Several forces are at work in the "social collaboration" tool marketplace that are creating great turbulence. 

It’s fairly well-known that businesses face a systemic issue with adoption of social collaboration tools. These tools (also called enterprise social networks, or social business) share some common design motifs, like activity streams, project or group workspaces, file sharing, user profiles, and various communication mechanisms such as direct messages, @mentions and so on.

But what isn’t generally acknowledged is that business productivity was much higher in the years preceding the emergence of Web 2.0 social collaboration tools. This means that Web 1.0 era tools -- like instant messenger and the much maligned email -- may have offered more oomph, at least when compared with pre-Web techniques like fax, phone calls and inter-office mail.

The Slopes of Productivity

What’s at work here?

The fact is that the growth of business productivity has leveled off, starting in 2004, just when social collaboration took off. As John Fernald, senior research adviser at the Federal Reserve Bank of San Francisco reported in Productivity and Potential Output Before, During, and After the Great Recession,

At its peak from the mid-1990s to early 2000s, TFP [Total Factor Productivity] growth was similar to its pace from the 1940s to early 1970s. But after 2004, the IT-induced burst in TFP growth faded. For three of the past four decades, productivity growth has proceeded relatively slowly, suggesting this slower pace is the benchmark. Writing near the stock-market peak, Greenspan noted, in passing, the possibility of a 'euphoric speculative bubble.' With hindsight, the past two decades have seen speculative booms and busts in stock and housing markets, and the worst financial crisis since the Great Depression. It is tempting to point to these factors, including the Great Recession, to explain the swings in productivity growth. But the productivity retreat predated the Great Recession and is not limited to the 'bubble sectors.' Nor was it more pronounced in states that saw bigger housing-price swings (a proxy for indirect effects). Rather, the end of exceptional growth can be traced to industries that produce IT or use IT intensively."

The chart below shows the various slopes of productivity, clearly indicating the rise and fall of productivity growth, with the steep rise from 1997 to 2004, and the subsequent return to historical, slower productivity increases.


Note Fernald's last sentence: the slowing of productivity is greatest in companies relying on IT extensively, even while the earlier period seems to have been accelerated by the adoption of an earlier generation of IT. So the emergence of the Web 1.0 era of computing sped things up, and the emergence of Web 2.0 tools and platforms seems to have slowed things down.

As a part-time optimist, I could suggest that perhaps another era of higher productivity lies around the corner, past the right margin of Fernald’s chart. But the curmudgeon in me wants to make the case that the social tools we have been using since 2004 are holding us back.

Wrong Tools, Wrong Era 

My thesis is this: the Web 2.0 generation of tools were (largely) contrived around an idealized company that may have existed at an earlier time, but certainly doesn’t match today’s work environment. The pace, shape, devices and organization of business today is so different from the pre-2004 era that the principles that drove the design motifs of social collaboration tools are, at the least, dangerously out of date.

This is why sales of those tools are shrinking, which is reflected in the analyst firms decreasing expectations for the size of the market for such tools.

The second factor is -- in a way -- the complement to the first. Part of the new way of work that has started to emerge in the past year or so is a change in social scale at work.

As companies flatten, and work patterns shift to more lean and agile patterns, work has become more self-managed, with small teams making more decisions on their own. There is a growing interest in tools that help people to get work done at a smaller social scale, rather than tools organized around coordinating the work of others, and focused on larger social scale. I think this is the case with work chat apps like Slack, Hall and Hipchat.

Another way to put this -- relative to Fernald’s chart -- is this: tools organized around maximizing visibility into what all project teams in a company are up to slow things down. Too much communication -- as Jeff Bezos has famously argued -- is not a good thing.

Perhaps we will see another uptick in productivity when we come to realize that communication is -- like management -- a necessary evil, and therefore it’s best to have only as much as needed and no more.

These are only two of the most important forces at work here. I'll cover some of the others in later posts.

Creative Commons Creative Commons Attribution 2.0 Generic License Title image by  R. Mitra