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May 25, 2005

Fear, Greed and Social Software

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Posted by Ross Mayfield

Enterprises are adopting social software out of both fear and greed. Fear is the primary driver for corporate blogging, while greed is driving adoption of social software within the enterprise. I have used this metaphor to explain what I see in the market lately, so here it is in one place.

Fear Drives Corporate Blogging

Fear is a powerful emotion for the corporate animal. An early adopter wave of non-brand-centric tech companies from Sun to Microsoft to SAP saw opportunity to engage developers with the tools they use. Today most every F500 company is looking into blogging, particularly brand centric companies, but they do so differently. All those revolutionary bloggers having conversations about their brands and influencing others is pretty scary. Suddenly your brand is being watched, augmented, de-located

Corporate executives unfortunately fear their employees more than they trust them. An even greater risk to their brand, they fear, comes from within. Since the advent of email, employees have had the ability to message and forward the influencers, the press, regulators, anyone. Further, the hierarchical structure of commands flowing down and information flowing up enabled horizontal flow of information.

What is new are cases like Microsoft discrimination policy being Scobleized and the Los Alamos National Laboratory revolt. Here the heterarchy transcends the firewall and pressure can be applied from without. Sometimes business follows developments in politics. When Reagan ran into resistance from a Democratic Congress in the 1980s (lobbying or institutional pluralism failed him), he leveraged the media for mass appeal to fax representatives (individual pluralism). In other words, he was Going Public, in a way similar to how employees can through blogs when institutional mechanisms to influence executive decisions fail them.

In practice, only a few employees (e.g. Scoble, Tim Bray) have gained enough of a following to consistently lead through Going Public. However, the emergent attention forming structure of the blogosphere can take a fit message and self-organize around it with a moment's notice. While extremely rare, this pattern gives employees the notion of empowerment by pulpit that can be ignorantly abused. Nobody gets fired for blogging, the real role of a blogging policy isn't a policy itself, but an opportunity for education and re-engaging employees in a more common sense.

Fearing these scenarios, the corporate animal uses it's fight or flee instincts. No better way to keep your employees from blogging than to sue other bloggers. When conversations aren't going your way, carpetbomb them. View the people in these conversations as consumers instead of participants, and set up fake blogs for them to consume. Or do what you are great at, nothing, ceding early mover opportunities to others.

Sidebar: Please understand that I am generalizing about Fear in corporate blogging, but I do think it is the norm. There are wonderful exceptions where corporations are embracing the blogosphere as an opportunity. But they are exceptions. The other qualifier I will put on the above remarks is that fear quickly turns to greed. What we once fear we then understand, see opportunity and embrace. Oh, and one more, fear may not get you laid, but it does in the parlance of corporate M&A (while governments treat corporations as individuals, they are no more than a Fakester in my heavily bounded reality). Anywho...

Greed Drives Enterprise Social Software

Behind the firewall, it is a different story. We are emerging from a post 9-11 phase of insecurity that put a premium on security and compliance. While regulatory requirements have leveled new burdens in the enterprise, demand is shifting back to the traditional reasons enterprises invest in IT -- competitive advantage.

But this time, it may be different. Where competitive advantage used to stem from automation of business processes to drive down costs, those opportunities may be gone. Not that Nicolas Carr was right, far from it, but value has shifted yet again.

In the one business strategy book you must read this year, The Only Sustainable Edge, by John Seely Brown and John Hagel, the authors not only argue that innovation is the only sustainable edge, but that collaboration underpins innovation itself.

Most will read this book to view offshore outsourcing as a positive, rather than a negative. The world is flat, and it helps to understand the Ricardian specialization at play, and how clusters of capabilities are not only a natural, but a good thing. The book actually suggests this as a fact and value argument, I am imposing a frame of value.

But, returning to the fact of IT for competitive advantage, the readers of this blog will be interested in this. "95% of IT expenditure in companies supports business processes. Almost nothing goes into the social fabric." Meanwhile, the vast majority of what workers actually do is handling exceptions to process, what you could call the domain of business practice.

Wikis, Blogs, RSS Aggregators and other Social Software provide an alternative to email for supporting the social fabric. Hidden in email is 90% of collaboration and 75% of knowledge assets, but all the value disappears below the fold -- while spam, occupational spam and viruses hamper productivity.

Sidebar: The Social Life of Information was the one book that perhaps inspired me most to co-found Socialtext -- with cases of how value is realized from the social context of tools, and perhaps how social context within tools fosters value. Full circle. My takeaway when we were all defining Social Software (I still say Social Software adapts to its environment, instead of requiring its environment to adapt to software):

People are smart about how they get their work done. If a software-driven business process fails to serve their activities, they will adapt using their informal network resources to get it done. In other words, when business process fails, business practice takes its place. This is a major point of John Seely Brown's Social Life of Information.

If the opportunities to gain advantage from automation are largely gone, the remaining frontier is innovation. This latest work observes how leading companies like Li & Fung build capabilities across loosely coupled networks with productive friction to foster innovation. They envision a new stack to accelerate not only productivity, but innovation:

  • Social Software -- easy group forming to handle exceptions with diverse specialization, innovate, remember and learn
  • Service Oriented Archiectures -- to realize economies of scope and span
  • Virtualization -- to realize economies of speed and scale for underlying datacommodities.

Back to adoption. Fear is hardly the reason for IT adoption of social software. Interestingly enough, enterprise social software is orders of magnitude cheaper while providing 80% functionality -- than previous generations of collaboration, portals, content, document, knowledge and other "management" systems -- but this only lowers the barrier to pilot. Simple group productivity may be the spark, but the great intangible is helping people innovate together. Enterprises adopt social software because of the opportunity to change through innovation.

But a funny thing happened on the way to the forum. Individuals are greedy as much as the next individual. Like all disruptive technologies (PCs, spreadsheets, local area networks, email, IM) and horizontal productivity apps, Social Software is entering the enterprise from the bottom-up. It is the individual who brings an open source or hosted tool to serve her needs or her workgroups needs to gain advantage over others within the enterprise.

But if you follow JSB and Hagel's work -- the language and source of competitive advantage is changing from competitive advantage to cooperative edge. We innovate through trust, sharing and productive friction between individuals and partners with diverse expertise. Open source is more than a licensing scheme, it is a way of working to learn from.

Turning Fear into Greed

Perception of risk can foster new markets, prompting each player to at least bet their ante. In practice for publishing, for example the ante at this stage is simply offering an RSS feed for existing content. But when you only act in fear, fight or flight instincts kick in to prevent you from seeing opportunities. The upside is someone else isn't acting out of fear and zero-sum competition (e.g. Sun in corporate blogging, DrKW in enterprise social software). Enlightened enterprises will act on opportunity, gain an edge, later to be copied out of greed, but the edge is sustained by innovation.

Welcome, Slashdot overlords

UPDATE: Some of the feedback I have received points to the need for more success stories, particularly in corporate blogging. Anyone know of any studies that have demonstrated the value proposition of letting employees blog or having a corporate blogging initative? It could help turn fear into greed.

Comments (9) + TrackBacks (1) | Category: social software


COMMENTS

1. Ross Mayfield on May 25, 2005 11:59 PM writes...

Steve Duncan makes a point I should have made in this post -- the need for more success stories of realized value propositions that can quickly turn fear into greed.

Permalink to Comment

2. will on May 26, 2005 6:02 AM writes...

good post, it will be interesting to see how these 'new forms' of software develop within and through companies. i would agree about corp execs (v generally) being untrusting of their staff to a certain degree. on the social software side, i think it is a little harsh to classify any desire to develop new forms of social software for business purposes as stemming from 'greed' - if you view companies as the wealth generators in society, they are the bodies that provide for us to live our lives within the capitalist system that exists in the world today. if ICT is an enabler within business processes (or the reorganisation of the business processes around these technologies) then any form of new tech that can be of a benefit to them will be adopted. in this respect you can define greed in an (almost) positive light in terms of our natural desire to better what we do. the word for me though has too many negative conotations, the greed that you describe may just be a natural desire to better the way we do things.
anyway good post & v interesting :)

Permalink to Comment

3. jim wilde on May 26, 2005 7:49 AM writes...

Great post Ross. You touch on the best reason "Enterprises adopt social software because of the opportunity to change through innovation" for any business to use social software. We seem to be in most cases following the botton-up trajectory rolling out our products/services - Ideascape - on an enterprise level. Although on a direct approach to upper management we do hit the wall of fear and I might add ignorance to the list.

Permalink to Comment

4. Paul on May 26, 2005 12:19 PM writes...

Excellent post with great insights. I have been fascinated by how new technologies are changing the relationships between organizations and their stakeholders (customers, suppliers, employees, etc.). My bog can be found at www.digitalstakeholders.org and it is great to see another blog covering similar, yet different topics. Keep up the great work!

Permalink to Comment

5. Jason Davis on May 26, 2005 2:02 PM writes...

Very good post. Fear and Greed are definately big motivators. I work in the recruiting world and I know because I have seen it first hand that those companies that use blogs to proactively promote their HR brand are benefiting. The problem is that most companies are afraid to let some person in HR start talking to the public. Once a voice gets loud, it is hard to quiet it down and even if you do, the corporation will be perceived as the bad guy even if the big voice was saying some very bad things.

Permalink to Comment

6. Michael on May 26, 2005 4:39 PM writes...

The Fear - that is not only because of some information leaving the company trough the back door - this is because of the whole power system that starts to shift. And the usual reaction is to use the old tools - but even harder.
On the other side you cannot expect a company to change their whole trust system within months. And even so, would it really be clever in the end?

Permalink to Comment

7. Coofer Cat on May 26, 2005 5:15 PM writes...

For years, corporations have been very careful about their "message". The "fear" is of course that we, minions of the machine, may say something "off message".

However, corporation's greed may come to realise that some of their minions are infact the single best at whatever they do in the world. In corporate-speak, that's "world class". In recruiting circles, that's like a magnet for decent help. In the customer sense, that's a beacon of competence.

Those people may well not be saying what the marketing department are saying. In my view, the company needs to raise it's game in such situations. Of course, companies don't like to be told what to do, much prefering to make it up as they go along.

(sorry, ever the cynic ;-)

Permalink to Comment

8. Nathan Dintenfass on May 27, 2005 1:44 AM writes...

As for success stories, I think Macromedia is a clear case (though not, to my knowledge, using SocialText). They have "allowed" (and encouraged) employees to talk directly with various customer groups through blogs -- both with "official" blogs hosted inside the firewall and on personal blogs. Even in the midst of the Adobe acquisition, a simple legal disclaimer appended to the various posts was sufficient for Macromedia bloggers to post personal reflections on the deal. You can view an aggregation of all Macromedia blogs at http://weblogs.macromedia.com/mxna/.

Permalink to Comment

9. natalia on June 7, 2005 2:47 PM writes...

escuche un tema de la banda y me gusto me gustaria saber mas aserca de la banda

Permalink to Comment

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Business processes and practices from On IT-business alignment
Ross Mayfield's perspectives on the demise of business process and the rise of social software, which the other Neil has previously commented on, continues to spark debate. This time, fellow analyst Mike Gotta over at Burton Group enters the fray. ... [Read More]

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