As part of my unlearning and learning process towards better understanding of Social Business I’ve been thinking back the time I worked for a Swedish Supply Chain Management (SCM) company IBS.
Yes, I am recalling the attempts we made in order to build a platform for a global wholesale distribution, the concept was called as Virtual Enterprise.
It is now most interesting to follow the discussion about social business design and to find many similar perspectives.
Simultaneously with The Power of Pull, a warmly recommended read, I have been re-reading older European research about business process design (pdf), written by two Swiss gentlemen Elgar Fleisch and Hubert Österle. Already eighteen years ago (!) in 1993 they created an interesting concept of Integration Area that refers to organizational processes which are characterized by high dependency, and therefore require a high degree of coordination.
They discuss the complexity of inter-organizational networking which is associated with human interaction, organization structure, and the culture. In order to reduce this complexity, Fleisch and Österle presented the Coordination Areas. The five coordination areas that are highly dependent of each other are: Supply Chain Management, Relationship Management, Innovation, Infrastructure, and Organization Development.
Here below their model for inter-organizational networking for complex environments:
The difference between these two concepts is that the integration area pursues integration through integrated information processing, while the coordination area pursues integration through the organization of dependencies.
Related to the latter, organization of dependencies, an interesting parallel could also be drawn to the systems theory and its qualitative determinants. Two system determinants, attributes of the elements and the degree of the organization among system elements, employ the same kind of complex dependencies.
Fleisch & Österle also used a notion of networkability:
“The inter-organizational dependencies within coordination areas are contrasted by the intra-organizational dependencies across areas. Both play a decisive role in the networkability structure of businesses.”
It is easy to find confluence. After reading some of the recently published books related to the social business and comparing the models and messages in those to this older research – you can find many themes that are in common.
Good old SCM and the Social Business
Fleisch & Österle state that coordination of business processes have to cover both outputs and all associated design areas such as process, IT, people, organization structure, and culture. The efforts my company made 10-15 years back, associated with Supply Chain Management, were directed towards this kind of coordination of the inter-organizational processes.
Yes, there’s a clear connection between these SCM development efforts and Social Business/Enterprise 2.0! Exactly as Jacob Morgan tweeted while ago.
Here’s few more pickings from the nostalgia period research (1997-2001):
Fleisch and Österle developed a model called “Five computerization phases towards business networking”. They describe an integration area as an indicator of the degree of “informatization” of an organization. The size of integration area is growing while technology develops. Well, this reminds me of Enterprise 2.0 when seen from a tool & information perspective. However, their model was not yet very social one.
Some of the nostalgic themes of that time were:
- On the tool side, the new portal technologies as the tools to give a common view of supplier relationship related information and system integrations for integrated processes. For example information stored in the ERP, CRM and Human Resource systems. Very much system and information flow centred approach.
- On the process side, the concept of Supplier Relationship Management (SRM) was a hot topic as the supplier relationships emerged and companies wanted to create a strategically managed structure around their supplier relationships. In 2001 Gartner Group stated about SRM as follows: “[…] this goes beyond e-procurement and strategic sourcing to embrace the collaborative creation and management of supplier-enterprise products and processes.”
A bit like pre Social Businessian, isn’t it?
Summarized it can be said that the focus were clearly around the processes, work flows and managing information within the processes. Some initial ideas for the collaboration on the individual level were present, but were still rare in the businesses. What was missing then was naturally the emerging new communication culture and the possibilities enabled by social media – to connect, discuss, and to create value also on the individual level.
From a System Level to a Human Level & The Power of Pull
The focus is now broadening from the system level to the human level: how individuals communicate, interact and create value together has become essential. The core concepts have changed from the pure process view with task descriptions, detailed instructions and strict control towards empowerment of people, enhanced interactions inside and outside of the own organization, away from the information/knowledge silos – all this supported by the new kind of social technology.
However, there’s much to do. Firstly, we are still often calling people as resources or assets, sigh! We do have Human Resources departments, like people were parts in a machine. And secondly, social media is often reduced to a set of tools only.
One of the best readings on the topic is the latest book of John Hagel, John Seely Brown & Lang Davison. They present a Pull approach with which you can turn uncertainty into opportunity, and further enable small moves to make a huge impact. The Pull approach consists of three levels:
- At the most basic level, pull helps us to find and access people and resources when we need them.
- At a second level, pull is the ability to attract people and resources to you that are relevant and valuable, even if you were not even aware before they existed.
- Finally, the third level of pull – the ability to pull from within ourselves the insight and performance required to more effectively achieve our potential.
I do believe that the Pull approach enables us to learn faster and translate what we’ve learned into improved performance; the performance of ourselves but also the people we connect with.
One driver for this nostalgia trip was actually this sentence in their book:
”These three levels of pull go far beyond the “on-demand” focus of technology industry in recent years. On-demand initiatives generally seek to facilitate the first level of pull, but they have very little to offer regarding the second and third levels of pull.”
I fully agree with them.
I will continue to study social business design and how to use the power of pull to access new sources of information, to attract like-minded individuals, and to shape serendipity to increase the likelihood of positive chance encounters.
Still much to learn for a Serendipity Hippie like me. The passion will help me on the way.
PS. Dachis Group describes the Social Business Design in a way I like a lot. Their model covers how customer can participate in the value creation, how to enhance collaboration, and how to rethink and optimize the value network. The latter – Business Partner Optimization – is quite close to the Virtual Enterprise concept I was working with in the end of the 90’s. It is fascinating to notice how the basic ideas of social business have been around for a long time, and now finally becoming part of our daily business.
Related reading from Dave Grey of Dachis Group – The Connected Company.