It is impossible to ignore the macro perspective when trying to predict what will happen within the social business and Enterprise 2.0 arena in 2012. With a new financial crisis just around the corner, this time to be caused by several Western nations caving in under unmanageable debts, the threat of such a crisis is already driving the world economy towards a recession. Even though many businesses are still making good profits, they know they have to prepare themselves for less favorable market conditions. I believe social principles and technologies have a key role to play in these preparations.
Unlike the financial crisis in 2008, which came pretty much as a shock, companies actually have some time to prepare themselves for whatever will come during 2012. The goals of such preparations should not only be to survive and endure as a business during a likely upcoming financial crisis and recession, but also to come out of it stronger than the competitors. This will require them to become more agile, innovative and efficient. The times of stability and predictability allowing for long-term planning are history, and it is time for companies to accept and act on that insight.
Avoiding the Vicious Circle of Blunt Cost Reductions
One way to prepare for harder times is to reduce a company’s vulnerability by reducing costs. As many companies have outsourced almost everything than can be outsourced and experience diminishing returns on their optimization of production processes, they will have to look at other parts of their business to reduce cost, such as functions like R&D, Marketing and Sales.
However, with increasing customer demands and constantly changing market conditions, in combination with an increasing dependency on the talent and creativity of knowledge workers, reducing costs in these parts of the business cannot be done simply through reducing headcount or holding back on investments in their work environment, such as new or improved digital tools and services. People simply don’t get more motivated to do a better job if they fear losing their jobs. Nor will they be able to get better at doing their job if they don’t have the best tools available. Blunt cost savings will likely push the top talent to leave the company and make a large portion of the people who stay disengaged. Productivity will fall. Chances are it will create a vicious circle, with productivity falling at the same pace or even greater pace than the reduction of the costs. Then there’s the question how such cost savings will make the company more agile and innovative.
The challenge is to achieve greater efficiency and quality at the same time, and that cannot be achieved without empowering people and making them more engaged in their work, company and customers. A better approach than blunt cost savings is to do more with less and redirecting work from wasted effort to value creation. The factories are already lean and now is the time for a leaner information workplace. I don’t see how any company can, in the face of harder times, afford the wasted time, money and talent that is a result of excessive administration and bureaucracy, inefficient practices, lack of collaboration, underutilized talent, demotivated employees and talents leaving for better opportunities.
Unfortunately, a lot of the costs in a knowledge-intense business are invisible to the eyes of controllers and executives, and a key challenge is to make these visible. But it starts with acknowledging their existence and an intention to do something about them.
Creating a Leaner Information Workplace
A lean information workplace cannot be achieved unless organizations and the work environment are designed to fit humans. Nor can it be achieved without smart use of new technologies, such as using social technologies to connect people and information across organizational and geographical borders. Smart companies will focus on reducing the friction in employee-to-employee communication and making use of social principles and mechanisms to improve the findability of people and information, innovation, organizational agility, workplace awareness, expertise location, employee engagement, knowledge sharing and collaboration. They will use social technologies as an integration layer bridging organizational, geographical and technological silos, allowing different parts of a large and dispersed company to be tied closer together so they can act in a more agile and coordinated way.
As consumers, we have gotten used to being able to perform tasks and have access to information and resources on the go. It has changed our behaviors as consumers, such as how we look for and use information and the way we carry out our tasks. We also bring these new behaviors to work, along with our devices and services. We have discovered the benefits of seamless working from any device, allowing us to work from anywhere at any time. A project manager might begin to write a status report using an app on her tablet at home, then leave for work and continue working on the status report while on the subway, using an app on her smartphone that is connected to the same service as the app on her tablet, and when arriving at the office she finalizes the status report using a desktop app or web application from her laptop.
Mobility gives employees the flexibility to decide when and where to perform a certain task. If a task can be performed anywhere at any time instead of requiring the user to sit in front of a laptop at a desk, the user can perform the task when and where it needs to be done. It is hard to see how this won’t help to improve knowledge worker efficiency and productivity. For example, it will help to reduce or eliminate waste such as unnecessary traveling, time spent on waiting for other people to push work forward and defects and rework caused by bad decisions because we didn’t have the right information at hand when making the decisions. It will also reduce the barriers and friction in employee-to-employee communication, thereby allowing for better and faster coordination, decision making and execution of joint efforts.
Here Comes My Prediction for 2012
I usually keep away from making predictions, and my only prediction for 2011 was that enterprises would become more social and mobile. For 2012, I simply repeat this prediction, and I predict that the trend will get even stronger as the use cases and business rationale become clearer for every company that implements social and mobile technologies, successful or not. The next frontier for improving operational excellence is the information workplace, and social and mobile technologies are revealing new opportunities for improving information work. A year ago I didn't see any forces strong enough to disrupt this trend, not even an upcoming financial crisis and recession.
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