A little over 10 years ago, we published the paper that launched our new venture, Headshift, which was a consultancy dedicated to helping organisations become more effective using social technologies. Now, having sold Headshift to Dachis Group, integrated and handed over to new management, we are free again to think things through and plan our next venture, which we hope will establish new ways of addressing some of the same issues that prompted us to start the last one.
This blog, entitled Post*Shift, is intended to share our thinking with our networks around the world, hopefully get some good quality input into how we tackle the issues that concern us, and see what resonates. This is our Post*Shift period, in the sense that it follows the end of Headshift, but also because the ideas and technologies of the social web are now essentially mainstream and uncontroversial in a way they were not a decade ago. So, in a sense, the shift has already happened. The big question is what’s next: what do we do with it, how will business and society adapt in response, and how can we accelerate this process.
In essence, we have been banging our heads against the brick walls of corporate structures, culture and politics for too long, trying to change them from the inside, network by network, node by node, when their very structures (HR, IT, Operations, Finance, Marketing) act as a barrier to change. Some are changing, however, and some will change; but many will not and in an ideal world, they will be disrupted or replaced by companies that are – as we used to say – ‘smarter, simpler, social’. But what if we step back and try to understand how to create new companies – the corporations of the Twenty-First Century – as natively social, digital, human structures right from the start? How might they look and how might they compete with more traditional companies to show what is possible? This is one of the key questions we will return to in this blog.
But first, how did we do against the brief we set ourselves just over a decade ago? We would give ourselves a charitable 6.5/10 and a shiny sticker for effort.
When we first became interested in the rise of social software in 2001/2002, we saw potential not just for doing existing things better inside organisations, but also potential to transform how they are set up and run. If truth be told, our not-so-hidden agenda was probably more about humanising the enterprise to make the experience of work suck less, and changing organisations for the sake of society as a whole (more socialised firms are less likely to create negative externalities), than it was just about maximising shareholder value. But over time, we have come to understand much better the exciting potential of this shift to take huge costs out of the economy as a whole and re-direct profit towards firms actively creating and sharing value, and away from rentiers and oligopolistic corporations. The opportunity for such a huge economic and social win-win remains a tantalising attractor.
Overall, our influence in helping to pioneer the idea of social technologies in the workplace was probably greater than our own successes in transforming the individual companies we worked with. In the beginning, before labels such as E2.0 and Social Business existed, we tried to be open with our ideas, and we shared them as freely as we could with anybody who was interested. This helped us develop our networks rapidly, and we owe a huge debt of gratitude to the European conference scene (Reboot, Lift, Next, early Le Web, to name but a few) that enabled us to meet so many great like-minded souls working at the intersection of business and social change in such a short space of time. Looking back, I can see we had some minor influence on a range of companies, both new startups and established players, who picked up some of these ideas and ran faster and further with them than we were able to. That feels good.
I think we got a lot right in seeing the importance of these ideas, these new tools and more importantly the new affordances they made possible. But although we have seen these become mainstream, to the extent they are no longer contentious as business tools, I think we under-estimated the sheer level of inertia and resistance to change that exists in many companies. So much waste of human talent remains in the way that companies continue to operate, that we cannot claim to have succeeded.
Part of the reason for this is historical. The DNA of today’s corporate structures is a century old, by and large, and like a tree trunk grown around an old bicycle, company cultures have slowly assimilated external societal changes without really changing. Part of this is specifically about technology and its role in propping up old, cascading hierarchies and other artefacts of ‘traditional’ corporate life. Far from realising the hopes and dreams of cybernetics, the centralised, command-and-control approach taken by the majority of IT functions in large firms has, if anything, reinforced the impersonal, process- and politics-based culture of large firms. But partly, of course, this is just a matter of time and patience. Email has been around in companies for over 30 years, and yet so many people even today struggle to use it properly. Perhaps social tools need the same amount of time to become so normal that they are effectively invisible.
When we started out, this was all so new that we had to spend a lot of time explaining what on earth we meant by ‘social technology’ and how this might benefit companies and other organisations. Then we focused on helping them begin to get to grips with some of the basic technologies, such as blogs, wikis, social networks, activity streams and so on. Later, when most companies had at least an experimental or pilot project underway with some or all of these technologies, we saw a greater focus on adoption and how to solve the many complicated people and cultural issues that acted as barriers to greater participation within the organisation. Now, we are interested in the whole question of how to design Twenty-First Century organisational structures, and there are various aspects of the shift in technology and culture that we believe most companies have yet to fully understand.
Outside the traditional world of corporations, we have seen a wonderful Cambrian explosion of small startups over the past 5 years. Here, the picture is very different. So many small teams are chasing the dream of an app that gets traction, leading to acquisition by a big player (and often, sadly, the shuttering of the app that got them there). This can be great for the lucky few who get bought because a big player needs them as a chess piece in a larger game, but whilst a few individuals can get rich, this does not necessarily constitute the creation of value. Some of these startups have been amazing, but the vast majority are producing a.n.other web or mobile app aimed at people like themselves, rather than building sustainable companies that can compete with traditional firms in mainstream economic sectors, solve big problems and create jobs. Is there a space between the world of app startups and traditional firms? If so, how do we make it work? Could we persuade more young, talented entrepreneurs to put their skills to work building the firms of the future, rather than just flipping, pivoting and selling out?
Ownership and stewardship are very interesting issues for companies today. We have seen so many examples of disconnects between shareholders, management and employees, and how this can go badly wrong, such as in the irresponsible behaviour of bankers leading up to the the 2007/2008 crash. The rise of crowdfunding and the proliferation of angel and seed investors suggest that it is now possible to create mixed funding models that can give some people longer-term ownership of businesses, whilst still allowing exits for pure venture capital plays. There are many lessons to be learned about the incentive problems inherent in the management of public companies, and also from the continuing tradition of family- or locally-owned firms (let’s not forget that the majority of economic growth in Europe is driven by SMEs). What does this mean for people wanting to create successful firms that last in the Twenty-First Century?
Large, traditional firms are struggling to attract the brightest and the best in an age when having a job is less a duty than just one option among several others (and, ironically, all of this is happening against the backdrop of mass youth unemployment, which also brings into question the value and relevance of our educational structures, most of which are still built around a century-old blueprint of what ‘production’ looks like). All the advertising and employer branding in the world could not persuade the smartest engineers to toil away in the IT department mines of a less-than-visionary corporate. And for those who do choose to join large companies, they quickly learn to play the game and perpetuate silo behaviour, rather than unleash their passion and try to make a difference, meaning that on the whole, their engagement is very low. Given how much we have learned recently about motivation, incentives, learning, conditioning and human behaviour, there must be ways to solve this problem. But how?
Despite all the energy, passion and innovation that goes into building startups, and the importance of a positive employee culture to attracting, developing and retaining the best people in a hugely competitive market for skills and talent, the majority of startups lack focus on culture development. Only 1/3 of start-ups try to do something about it, while 1/3 do not think about it at all. Depressingly, the final 1/3 end up trying to emulate the perceived ‘grown-up’ behaviour of big firms, leading to departmental structures, processes and procedures that are old-fashioned, irrelevant, and ultimately kill innovation and alienate people. Sometimes this is caused by the relentless focus on product development, linear growth and high returns demanded by investors, rather than by the inclination of founders. Often, this is simply because managing rapid expansion without losing your soul is really hard to do. Having exceptional tech and creative skills is no guarantee of a founder’s ability to manage growth and (as we discovered) what works seamlessly in a 5-person startup team does not easily scale beyond 30 or so – at which point, the easiest option is to just let ‘professional’ management practice take over, with varying degrees of success. Can startups grow quickly and profitably without killing off the very culture and passion that sparked them into existence in the first place?
Productivity and growth are no longer linear, if they ever were. They have gone quantum. Small teams can produce millions of dollars of value, seemingly from nothing, whilst huge, lumbering bureaucratic departments with massive resources can struggle to produce any at all. Even large firms should be capable of creating protected spaces where talented teams can operate in the most effective way possible. Is it really possible to inject Twenty-First Century technologies, skills and values into long-established corporations? Are they prepared to take the pain of change, or is innovation tourism the most they can aspire to?
Technology is getting better at finding value in the large, aggregate data sets, that our increasing connectedness is generating. Even older firms are sitting on potentially valuable data that could be used to improve their products and services and strengthen their position in global markets. What does this mean for the way that we design organisations for the future?
So many questions! But ultimately, trying to answer these is what this blog is for, so that we can canvas views and collect ideas about how to tackle them.
Until then, one final question: why us? Why Lee and Livio? What do we have to offer?
Well, you never know what you have until it is gone. The old Headshift culture of smart people working together with a minimum of hierarchy, guidance and mentoring rather than management, and the freedom to try things out, proved to be a lot more resilient than we realised at the time. Through both luck and judgment, we built a very effective team whose values and culture survived long past the acquisition of the company. We had previously launched and grown a successful web agency focused on online knowledge sharing in the mid-90’s, which developed a similarly strong culture of collaboration, but we had very traditional investors and followed a pretty standard management philosophy, so although we had a loyal team, we probably didn’t get the very best out of them. With Headshift, we had a chance to learn some lessons and be brave enough to hire good people and let them get on with it. Looking back on that experience, I think what we enjoyed most of all was giving a team of superbly creative people, who wanted to make a difference, the confidence and the support to have a go. Having seen what that approach could achieve in a single team, and having exported some of that approach into our previous client organisations, we finally think we might have some useful experience to offer others who are trying to build passionate teams with ambitious and disruptive goals.
How we do this, and in what form, is something we hope to work out in the next few weeks on this blog.
Photo credit: Jacob Bøtter