Friday, October 12, 2012

Friday, May 04, 2012

save money on crowd labor? build brand affinity!

As many of you know, my off-hours project over the past few months has been a deeper analysis of the connection between worker engagement and brand affinity in a task-based labor market. Based on my hands-on experience with crowdsourcing solutions and literature review, I have arrived at the hypothesis that, in a task-based market, brands with stronger opinion / affinity ratings will have a labor cost advantage over lower performing brands. This hypothesis is based on what I perceive as a functional equivalence between brand preference in purchasing models (where preferred brands experience higher pricing power and/or rates of repurchase) and task selection models in the rapidly evolving task-based labor market. It is my opinion that brand preference will exhibit as a positive task selection bias confirmed by lower costs for equivalent work.

The research population for this directional research was a community of highly-rated workers on Amazon Mechanical Turk. A total of US-based 720 “Turkers” (as they refer to themselves) with completed task approval rates of greater than 90% and more than 500 tasks completed responded to the survey tool. Additional details on the survey methodology are covered in a prior post. Note that Amazon does not make available worker population counts for Mechanical Turk, so meaningful evaluations of statistical confidence are challenging.

The survey tool (screen capture available here) was constructed to require a participant to select between two theoretical tasks on Amazon Mechanical Turk. The participant was asked to make their choice based on the assumption that the tasks were effectively identical, and that the only difference between the two tasks was the identity of the task requestor. For the requestor, participants were asked to choose from two (2) randomly selected, well-known consumer brands. Participants were also asked how much the requestor of the non-selected task would have to pay in order to have their task chosen over the preferred brand (based on the assumption that their preferred brand was offering $1.00 to complete the task). Finally, participants were asked to provide their opinion of each brand on a Likert scale, ranging from “1 – Poor” to “5 – Excellent”.

The survey model was designed to provide a cost differential between the two (2) brands. This variable provides a measure of how much more the non-preferred requestor would have to pay in order to have their task completed instead of the preferred brand. The following histogram classifies the responses based on the cost differential reported by the respondent.

Cost Variance Histogram

As you can see, Turkers expect significantly more to complete tasks for a non-preferred requestor. Over 77% of respondees expect more than double (i.e., the categories including, and to the right of, “1.00 to 1.99 Additional”) to complete a task for a non-preferred requestor. While this level of difference may not hold over time as task-based markets become more mature, the current environment clearly requires a significant cost premium for those brands lacking in affinity.

Observation: Preferred brands pay a lot less, even when opinions are equivalent

My first exploration involved looking at just those situations where the participant gave both brands the same opinion score (e.g., they rated both “5 – Excellent”). Out of the 720 responses, 215 fell into this category. However, since the participant was required to choose one brand over the other and then provide a cost differential, it was possible to identify what a basic “preference” would cost a company. Based on the instruction that their preferred brand was offering $1.00 to complete the task, participants reported that they would expect an average of $2.91 from the non-preferred brand to complete the task (a cost differential of $1.91). This is nearly triple the cost to the preferred task requestor.

This is a striking result; when a Turker has to choose between two functionally equivalent tasks, requestor preference becomes a significant factor. And, even when the Turker holds similar opinions of both requestors, the preferred requestor has the potential for their work to be completed at much lower cost.

Observation: Brand opinion has a role to play, but only to an extent

Extending the initial analysis, I established the concept of “Opinion Distance”, a variable defined as the absolute value of the difference in opinion scores between the two (2) brands presented to the respondent. Based on this definition, Opinion Distance can range from “4” (i.e., Brand A = “5 – Excellent” and Brand B = “1 – Poor”) to “0” (i.e., both brands have the same opinion score). Responses were then categorized and averaged based on their Opinion Distance value.

As the following chart indicates, any difference in brand opinion (Opinion Distance greater than zero) results in a significant cost increase over and above the basic preference differential identified in Result 1. At an Opinion Distance of one (1), a Turker expects to receive an average of $3.58 to complete a task for which the preferred brand would pay $1.00, more than tripling the cost to the requestor.

Cost Variance vs. Count of Opinion Distance

Of particular interest is that there appears to be an implicit maximum premium that Turkers are willing to charge for a given task, regardless of brand opinion. While the average reward expectation differentials for Opinion Distance of two (2) and above are greater than basic preference (Opinion Distance of zero), they are actually less than responses with an Opinion Distance of one (1). Additional analysis needs to be performed, but it would appear that worker value models establish a reasonable maximum reward for a given task. The survey included a text response area that I am in the process of reviewing—it is hoped that this unstructured data will provide additional insight and direction for additional research.

Conclusion and future research directions

Based on this initial research, there would appear to be reasonable support for the established hypothesis. Additional analysis of the initial dataset should provide confirmation, and further results will be shared as the analysis is completed. I am also making the dataset available for download to anyone who would be interested in conducting their own analysis and contributing insight. You can download the Excel-formatted file here.

As mentioned, the results have provided multiple avenues for further investigation. Several that are of immediate interest are:
  1. Investigating the difference between preference and opinion as it relates to brand affinity in a task-based labor market, and identifying the significant components of each;
  2. Better understanding the mental models by which task workers value their effort and determine which tasks are “worth” completing;
  3. Identifying if there are significant differences in response patterns when crowd labor is a primary / exclusive source of income (vs. a contributing / optional source).
Finally, it should be noted that this research is not intended to be authoritative, but to establish initial direction for additional, more rigorous studies. In order to extend the validity of these findings, crowd workers from other platforms would need to be included, as well less qualified workers (e.g., lower task approval rates). However, the research does provide important insights to businesses seeking to leverage the most qualified crowd worker pool on today’s largest crowd worker platform.

Sunday, April 29, 2012

Social Enterprise ROI? You can get there from here!

Originally published on the Acquity Group Blog.

It’s been fascinating to observe the growing interest in justifying the ROI of Social Enterprise investments over the last three to six months. It’s right on schedule, of course; the Innovators and Early Adopters have been cleared off of the curve with generally positive results, and we’re now staring into the face of the Early Majority. The challenge is that the deeper you get into the adoption curve, the more evidence-driven the adopters become.

When sitting in a roomful of business stakeholders, everyone agrees on the importance of ROI. But just try getting to consensus on what ROI looks like for Social Enterprise initiatives. The fundamental issue with trying to define and calculate Social Enterprise ROI is that the ad hoc processes you're improving have never been identified nor measured by management. Armies of managers and consultants have spent over a half-century defining and analyzing ERM processes; a quarter-century figuring out CRM processes; and, less than five (5) years focused on the convergence of collaboration, innovation, communications and shadow processes / organizations out of which the Social Enterprise emerges.

The fundamental issue with trying to define and calculate Social Enterprise ROI is that the ad hoc processes you're improving have never been identified nor measured by management.

As we’ve done Social Enterprise research and work with our clients, we’ve identified two (2) workable responses to the ROI question:
  1. Your organization can spend the upfront time identifying ad hoc processes, defining and measuring them (this generally requires patience and the support of outside expertise).
  2. Alternatively, you can find favorable user clusters in which to introduce Social Enterprise initiatives, identify critical metrics for the group, and conduct pilots. In this scenario, stakeholders agree to treat the pilot as a “black box”—comparing the “going in” metrics to the post-pilot outcomes.
We’ve also come to understand that conservative (i.e., "risk-averse") organizations almost always want to map processes first. We regularly do this work for our clients, and have developed approaches that get to consistently useful results. However, given the limited cost of standing up Social Enterprise pilots (close to zero for a SaaS solution from a willing vendor), we’re much more interested in working with our clients to help design pilots that achieve results and deliver the “quick wins” needed to justify additional investment and deployment. As always, there are caveats: if there are legal / regulatory / compliance or cultural / organizational issues that would limit pilot effectiveness or create excessive unmanaged risk, then a process mapping approach is a worthwhile first step.

It's interesting to note that many of the leading solution vendors in the Social Enterprise space (e.g., Jive, Yammer, SocialText) have coalesced behind the "pilot and learn" approach, while enterprise platform vendors (e.g., Microsoft) still trend towards "learn then deploy".

So by all means, ask the ROI question. Just understand going in that there’s work to do to define it, but that you have options regarding how you get to the answer.

Tuesday, April 24, 2012

the future of knowledge work and the return of task specialization

“The means of production should be owned by the purrrletariat.” - Lenin Cat

If you’ve been tracking my Twitter feed (@CycleBot) recently, you’re aware that I’ve been using Amazon’s Mechanical Turk to investigate possible correlation of worker engagement and brand affinity. I’ll be sharing the results of this research, as well as my practical experiences using Mechanical Turk, over the coming weeks. As I’ve been working through this project, as well as observing the rapid growth and evolution of crowdsourcing and open innovation practices, I’ve started to get a personal sense for the emerging future of knowledge work.

I’m not ready to go out on a limb and speculate on the timing of wholesale adoption of new work models, especially as I think we’re still 2-3 years away from a clear inflection point. But when you look at crowdsourcing markets such as elance (who just surpassed the $500m mark in work facilitated(1)) and task facilitators such as Mechanical Turk (still in beta, but already averaging $15k+ in payouts per day(2)), it’s clear that the future of knowledge work is experiencing a dramatic shift towards task specialization. Compared to the Industrial Revolution, which created unhealthy co-dependencies between workers and the enterprise, the timing and nature of this current revolution is refashioning the market for work in ways that should ultimately be beneficial for workers, businesses, and society as a whole. It’s my opinion that knowledge workers will increasingly be free agents for hire in this new order, executing on pre-defined activities and moving on to the next opportunity.

The key trends I see driving this change are:
Drivers of Future Knowledge Work

Anywhere, anytime access to work

No surprise here: there’s already a ton of data demonstrating the ubiquity of devices and networks to connect us to our tasks and the resources required to complete them. And demand is moving in lockstep with supply: a recent Cisco global survey of 2,800 college students and young professionals showed that 40% of them would accept a lower-paying job in exchange for better access to social media, the ability to work from the location of their choice, and to select their own mobile device(3).

This rapid shift is driving behavioral change towards work. As I write this, I’m sitting in my favorite overstuffed chair with a view of the local deer mowing down my tulips (a friend once referred to my tulips as “deer nachos”). Today, I’ve spent time with my wife and son during the “business day”, chatted with the neighbors over lunch, and strolled to the library for a change of scenery and some inspiration. It’s been over a decade since Faith Popcorn put labels to the trends of “cocooning” and “cashing out”(4), but the availability of anytime, anyplace access is putting the exclamation point on the trends. A consequence of this shift is that worker identity is increasingly less affiliated with the employer and more focused on the task.

By extension, this trend also expands the marketplace of potential knowledge workers. For many midmarket companies (MMCs) and smaller firms, solutions such as Amazon’s Mechanical Turk create low-barrier opportunities to quickly and easily outsource and offshore work. The population of workers on AMT is globally diverse (current participation from at least 66 countries identified(5)) and continues to expand in numbers and nationalities. MMCs and smaller companies can plug into a global workforce without the concerns of infrastructure investment, currency exchange or political risk. As the opportunity space grows for businesses, so also does the competitive space for knowledge workers. The end result is an emerging global market for knowledge work.

Increasing atomization of work

When I first started thinking through this topic, the analogy that came to mind was analog vs. digital. Historically, knowledge work within the enterprise was experienced as a series of peaks and valleys—periods of high activity moderated by time for planning, development and socialization—akin to an FM radio signal. As we’ve moved into the digital age, the nature of our work has evolved to be much more packet based—either you’re executing on a task (“on”) or looking for the next task (“off”). Opportunities for career growth and forward thinking occur outside the digital workstream, if they occur at all.

Then the obvious analogy struck me: mass production. What’s changing about the nature of knowledge work is the increasing encapsulation of the basic unit of work (i.e., a task). As a result of advances in business process design, information management, and technology, knowledge workers are better equipped than ever with the contextual information required to complete a task without external intervention. Consider: a common use case for Amazon’s Mechanical Turk is content categorization. Workers on Mechanical Turk develop skills and achieve qualification levels in content categorization, and businesses create self-contained tasks for these workers that provide them with all of the context required to complete the category assignment activity(6). This echoes the mass production innovations of the Industrial Revolution, where assembly activities were bundled into self-contained work units. As long as the upstream workers on the assembly were all doing their jobs correctly, the individual worker could accomplish her work unit without additional input or interruption. We have already achieved this level of segregation for many types of knowledge work, and the list will continue to expand.

Increasing importance of knowledge specialization

Hand in hand with the atomization of work is the increasingly specialized knowledge required to accomplish a given business task. As recently as 15-20 years ago, a marketing professional could have a successful career as a generalist. Today, specialization is the name of the game: interactive marketing, analytics, campaign management, lead management, etc. Similar drives towards specialization are occurring throughout the professional knowledge domain.

The two (2) primary catalysts of this trend are: the increasing capabilities of automation solutions; and, the exponential growth of the knowledge corpus. Regarding automation, Business Insider recently published a post asking whether developers—the footsoldiers of the automation revolution—would become obsolete(7). The article profiles a startup company in the process of building a platform that would eliminate much of the front-end development and optimization required to launch a new multi-channel web presence, turning the complexities of site creation into layman’s activity. Of course, companies have been chasing this capability for as long as there have been websites. The difference is now is that we’re nearing solution maturity.

Talent doesn’t become obsolete; the definition of talent changes, and talented people equip themselves to fit. Just like COBOL and FORTRAN developers learned C+ and Java (or retired), generalists of today whose work is being replaced by automation will move to areas of deeper specialization. Developers who once wrote exception handlers for webforms will learn to optimize Latent Class Analysis algorithms for large datasets (or retire).

Which brings us to the continuing expansion of the knowledge universe. Certain domains started early down the path of specialization as a practical response to the amount of knowledge required by a person to be minimally effective and keep pace with the introduction of new knowledge (medicine is the easy example, engineering and law are others). Until recently, the business world has held on to the belief that talented generalists make the world go round—a perspective no longer sustainable as the pace of innovation and the brutal efficiency of the market continues to ratchet upwards. Instead of getting caught in a squeeze play (between the need for access to specialized resources and the expense of maintaining dedicated specialized resources) more and more companies (especially at MMC and smaller scales) will opt to farm out specialized activities instead of hire.

Activity / workflow management solutions

While still maturing as a foundational, business-managed capability, the future value of business process management (BPM) is already apparent. Business processes have evolved from whiteboards and guesstimation to rapidly configurable and measurable system-managed workflows. The task encapsulation required to enable robust knowledge work markets (e.g., providing effective context and intuitive activity design) will require further evolution of BPM solutions, standardization of common task inputs / outputs, and new insights and approaches to user experience design; but, significant efforts to address these issues are already underway(8). In addition, enterprises will need time to evolve their structures and define effective practices to effectively integrate the crowdsourcing of knowledge work.

Adeptly applied, BPM will be a game-changer for the transformation of knowledge work. As BPM solutions mature and move up the knowledge value chain, the economic focus will shift from the worker to the task. To see what the future looks like, sign up as a worker and spend some time performing tasks on Amazon’s Mechanical Turk (lower on the value chain, standardized inputs / outputs) or get your own personal logo created at 99designs.com (a bit higher on the value chain, but also based on standardized inputs / outputs).

Activity scoring metrics / gamification models

A key component of the evolving BPM solution set is the visibility and use of performance metrics in the worker experience. Worker metrics have expanded beyond their early successes in customer service and industrial processes to become a management tool across the diversity of enterprise processes (as evidenced by the growing interest in workforce analytics(9)). In a crowdsourced knowledge market, metrics and gamification drive pursuit of performance on both the buyer and seller sides of the transaction. Buyers (businesses) have objective, quantitative data on which to allocate tasks and compensate for output. Sellers (knowledge workers) have an unambiguous understanding of the relationship between performance and compensation, and can make informed cost / benefit decisions regarding additional investments in skills and expertise development.

Disillusionment with the corporate model

For many, the ongoing parade of corporate scandals and fraudulent activity (beginning in the last decades of the 20th century and culminating with the Enron / Andersen and mortgage crises in the first decade of the 21st) has stripped away the veneer of the corporation as “citizen”. While government and businesses have reacted with an array of corrective measures—Sarbanes-Oxley, the Consumer Financial Protection Bureau, Corporate Social Responsibility, enhanced internal control frameworks)—public confidence will be slow to return. In a recent Gallup survey of honesty and ethics among professions, “business executives” were ranked 14th out of 21 professions evaluated. The only professions ranking lower were: labor union leaders, stockbrokers, advertisers, telemarketers, lobbyists, members of Congress and car salespeople(10).

Viewed through a pragmatist’s eyes, the singular purpose of the corporate structure is the effective and efficient aggregation and allocation of capital. However, the role of the corporation expanded broadly during the 20th century, eventually taking over many responsibilities previously held by the individual or community (e.g., social hub, healthcare and retirement provider, personal development resource). Commensurate with this growth, the Western world increasingly romanticized the corporate structure, positioning it and it’s practitioners as the ultimate realization of the capitalist ideal. All for a business structure originally conceived to make it easier for people to pool and invest their money.

Ultimately, society is healthier if the responsibilities that have been transferred to the corporation are returned to the community and the individual. Not only is personal freedom increased, but the influence of corporations in community and government affairs is diminished. The transition of the knowledge work market from a focus on the worker to the task should accelerate this transfer, and allow the corporation to return to its intended role as manager of capital flows. While presently not a significant factor, continuing ethical lapses in the management of corporate structures will likely result in accelerating the migration of knowledge workers to independent status.

Generational shift in values

A substantial body of academic research identifies the clear differences in the work values of younger generations, especially in the developed world(11). Compared to older workers, young people entering the workforce today are more driven by leisure and extrinsic values, and less motivated by the intrinsic, social and altruistic values of work. This dynamic has significant implications for the design of future work. As the importance of the workplace for providing meaning, community and opportunities to help others diminishes, the value and relevance of the ancillary roles adopted by the enterprise (i.e., activities other than capital acquisition and allocation) also decreases. Further, the task-driven nature of future knowledge markets is directly aligned with the younger generation’s focus on leisure and extrinsic rewards. In a task-based market model, knowledge workers have the freedom to choose when and where they work; and, there is a direct and unmistakable relationship between task performance and compensation. Recent difficulties in the economic environment will also increase the likelihood that younger workers will be more receptive to alternative forms of work vs. the long-term employment models available to older generations.

Conclusion: it’s a free agent future

Where does all this lead us? Obviously, any number of factors could impact the nature of future knowledge work: regulatory action, geopolitical upheaval, pace of technological change, economic events, cultural resistance, the coming zombie apocalypse. However, by observing the changes already underway and projecting the identified trends into the future, it’s clear to this author that the current model of knowledge work is in for a significant change. From the perspective of the individual, this transformation unlocks the organizational structures established and evolved since the Industrial Revolution, and makes available the pre-industrial “independent craftsperson” model as a viable option for earning a living.

From an enterprise perspective, a wide range of new opportunities open up. Freed from the requirement to allocate capital towards the maintenance of a permanent knowledge workforce, leaner organizational structures should emerge. To be certain, the enterprise will always need to maintain a core of strategic resources with a clear understanding of its purpose and goals to sustain its competitive advantages (primarily via the effective allocation of capital). However, the ability to manage capital for knowledge work more dynamically and with greater precision creates the potential for greater innovation. Ideas that couldn’t get to target ROI using existing structures can be explored and given the opportunity to evolve into meaningful lines of business. Capital allocation is freed from tradition and organizational culture(12), and the enterprise core team adopts a role similar to that of a venture capitalist.

Sunday, April 22, 2012

What does Turker Nation think of your brand?

I’ve completed the information gathering phase of my current research effort—exploring the relationship between brand opinion and crowdworker engagement. While I’m still churning through the data analysis, I thought I’d share some descriptive statistics with you to give you a sense of what’s coming. For an overview of how I produced these numbers, see the Methodology Overview (below).

Turker opinions on US consumer brands

As part of the survey methodology, each participating “turker” (a worker on Amazon Mechanical Turk, a crowdworker platform) was asked their opinion of two (2) well-known US consumer brands. They were asked to rank their opinion on a scale from “1 – Poor” to “5 – Excellent”. While the average score of each brand is not specifically relevant to the research question, the results do paint an interesting picture, as indicated by the following graphic.
Brand Ratings by AMT Workers
What’s interesting is the manner in which some of the ratings skew when compared to other measures of brand performance. Consider Volkswagen, which respondees scored third highest out of the 35 brands evaluated: or Nintendo, which scored fifth highest. In the 2011 Interbrand Global Top 100 Brand Rankings(1), these two brands placed 47th and 48th, respectively. This is well back in the pack from Google (Interbrand #4), Nike (#25) and Coca-Cola (#1). The survey did include an open response question, asking for a rationale of their opinion. I hope that an analysis of this information will provide additional insight and testable hypotheses.

Knowing the identity of the task provider

While some companies are attempting to maintain anonymity within Amazon Mechanical Turk (“AMT”), this is likely to be counterproductive. As the following chart indicates, a third of Turkers think it’s “very important” to know for whom they’re working, and another two-fifths are at least interested.
Brand Ratings by AMT Workers
There are a variety of reasons for wanting to know, and the subject deserves further analysis. An obvious reason, identified by reviewing discussions on the Turker Nation discussion site (http://turkernation.com/) is that there have been issues with payment from certain requestors. Also, new requestors are viewed with suspicion until they’ve demonstrated their consistency and reliability. Other Turkers are selective about the organizations for whom their willing to work—this is the focus of my research, and will be covered in a future post.

Methodology Overview

Over the period from April 5th to April 19th, 2012, I published a worker task for completion on Amazon Mechanical Turk (“AMT” - http://mturk.com). The task was a survey comprised of five (5) questions to gather information on brand / company opinion and task selection drivers. The task was published to AMT workers (“Turkers”) located in the United States (to provide for consistency of brand awareness) who have completed more than 500 tasks with a 90%+ approval rate on their completed tasks. These filters were implemented per suggested best practices to avoid potential bots and spammers.

Regarding the representativeness of AMT workers, there have been numerous studies performed that indicate that “Mechanical Turk workers are at least as representative of the U.S. population as traditional subject pools, with gender, race, age and education of Internet samples all matching the population more closely than college undergraduate samples and internet samples in general.”(2) As result, this initial study chose not to collect additional demographic data, although future research may extend into this area.

Out of a pool of 1,200 potential responses, I received 1,002 task submissions. After eliminating incomplete responses and multiple responses from the same worker (to reduce sample bias) I was left with 728 valid responses on which to base analysis. On average, a worker spent 1 minute and 48 seconds completing the survey.

Notes

(1) "Best Global Brands 2011." Interbrand. 2011. Web. 22 Apr. 2012.

(2) Paolacci, Gabriele, Jesse Chandler, and Panagiotis Ipeirotis. "Running Experiments on Amazon Mechanical Turk." Judgment and Decision Making. Society for Judgement and Decision Making, Aug. 2010. Web. 22 Apr. 2012.

Creative Commons License
What does Turker Nation think of your brand? by Steven Beauchem is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.

Monday, March 26, 2012

want to build the social enterprise? stop getting in the way.

Originally published on the Acquity Group Blog.

Let’s start by stating that there is no shortage of technology solutions upon which you can build a social enterprise. While no one vendor has yet pulled together all the components (including social media, unified communications, synchronous collaboration, asynchronous collaboration, and asset management) into a single, cohesive vision, a number of vendors—or vendor ecosystems—are closing in on the goal. And, numerous enterprises have gotten fairly close with a bit of integration legwork.

Given this assumption, what’s holding back businesses from embracing the vision and benefits of the social enterprise? People. The social enterprise is, first and foremost, about people. I don’t want to minimize the value of solution fit (and we’ll be talking solution fit in future posts), but you’re not going to get anywhere if your employees aren’t invested in the importance of changing their behavior to respond to the demands and opportunities of a highly dynamic, energetic, collaborative marketplace. They’re also not going to commit their time and energy if you haven’t created an environment of trust, and instilled in them a sense of purpose.

In a work environment driven by a positive, productive culture and purpose, social enterprise solutions are like rocket boosters—they enable the business to achieve its objectives faster and better than without. In an organization with culture issues, the same tools become graveyards of half-hearted attempts to start something. I’ve learned over time that when a business leader complains about ineffective adoption of social enterprise solutions by her workforce, nine times out of ten the issues are cultural.

What’s a leader to do? Focus attention, build trust, triage constraints, and get out of the way.

Focus energy: today, businesses must compete for mindshare within their employee base. Our always-connected, media-driven society reduces attention quality available to any given activity, especially those to which the individual does not possess a strong emotional attachment. As a result, leadership must distill their organizational identity and strategy into clear, concise, emotional-response-generating purpose, and leverage all available tools to create employee engagement in support of it.

Build trust: within the enterprise, there are two (2) primary dimensions of trust. There’s “vertical” trust: the sense that the employee’s managers and leaders understand core purpose, have the ability to achieve it, and are committed to supporting her efforts to contribute to it. “Horizontal” trust describes the level of confidence the employee has in her peers to collaborate successfully, and to address differences in priority and opinion on the basis of shared understanding of core purpose.

Understatement of the day: trust is hard to achieve. If it’s not already embedded within the culture, it takes significant time and commitment to get there. But the outcomes are worth the effort: a more flexible, dynamic workforce, an increased willingness to innovate, and an improved ability to attract talent. (For a great perspective on trust in the enterprise, check this post from Linda Hill and Kent Lineback at HBR Blog Network.)

Triage constraints: take a hard look at the work environment. What’s resisting or preventing the efforts of your employees to achieve the organization’s core purpose? Obviously there are legal and regulatory frameworks that must be accommodated based on the purpose you’ve chosen to fulfill. Beyond this, most enterprises have a host of policies, processes and systems that were implemented with the best of intentions, but they don’t support what you’re trying to achieve.

Toyota introduced us to the “5 Whys” concept; I suggest exploring your business environment using the “5 Hows”. For a given organizational asset (policy, process, system) ask “how is this enabling our core purpose?” When you have an answer, ask again: “so, how does that enable core purpose?” Keep asking until you can tie the asset directly to your purpose. If you can’t answer the question, or if it takes you more than one or two answers to get clarity, you know you have an asset that needs changing or eliminating.

Unfortunately, some of the assets that will require your attention are going to be people. In an environment where trust and commitment to purpose are increasingly a requirement for business success, employee engagement and talent at every level is crucial. However you decide to manage these issues, make sure that you’re doing the right things (e.g., communications, transition planning) to sustain trust. (Workforce analytics are emerging as a powerful tool to help you do this work. For more information on the topic, take a look at this overview post from Tim Ringo at Maxxim Consulting.)

***

Once you’ve done all the heavy lifting of establishing purpose and fixing processes and culture, it’s time for leadership to get out of the way. I’ve posted previously on the importance of “seeding” your social enterprise, but the most effective patterns of innovation and collaboration are going to emerge unexpectedly. It’s your job as a leader to tend the garden, encouraging the growth and development of social enterprise patterns that are working, and reallocating resources away from tactics and tools that are not. With effort, you’ll have the social enterprise environment your business needs to achieve its purpose, and the right processes and understanding to evaluate new social enterprise capabilities for adoption.

Additional Resources

Li, Charlene, Alan Weber, and Jon Cifuentes. "Altimeter Report: Making The Business Case for Enterprise Social Networks." Altimeter Group, 22 Feb. 2012. Web. 26 Mar. 2012.

Miller, Megan, Aliza Marks, and Marcelus DeCouloude. "Social Software for Business Performance." Deloitte LLP, 2011. Web. 26 Mar. 2012.

Adler, Paul, Charles Hecksher, and Laurence Prusak. "Building a Collaborative Enterprise: Four Keys to Creating a Culture of Trust and Teamwork." Harvard Business Review July-Aug. 2011: 95-101.

Ringo, Tim. "Workforce Analytics Isn't as Scary as It Sounds." HBR Blog Network. Harvard Business Review, 23 Mar. 2012. Web. 26 Mar. 2012.

Tuesday, March 20, 2012

the success of purpose-driven organizations: a basic conceptual model (first draft)

“If Daddy didn’t go to work, many families wouldn’t be able to fly around the country and be with their loved ones. Without Daddy doing his job, little kids all across the country wouldn’t get to see their grandparents, their aunts and uncles, or any of their cousins. Daddy has to go to work to make sure everyone can be with their families.”
-Southwest Airlines ramp agent, explaining to his children why he works on Thanksgiving(1)

Over the last decade, there’s been a lot of interest and activity developing around the concept of “purpose-driven business”(2). With good reason: organizations built around purpose-driven concepts (e.g., Southwest Airlines, Apple Computer, Disney) have consistently outperformed their segments (by an average by 6:1) and the market as a whole (by an average of 15:1)(3). What has been lacking from the movement are useful descriptive models (which is also the basis for much of the lack of enthusiasm seen until recently in academic and consulting circles(4)). Much of the literature on purpose-driven business has been quiet on the question of “why it works”, focusing instead on the “why you should adopt”.

What follows is my personal strawman on the mechanism behind purpose-driven success, an idea that has been knocking around my head for the last several months. I’m sure this is not the first attempt to describe how purpose-driven enterprises work, and the concepts certainly require additional input and refinement. Hopefully you’ll find the model useful; even more importantly, I would welcome your ideas for improvement.

Purpose-Driven Organizations: a Basic Conceptual Model
Please note: as an initial hypothesis, this model is not yet fully researched. You will likely see the model and attributions evolve as it is tested and new ideas are integrated.

Corporate Purpose: the essential definition for corporate purpose comes from Jim Collins and Jerry Portas in their book Built to Last: “Core purpose is the organization’s fundamental reason for being. An effective purpose reflects the importance people attach to the company’s work—it taps their idealistic motivations—and gets at the deeper reasons for an organization's existence beyond just making money.”(5)

Personal Meaning: this is perhaps the most difficult of the model concepts to describe. Everyone has a unique perspective; for that reason a common definition is challenging. From academic literature, personal meaning has been defined as “having a purpose in life, having a sense of direction, a sense of order and a reason for existence”(6). While there are any number of externalities that drive personal meaning (e.g., religiosity, self-identity, enjoyment of job and personal activities, human relationships), individuals derive a significant amount of meaning from the organizations with which they are affiliated, especially their employers. It stands to reason that people seeking employment are more likely to choose organizations whose purpose sustains their “sense of direction and [a] reason for existence”; and, that employees that work for such organizations are more likely to have their personal meaning sustained and enriched.

(Note: for a deeper perspective on the subject of personal meaning in the workplace, see the recent McKinsey quarterly article "How Leaders Kill Meaning at Work".(7))

Individual Intention: “A determination to act in a certain way”(8). While the science in this area is rapidly evolving(9), there is general agreement that the higher-order behavior of individuals is driven by intention. Research is impacting our understanding of the nature of intention—how much is conscious vs. how much is ingrained and habitual. However, the formation of specific, productive intentions is certainly enabled by a positive, energetic personal meaning.

Collective Action: organizations are well understood as social constructs established for the purpose of fulfilling some need. Holding equal such concepts as composition, role definition and resource allocation, the organizations that function most effectively are those where the intentions of individuals throughout the enterprise are inherently aligned to motivate collective action in pursuit of corporate purpose. Organizations lacking inherent alignment of intentions to motivate collective action spend significant time and effort building and maintaining systems and policies to limit individual intent (consider the example of Kodak, whose engineers were developing significant innovations in digital photography as early as the 1970s, but whose efforts were suppressed by leadership(9)). In lieu of individual intent enabled by personal meaning, extrinsic rewards become the primary mechanism for driving collective action. Such systems can achieve performance results (measured by financial performance) over the short-term, but often result in incentive distortions and misalignment between desired and actual behaviors.

Shared Results: regardless of the outcomes, organizations structured around purpose share in the results produced by collective action. Purpose-driven organizations are, by their nature, learning organizations. Individuals and groups are enabled to develop their ideas and explore new approaches. Successes are celebrated, and failures are embraced as opportunities for growth. It is this collective accountability that makes it possible for the corporate purpose to be questioned, tested, and ultimately reinforced as the foundation for organizational success.

Implications

Though I’ve been focusing primarily on the process to date, some implications are beginning to take shape. Most significant is the potential to move beyond post hoc identification of purpose-driven organizations. The usefulness of a descriptive model is in its ability to enable more consistent comparisons of heterogeneous organizations, as well as to provide a basis for temporal comparisons. As more is understood regarding each of the model components, it will become possible to define appropriate methods to measure performance (e.g., interview and survey techniques to measure personal meaning, observation and survey techniques to measure individual intent, correlation analysis among components).

Ultimately, the model should evolve to provide business insight through the identification of best practices for the creation and stewardship of corporate purpose, and for organizational support and nurturing of success within each component step of the model. Equipped with this information, leaders and managers who see the value of the purpose-driven approach would be much more likely to take action for the benefit of their organizations.

Notes

(1)Spence, Roy, and Haley Rushing. It's Not What You Sell, It's What You Stand For: Why Every Extraordinary Business Is Driven by Purpose. New York: Portfolio, 2009. Print.

(2)Not to be confused with the recent personal faith / self-improvement following that has developed around The Purpose-Driven Life by Rick Warren.

(3)Collins, James C., and Jerry I. Porras. Built to Last: Successful Habits of Visionary Companies. New York: HarperBusiness, 1994. Print.

(4)Kiechel, Walter. The Lords of Strategy: The Secret Intellectual History of the New Corporate World. Boston, MA: Harvard Business, 2010. Print.

(5)Collins & Porras, 1994

(6)Reker, G.T. "Personal Meaning, Optimism, and Choice: Existential Predictors of Depression in Community and Institutional Elderly." The Gerontologist 37 (1997): 709-16. Print.

(7)Amabile, Teresa, and Steven Kramer. "How Leaders Kill Meaning at Work." McKinsey Quarterly. McKinsey & Company, Jan. 2012. Web. 18 Mar. 2012. <https://www.mckinseyquarterly.com/>.

(8)"Intention." Merriam-Webster. Merriam-Webster. Web. 18 Mar. 2012. <http://www.merriam-webster.com/dictionary/intention>.

(9)Mendes, George. "What Went Wrong at Eastman Kodak." Publication. St. Andrews: Strategy Tank, 2006. Print. (PDF version downloaded from: http://strategytank.awardspace.com/articles/What%20went%20wrong%20at%20Eastman%20Kodak.pdf on 03/19/12.)

(10)Eagleman, David. Incognito: The Secret Lives of the Brain. New York: Pantheon, 2011. Print.

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Purpose-Driven Organizations: a Basic Conceptual Model by Steven Beauchem is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.

Wednesday, March 14, 2012

innovation demands continuous renewal

Recently published on Slideshare: John Woodworth from 3M presents the case for building the open, creative enterprise. The presentation is an excellent summary of the key principles and value drivers for moving enterprise competitive advantage from a focus on productivity to one focused on innovation. While much of what he covers is familiar to innovation and collaboration practitioners, it's fascinating to see this message presented as a renewal mandate to an organization (3M) that many of us view as synonymous with innovation. As John points out in the presentation, the competitive landscape is more dynamic than ever. Even leading organizations have to continually challenge themselves to stay at the forefront, or risk being quickly overtaken in a market that is becoming ever more idea-driven.

Tuesday, March 13, 2012

social technologies for enterprise open innovation

Excellent visualization of the social technologies that businesses are leveraging to drive open innovation. Source: McKinsey Quarterly (Wiring the Open Source Enterprise, 01/2012).

Monday, March 12, 2012

a consultant's non-objective response to Kony 2012

"And a child shall lead them." - Isaiah 11:6

I'm struggling to write this post, as it's difficult to find the right entry point. So I'm just going to dive in and sort it out later. Earlier today, two of the most important roles I play in my life intersected, and the results nearly floored me. I wanted to get this experience captured quickly because it really struck a chord with me. I hope you find it meaningful as well.

In my career role, I'm a consultant, currently focusing on the Digital Strategy and Social Enterprise domains. I like to think I'm pretty good at it; my clients keep asking me back, so I must be doing something right. Besides having the prerequisite knowledge and skill, I also love the work. Some of the details I could do without (e.g., the long hours and travel), but I am excited to get up in the morning knowing that the opportunity exists for me to have a positive impact on my client organizations and the humans that come together to make them work.

At home, I'm Dad to my 12-year old son, Matthew. Compared to being a consultant, I love fatherhood immeasurably more and understand it considerably less. I am amazed, frustrated, impassioned, frightened and more every day as a parent, sometimes all within the span of a minute. Still, every day I go to bed looking forward to the next.

What brought these roles together? Matt came home from school this past Friday having seen the Kony 2012 video at school. Obviously, I was aware of it--I had seen a few clips and had fully internalized the volumes of expert opinion on the Invisible Children movement as yet another watershed moment in social media history. So when he asked about it, we were able to have an informed discussion (although a bit awkward: I still struggle with explaining why there is so much pain in the world). And I thought that was the end of it.

On Sunday morning the ground shifted. The family (Susan, Matt and me) and cats were enjoying weekend reading on the sofa, when Matt pulled Susan and I out of our books to say "I want to show you something." The three of us sat quietly for 25 minutes while the Kony 2012 video played, then we proceeded to talk about the things we could do to help in this cause: look for additional information to improve our understanding, call or write our elected representatives, donate to this group and others, tell friends and acquaintances (on & offline), stay connected. Matt had self-enlisted, and then invited us to participate. I was proud of him for his compassion for others, and for his courage to share it with us.

Invisible Children: inexperienced or insidious?

This is as good a point as any to address the controversy around the Kony 2012 video, and my struggle to write this. I'm well aware of the human and organizational flaws inherent in the Kony 2012 movement. To summarize the key concerns:
  1. The video is overly simplistic in its response and can be emotionally manipulative;
  2. The sponsoring organization (Invisible Children) spends too much on awareness and not enough on solving problems "on the ground';
  3. Invisible Children receives funding from sources whose motives are considered questionable by some external observers.
Regarding the first point, I would say that Invisible Children has accomplished for Joseph Kony what every single CPG company is paying a fortune to do for their products: build awareness. In an environment where ideas have become "productized", Cause Marketing is no different than traditional Product Marketing. You can't solve a problem / sell a product until people know of the need; you have to make people aware. It's overly optimistic on the part of critics to assume that, in this media saturated environment, people are going to sit still for the details before you've given them a frame of reference. Today, you have 70 million people who now have a reasonably accurate (if not fully complete) understanding of the situation. That's 70 million more than yesterday. And, like any engagement funnel, some portion of them will be looking for more detail.

From this, it follows that it costs money to build awareness. There is a misconception among many that social media makes things happen for free. The costs are different, and often less, than traditional marketing campaigns, but they don't zero out. While I agree that the percentage of funds raised actually benefiting the cause is low at this time (30%), some back-of-envelope calculations indicate that their current spending per "conversion" is more efficient than "for profit" industry benchmarks. Like with any startup (as good a description as any for Invisible Children) expense ratios are high at launch (when revenue is low) and trend downwards as success is realized. It would be interesting to see their marketing expense per dollar contributed (a valid metric for this discussion) in comparison to more traditional non-profits who rely heavily on traditional cause marketing tactics (e.g., American Red Cross, Sierra Club).

A response to the third item is entirely personal--there's no objective good answer. However, any organization that solicits contributions in the social domain receives money from people and organizations across the belief spectrum. People choose the cause; the cause doesn't choose the people. Maybe I'm being too lenient on this topic. I do know that if they were working to save my son, I'd be a lot less concerned where they were passing the hat. I would also suggest that if we wait for the perfect opportunity to donate, we'll be waiting a long time.

Why is all this important? Speaking for myself as a consultant (and for many others in the profession), we have a tendency to prize objectivity. We're valued for our ability to step into an environment, make dispassionate assessments, and provide recommendations that will change things for the better. In this focus on objectivity, we sometimes lose sight of emotion, of purpose. We know the benchmarks, the best practices, the methodologies; but we fail to connect with the human stories that slow or interfere with precision. It is the messiness of the human narrative that creates engagement.

There is so much going on with the viral success of Kony 2012 that could be (and already has been) intellectually dissected by a cadre of experts. As a consultant, my mind is already cranking out ideas about how the virality of this cultural phenomenon will shape my future work. However, when we focus on the mechanics and metrics ("wow, more than 71 million viewings!"), we overlook the collective human stories that make the numbers possible. We miss out on the meaning inherent in family sharing time together on a Sunday morning, embracing the possibilities offered to engage with shared purpose in a global effort for good.

Moments like these help me bring humility to my work as a consultant: remembering that we don't create connectedness and social good with our work. The talented architect doesn't make a home; she designs with intent and honesty based on her understanding and intuition of the future occupants' dreams and wishes, and hopes for their fulfillment. The best we can accomplish is to create rich opportunities for people of purpose to come together, and to participate fully in what emerges.


Thursday, March 08, 2012

crowdsourcing: the knowledge worker is dead! long live the knowledge worker!

I rediscovered the site 99designs.com this past weekend. If you haven't taken a look, you should: it's a pitch-perfect application of crowdsourcing principles. And, as you browse the folios of some of the designers, you come to realize that there's a ton of design talent out there that's not attached to an agency or other enterprise.

It got me thinking about my employer (which--no surprise--derives a significant chunk of revenue from design services) and disruption curves. What prevents our clients (primarily F1000 companies) from crowdsourcing their interactive needs? What determines how quickly crowdsourcing approaches to a given knowledge worker job become "good enough" for enterprise use? How soon do my colleagues and I need to start thinking seriously about hanging their own virtual shingle? While I haven't yet looked closely at the data or done the math, I get the sense that there are three (3) key variables that impact the rate of change to a crowdsourcing approach for a given job / business capability. Now I just need to find the effective data to prove my hypothesis:

Specialized Knowledge (positive correlation with rate of change): Take a look at the career disciplines that are trending more quickly towards croudsourcing: visual design, legal work, contract research, programming, writing / editing. They all require deep expertise, both to perform the work and to effectively evaluate work opportunities for fit. In addition, the knowledge worker "goods" they produce are created independently or with limited acquirer involvement, making crowdsouring models attractive for both the provider and the acquirer.

Knowledge work requiring lower levels of expertise (e.g., formal customer support, process fulfillment) has followed a separate path out of the enterprise, via outsourcing and offshoring. While there is definite movement towards decentralization of these jobs (e.g., work from home customer support), and solutions are beginning to emerge to enable task distribution and resource matching (e.g, Amazon's Mechanical Turk), the business infrastructure hasn't evolved to the point where these activities can be effectively crowdsourced at scale (my ballpark estimate: 2-4 years to inflection).

Personal Capital Investment (negative correlation with rate of change): I'm writing this post on a sub-$1000 laptop. Along with my mobile phone, I have all the tools I need to produce my knowledge "goods". From a capital investment perspective, mine is an easy job to crowdsource. A nuclear physicist, on the other hand, needs lasers and colliders and magnetic bottles to do their work. (Sidebar: why aren't more physicists evil supervillians? Money! It takes serious cash to build planet-obliterating particle beam satellites. But who wouldn't want to own one, even if your downfall at the hands of the debonair secret agent were assured? I digress...) Interestingly, when it comes to sciences, it's beginning to look like certain aspects of life science may have a shorter runway to crowdsourcing, given their nascent DIY movement (see yesterday's announcement about Petridish and today's NY Times piece regarding the rapidly decreasing costs for gene sequencing).

Perceived Value / Risk of crowdsourced "good" to the acquirer (negative correlation with rate of change): To date, the jobs / business capabilities exhibiting a faster rate of change to crowdsourced fulfillment are already being outsourced. Put another way, the aqcuiring organization already has an understanding of the value and risk associated with sourcing the "good" from its extended enterprise. 99designs.com is a good reference case: visual design services have been migrating out of the enterprise for decades: crowdsourcing is simply accelerating the movement by providing a newer, more efficient sourcing channel.

Of course, the counterargument to this claim serves up examples like P&G's "Connect + Develop" or the Open Innovation platform Innocentive, where the crowdsourced goods produced are integral to key business processes. While companies building virtual R&D capabilities are realizing significant value, the domain risk / value function is generally well understood: they've been leveraging contract research entities for years. At the same time, successful case studies like P&G lower perceived risk within the domain as market followers justify adoption as a means to maintain competitive position. Real risk diminishes in parallel, as the business and legal structures clearly defining responsibility and ownership are formalized.

My opinion is that there's something fundamentally human about the crowdsourcing ethos. Enough has already been said about the compromises and limitations of legacy work structures that evolved over the last century. Ironically, these structures serve neither the employees that live them nor the enterprises that enable them very well. Today's crowdsourcers are returning concepts of accomplishment and value realization to the individual, where they belong.

More updates as I dig into the dig into the data. Feedback welcome!

Monday, March 05, 2012

#fivegoodtweets

There's been a lot written about writing tweets that get retweets or followers (or both). What I haven't seen covered exhaustively is how to tweet purposefully. How do we, as individuals outside of a corporate interest, consistently create microcontent that provides meaning and value to a self-selected audience of consumers? I'll leave it to sociologists to define what sort of implicit social contract exists between followers and the followed, but I'm a believer in increased retweets and following being an outcome of well-intentioned tweeting, as opposed to the objective.

I've been working recently under the mantra "five good tweets" daily. What makes a good tweet? I don't have a rigorous code, but I notice myself focusing on a few principles as I progress through the day:
  1. Evaluate the environment (physical / digital) from the perspective of your followers. I haven't gone as far as to create specific personas of followers, but I try to pay close attention to who's following me and why. Every so often, I'll spend additional time exploring the social graphs of some of my followers. What am I saying that got their attention in the first place? What am I looking at today that they would find interesting?
  2. Sift for value. Lots of things are interesting, but I try to aggressively filter for those items that will have a beneficial impact for a reader. Look for the nuggets that: are  immediately useful (tools, approaches, emerging practices); provide a unique, new or contrarian perspective on accepted wisdom; or, serve as a spark for future creativity and improvisation.
  3. Trust the idea. If a concept has made it past my internal censors to reach this point, it's time to let it do the work (in 140 characters or less). Don't hard sell: it turns followers off and demonstrates a lack of confidence in your perspective and voice. On the flipside, don't undersell...there was a reason you selected this idea out of all the noise you could have squaked about. Let the idea write the tweet: where's the value? what will resonate with your followers? why does the idea WANT to be understood?
So, that's it. Hopefully not earth-shattering, and probably said better elsewhere.

Looking back, have I acheived my "five good tweets" goal? Hardly! Somedays I struggle to find anything relevant, and I end up silent or pushing dreck (sorry about that). That doesn't reduce its aspirational value, and it ensures that I'm doing my part to maintain the Twitter-mediated relationships that I have with a host of intelligent, dynamic humans.

The approach has other intrinsic rewards. Beyond extending my peer group into diverse and remarkable areas, I find that I'm better at conscious observation and filtering. It's easy to to be a passive consumer of the Internet firehose; it's much harder to stick your head in the onrush and find importance. Asking the question "is this worthy of one of my five good tweets" helps me to more efficiently filter out the trivial and get to ideas that are relevant to both me and my peers.

Saturday, March 03, 2012

Programming as Artform

Fascinating post from joe evans @techcrunch (http://tcrn.ch/xPPEUX) on the cost/benefit of pair programming. While not the focus of the article, his observations about programming as artform have been on my mind lately as I've been working thru the CodeYear program at Codeacademy. The processes is helping me recall forgotten skills and ways of thinking, and is introducing me to new concepts and approaches. However, no matter how hard i work at it, I'll never come near to being a talented developer. 

There is deep creativity involved in writing exceptional code. I can look at an object or module and appreciate the nuance and insight that went into its creation. While I might be able to write something that accomplished similar objectives (probably not), it certainly wouldn't be as effective and efficient (or elegant). It would be a kludge par excellence.

I think the best analogy is of programming as a functional art. If you think about pottery or glass blowing or woodworking or photography, there are a lot of people who've taken a few classes and can create a vase or a bookcase. My son and I spent weekends this past summer building a bookcase from plans in a woodworking magazine. It's functional, but as hard as we tried, you can take one look at it and know that it was the work of amateurs. Similarly, there are very few people that have risen to the level of turning these disciplines into "art".

Programming artists, you are appreciated! Thank you for taking our half-baked ideas and making them beautiful.