ExperienceCurve

Re-Writing the operating system for business

It is surprising to me how many big companies do not understand how the web and social media is going to empower and change EVERY ASPECT of their business, their industry and their competitors business. The reason is simple, the operating system for business has changed, in other words the way human beings are motivated to connect and create value has changed. My belief is that every business has to realize that it is a co-creative eco-system that includes it’s employees, partners, competitors and customers and the way they are motivated to create and realize value is the only measure of success. This TED video get’s to the heart of the problem and that the current reward system is actually hurting businesses and industries ability to innovate and dare I say evolve. It’s important to mention how industries need to change as they are one of the greatest impediments to change for a corporation as they are where the culture of value creation is created. Most corporations that want to survive have to re-imagine themselves as industry change agents instead of cogs in a ever more decrepid clock.

“A task that requires mechanical skill, bonuses worked as expected, the higher the reward the higher the performance”

“A task that requires rudimentary cognitive skill a larger incentive led to poorer performance”
D. Ariely, U. Gneezy, G. Lowenstein, & N. Mazar, Federal Reserve Bank of Boston Working Paper no. 05-11, July 2005; NY Times, 10 Nov. 08

via EstateofFlux

There are some consultancies emerging which are helping companies with this task of re-imagining their value creation system, these include The Dachis Corporation, The Altimeter group and Victor & Spoils. Interestingly all these companies come from different backgrounds, Dachis coming from the digital/interactive agency world, Altimeter coming from the world of analysts, and Victor & Spoils coming from an advertising background so it will be fascinating to see how they approach this transformation of business.

My personal philosophy is that organizations need to provide a framework for their customer base (and entire ecosystem) to participate in the co-creation of meaningful value. The new paradigm is co-creation, co-operation on bigger ideas than just the motivation to consume. As Kathy Sierra says organizations have to find the bigger idea that their product lives in and work on that bigger idea.

Of course I should mention that Traackr.com is a tool that helps organizations connect with the most influential people in particular industries, which in my mind is the first step for an organization that wants to be an industry change agent. Give me a call or email me if you would like a demo 415.713 6763

UPDATE: I have not read it yet but it looks like The Genius of the Beast: A Radical Re-Vision of Capitalism will be an interesting read in relation to rethinking business.

  • http://humanvoice.wordpress.com Tom O’Brien

    Karl:

    Well put – and can’t be said too much. The world has already changed – how are you (big Co.) going to keep up.

    Interesting coverage on our work on motivations in Lee Eisenberg’s new book Shoptimism – chapter 8.

    Figure out what motivates your tribe (customers, partners, employees) and then figure out how to feed that motivation in a compelling, authentic and helpful way.

    TO’B
    @tomob

  • http://www.mattjmcd.com/2009/11/daniel-pink-on-the-science-of-motivation/ Daniel Pink on the Science of Motivation at A New Marketing- Ideas on Marketing, Design, and Technology from Digital Strategist Matt J McDonald

    [...] tip to Karl Long for his great post where I found this.) « All Media Is Social – The 4 Levels of Social in Media [...]

  • http://experiencecurve.com Karl

    Thanks Tom, i’ll check it out. I’m a big believer in the tribal leadership concept.

  • http://www.simplyzesty.com Niall Harbison

    We are trying to create an agency that does exactly the things that you talk about in this post. We are sick about everybody talking about the conversation and the need for brands to get involved in it. I think they know that much at this stage or at least most of them do. Just as important as what they broadcast and how they interact with customers is what they do internally and how they leverage these technologies to enhance their connections and build things like better B2b relationships.

    Interesting times :)

  • http://experiencecurve.com Karl

    Agreed Niall, the business operating system needs to be re-written from the inside out.

  • http://www.ricksmith.me RickSmithAuthor

    Karl, interesting perspective. I have been doing a lot of thinking lately about how power has moved to the masses – crowd sourcing, customer and employee empowerment – these are all symptoms of a much larger change taking place. Thinking about this stuff for my next book.

    keep it up!

    Rick Smith

  • tpp

    Karl,

    I’d be interested in your perspective on leveraging third party tools/services (Twitter, et.al.) versus building something custom just for your business to facilitate building the “ecosystem”.

    It seems to me that the “let’s reinvent the wheel and build our own” is more prone to failure. Not to mention being phenomenally expensive.

    How do companies perceive Open Web (for lack of a better word)…public APIs, mashups, open standards, non-proprietary data formats, open data exchange?

  • http://www.activepro.com/2009/11/05/changing-the-ways-businesses-currently-operate/ ActivePro » Blog Archive » Changing The Way Businesses Currently Operate

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    [...] the way people operate and interact with businesses, or perhaps as Karl Long put it recently, to re-write the business operating system. Indeed, it is partly this over-emphasis of the role of software in the definition of E2.0 that led [...]

  • http://fourgroups.com/blog Bruce Lewin

    Very interesting – could equally apply to HR as much as businesses as a whole!

  • http://experiencecurve.com Karl Long

    @tpp good question, I tend not to focus too much on the tools as much as the cultural change that is needed to empower employees to explore and experiment in ways that are aligned with the bigger idea the organization might be involved with. I do think that experimenting with tools that are out there is a much more efficient route though as opposed to building a custom toolkit. Although that being said I know Best Buy built their own internal social network for employees using an open source portal building tool called Drupal.

  • http://hostedtel.info/ hostedtel

    How the company perceives Web ublic APIs opening, mashups, open standard, the data form not had specially, open data interchange?

  • http://www.formation-mac.fr depannage mac paris

    i agree, we cd aply it at the HR

  • http://www.oursimply.com/ Our simply

    open standard, the data form not had specially, open data interchange?

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