to see that Kim Cameron’s ideas on the Laws of Identity are starting to permeate through-out the organization. More on this in future posts.
   

Sharepoint has a ways to go in other areas. While it supports blogs and wikis, I would not yet call it a true enterprise class system. Sharepoint 2007 is missing things like Blog Types and built in collaborative tag tools.

But, the race to build the tools that power Enterprise 2.0 has only just begun, and Microsoft is a definite contender.

What’s the difference between Invention and Innovation?

Daniel Scocco defines the difference perfectly in his new blog: Innovation Zen

The first confusion to dismiss is the difference between invention and innovation. The former refers to new concepts or products that derive from individual’s ideas or from scientific research. The latter, on the other hand, represents the commercialization of the invention itself.

The interesting thing about Daniel’s article for me is that he writes about AT&T Labs as an example of a place that did a lot of inventing, but, at least early on, had challenges with innovation.

Last year, on a flight back from Cleveland, I sat next to Dr. Curtis Crawford. Dr. Crawford used to run AT&T Labs. It was under his guidance that AT&T Labs evolved from an inventing organization into a place dedicated to innovation.

Dr. Crawford put it this way: Innovation happens when you figure out how to make money from an invention.

At the end of Daniel’s post, Maharaj Kishen Koul has a really interesting comment - or at least a thesis:

Whereas the earlier part of the 20th.century was the century of ‘INVENTION’,the tail end of the 20th. century and the beginning of the 21st. has been dominated by ‘INNOVATION’. If ‘ NECESSITY and NEED’ were the mother of Invention, ‘ GREED and INTEREST’ are the mother of Innovation.

I am a firm believer in the free market economy, so I have no problem with the notion of simple motivating forces like greed and interest being the driving forces that compel individual agents in what is an emergent system.

But I think that greed and interest do not represent key differences between 20th century invention and 21st century innovation. People were greedy and self interesting in the last century, just as much as they have been through out our history. Instead, I think the difference comes from a new level of communication.

While at AT&T labs, Dr. Crawford worked hard to improve internal communications and connect the inventors in the lab with the people in marketing.

Increasing the pace of innovation by increasing the level of communication is what Tara was talking about in her It’s not an Us vs Them article.

Daniel Scocco has hit directly on what this site is about.

And to continue on with this reaction to Maharaj Kishen Koul’s thesis, if 21st century innovation is motivated by improved communication, then I am very optimistic that innovation of this century will be focused on things that benefit world more.

A great fun example is the new sports car being developed by Tesla Motors. It is lightening fast and electric. And it is flat out cool. And it is totally clean. It’s the car pictured at the top of this article. That’s innovation.

Phil Ryu is a marketing genius. No matter what your company makes, you would do well to copy Phil’s idea.

His idea is simple: Get people to make a fake version of your next product. Phil ran a contest to get people to design fake screen shots on the next OS/X.

The contest became a brilliant way to collect and rank great ideas. I think that Phil Ryu has invented Product Design 2.0.

You can see the design ideas here.

A few days ago, I remember hearing about the challenges that Chrysler is facing coming up with a replacement for the PT Cruiser. Copying Phil Ryu’s idea would be a brilliant way for Chrysler to build major brand buzz and cheaply generate the buzz they needed for their next product.

Start with a Contest for the best sketches. Pick 8 finalists. Get the people to refine their designs, and just like America’s Idol or Britain’s Pop Idol, start to kick out designs. Finally, the last 3 designers get to work with a professional Chrysler design team to make a real Concept Car. Get everyone to vote on their favourite, and then put the new hit car into production.

Xerox PARC invented most of today’s computer stuff. “Stuff” is the technical term. By 1973, the folks at the Xerox Palo Alto Research Center invented the first personal computer, with a graphical user interface, a mouse, and a word processor.

The folks at IBM seem to have set up something similar. It’s called the IBM Watson Research Center. The center has been in place actually, since 1945.

They have some really cool projects on the go. I particularly like the Bloom Project, and History Flow.

The Activity Project is interesting. The idea is simple. There are a range contexts governing the way people communicate. The project reminds me of the way that Joyent works.

I found out about the Watson Research Center after looking at my blog traffic reports. I kept seeing something like this:

http://dogear.webahead.ibm.com/…

Dogear is social bookmarking for the enterprise.

Obviously people are using Dogear. I wonder when IBM is going to start selling it.

So grab your client, pull’em in

Sit’em down, let’s begin

IT”S THE AGILE DANCE!

Thomas Landspurg says that the Agile Development takes two. In other words the Agile approach to development require heavy client input. He’s right.

Thomas Landspurg is the CTO of mobile game maker In-Fusio.

Thomas runs a blog called TomSoft, and he was kind enough to post about my Waterfall Drives IT Engineer Over the Edge - you can see Thomas’ response here.

Here are his key points:

• The Waterfall has been taught as “The Method” for CS development at Universities for years. It will take a big effort to over come that
• The clients have a job to do. Before they get to a finished product, they have to sit with their developers and provide feedback.
• If the IT developers do not get direct client input, they are forced to go with the Requirements Doc and nothing else.

Setting up a culture of creative feedback is critical to the success of any IT project, and especially one that uses Agile Development Techniques.

Perhaps this is why so many companies release their 1.0 version as a “Beta”. By calling it a Beta, they are creating a client expectation that they should be providing feedback if they don’t like what they see.

To me, this is yet another example of how Enterprise Blogs can be used to speed innovation within an organization.

If, for every IT project, you set up an “Agile System Development Blog”, you create a platform where all users can efficiently communicate with all IT engineers.

Today the Wall Street Journal had an article that asked “Is it time to dump your desktop?”

The author Rob Guth talks about ThinkFree, which has a Java very of Office. It’s certainly a very cool application, but the spreadsheet does not handle everything yet.

For example, a few years ago, I put together a spreadsheet to calculate a Cholesky Decomposition of a variance/covariance matrix. This is one of the key steps used by people trading credit derivatives and CDOs. And it’s a great example of Wall Street derivatives traders happily using something that they know does not work. Stanford’s Darrel Duffie has shown that you are much better of using correlated default intensities. All of which is probably not of interest to most of the folks who read this blog.

ThinkFree lets you publish the spreadsheet, so you can see the results for yourself here: Cholesky Decomposition Spreadsheet. Make sure you check out all three tabs. You will see that the basic decomposition works fine, but ThinkFree seems to have some trouble with matrix multiplication. To really see the calculations, you will need to go into power edit mode.

Maybe that isn’t an issue for most people.

In the same web issue, the WSJ has a pod cast with Microsoft’s Rajesh Jha, who talks about Office Live. Jha talks about how Microsoft is going after the under served small business market.

Are we there yet? Has Enterprise 2.0 Started to Arrive?

It is good news that the WSJ is starting to think about the use of Web 2.0 technology within the enterprise. However, as I have said before, simple web based versions of what we already have does not represent an amazing new development.

Open Office and Star Office have been around for years. Both offer a viable alternative to Microsoft Office. Neither have taken off. People do not have much reason to switch from MS Office. MS Office works well enough for its intended purpose, so what is the reason to switch.

The real opportunity presented by Web 2.0 technology isn’t simply to replace MS Office, but instead to embrace and radically extend office.

For ten years, knowledge workers have had Word, Excel, PowerPoint and nothing new. That’s ten years of the same tools.

Now, with Web 2.0, there is an opportunity to add to that tool kit with a whole new series of tools. The first two new tools are Blogs and Wikis. After that, embedded widgets or Mashets will help to further empower knowledge workers.

It’ll be interesting to see how long it takes before the WSJ starts to cover the use of those Web 2.0 tools within the enterprise.

Last week, I saw the exchange above. The names have been changed, but the cartoons basically show what happened.

There is only one problem here. The engineer in the cartoon has no idea how to really develop software.

He has been sold a bill of goods. Conned. Tricked. Hood-winked.

Like a dedicated member of a cult, he believes what he has been told; he believes there is only one way to develop software. The method he believes in is called the Waterfall.

Just as Karl Marx predicted that Communism is the inevitable next step after Capitalism, the Waterfall model of developing software dictates that all software development must follow a set path:

1. Requirements specification
2. Design
3. Code
4. Test and Validate
5. Maintenance

Sure…. history has proved Karl Marx absolutely wrong. Sure, even the guy who first came up with the Waterfall approach said it was “risky and invites failure”. And sure the Waterfall isn’t the only approach to developing software.

But, that hasn’t stopped IT department after IT department from sticking rigidly to the Waterfall approach.

Most IT departments stick to it so rigidly that they can not even understand when their clients are trying to work with them towards an iterative approach.

One alternative to the Waterfall is called the Agile Development.

There is a foundation, with an Agile Manifesto. You can read the a great introduction by Victor Szalvay, called An Introduction to Agile Software Development.

You might also want to check out a great book called Agile Management for Software Engineering: Applying the Theory of Constraints for Business Results Here’s a quote:

If software knowledge work is to remain in the rich, developed countries of the world and software engineers in America, Europe, and Japan are to maintain the high standard of living to which they have become accustomed, they must improve their competitiveness. There is a global market for software development, and the rise of communications systems such as the Internet, have made it all too easy to shrink the time and distance between a customer in North America and a vendor in India or China.

Jobs are at stake! Just as western manufacturing was threatened by the rise of Asia in the latter half of the 20th century, so too is the knowledge worker industry threatened by the rise of a well-educated, eager workforce who can do the same work for between one tenth and one quarter of the cost.

The answer isn’t that software developers must work harder if they want to keep their jobs. Software engineers aren’t the problem. The answer is that management techniques must improve and working practices must change in order to deliver more value, more often, in order to improve competitiveness.

…

The secret to economically viable software engineering is new working practices based on new management science. The Agile manager must construct an Agile learning organization of empowered knowledge workers. When this is achieved the results will be dramatic. Improvements of 4 times are easily achieved. 10 times is definitely possible. Imagine if your software engineering organization could do 5 times as much work in half the time it currently takes. What would it mean for you, your job, and your organization?

The Root Cause - A Belief that IT can’t talk to Business

Managers use the Waterfall approach because they think that it takes a long time to develop an IT application.

Managers also use the Waterfall approach because they think that their IT engineers can’t communicate with the business.

Both ideas are wrong.

If you really have an IT department that is incapable of talking to your business users, fire them all, and out source the whole department to India or China. However, it is unlikely that your IT engineers are incapable of talking to your end users. Instead, it is highly likely that they can and should be able to directly deal with at least your internal end users. That direct communication will help them to produce solutions that better fit the end user’s needs. In other words, direct communication radically reduces the risks of any IT development project.

The notion that IT solutions can not be instantly developed is also wrong.

New tools, such as Ruby on Rails, mean that most web based applications can at least be prototyped within a couple of days.

If you are a manager, a director, if you sit in the C-level suite, you need to learn just a little about Ruby on Rails. You need to learn about Ruby on Rails so you can set your expectations correctly.

Learning about Ruby on Rails only takes 5 minutes. For non-coders, some of that 5 minutes is dull.

However, you do not have to do much, other than watch.

5 min video of how a coder creates a web interface to search for photos on Flickr

In 5 minutes, you will see a developer put together a very cool, very slick and very powerful web application.

When your IT teams develop something for you, you should be expecting that kind of instant turn around.

Given that it only takes minutes to build working prototypes, it is obvious that IT engineers should be sitting with their end users, working quickly and iteratively towards a working prototype.

The crazy scene I witnessed last week should never happen with a modern capable Agile IT team.

I do not blame the poor developer who was forced to stick rigidly to “the reqs doc”, but I do blame his CTO.

The Waterfall is not the right way to build software. The Waterfall is evil! ;)

In his seminal book Emergence, Steven Johnson talks about how people learn to “control” events in an emergent environment.

An open economy is a perfect example of an emergent environment. In a free market economy, independent agents work according to simple rules. People aim to maximize their personal utility. They bump into each other first in a random way, learn how they can trade with each other, and quickly start to produce discernable patterns. The patterns exist in supply and demand, in prices, in the production and movement of goods, and because of competition and the profit motive, a constant stream of innovation.

But, the general economy is not the only system where patterns emerge out of what appears to be chaos of random behavior from lower level actors within the system. The field of study is called “emergence”.

For example, blogs on the open internet are a chaotic system powered by individual actors. In this environment, discernable patterns emerge.

Emergence and intelligence

One of the ideas Johnson discusses is the observation that the higher-level patterns in these systems can start to become intelligent.

For example, not one of the cells in your brain is individually aware of who you are. But collectively, the cells produce discernable patterns that result in both your identity and your intelligence. The patterns begin with chemical signals that result internal electrical storms. The storms represent cascades of information. Low-level exchanges between individual neurons transform into coherent patterns, such as brain waves, which in turn are components of thought. The compellations of these pieces of thoughts become things like ideas, emotions and memories. And, these, in turn, collectively become self-awareness and human intelligence. That intelligence emerges from individual pieces that are unaware of the whole, just as they are unaware of the intelligence they help to build.

The “invisible hand” of a free market economy exhibits the same thing by efficiently allocating resources in an eerily intelligent way. Again, individual agents are not necessarily aware of their role in the broader system. If you buy a cup of coffee on the campus of Queen’s University in Kingston, Ontario, there is no economic over lord who coordinated all the things that had to happen to correctly deliver the coffee into your hand. No one coordinated and controlled the roles of the paper company that made the cup, or the lumber company that cut the tree, or the farmer who grew the beans, or the long chain of middle-men and buyers, shippers, marketing teams, to say nothing of the actors and writers and directors who created the entertainment that was the advertising vehicle used by the creative agency hired by the coffee company’s marketing team to subliminally convince you to buy the cup of coffee. Yet, the system still works.

Emergence and the intelligent company

Just as high-level patterns of intelligence emerge from separate brain cells or individual agents within a free market economy, groups can be motivated to create intelligent decisions in other circumstances.

Specifically, CEOs can turn their entire companies into engines of emergent intelligence, where the company’s employees are capable of collectively producing brilliant decisions for the company.

This approach may not be useful in all aspects of any one company’s activities, but it certainly has applicability when it comes to fostering innovation.

Emergent intelligence only evolves when agents have the freedom to act independently. The traditional command and control structures employed by most large firms do not lend themselves to fostering this kind of independence.

In the past, I have discussed some of the steps that senior management can take to foster emergent intelligence and constant innovation. See Turning Knowledge Workers into Innovation Creators.

All of these steps require senior management to surrender direct control over the process of innovation.

However, that does not mean that there isn’t still a roll of management to play. Their task now is to cultivate an environment that encourages innovation.

Learning to cultivate emergent intelligence

Learning how to cultivate emergent intelligence is not necessarily trivial. However, in Emergence, Johnson provides a great description of the process.

Think about the ten-year-olds who willingly immerse themselves in [the video game] Zelda’s World. For them, the struggle for mastery over the system doesn’t feel like a struggle. They’ve been decoding the landscape on the screen – guessing at casual relationships between actions and results, building working hypothese about the system’s underlying rules – since before they learned how to read. The conventional wisdom about these kids is that they are more nimble at puzzle solving and more manually dexterous than the TV generation, and while there’s certainly some truth to that, I think we lose something important in stressing how talented with their joysticks. I think they have developed another skill, one that almost looks like patience: they are more tolerant of being out of control, more tolerant of that exploratory phase where then rules don’t all make sense, and where few goals have been clearly defined. In other words, they are uniquely equipped to embrace the more oblique control system of emergent software.

I think Johnson is right. But, I think those skills also apply to succeeding in an emergent environment, and not just playing an emergent video game.

For example, those crazy young hipster bloggers can only get themselves up to the top of the technorati charts using oblique means of control. The recipes are complicated. To achieve that kind of success requires posting at a certain pace, posting about successful memes, commenting often on other people’s sites, and then establishing a viral dialog with the people who comment on your posts. But, following the recipe is no guarantee. And, because you can’t force people to visit, you have little direct means of control. But, that doesn’t stop new bloggers from succeeding.

Examples of Oblique Control

OK, so how does an executive obliquely manage towards a desired goal?

Oblique Control - The Fed: A great example of oblique control is the Federal Reserve, which only controls an over night interest rate charged to banks. And even then, the Fed Funds window is rarely used. So, the Fed Funds rate is only very occasionally charged to banks that end up borrowing from the Fed once or twice a year. How does the Fed control the economy? It certainly doesn’t do it directly.

But, the odd rate hike by the Fed, or pronouncements from the Fed Chairman, send markets moving quickly in one direction or another.

Ask any economist why, and they won’t be able to give you an honest answer. They might talk about the money supply. But once you get down to the exact mechanics, the truth is no one really knows.

Oblique Control - Irish Education: This is a simple story with an amazing outcome. Before 1980, Ireland was one of the poorest nations in Europe. It is now one of the wealthiest.

The Irish Government has taken many steps to achieve the Irish Economic Miracle, and to turn Ireland into the Celtic Tiger. Reducing corporate tax rates and encouraging foreign direct investment were important steps, but none of those was as important as improving the quality of the Irish work force.

The Irish Government improved the quality of the Irish work force by improving the quality of the Irish Education system, making it one of the best in the world.

The International Institute for Management Development (IMD), which is a business school located in Lausanne, Switzerland, releases an annual World Competitiveness Report. In 2006, IMD Ireland ranked at the top for Educational System and Higher Educational Achievement. From the IDA Ireland site, I got these details on Ireland’s education system:

The Educational System in Ireland meets the needs of a competitive
economy (country score)

Source - IMD World Competitiveness Yearbook, 2006

Higher Educational Achievement
% of population that has attained at least tertiary education

Source - IMD World Competitiveness Yearbook, 2006

Ireland is a successful free market economy. Central planners didn’t say “grow” or order innovation. Instead, the Irish Government exercised oblique control, using the levers they had access to, such as increased educational spending, to produce a workforce that attracted companies the world over to Ireland.

Oblique Control – Amy Sutherland’s NY Times article “What Shamu Taught Me About a Happy Marriage”

While researching a book on exotic animal trainers, Amy Sutherland started spending time watching those trainers.

I listened, rapt, as professional trainers explained how they taught dolphins to flip and elephants to paint. Eventually it hit me that the same techniques might work on that stubborn but lovable species, the American husband.

The central lesson I learned from exotic animal trainers is that I should reward behavior I like and ignore behavior I don’t. After all, you don’t get a sea lion to balance a ball on the end of its nose by nagging. The same goes for the American husband.

Amy Sutherland talks about a second lesson:

a dolphin trainer introduced me to least reinforcing syndrome (L. R. S.). When a dolphin does something wrong, the trainer doesn’t respond in any way. He stands still for a few beats, careful not to look at the dolphin, and then returns to work. The idea is that any response, positive or negative, fuels a behavior. If a behavior provokes no response, it typically dies away.

And the process seems to work on humans as well as animals:

After two years of exotic animal training, my marriage is far smoother, my husband much easier to love. I used to take his faults personally; his dirty clothes on the floor were an affront, a symbol of how he didn’t care enough about me. But thinking of my husband as an exotic species gave me the distance I needed to consider our differences more objectively.

I adopted the trainers’ motto: “It’s never the animal’s fault.” When my training attempts failed, I didn’t blame Scott. Rather, I brainstormed new strategies, thought up more incompatible behaviors and used smaller approximations.

The same can and should apply to managing a large organization, and especially when your goal is to manage towards encouraging innovation. To guide emergent intelligence in an organization, you need to think about management techniques that foster innovation, and encouraging dialog and the exchange of ideas.

Imposing rules and taxonomies isn’t going to achieve the goal. Nagging people to add to the “knowledge repository” isn’t going the right answer either.

Instead, you have to use the carrot; not the stick. Reward people in socially relevant ways for great contributions.

Oblique Control – Freakenomics:

Can small cheap rewards, such as public praise, actually change people’s behavior?

In their real interesting book, Freakenomics, Steven D. Levitt and Stephen J. Duner prove their thesis again and again. Thesis is:

Small changes in incentives can radically change behavior.

They begin the book with a great example. Some economists were looking at the impact of incentives upon the behavior of parents as they picked up their kids from day-care. Specifically, the economists were interested in how often the parents were late. To test the power of incentives, they introduced a fine of $3 every time a parent was late.

It was announced that any parent arriving more than ten minutes late would pay $3 per child for each incident. The fee would be added to the parent’s monthly bill, which was roughly $380.

After the fine was enacted, the number of late pick-ups promptly went… up. Before long, there were twenty late pick-ups per week, more than double the original average. The incentive had backfired.

Is this proof that incentives don’t work? No. Instead, they work very well. These incentives acted as a “sin-tax”. Parents were able to buy off their guilt at being late with a small $3 payment.

Before the fine was enacted, another set of incentives was compelling them to show up on time. It was a social incentive. An incentive to been respectful of the day-care workers, an incentive to be seen as a good parent.

If you flip this around, in a work environment, compensation can be used to compel your employees to show up every day. But it isn’t the only incentive that is available.

Positive social incentives can encourage people to share knowledge, collaborate, innovate, and thus produce emergent intelligence.

How to use Oblique Control to Foster Constant Innovation

If you are a senior executive, here is what you need to do:

You have to begin by creating an environment that supports emergence. That means setting up a system for more efficient direct communication between employees. That means enterprise blogs, Wikis and social book marking tools.

Then, let the system evolve. Let users evolve their own tags. Let group evolve towards a common set of categories by letting individuals use anything they like. They will eventually start to use common categories just as people quickly adopt trends and fashions.

Impose only the minimal amount of structure. For enterprise blogging, for example, let super users define Blog Types, such as People Pages or Project Pages. It makes sense to seed the system with likely candidates, but recognize that needs change and people come up with great ideas. People are smart. They will work out ways to improve the system. The secret to managing an emergent environment is to let them do their thing.

Meetings, centrally planned taxonomies and rigid dictated workflows will not achieve innovation.

Finally, get involved. If you are using blogs, make sure that you praise good work. Make sure you notice when someone uses a project blog to write an article that is useful to the whole company. Use old-fashioned email to draw people’s attention to the best post of the week.

The resulting positive social pressure with drive everyone in the organization to struggle to receive that same kind of recognition.

Finally, react to comments. React to feedback. Emergent intelligence only occurs when there is dialog within the system. You have to make sure that dialog takes place.

Here is something for those who remain unconvinced that Folksonomies work.

Jerry Bowles has started a great new blog that is certainly worth checking out.

It’s called Enterprise Web 2.0.

Jerry has a great article entitled: Top 10 Management Fears About Enterprise Web 2.0.

Here’s the list and my comments on each question:

Enterprise Web 2.0 Technological Barriers

1. How can I be certain that the information that is gathered and shared behind the firewall stays behind the firewall?

Blogging is part of the communication continuum - Instant Messaging, Email and Blogs. Your employees currently follow a policy to keep some information only “behind the firewall” when using IM and Email. They will need to follow the same rules when it comes to using and sharing information they find with your Enterprise Web 2.0 tools.

2. How do I control who has access to particular levels of information and databases?

Set up a simple 3 layer system. Everyone, Department Only, Project Team. For specific project blogs, set a default access level, and then make exceptions on an article by article basis.

Enterprise blogging tools like WordPress MU can dynamically re-draw pages depending on the viewers access control.

Setting up the read access lists is also fairly easy. The user experience looks like addressing an email.

3. How do I protect the integrity of the information from malicious tampering by disgruntled employees or managers?

You use the wisdom of the crowd combined with audit trails and roll-back features. For example, say you are using Social Text as an enterprise Wiki to document policies and procedures. If an angry employee changed one of the policies, Social Text would keep track of who changed it, what changes they made and when. The group (aka the wise crowd) would be relied upon to catch the error. The employee could then be held accountable for their actions.

It should be noted that most companies have this problem today, but it is actually much more serious. There is no access control over most policy and procedure documents. The docs just sit there on a shared drive, available for hundreds of people to anonymously edit.

And, in today’s environment, there is an even greater risk: without the enhanced search and cross-linking features of blogs and wikis, most employees have trouble getting the information they need when they need it. The result is a high chance for mistakes because people are not familiar with the policies.

4. How can I be sure that information is being “tagged” properly for efficient retrieval later?

Social tagging works.

Just as the government does not have to enforce a proper price for beer or any other good or service in an open market economy, the knowledge management department does not have to enforce a rigid standard for how things are tagged. People will tag things as they want, and eventually, cultural standards will arrive. See Stu Downes Folksonomy in the enterprise for more proof.

Also, remember that things are not tagged on the open Internet, at least not according to any centrally planned taxonomy, and yet you can still find exactly what you are looking for. You use Google.

After you deploy your Enterprise Web 2.0 solutions, if you are still having trouble finding what you need, buy a Google Mini. The Google Mini doesn’t work all that well in Web 1.0 Intranets, but with all the additional cross-linking that will automatically happen in enterprise blogs and wikis, Google Mini should work just fine.

5. What kind of training do employees need before they can effectively use the technology?

Some employees will need no training. Generally, these will be younger employees and the 5 to 10% who already have a personal blog.

Other employees will need fairly extensive training.

Enterprise Web 2.0 Cultural Barriers

6. How can I monitor the system to make certain that what individuals are saying and sharing reflects company policy?

This is less of an issue if you are dealing with Internal only deployments of Enterprise Web 2.0.

Today, you have to deal with this issue when if comes to emails, voicemails, phone calls, instant messages, etc.

The one advantage to Web 2.0 is that if someone puts up something offensive in a Blog, you can take it down. Once an email is sent, if can be forwarded on to millions.

7. What are the legal dangers in saving and sharing so much loosely supervised input?

In some instances, there are serious legal dangers. In a consulting firm, if you promise the client to only share client information with the project team, that information better not be shared with the whole firm.

The best way to address this issue, is to develop a one-page set of rules for employees. Simple guidelines on what they should and what they should not post. The guidelines should be blunt, easy to read, and feel almost like Enterprise Web 2.0 commandments.

Thou shall not flame thy colleagues.

If the legal department helps with crafting the guidelines, along with input from HR, you should be able to minimize the implications of this risk. Note also, that this is a danger in today’s environment. Except you have little to no ability to see who read what on the company’s shared drive. The result is no accountability in today’s systems.

8. How do I distinguish “productive” use of the technology from horsing around?

How do you distinguish between productive use of email and horsing around? Or even worse, how do you distinguish between productive use of email, and CC’ing to CYA internal spam where co-workers fill each other’s inboxes with stuff they only ends up wasting time. “Just in case you might need to know about this in six months, let me re-cap today’s meeting”. That stuff can now be put on the blog or into the wiki, and found when it is needed.

9. How do I “manage” the gathering and disseminating of so much unstructured information?

This is like the tagging issue. There are tools out there, such as RSS that help.

However, I also believe that it is important, in the enterprise setting, to impose a little structure. Instead of having blogs, for example, have purpose specific blogs:

• People Work Sites can be a combo of resumes, current projects, contact info and personal blog
• Project Work Sites can list the client, include to-do lists, related docs, include updates, and have links to the people working on the project.

The right list of Work Site types (or purpose specific enterprise blogs) depends on the company, and like everything else, will probably evolve over time.

10. How do I know if I’m getting my money’s worth out of the investment in technology?

What investment? This stuff is so cheap, you will hardly be able to notice the expense.

With customizations, hardware costs, integration costs and deployment costs, you are looking at less that $50,000 for an enterprise blogging system for thousands of users.

Conclusion

In the end, the adoption of Enterprise Web 2.0 technology is an issue of both risk and reward. Risk management is about balancing the risks with the business benefits.

Enterprise IT is slowing the adoption of Web 2.0 because they are only familiar with the risk side of the equation. Isolated from the profit centers, enterprise IT only thinks about how things could go wrong, and then comes up with the logical answer of NO.

That, however, is not a logical business decision from the perspective of the CEO.

Enterprise Web 2.0 technology will flatten the organization’s management structure, highlight good ideas, create an environment that is more of a meritocracy, make a company more nimble and more customer focuses and most importantly increase the pace of innovation. In the face of these business benefits, the risks are minor.

CTOs, CIOs and CKOs who fail to see the big picture will loose all control of their end users as their employees turn to open Internet solutions, such as Sales Force, instead of waiting for a sanctioned behind-the-fire-wall solution.

For enterprise IT, Web 2.0 really does force the issue: Get It, or Get Out of The Way.