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Newton and inertia - why our enterprise social efforts continue to fail

Den Howlett Profile picture for user gonzodaddy May 26, 2014
Summary:
Is it possible to apply Newtons Laws of Motion to explain why social efforts inside large organizations fail? We think so.

change via Rick Ladd
I have consistently said that bringing 'social' into the enterprise is fraught with massive problems, risk and a high likelihood of failure. Much of this is predicated on the origins of the moniker 'social,' attempts to see social as merely a digital tools problem and the way in which its marketing led supporters have consistently failed to understand organizational purpose. These minor inconveniences didn't prevent anyone from pimping the crap out of 'social' in the late 2000's. I dread to think of the millions of wasted dollars.

Today, those ra-ra conversations have largely been muted with attention turning from adoption to value creation and strategic intent. From this cynical perch it sounds a lot like 'if one thing fails, let's try another.'

Regardless of where I look, the loudest voices in this conversation have utterly failed to understand why social, even when aligned to ideas around collaboration, are doomed to failure. The big surprise is that companies reportedly continue to engage in this topic in the manner they do. So what's the big issue?

I often use the IBM Moment as an explanation as to what it takes for business to change. The story is straightforward enough. In 1993, IBM was imploding and at risk of being broken up. Lou Gerstner came in as turnaround CEO and, among other things, created a unified organization that delivers a complete solution. In short, IBM (largely) had one purpose, one direction. He also implemented systemic cultural change. It worked. From Wikipedia:

Gerstner is credited with saving IBM from going bankrupt in the early 1990s. The subsequent refocusing on the IT services business (which grew to nearly 50% of the IBM's revenues), the embrace of the Internet as a business phenomenon, and a broad effort to revive the company's culture are widely seen as having resulted in one of the most remarkable turnarounds in business history.

Despite being credited for the turnaround Gerstner wasn't wholly successful and presided over a period where competitors like Microsoft, Dell and Oracle were able to challenge its once dominant position. Even so, the lessons from Gerstner's period as CEO still ring true. But in order to understand why social largely fails, you have to look a bit deeper. Here are a couple of example.

Inertia wins?

In early 2013, there was a horse meat scandal in the UK and Ireland. In the immediate aftermath, sales of frozen meat and burgers at large supermarkets plunged while the local butcher trade saw a surge. A year on and despite government cutbacks in resources to police the food industry, supermarket sales are almost back to normal levels. The most popular explanation is that heavy discounting has brought shoppers back to the large supermarkets. I wonder whether inertia plays a role.

In the US, the Edward Snowden revelations have led to endless columns of opinion, claims and general gnashing of teeth. The latest? Marc Andreessen moaning that the scandal has damaged US reputation:

"The level of trust in U.S. companies has been seriously damaged, especially but not exclusively outside the U.S. Every time a new shoe drops — and there are 10,000 of them — it serves a blow to the U.S.," he said.

Crucially, Andreessen is reported to have opined:

Silicon Valley's repeated meetings with the Obama administration were mostly for show and have produced "not even a little" progress on privacy and surveillance issues.

Policy inertia?

Applying Newton's three Laws of Motion

Newtons 1st law of motion
Thinking more about this topic I pinged an ex-IBM colleague, asking for his opinion about change. His view is that most large companies don't have one direction but many. Extrapolating that thinking, it occurred to me that the many forces that exist within an organization likely help to maintain inertial stasis. Quite how this operates is still something I am scratching my head over but it intuitively makes sense based upon my observations in and around large organizations. That got me thinking about Newton's laws of motion and how they might apply to the organization.

First law: When viewed in an inertial reference frame, an object either remains at rest or continues to move at a constant velocity, unless acted upon by an external force.
Second law: F = ma. The vector sum of the forces F on an object is equal to the mass m of that object multiplied by the acceleration vector a of the object.
Third law: When one body exerts a force on a second body, the second body simultaneously exerts a force equal in magnitude and opposite in direction on the first body.

Applying these laws to organizations, it is fairly easy to understand why resistance is commonplace.

Most efforts around social adoption have assumed one of two approaches: either it is a bottoms up phenomenon (small and diffuse forces) or a top down mandate (a large force but meeting multiple resistance points.) This invokes Newton's 1st and 3rd Laws. Both approaches have so far, largely failed. Where there has been success, these have often been inside discrete organizations - Newton's 1st Law. Very few have had lasting or fully organizational impact. In some cases, there has been a reversal of adoption - Newton's 3rd Law.

Does value creation make the case?

According to Simon Terry:

Importantly adoption is rarely a goal that makes sense to the managers and leaders whose support is needed to foster a collaborative culture and role model usage. Conversations advocating adoption of social collaboration and other future of work practices can seem abstract and a side issue to the work of the organisation to many managers. Managers are looking for how enterprise social networks contribute to value creation.

Well yes, but this argument doesn't address the individual needs and purposes that middle managers fulfill. And here comes the crunch. Many large organizations are an amalgum of large organizations. For example, when SAP consolidated all development into one person's hands, that represented 22,000 people. That in turn was made up of many organizations of different sizes that have competing agendas. Was that ever going to work, as organized?

Rick Ladd, who spent decades at Boeing and its acquired companies makes it real. In Why Are Some Large Enterprises So Darn Stupid? says:

Each one of these organizations were not only capable of, but repeatedly dabbled in a level of bureaucratic numbskullery that I still find hard to fathom. I have yet to have it explained to me – at least in a way I can understand – why large for-profit organizations engage in activities that are guaranteed to hinder their ability to perform well or that cost far more than is reasonable. Frankly, I’m not sure anyone who’s directly involved in them can explain why it’s so, because I’ve never known anyone who said it was their job to slow down or squash anything . . . yet that’s exactly what happens in many instances.

Newton to the rescue?

I'm not convinced that organizations are stupid. Instead it seems to me that the unexpected consequences of Newton's Laws of Motion make a great deal of sense in this context. They can be applied because they are the basis of  physical mechanics. Most organizations are developed along mechanistic lines that find their roots in the Taylor-esque view of work where the person is viewed as a unit of production that can be standardized.

This is a very comfortable view for management because it allows for the kind of compartmentalization that is commonplace in business and which serves to preserve the structures that support all organizations. It should therefore be obvious that in this approach, social will always fail. Why? Because social engagement disrupts the structures upon which management depend and which forms the basis of power.

Anyone who knows anything about power also knows that power corrupts. The extent to which that becomes corrosive varies but it is a reality that is impossible to avoid.

Social proponents say that enterprise value cannot be optimized unless the whole organization is digitally wired via social tools. But that leaves us with a conundrum. Alignment around strategic intent sounds like a viable approach. But as we have seen time and again, culture eats strategy. And if that culture is rooted in Taylor-esque mechanics then without recognition of that fact then where to next?

As my ex-IBM colleague points out: Individuals will do all out wars to prove the establishment wrong. But individuals perish at some point. And the establishment wins.

IBM Moment revista?

When HP appointed Leo Apotheker as CEO, Larry Dignan brought an interesting dimension to whether Apotheker could be the next Gerstner at a company that in 2011 was a basket case. As we now know, Apotheker's short reign was adjudged a failure. Three years on?

More layoffs make the headlines and HP's stock price improves. But is HP still a basket case? Nobody knows for sure. What we do know is that even now, its stock price is way off where it was five years ago. In 1993, IBMs stock price was in the $45-52 range. By May 1997 it was $160.

HP may be the company to watch but they are also a classical example of inertia at scale in action. Basket case or not, they are still around.

Verdict

  1. The answer to the social conundrum is a multi-headed problem. This analysis attempts to view the organization as a physical entity obeying Newtons Laws of Motion.
  2. If you accept this approach then failure is inevitable even if small wins occur unless you also believe that organizations need IBM Moments. Even then, long term success is far from assured.
  3. Talking to strategic intent and value creation make great headlines and appeal to the consulting mindset. They fail to address the root cause problems that prevent success - even with the best of intentions.
  4. While not discussed as a separate topic, any notion that Gen Y will ring in the changes is delusional at best. More on this later.

Bonus link: Entropy and Equilibrium in organizations

Disclosure: SAP is a partner at time of writing

Featured image credit: © vallepu - Fotolia.com

Toilet roll image credit: Rick Ladd

 

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