If you’re CTO and cheerleader for an enterprise social networking vendor, then it’s logical to talk up the impact of networks on the way people work today. So it’s not surprising to discover that Adam Pisoni, co-founder and CTO of Yammer, has made this proposition a central plank of his pitch to prospective customers.
Speaking at today’s Microsoft Working Social event in Amsterdam, he summed up with a stark message:
“Your customers are outpacing you because they’ve formed a giant network — and you’re going to have to work like a network yourself to keep pace with them.”
It was a message we can’t fault here at diginomica, since it overlaps with our own philosophy of frictionless enterprise and the digitally connected future of business. And while it’s partly about encouraging organizations to use technology (and in Pisoni’s case Yammer specifically), it’s much more about how enterprises organize themselves for this new world in which customers, partners and employees can all interact so much more closely and effectively with each other. As Pisoni said:
“Rethink the whole way you run your company. The new model is about how to build a company that is built to respond rapidly — to its customers, to new information.”
The Responsive Organization
Pisoni’s name for that new model is one that now has its own website and manifesto: The Responsive Organization.
One of the most telling examples cited by Pisoni was Spanish fashion retailer Zara, which he said has reorganized itself to reduce the lead time for producing a run of new clothing to just fifteen days. This means that, if branch staff notice customers asking for a specific type of clothing that isn’t in the store, they can relay that information back to product teams who can get a trial run of product in the stores within two weeks to test the market.
The IT world has become familiar with the notion of agile software development that allows iterative prototyping, so that incremental changes can easily be tested without having to invest huge resources. The Zara example applies similar disciplines to physical product development. Pisoni offers a concise aphorism to sum this up:
“They have decreased their cost of failure so that they can increase their rate of innovation.”
Pisoni set out four components of the move to the responsive organization, each illustrated with a Yammer customer example.
Hierarchies -> Networks
Creating networks that cut across traditional enterprise hierarchies empowers individual workers to add value to the organization. Pisoni described an example from the US insurance giant Nationwide. A customer whose RV trailer broke down while on holiday called to find out if their policy covered this. The call center agent who took the customer’s call didn’t know but posted a question on the network, found an answer and was able to help the customer resolve their problem. Pisoni’s verdict:
“By not being constrained by the limitations of the hierarchy and leveraging the collective knowledge of the company, employees are in a position to respond …
“For the first time because of networks like Yammer, employees have a voice.”
Control -> Empower
The traditional enterprise hierarchy divides workers into thinkers and doers, said Pisoni, in structures that don’t allow the doers to think. But today’s customer-facing employees have much more to contribute than this traditional model allows.
He described an example from the airline Qantas, where customer feedback about a problem with an in-flight menu was posted to the Yammer network by the flight attendant. The menu was changed within three days. Pisoni commented:
“It’s unheard of that actual customer feedback was able to change the menu in three days, all because there were employees who were empowered to give feedback in real time.”
Extrinsic rewards -> Intrinsic motivation
In today’s fast-changing business environment, business goals are no longer predictable enough for the old model of carrot-and-stick incentives to work, said Pisoni:
“Today there’s a disconnect between incentives and what employees feel is best for the company.”
He gave the example of US premium grocery chain Whole Foods Market, which began to incentivize store employees as a team and resolved to reward innovation. Staff at one California location opened an in-store tap room and within two weeks it was generating more revenue than the seafood department. The chain now has tap rooms in a hundred US stores, he said.
Customers & partners -> Community
“The network of your company isn’t just your employees, it includes your customers and partners …
“Today technology has empowered partners and customers to have a voice.”
Pisoni’s example of this point came from Australian mall operator Westfield, which created an external Yammer network for communications among retailers within a mall:
“The original idea was they would use it to broadcast information. What they quickly found out was that retailers were communicating with each other and with Westfield.”
Each of these four components challenge traditional organizational structures in the enterprise, said Pisoni:
“Companies as they exist today were designed for the industrial revolution when most of the work was routine and repetitive …
“The world has become a giant network but companies have remained rigid hierarchies.”
Therefore the use of tools like Yammer has to be seen as a means of enabling change in how the enterprise operates, he said.
“It’s not about the technology any more. There’s value in working differently. Tools like Yammer don’t work unless you change the way you work.”
That message also reflects the practical reality that tools like Yammer work best in organizations where the culture is ready for change. In championing the cause of the responsive organization, Pisoni also happens to be targeting a subset of prospective customers that have already recognized a need to keep pace with a more connected business environment, and therefore are ready prospects for an enterprise social networking tool like Yammer.
Disclosure: Microsoft paid the writer’s travel costs to attend today’s event.
Image credits: Reception bell © Dan Morar – Fotolia.com, Adam Pisoni portrait courtesy of Microsoft