At the beginning of the year, on January 2 in fact, I wrote about reciprocity. My hopes were that we’d begin using the behavior of reciprocity both within the walls of our organizations as well as being members of society at large.

It’s my personal belief that we’ve taken some positive steps forward in society (think you, as a person) but within the construct of organizations (or work life) we’re not where we should be.

A joint effort of Capgemini Consulting and theMIT Center for Digital Business resulted in a wonderful report recently published entitled, “Digital Transformation: A Road-Map for Billion-Dollar Organizations”.

One key line struck me:

Whether using new or traditional technologies, the key to digital transformation is re-envisioning and driving change in how the company operates. That’s a management and people challenge, not just a technology one.

And there’s the rub.

In 2011, I don’t believe organizations have fully comprehended what ingredients are necessary to ensure an organization (management and people) is in fact going to become more productive.

Why do I land on productive, and not collaborative, or engaged, or learned, or reciprocal, or connected?

Being more productive is the end game. What an organization does with its employees and their blocks of available time to perform in the workplace is the quintessential Rubik’s Cube puzzle.

Today, towards the end of 2011, it still feels scrambled and unsolved. The mistakes I see happening far too often (and more than any list of successful examples) are when organizations manually pop the pieces off the cube and forcibly push them into place to ‘solve the puzzle’.

Contrived? You bet.

I also believe we continue to employ “if you build it they will come” attitudes in the organization. Dropping Enterprise 2.0 / Social Anything tools into the company theater is not going to guarantee your employees/leaders are collaborating and it’s certainly not going to drive reciprocity.

Enterprise 2.0 or Social Anything, if we’re not careful, could simply turn into the next ERP.

And we all know how that’s going, don’t we?

Laurie Buczek writes “the big failure of social business is a lack of integration of social tools into the collaborative workflow.” Whilst I don’t disagree that integration into the workflow isn’t a huge opportunity, to me, we need to stop the press and acknowledge that it’s the behavior of people that has to change in parallel with the deployment of any Enterprise 2.0 / Social Anything technology.

And quite frankly, I think many organizations are failing at this very concept.

According toBluewolf Consulting, 60% of organizations don’t yet support ‘social’ inside the company. The better question to ask, however, is what type of productivity gains, employee engagement improvements and customer satisfaction increases have occurred with the 40% of the organizations that have deployed ‘social’ inside their company.

The ROI of Enterprise 2.0 / Social Anything is not how much did it cost to deploy the technology; it’s what gains have we seen in productivity, employee engagement and customer satisfaction as a result of new collaborative behaviours that are aided and propelled by Enterprise 2.0 / Social Anything technologies.

And there’s the rub, part two.

Through my travels, interactions, conversations and social threads in 2011, there are three interesting camps that have formed:

• Technologists
• HR / Learning Professionals
• Vendors

The technologists are happy discussing Enterprise 2.0 / Social Anything features, gizmo’s and futuristic trends … but they forget about the behaviours that are needed to actually make the software more effective in the first place. They forget adoption occurs only when people behave in a way that allows collaboration to manifest across an organization.

The HR / Learning Professionals are having massive difficulty adjusting to a world with Enterprise 2.0 / Social Anything technologies, but they can’t get in front of it in time to actually establish the behaviours for an organization … even if they knew what behaviours to depict in the first place.

The vendors aren’t helping either. Their focus is on the technology and not the collaborative behaviours that need to be employed at a company in parallel. As a consequence, to me, many are simply selling an ERP destined to fail. The ‘social’ ERP. Snake Oil.

As McKinsey & Company points out in their 5^th annual Business and Web 2.0 Survey, adoption rates of Enterprise 2.0 / Social Anything is on the rise, but they confess that “benefits remain consistent over time.”

Why?

And why do they further assert:

Many believe that if organizational barriers to the use of social technologies diminish, they could form the core of entirely new business processes that may radically improve performance.

The organizational barrier of Enterprise 2.0 / Social Anything is the requisite behaviour change that is necessary within the organization itself, within the people that work there.

But all is not completely lost.

Anthony Bradley and Mark McDonald of Gartner recently penned the book, “The Social Organization: How to Use Social Media to Tap the Collective Genius of Your Customers and Employees”. The beauty of their book is they focus on the behaviour of building community and collaborative practices.

Paul Adler, Charles Heckscher, and Laurence Prusak in the July-August 2011 issue of Harvard Business Review wrote a brilliant piece entitled, “Building a Collaborative Enterprise”. They opined:

Collaborative communities seek a basis for trust and organizational cohesion that is more robust than self-interest, more flexible than tradition, and less ephemeral than the emotional, charismatic appeal of a Steve Jobs, a Larry Page, or a Mark Zuckerberg

They continue:

Collaborative communities share a distinctive set of values, which we call an ethic of contribution. It accords the highest value to people who look beyond their specific roles and advance the common purpose.

Which now brings me full circle to my original thesis.

2011 has not seen the level of reciprocity as I had hoped. Enterprise 2.0 / Social Anything technologies continue to be the lead news story, with the more important tenet of collaborative behaviours shoved to the back page.

As a result, there continues to be systemic challenges to increasing productivity, engagement and customer satisfaction.

But, if we focus on those behaviours, if we seek out the right model for leaders and employees to share, consume and contribute that is more common sense than non-sensical, we’ll have both reciprocity and productivity in 2012.

Then again, if all else fails, you could always touch a teddy bear. (seriously)

Yes, I know that Facebook has 23 million users. Yes, I see people on Facebook everywhere I look – on the trains, at traffic lights and when at work. Personally I spend more time than I should on LinkedIn and Facebook, much to chagrin of my family. Yes I am believer  a believer of social media and social learning. Who  wouldn’t be ? Have a look at some the statistics:

• Facebook. -More than 800 million active users, each with an average of 130 friends. More than 50% of active users log on to Facebook in any given day.
• LinkedIn - 100 million professionals worldwide.(March 2011). Impressively there are 17.8 million members in LinkedIn Groups who post 1.2 million posts and comments per week .

In terms of the social learning flavour, what better example than Wikipedia, where people generously give their time and expertise to build this impressive knowledge base. Check out the discussion forums at www.whirlpool.net.au. I have benefited numerous times from the in depth knowledge shared by that community about IT hardware and software issues (highly recommended that you check the forums before a hardware or software purchase).

An easy assumption to make in light of these success stories is that social learning at work will work. Certainly this is what social learning technology vendors will have you believe from their marketing efforts. Case studies of success of social learning at organisations such as IBM are compelling.

However beyond these few but well publicised success stories, I have struggled to hear about other social learning initiatives have been sustained beyond the initial launch.  I have been involved in setting up social learning for customers and this first-hand experience has led to a healthy scepticism about the predicted success of social learning at work. Four reasons for this healthy scepticism are:

1. The ingredients for successful of social learning go against the grain of traditional organisations.

Working at IBM and Google is very different from working at, let us say a bank or a mining company. People and their intellectual outputs is the lifeline of businesses (technology and professional services). The culture, processes and the reward systems reflect this and tend to be more “employee centric”, open and based on shorter power distance (Geert Hofstede’s model).

Organisatons in more traditional industries tend to less open and more hierarchical. They are characterized by the need to manage risk and the predominance of top down communication. Social learning which is based on more democratic principles struggles to establish itself and grow in this environment. Many social learning initiatives in such organisations begin with a flourish and usually end up being another channel for top down communication with very little participation from the employees.

Another barrier to social learning in organisations is the low tolerance for risk. While social media in general tends to be self-regulating, the possibility of a post being inappropriate is real and too risky for many organisations. Some organisations approve comments before they can be published to remove the risk but it takes way the spontaneity and authenticity of the participation. I hasten to clarify the difference between the approval and moderation. Moderation adds value to the discussion and increases the rate and quality of participation

2. The employment social contract has changed

In world of increasing retrenchments and outsourcing the message sent to employees is “fend for yourself”. Employees have less motivation to contribute to the success to the organisation beyond what is mandatory or what is incentivised. The success of social learning depends on employees taking the time to participate and contribute their insights, knowledge and expertise without any extrinsic rewards. As mentioned people contributing to wikipedia or whirlpool.net.au don’t have any monetary incentives but they are generous with their participation but when it comes to contributing to social learning in the organisation, the state of mind is likely to switch to a “mercenary” or “what is it in for me” mode.

3. Underestimating ingredients for success

Many organisations see the deployment of technology to enable social learning as the “silver bullet” and the “end game”. Some of this misconception is created by technology vendors but mostly it is due to organisations failing to understand that selecting and deploying technology to enable social learning is probably the easiest part of the process.  One thing makes social learning a different beast – it is not mandatory for employees to participate but its success entirely depends on their participation.

Lack of “business purpose” is another common reason for failure. Many social learning initiatives are commenced for the sake of trying “social learning”. The success of social learning depends on the ability of the community and its contribution to provide value add. At its best it acts as a performance support system for employees trying to solve a business problem.

Another grossly underestimated aspect is the effort and skill required to nurture and sustain a community. Initially communities may need a dedicated community manager or a moderator (part time or full time) who provides the necessary energy and structure in the forming stage. This is rarely catered for.

4. Where is the time?

Ok let me ask you a question. In between your growing workload and the need to maintain work life balance do you have time to participate in social learning? Would you rather spend time on Facebook with your social community (friends and family) in an environment you can express yourself with very few rules or would you sacrifice some of that time to participate in social learning at work. For many employees the choice is not very difficult.The acceleration of pace of work compounded by information overload means that employees have very little down time to participate in “non-essential” work  activities and social learning.

In conclusion, social learning is unlike anything organisations have experienced. It is a double edge sword. If you can make it work it produces results like nothing else can by harnessing knowledge and insights of your employees. If you can’t it will die a quick death or may even be counter-productive.

When you commence on the social learning journey, go there with your eyes open and your expectations tempered. Be prepared for that 99% perspiration.

A lot of problems in business could be solved if we could align the interests of employees and managers with owners. Is there a way to get everyone to act like owners? The answer is yes – but not without changing the structure of your company in ways that might make you a bit uncomfortable.

The idea of aligned incentives is kind of a holy grail. The goal is always the same: to align the interests of managers and employees with the owners of the business.

Why do so many incentive plans fail?

We pay commissions to salespeople because we want them to get energized about selling things. We use profit-sharing and stock options to get people excited about increasing the value of the business. We try to align executive pay with incentives like earnings growth, revenue growth or stock prices.

But too often these attempts fail to get people to think and act like owners. Why?

Short-term thinking. Since we have to reward people within a reasonable timeframe, many incentives tend to focus on short-term measures. Optimizing incentives for short-term results discourages long-term thinking that may be necessary to ensure the survival of the company in the long run. For example, in the rush to earn commissions, salespeople make deals that the company can’t make a profit on, or push customers to buy more than they need, or offer too much because they want to squeeze in a deal at the end of the quarter. Their efforts increase sales in the short run but destroy value in the long run. And for executives, there are always ways to drive up the stock price or other measures in ways that look good in the short term but destroy value in the long term.

Too vague. Stock-option and profit-sharing plans reward employees when the company does well, but the larger the company, the more difficult it becomes for people to feel that their efforts have an impact on the stock price. Frontline workers often have a hard time believing that anything they do can affect stock prices or profits one way or another. Their impact is just too small relative to the actions of the company as a whole.

The industrial era was built on the kind of carrot-and-stick management that rewards some behaviors and punishes others. This has been successful in a world of predictability, where work can be broken down into routine tasks that can be done according to a prescribed formula. But it won’t serve us in the 21st century. In the coming years we will need to get the absolute best our people can offer. We will need their heads and hearts as well as their hands.

In his book Drive: The Surprising Truth about What Motivates Us, Dan Pink cites research that indicates extrinsic rewards, such as sales commissions or other financial rewards, do work well under certain limited conditions: when a task simply requires people to follow a formula, such asAdam Smith’s famous pin factory. But for jobs that require complex or creative thinking, extrinsic rewards can be dangerous, because they tend to restrict people’s ability to notice things on the periphery and craft novel solutions.

Pink’s prescription is that in a world that increasingly requires people to think creatively, solve problems and remain flexible in uncertain environments, extrinsic incentives don’t work, and we should instead focus on the kinds of intrinsic motivation that drives artists, inventors and other creative professions: mastery, autonomy and purpose.

Certainly Pink’s point is an excellent one. Intrinsic motivation does indeed motivate people and drive creative success. But in business creative success is only part of the equation. In business we also need to make money. A quick look at the history of inventors and other creative people will confirm that, while creativity and invention may be necessary components of innovation, they are not sufficient if you want to achieve both innovation and business results.

The great innovators in business did not succeed on creativity alone; their success was a blend of creative thinking and business logic. There was no lack of creativity and invention in Xerox PARC, but Steve Jobs and Steve Wozniak were able to translate that creativity into a tangible product that people were willing to pay for. The great innovators in business – Henry Ford, Thomas Edison, Benjamin Franklin, John D. Rockefeller, Andrew Carnegie, Walt Disney, Sam Walton, Ted Turner and so on – blended creativity with business sense and a deep understanding of customers and market dynamics.

The challenge in aligning incentives is threefold: First, incentives must be real and tangible enough that people can see the impact they have on the business as a whole; second, they should balance long-term and short-term thinking; and third, they should balance rewards so they reward people for things that make the business as a whole healthier and more successful.

A good incentive system should reward people for thinking and acting like owners. So is it possible to get every worker to act as if they own the business?

It is possible. And the answer is actually quite simple. The way to get everyone to act as if they own the business is to give them a “business within the business.”

The podular organization.

To make this work, you first have to understand that the most common template for large-scale modern business design, the multidivisional corporation, is not the only way to do it. The multidivisional form, first realized by General Motors in 1920, has become the standard form today. While phenomenally effective in some ways, the multidivisional form also has significant weaknesses when it comes to innovation.

There are things that seem “obvious” about organization design that are in fact not so obvious at all. Some things that we take for granted as fundamental are in fact only optional.

We tend to design organizations by splitting them into divisions. We divide the business, and the labor, in order to do work more efficiently. We put the software developers together so they can focus on software; we put the salespeople together so they can focus on selling and learn from each other, and so on. Sounds obvious, yes? And it’s very efficient. But as we move into a world where efficiency leads to commoditization, and where value will increasingly be driven by innovation, efficiency is no longer the overriding goal.

How can you divide the labor in your organization to optimize for innovation rather than efficiency? The answer is to supplement divisional thinking with another approach that I call podular thinking.

In a divisional organization, the kind we are all familiar with, you divide the labor into functions and specialties. As you continue to divide an organization in this way, you increase efficiency, but as a side effect you also disconnect the people from the overall purpose of the business. People in a functional group tend to identify with each other more than they identify with the purpose of the organization.

In a podular organization, you divide labor into “businesses within the business,” each of which can function as a complete service in its own right. Since each pod functions as a small business, its focus remains outside the pod, on its customers. Those customers might be inside or outside the organization as a whole, but each pod delivers a complete service. A podular approach allows a large company to act as if it were a flock or swarm of small companies; it gives the whole a level of flexibility and adaptiveness that would never be possible in a divisional organization. A podular organization is a fractal organization: every pod is an autonomous fractal unit that represents, and can function on behalf of, the business as a whole.

Does this sound strange? How is this possible?

Let’s look at four examples from four different industries: A food processing company, a retailer, a software company and a conglomerate.

Morning Star’s self-organizing marketplace.

Morning Star, a privately held company, was started in 1970 as a one-truck owner-operator hauling tomatoes. Today the company is the world’s largest tomato processor, with revenues of $700 million a year.

At Morning Star, workers manage themselves and report only to each other. The company provides a system and marketplace that allows workers to coordinate their activities. Every worker has suppliers and customers – and personal relationships – to consider as they go about their work.

Every employee writes a personal mission statement that describes how they will contribute to the company’s goal, and is also responsible for the training, resources and cooperation they need to achieve it. Every employee also creates a yearly Colleague Letter of Understanding (CLOU), describing their promises and expectations for the coming year, negotiated in face-to-face meetings with peers. All the agreements, taken together, describe about 3,000 peer-to-peer relationships that describe the activities of the entire organization. Each Morning Star business unit also negotiates agreements with other units in a similar way.

If a worker needs something, they can issue a purchase order. If someone needs help or identifies a new role that’s needed to do the job better, they can start the hiring process. The bigger the dollar amount, of course, the more important it is to lobby your peers and get their buy-in for the purchase, because the unit will sink or swim together. Over time, workers tend to move from simpler to more complex roles, hiring people to fill the roles they need to support them. There’s no competition for management jobs because there are no management jobs. To get ahead, workers must find better and more valuable ways to serve their peers.

The discipline at Morning Star comes from a strong sense of mutual accountability. Problems are settled through mediation. If mediation can’t settle it, a panel of peers is convened. If that doesn’t work, a dispute will go to the president for a final decision. If the problem is serious or sustained enough, the worker may be fired. But while people can be fired, nobody has a boss hovering over them. What they do have is customers.

Every two weeks, the company publishes detailed reports of finances and other measures, that are transparent and available to everyone.

Business units are ranked by performance, and those at the bottom of the list can expect a tough conversation. In yearly planning meeting, business units present their plans to the entire company and workers invest using a virtual currency which then informs the budgets for the year. Workers elect compensation committees who evaluate performance and set pay levels based on performance.

Morning Star is a marketplace, where every worker is a business within the business. You can read more about Morning Star on their website or in this excellent HBR article by Gary Hamel, First, Let’s Fire All the Managers.

The Nordstrom way.

Nordstrom is a publicly traded high-end retailer, known for excellent service, with revenues of about $9 billion a year.

Nordstrom’s employee handbook is so short and simple it can fit on an index card. It states:

“Use your best judgment in all situations. There will be no other rules.”

Nordstrom salespeople are free to make their own decisions, although Nordstrom’s strong culture of putting the customer first provides a guiding light for all to steer by.

That customer-service culture is at the core of Nordstrom’s success. The entire system is organized in order to support that salesperson on the Nordstrom floor to help them deliver the best possible customer service. If Nordstrom stocks something, they will make every effort to stock it in every size available – they don’t want to disappoint a customer by not having something in their size.

Salespeople aren’t chained to a department like they are in other stores. If a salesperson wants to walk through the whole store to help her customer pick out clothes, shoes, cologne, and anything else, she can do that. A Nordstrom salesperson might stay in touch with customers by Twitter, email, or whatever else is convenient. The message to customers is: however you want to buy it, however you want to interact with us, we can do it that way.

Customers are encouraged to take things home and try them, and bring them back at any time. If you ask, “How long can I bring it back?” the answer you will hear is “forever.” And they mean it.

One Nordstrom customer said “What I love about Nordstrom is that if I want to browse by myself that’s fine, and if I want help people are there and happy to assist me.”

As you can imagine, customers love it.

“Nordstrom has the faith and trust in its frontline people to push decision-making responsibilities down to the sales floor, the Nordstrom shopping experience is “as close to working with the owner of a small business as a customer can get,” said Harry Mullikin, chairman emeritus of Westin Hotels. Nordstrom salespeople “can make any decision that needs to be made. It’s like dealing with a one-person shop.” From The Nordstrom Way: The Insider Story of America’s #1 Customer Service Company by Robert Spector and Patrick D. McCarthy.

Nordstrom culture demands that the employee put the customer before company or profit in all decisions. Nordstrom provides a platform, the store, and each employee is treated as an entrepreneur who can set up a business on the platform. With commissions, Nordstrom salespeople can make six figures yearly on a base wage as low as $11 an hour. One worker stated:

“The way I saw it, the Nordstroms were taking all of the risks and providing all of the ingredients-the nice stores, the ambiance, the high-quality merchandise-to make it work. All I had to do was arrive every morning prepared to give an honest day’s work, and to value and honor the customer.”

Nordstrom employees can offer the best service in the industry because every Nordstrom salesperson operates a business within the business, backed by the full support and resources of a Fortune 500 company.

Self-organizing teams at Rational Software.

Rational software was founded in 1981 to provide tools for software engineers. Rational was acquired by IBM for $2.1 billion in 2003. Since Rational has been acquired I will describe the company in the past tense, although it may operate similarly today as a group within IBM.

Rational’s goal was very transparent to everyone in the company: “Make customers successful.” Customers were served by small, autonomous pods known as field teams. Each field team operated as a fully functional, stand-alone unit, with technical and business experts working closely together. The same team who sold a product or project was also responsible for delivering it. Resources were distributed to teams based on their performance.

Rational’s team-based approach permeated the culture at all levels. “If you weren’t team oriented, you wouldn’t survive” says Jerry Rudisin, Rational’s VP of Marketing from 1991 to 1999. Rational put team orientation first even when it hurt the bottom line in the short term. “When I was a district manager, I fired the top sales rep more than once” says Kevin Kernan, who worked at Rational in a variety of roles for 17 years. “We had zero tolerance for people who didn’t exhibit team behavior – that was just poisonous to our culture.”

The cross-functional teams at Rational were a great way to build entrepreneurial skills within the company, because every team member understood every aspect of the business. Team members worked closely together and learned from each other constantly. As the company grew, many technologists grew into new careers in sales, fielding their own teams in new territories. Many went on to start companies of their own.

Rational management focused on managing the teams as if they were a portfolio of companies. Teams were evaluated on five things: First and foremost, customer success: Did the team help customers succeed in achieving their goals? Revenue: Did the team make or beat its revenue targets? Team development: Was the team optimizing for the career growth of each team member as well as the team? Territory growth: Was the team growing in reach as well as revenue? Business basics: Did the team play well with other teams? Did they spend money as if it was their own?

“You could have a team that did poorly in their overall ranking even though they made their revenue target, because their customers weren’t successful in achieving their goals” says Kernan. One year a new sales rep in a 7-person team was fired because he didn’t treat his team well and had filed some paperwork that was misleading, even though the deals he made with customers were all solid and his sales accounted for 25% of the company’s revenue.

Top-down intervention in team dynamics was rarely necessary. When a team member wasn’t performing, the greatest pressure for improvement came from the team itself. “When I was a district manager I had 25 direct reports, but I rarely intervened. The teams basically managed themselves” says Kernan.

Teams made their own hiring decisions, and hired outside consultants or traded resources with other teams when necessary. “You had to be careful when you brought on a new member,” says Ray LaDriere, who worked in one of the Rational sales pods. “If you hired someone and they didn’t pull their weight, the deal was that we had to carry them for a full year.” Since one poor performer could hurt the performance of the whole team, people were very careful in their hiring decisions.

“It was an amazing experience for 17 years, and I would be surprised if you found anyone who worked at Rational for any significant period of time that didn’t feel the same way” says Kernan. “Our goal was to change the world by changing the way people design, build, and deploy software. And we did it.

Democratic management at Semco.

Semco is a Brazilian conglomerate that specializes in complex technologies and services like manufacturing liquids, powders and pastes for a variety of industries; refrigeration; logistics, and information processing systems; real estate, inventory and asset management; and biofuels. Semco’s revenues are around $200 million a year.

Semco is a self-managed company. There is no HR department. Workers at Semco choose what they do as well as where and when they do it. They even choose their own salaries. Subordinates review their supervisors and elect corporate leadership. They also initiate moves into new businesses and out of old ones. The company is run like a democracy.

Says CEO Ricardo Semler: “I’m often asked: How do you control a system like this? Answer: I don’t. I let the system work for itself.”

Semco is organized around the belief that employees who can participate in a company’s important decisions will be more motivated and make better choices than people receiving orders from bosses. Workers in each business unit are represented by an elected committee that meets with top managers regularly to discuss any and all workplace issues, and on important decisions, such as plant relocations, every employee gets a vote.

Workers at Semco choose their own hours. CEO Semler recalls that when he first proposed the idea, managers were convinced this wouldn’t work, especially when it came to factory work. But Semler was confident. “Don’t you think they know how to manage their own work?” he asked. Turns out they did, and they do.

Semler says simply, “if you want people to act like adults you need to treat them like adults.”

Things do take longer than they do in a traditional, hierarchically-managed company. Semler elaborates in his book Maverick: The Success Story Behind the World’s Most Unusual Workplace:

“Dissent and democracy go hand in hand. It’s also good management technique. What traditional executives don’t consider is that decisions arising from debate are implemented much more quickly because explanations, alternatives, objections, and uncertainties have already been aired.”

One of the principles underlying Semco’s success is the idea that every business should be small enough that each worker can comprehend it as a whole system. If a business grows to more than 150 people, Semco will split it into two.

Another principle is transparency and trust.

“The only source of power in an organization is information, and withholding, filtering, or retaining information only serves those who want to accumulate power through hoarding,” says Semler.

Once a month Semco holds open meetings for the employees of each unit, where all the numbers in the business are presented for open examination and debate. The company also offers courses to help employees better understand financial reports such as balance sheets, Profit-and-loss reports, and cash flow statements.

What about profits?

“Profit is highly important to us at Semco, and we’re as avid about it as a general is about his supplies. If provisions run out, his soldiers will die. If a company ceases to make money, it too will die. But armies are not created to feed soldiers, just as companies don’t generate income just so they can hire more employees. Food fuels the soldiers and keeps them going. Yet to serve as more than mere gun fodder, they must have a higher purpose, a reason for going through boot camp and charging the enemy in battle… This is where profit and purpose meet and, unfortunately for most organizations, it’s a head-on Humvee wreck.” ~ Ricardo Semler, The Seven-Day Weekend: Changing the Way Work Works.

Nearly a quarter of Semco’s profits go to employees, but the company doesn’t decide how to distribute it. Each quarter, the profit contribution of each unit is calculated, and 23% of profits go to that units employees, who can distribute it however they wish. So far, they have always decided to distribute that money evenly to everyone.

Employees who are particularly confident can choose to put up to 25% of their pay “at risk.” If the company does well, they get a bonus raising their compensation to 150% of normal; if the company does poorly, they are stuck with 75% of their pay.

Does it work? Semco’s growth from $4 million in 1980 to more than $200 million today seems to point in that direction.

Can your company go podular?

Although each company has done it differently, Morning Star, Nordstrom, Rational and Semco have all found success by organizing along podular lines. This kind of design won’t make sense for every situation, or for every division. But no company can afford to ignore its innovation efforts. To ensure its long-term viability, every company needs to find a balance between their efficiency and innovation efforts.

The podular organization may be unusual, but it’s not a theory. It’s a fact. It can work in retail, it can work in manufacturing, it can work in technology, and it can work for a conglomerate. It can work for private as well as publicly-traded companies. It can work for a Fortune 500 company. Can it work for you? You can only find out if you’re willing to give it a chance.

You might start by reorganizing a single unit, like an innovation unit, a single store or location, or an R&D group. Look inside any R&D department or fast-growing web services company and you are likely to see a form of organization that’s more podular than hierarchical.

Podular organizations need to do a few things in radically different ways: First, they require information to be transparent and readable by everyone; second, they require principles, platforms and culture to guide individual decisions and give cohesion to the company as a whole; third, they require people who are not territorial, who are capable of open discussion and who will hold themselves and others accountable; and fourth; they require owners and managers who are capable of trusting people and teams to make good decisions and manage their “business within the business.”

When you give people a business within your business, you are aligning their incentives with owners and management. Everyone is a business owner, and everyone is a manager. Rewards are real and tangible, short-term and long-term benefits are in balance, and workers are rewarded when they are good stewards of the business.

If you want to unleash innovation, get closer to customers, and manage complexity, pods are worth a look.

You can read more about pods here and here.

Jonathan Miles post “A group of would be friends” (http://bit.ly/pkNUPX) reports a Twitter discussion last week that hinged around reasons why people do not engage with learning.  Jane Hart (@c4lpt) believes it is to do with people not being interested in their jobs, so why should they be interested in learning?  Jonathan was asked to tell his story, which is what his post is about – a great example of a community beginning to thrive when it began to build on its humanity.  Jane is clearly right, but her response, quoted by Jonathan, is only part of the story.

I have discussed before on this blog that the activity of learning is fundamental to our humanity.  It is the core activity that equips us first for survival and eventually for whatever prosperity and fulfilment of our potential that comes our way.  We are, by nature, curious beings who experience, reflect and re-model our behaviour in a continuous and progressive loop.

During my early career as Trainer in a high powered science research environment I was once involved in an experiment to try to determine how creativity gets lost in our make-up as we grow up.  At what stage in life and what was the cause for the natural inquisitiveness and creativity with which we are born becoming so muted? Why is it that many of the proud products of the education and training system and of our childhood and adolescent lives have lost the ability to notice what is going on around them, to analyse and reflect on it and to make plans to succeed in the environments in which they find themselves?

The shocking answer from that experiment was that the blockages begin to appear very early in life and are already well and truly evident by the age of about 7.  Parental behaviour, societal norms, schooling systems (thanks Roger Schank for crusading on this point!) and everything surrounding young lives seems to conspire to knock out of them the ability to think out of the box and conceive the extraordinary.  I remember a colleague of mine expressing huge indignation that her child’s teacher had forbidden the telling of fairy stories in infant school “How dare they” she screamed “deny my child the ability to fantasise and to dream?”

So what’s this got to do with non-engagement in learning in the workplace or in college and university?  If we have become used to not learning and our environment makes no distinction between those who learn and those who don’t, what incentive is there for people to re-awaken their fundamental and in-born skill?  If the person who learns gets the same reward as the person who “is just here for the beer” then what is the point, where is the stimulus.

I want to combine the hypothesis that learning is part of our humanity, and couple that with the oft quoted premise that the successful organisation of the next decade is the one that can harness the knowledge and skills of the people who work within it. Surely then it is important for organisations, their business leaders, their HR and L&D functions to find ways of enticing, encouraging and supporting their people to learn and to perform better.

Jane says quite correctly that if people don’t care, they won’t learn.  Jonathan says what many of us experience repeatedly – that even good programmes fall flat and people do not engage.  The story in his post then goes on to exemplify what I believe lies at the centre of this problem.  If the environment is not right, then however good the programme, however strong the incentive, however powerful the individual urge to learn, it will not happen. Get it right and remarkable progress is made.

Dick Beckhard’s famous so-called Change Equation (http://bit.ly/BJdko) provides the clue.

D x V x F > R

Three factors must be present for meaningful organizational change to take place. These factors are: D = Dissatisfaction with how things are now; V = Vision of what is possible; F = First, concrete steps that can be taken towards the vision; If the product of these three factors is greater than R = Resistance, then change is possible.

In a situation where people are not learning and don’t care about their jobs, something has to happen to alter the situation to prevent a slow and terminal decline in the individual’s capacity and that of the organisation to perform. Beckhard’s Change Equation says that change is dependent on three factors that must all be present for anything to happen – and that the combination of the three must be strong enough to overcome the emotional resistance to change that is a part of the nature of every human being.  Therein lies the paradox.  We are all programmed to learn, but at the same time our security needs make us resistant to take risk and to explore once we have a place of safety in our lives.

A dissatisfaction with where we are now, a vision of a better place somewhere out there, and some idea of how to get from the unpleasant now to the better future are the components.

How does this apply to L&D and to our learning communities?

• Complacency and too great a comfort with our current skills levels, our performance and a lack of ambition, if not challenged in an environment that is supportive but firm (tough love) lead to switch off and entrenchment – and rejection of anything to do with learning and trying to do things better;

• A failure to describe, in ways that are easily understood and which excite, that a future that involves learning and change and that will offer more than the monotony and hopelessness of the current situation, is sure to prevent people even looking at the possibility that with a bit of effort there might be something better out there.

• Presenting those who we seek to assist with methodologies, platforms and content that are alien to their lifestyles, are inconvenient, not timed to be relevant, and which lack support in applying new knowledge (whether from manager, coach, subject matter expert, mentor, or work colleagues) is not the way to re-kindle the desire for learning, difference, change and improvement.

In L&D in-house trainers. vendors and educators have become extremely clever at devising content and packaging it in ways which from an academic perspective are ground breaking and worthy of great praise. Every day my mail is full of new offerings incorporating every new tool, application and gismo that can be imagined. But if they are not used in an environment in which the individual is comfortable and is motivated to try them out, embrace them and apply the learning they can undoubtedly generate, then it is like having a magnificent space satellite without a rocket to put it into orbit.  It is worthless.

Our role in L&D must be to partner with our organisation leaders and managers to create that environment in which people will see a world of possibilities.  Then we have to show the skill and sensitivity to encourage people through the workplace networks and communities of which they are part, and through the learning communities we initiate, foster and invite them to join, to take some steps to try for themselves what might be out there for them.

That’s hard enough on a face to face basis and requires the focussed efforts of everyone who influences the workplace environment.  For it to succeed with the online communities that are now part of our social world and are rapidly becoming our working world requires us to plan carefully for those communities and to show great skill in making them places that are personal, warm, welcoming and supportive.  Organisation culture, learning platforms, hardware and software accessibility, technical support, personal encouragement and forward thinking stimulation of the communities are all part of the job of the Learning Leader in our new and incredibly exciting world.

There is every reason to be optimistic that the tools we now have at our disposal can make a real difference if we are able to ignite the spark that lights the desire to learn in those around us.  The good news is that the availability of the wirearchy, the social media and its empowerment of people to social learning and working smarter makes it a responsibility of everyone and a possibility for everyone – not just the L&D function.

Jonathan’s story is an inspiring one of taking some small steps and seeing some unexpected and extraordinary results – thank you for sharing it!

Talent Management 2.0: organic, mathetic, wonderful.

These days, one ought to be a talent. Once declared as such, there‘s only one way: up – straight up the career ladder. At least one can have this impression when attending career fairs, speaking to recruiters or browsing the web for job opportunities. „Talent“ seems to be the new „sexy“. The next fancy term to characterise the so highly desired skilled employees needed to fuel the knowledge-economy. Even though no one can really tell what characterises extraordinary talent – one thing is for certain: everybody wants to be one and every employer wants to have them.

More than ten years have passed since the first companies developed, set up and armed themselves with so-called talent management programs in order to win the „war for talent“. Well over a decade since a handful of McKinsey consultants created this term, related to the expected shortage of the highly skilled and gifted in the 21st century, one can observe a wild jostle taking place on the battlefield of the war for talent. Companies advertise their graduate programs with all kinds of wild measures and conjure a corporate culture of harmony and mutual respect on their corporate websites and PR events in order to lure young applicants with corporate learning programs and career prospects. All the more so, reality often hits hard after joining one of these companies...

Advertised as „individual development program with continuous feedback and coaching“ most talent management programs are nothing but standardised, boring, linear and interchangeable. In most cases, their sole purpose is to produce line managers best prepared to take over their bosses‘ job when it eventually becomes vacant. Only very rarely, their purpose is to develop an individual employee and his or her diverse set of talent. „Talent management“ can rather be understood as a label for a form of institutionalised „staffing circus“ – its purpose is to successfully complete the yearly parcours of staff appraisal, performance review, potential assessment, talent talk, peer reviews, etc.

This form of „industrial“ talent management, where junior leadership talent drops off the assembly line after years of training can be classified as „talent management 1.0“. Its key features are: linearity, standardization and predictability. However, no matter how good an organisation is at running their „talent factory“, the war for talent won‘t be won with talent management 1.0. In fact, the war for talent is already over – talent won. That is, bargaining power has already shifted from employers to the highly skilled and talented and will continue to do so. Few organisations will be able to ask job candidates to please assimilate smoothly into the organisation, don‘t cause to much trouble, follow linear career paths and don‘t think too much out of the box. In order to really appeal to Gen Y and Gen Z talent, industrial talent management has to become organic talent management, cultivating an open learning environment and preparing the ground for talent to develop to its fullest potential.

To implement „talent management 2.0“, a shift of paradigm in the talent mindset has to take place. Talent management 2.0“ has to support the unfolding of employees‘ individual talent. Successful talent management 2.0 is deeply routed in an organisations identity and strategy, spreads through the entire organisation and aims at improving its ability to learn and achieve like a true learning organisation. Talent management 2.0 embraces diversity of talent input and prepares the ground for diverse talent to transform into diverse competencies. This concept is contrary to the assembly line model of talent management 1.0 where every candidate gets taught more or less the same in corporate development programmes and diversity of talent is essentially ignored.

Some of the key factors for successful talent management include value management and openness of organisational culture, challenging and meaningful assignments and responsibilities for day one, inter-generational leadership and the integration of top talent in diverse teams. But most importantly, the core criteria for the development of talent should not be a company‘s current need for people and competencies in a certain area but its future needs. After all, the focus of talent management is a companies future workforce. While a company can put all its effort into finding and developing suitable candidates to fill todays pivotal positions, there is no guarantee these will be the same roles crucial for success in the future. Most likely, they are not. As a consequence organisations need to develop more towards broad individual competencies of talent and less towards particular jobs. As a consequence, talent management becomes part of a firms strategy and should be led from the head of an organisation itself.

Talent management 2.0 means overcoming old mental models and embracing new concepts of learning in organisations. Individual learning, learning in teams and learning as organisation itself. If born out of an organisations identify and core values and executed strategically, talent management 2.0 can become an energy source for any organisation: nurturing a workforce full of diverse competencies and helping to maintain a firms competitive advantage.

Much fuss is made of class-size effects in schools, but I often get blank stares when I talk about the dangers of putting 10,000 people together in an online learning environment. This might be OK in an environment with no social interaction, but what about where we are trying to foster Social Learning?

Increasingly, the call is going out for some sort form of Social Learning to be a part of our online learning initiatives. Quite right, too. We’re well aware of evidence linking Social Context and long-term learning retention. We know how important Social Comparison is to our lives. We see theopportunities of the web 2.0 to create both a push and pull of knowledge throughout our organisations. But we’ve also got vast numbers of people to include in these processes if we are to make Social Learning a full part of our workplaces.

One of my chief concerns about the implementation of Social Learning within the enterprise is how we can ensure that the benefits of Social Learning scales to meet the thousands of employees that we might have as an audience. For me, there is a mix up between the power of Social Learning and the power of Crowdsourcing. The latter theory suggests that the more people we throw at a problem, the easier that problem is to solve. The former is more concerned with meaningful relationships which we build with other people and how they help to provide the context for our learning. Social Media is a tool which sits at the confluence of these two ideas; articulate your ideas using Social Media and they have the power to not only influence your close followers, but also the wider world.

Robin Dunbar theorised Dunbar’s number; a limit to the number of other people with whom one can maintain a relationship. The number is said to be 150, give or take a little. Dunbar based his findings not on observations of our daily lives but on an evolutionary perspective to account for the optimal number of relationships an individual should have in order to thrive.

Other studies, like those conducted by McCarty et al, have sought to estimate network size empirically. These methods have yielded higher numbers than Dunbar’s; a mean of 291 was found in the McCarty study. However, even these measurements have their flaws. Most notably, the McCarty study relied on people to estimate their own network size. People are generally poor at estimating various aspects of their own lives, so we must take this finding with a pinch of salt.

Facebook is rapidly becoming a better measure in my opinion; 130 would be the average number of ‘friend’ relationships a person has on the platform. It would be fair to say this number is conservative at the moment; not everyone is on Facebook and many people keep a separation of their friends, family and co-workers which means their complete network is not accounted for by the number. However, this number is also likely to be skewed by the number of “non-friend” friends we tend to have on Facebook; mostly old school acquaintances, who we might like to spy on for Social Comparison reasons, but wouldn’t otherwise count as friends.

Of course, the real answer here is that there is no single number to succinctly articulate how big a social network will be; the number will be slightly different according to our behaviours and situation. But, whatever that number is, it is probably in the low hundreds.

It is important to remember that we’ve already got a lot of relationships before we set foot in a Social Learning environment. Our capacity to make more meaningful relationships is going to be limited by the number of these relationships which already exist. In other words, we’ve probably only got a few slots left open. So when you are faced with a room of 10,000 people, where will you start focussing your effort in order to start building these few new meaningful relationships without wasting your time?

The answer is you probably won’t. Most people don’t. Less than 1 in 5000 visitors to Wikipedia actually makes an edit each month. I’ve built a community platform full of social features with over 3,000 registered members. No one contributes. If the room was vastly smaller, say 10 people, you could fairly easily meet each person and make an assessment as to whether a relationship is mutually convenient. When we run smaller classes of 15 or so people on the 3,000 member community platform the social interaction flows readily. But it is impossible to do this on a grander scale whilst fostering true relationships. Sure, people contribute to large news websites with comments, but that’s more about Glory than it is building relationships.

So, what can we do to address this issue? Certainly, just putting a social media type facility on your learning platform and expecting relationships to flourish isn’t going to work. I often say that there is nothing sadder than an empty forum and God knows I’ve seen enough of them in the various back alleys of company intranets and LMS’s to last a lifetime. The answer, for me, lies in breaking down the whole population into smaller parts on an autonomous basis. And I would model this answer on Massively Multiplayer Online Role Playing Games (MMORPG’s), like World of Warcraft.

WoW has millions of players entering into its world every day. Players choose a realm to play within when they enter the game. Each realm is an individual copy of the game, perhaps characterised by being run in a different language (French realms instead of English, for example). Within each realm is a series of playable areas that take the form of continents; these can be explored autonomously and alone, with players taking on challenges that exist within them as they go. However, many of the more complex challenges that exist within each realm require a team effort to complete. This is where things get interesting. Small groups of players, banded together autonomously as “Guilds”, get together to take on the bigger challenges.

Of course, you don’t want to get together to take on a challenge and find some other group already in the dungeon (how often does that happen at work), so each challenge has the ability to provide a unique instance of itself for your group. This instance is a copy of the same challenge others can take, but only your group has access to it. This way many groups can take on the same challenge at the same time. Each person within the Guild needs to be engaged in order to tackle the challenge; there is rarely room for freeloaders as the challenges are often limited in terms of the number of players who can be in the group. Everyone contributes.

Guilds are often fairly tight-knit groups. Some of the more serious ones go on to meet each in real-life and many Guild participants would readily accept that some of their relationship slots are occupied by those which they play games online with. In addition, there has emerged a huge community of Guilds talking with each other; sometimes on friendly terms, sometimes more competitively. But the ability to showcase skill and discuss tactics with other Guilds is one of the biggest drivers of online communities outside of the actual game environment.

I believe this model can help to overcome the scalability issues that Social Learning often faces. Asking people to make an impact on the world as a whole is difficult, but it’s easy to be influential within your group. Hiding in the big wide world is easy, but it is difficult within a smaller group. Making meaningful relationships with everyone in your organisation is beyond the realm of possibility, but you can select a few people from which to learn within a smaller group.

In short, the answer lies in breaking down the enormous mass of your workforce into smaller groups, working together to improve both themselves and the organisation. The limitation in this approach is in the crowdsourcing approach to problem solving. If people work in groups separate from each other, how can we mitigate the silo effect and make sure we capture all of the learning on a collective basis?

Well, firstly I would suggest that silo effects can be countered by simple measures to ensure the groups are diverse in nature; only a certain number of people per department in each group for instance. Secondly, I wouldn’t stop any one being members of different groups for different topics, allowing insights to spread virally between groups. And thirdly, I would look to the groups to curate the best content to be pooled into a single, enterprise-wide access area. Instead of trying to aggregate everyone together on every topic, have groups nominate their best insights to be part of the company’s best insights and use a voting system within the realm to showcase the very best content.

There’s a lot more work to be done in this area, but for now, let me suggest 5 lessons from WoW to help your Social Learning initiatives scale massively:

• Break down online social interactions into smaller realms and instances for groups.
• Make sure everyone in a group needs to contribute in order for the group to succeed.
• Create areas for groups to interact with other groups.
• Don’t allow groups to match up identically with organisational structure – diversify!
• Curate the best bits of each group to deliver real insight back to the rest of the organisation.