Human Capital in the Cloud

Cloud as a verb. Picture credit: Marc Lagneau http://www.flickr.com/photos/marc-lagneau/6056044037/

Cloud as a verb. Picture credit: Marc Lagneau http://www.flickr.com/photos/marc-lagneau/6056044037/

I just stumbled into an excellent article on the future of the IT & HR departments by Forbes blogger, IBMer Rawn Shah.  Shah refers to an interesting blog post by Mr. Richie Etwaru (Director of Applied Innovation & Transformation Portfolio at UBS). The article has a very cool angle; the gentlemen speak about ‘Human as a Service’. Surprising and beautiful.

(Note. I am not a HR professional, but I do care about people; colleagues, partners, competitors – ecosystem-wide. Even if I am an eager social technology lover, I do understand it is all about the people!)

Cloud as a Verb

Firstly, in the article, Mr. Etwaru coins ‘clouding as a verb’. That stuck right away, an excellent thought – cloud is an enabler and therefore using it as a verb is very fitting:

“Practitioners looking to the future for a vision of the IT department a decade or two ahead must stop looking at the cloud as a noun and start looking at clouding as a verb. Cloud is a noun describing a set of efficiency principles that can now be applied to a newly stateless once state-ful storage and compute IT estate driven by virtualization and cloud operating systems…

Looking one or two decades ahead, leaders are pressed to answer what can be clouded above and beyond compute and storage… Leaders must imagine a world where Workplace can be a Service, Expertise can be a Service, Business Process can be a Service…”

Well put. All my favorite topics; cloud computing, the role of IT department, and here for the new kind of leadership and HR practices. All areas needing a fresh re-think, and some serious unlearning. The decades of siloed functions must come to an end. Similarly, so-called support functions for business – as the IT & HR depts are – must become truly supporting in the meaning of new ways of working. Social IT, as my dear friend Chris Dancy calls it. He has also coined another interesting notion: ‘People as a Platform‘.

I believe that more social IT would be less hated IT. HR departments have it a bit easier, I suppose.

Stateful and Stateless Design of Work

Secondly, the article discusses ‘talent as a cloud’ and takes a very interesting view on the design of work – namely ‘stateful’ and ‘stateless’ design of work.

Let me explain. The design of work within a stateful talent system requires that the resources are carefully planned and in place in advance, and making sure that all the puzzle pieces are in place before any activity can begin. Sounds familiar? Yes, this is the way most of us are used to work.

As the opposite, a stateless talent system, does not require the reservation of resources,  but “instead each step of the process completes it portion of activity and there is some indication of whom should receive the output next”, Rawn Shah writes. That does sound scary and too chaos-like to many. Rawn further explains the pros and cons:

“There are pros and cons to both, although it generally boils down to the overhead involved in knowing previous and next steps. Stateful devices made more efficient use of resources but were fairly inflexible or ‘brittle’. Stateless devices were cheaper and simpler to create, requiring less memory and processing to keep track of things. In the end, a stateless system is much more agile and resilient.”

Absolutely fabulous thinking and very much needed for the more flexible, agile business models. I’ll find this very inspiring. Not a simple task at all, but I feel and believe that we must – and especially leaders and HR departments must – start to rethink a bit. Many of you are already doing it, of course. 

Bad Fit with Your Business Processes?

The existing business processes are mainly designed for long-term to a group of specific jobs: a stateful reservation of resources (people and their expertise), managed by a single manager, for a certain project, under a certain period of time. Why it would be wise to try out a different way of work design? Here’s more of Rawn Shah’s brilliant thinking:

“Why is this? We often consider only the primary talents of an individual, their main skills or knowledge domain. The goal is to maximize their potential by applying them where they are best suited. Noble intent, but it ignores the reality that people are generally multidimensional and everyone has creativity and knowledge that can apply to other areas.

A stateful talent system focuses on a single purpose and seeks to optimize it to the utmost; a stateless model recognizes that they could be doing different things at different times and balances variety with skill.”

Yes for multidimensional talents, yes for creativity & knowledge flows over the borders. This is what is needed in the global competition: an organization cannot cope with the old style, with closed teams, one-trick-pony-managers, and strict hierarchies. Indeed, like rock’n’roll, social business design is here to stay.

Human Capital as a Service – in the cloud, beautiful!

Smart Robots as a Service

In his own blog Mr. Etwaru states:

“We may never move clouding up the stack all the way to making human capacity stateless and hence delivering said capacity as a Service, but the companies that move furthest and fastest up the stack clouding state-ful resources along the way will engineer the agility and on-demand efficient operating models to win.”

He also asks “Will smart robots eventually be instantiated to spin up more human capacity when demand is needed?”. His question is utmost relevant. My dear friends Cristina Andersson and Jari Kaivo-oja have written an interesting book (in Finnish) related to this topic – BohoBusiness. (As soon as it is available in English, I will share the link here.)

This is Not a New Idea?  

The thoughts by Mr. Etwaru and Rawn Shah reminded me of an old quote related to the adaptable structures and ecosystems, by Michael Porter himself:

“Industries are profitable not because they are sexy or high tech; they are profitable only if their structures are attractive.”

Most industries and organizations are trying to score right under the constant change by requiring these new types of adaptable structures – the structures within and outside of an organization, within the ecosystem it belongs to. The development is very, very rapid and it raises increased demand for choice, chance, change and flexibility. The stateless talent system might be a step towards a right direction.

This discussion also reminds me of old HBR article of Normann and Ramírez (From Value Chain to Value Constellation: Designing Interactive Strategy, Harvard Business Review, 1993). They stated that those organizations that are going to survive in the disruptive, changing environment are:

“[…] those looking beyond their immediate boundaries to the social and business systems in which they are enmeshed and discover new ways to reconfigure those systems in order to reinvent value for their customers.”

And this article is 19 years old.

Looking forward to follow the discussion by the people who know more about Talent Management and HR than I do. An interesting challenge for all HR professionals, I almost hope I could work with these issues : )

Human Capital instead of Human Resources?  

By the way, why don’t we speak more often about Human Capital (HC) instead of Human Resources (HR)?  I think that HR is a notion that belongs to the stateful system thinking, and HC fits in perfectly with the idea of the stateless talent system.

What do you think?


Related to this topic:

Excellent video by John Hagel: Recognizing the Power of Pull

For IT professionals, a great article by Chris Dancy, Bradley Busch and Kathryn Howard IT Service Management Going Social

Picture credit goes to Marc Lagneau – my friend found the lovely photo and thought it describes ‘Cloud as a verb’ perfectly. I agree.

Social Media, Value Creation and the Risk of Missing Out

SummerSweet

I have been pondering and writing about the on-going change in the way we work, now and in the future. I especially love to evangelize about and to the people like myself, the middle-aged knowledge workers. A new kind of social pressure is on us.

I feel this need for change everyday in my work and in the business environments I am actively part of. Yes, I particularly chose to say feel. I have one skill I like a lot: I combine numerous signals and facts, added with intuition. And yes, I am 100% layman futurist. You may laugh at that, however there are many reason-reasons to take the social revolution seriously. Here are two recent blog articles on the topic.

Firstly, Shel Israel wrote in Forbes:

“For the most part, social media—like rock and roll—is here to stay. And organizations that continue to ignore it will simply fade away. And that is our key point (in a book The Age of Context he’s collaborating with Robert Scoble). In a very short period of time social media has risen from oblivion, and is part of the lives and work of most people in the developed world.”

Secondly, check out my friend Oscar Berg’s blog post “Time is Ripe for Social Business” in which he lists recent research about this topic. Here’s one pick from his post:

“The potential for value creation when social technologies are used to improve collaboration and communication within and across enterprises is twice as big as the value that can be created through all other uses across the value chain. Based on numerous case studies and in-depth research in four sectors (consumer packaged goods, consumer finance, professional services, and advanced manufacturing), McKinsey Global Institute analyzed the potential value that could be obtained through the use of social technologies. The total potential value at stake in these sectors is $900 billion to $1.3 trillion annually. A third of that potential comes from business function-specific applications of social technologies in product development, marketing & sales, operations, and customer support, but two-thirds would arise from using social technologies to improve the collaboration and communications of knowledge workers within these functions and across the enterprise. (McKinsey Global Institute)”

Impressive figures, one of the key notions being value creation.

The Soft and Hard Elements of Value Creation

What an interesting combination of the soft and hard elements value creation has. I cannot help reflecting back to the year 2001 when I wrote my Masters thesis about value creation in business processes. My 11-years old Analyzing Framework for Value Creation is a very simple model on how organizations are creating value; the ways of enhancing the supply chain processes, and how they can find new ways for cooperation within the business ecosystems.

A bit outdated, but I was on the right path then, wasn’t I? But wow, I had no idea about how powerful new ways of communication there will be.

Here below a not-at-all-fine-tuned picture of my old framework from 2001.

On the outer circle there’s a blend of ‘soft’ elements: Culture, Commitment, Leadership, and Strategy. The middle circle represents the two main tasks associated with managing business processes: Coordination and Integration. On the inner circle I’ve chosen three set of pairs: Infrastructure & Architecture, Relations & Processes, and Information & Knowledge. All these further having an effect on the ultimate target in the middle – Value innovation and Creation.

Kind of Social Business 1.0, or Enterprise 1.5, isn’t it?

Now we all know that the real powerful value creation happens at the edge of organizations and that requires very different management and communications practices. No news here for you.

Transformation Ahead

However, there’s one specific aspect that bothers me almost daily, and makes me work harder: How will the “professionally middle-aged” (not necessarily chronologically) knowledge workers cope, and how to work on with our attitude towards the rapid change, and further to value creation. 

I have gone a long way on my transformation path, and already feeling mostly good about the change. But of course, there are many of us who hate this, fear this and/or despise this change. Most of us conveniently somewhere in between these two. There is both healthy and not-so-healthy skepticism towards social technology and social business, regardless of the length of your career. This change comes close to your very personal sphere and therefore causes the most interesting reactions and fears. Nothing wrong with that, we need time to think, learn and unlearn. The reactions are naturally based on the personal experiences, but also on the attitude that one have towards the future change. We all do have our own way of coping with it.

On the organization level, many businesses are facing huge challenges; global competition, economic issues and insecurity, and missing the right leadership skills. From the knowledge work perspective, the people and innovation should be in the core. That requires a new kind of leadership, and strategy as well.

My pet peeve is to observe and learn from this phenomenon, and to help my fellow knowledge workers whenever I can. Finally, what about the risks? There are many, and I chose one: the risk of not taking the risk.

Risk of Missing Out – ROMO

After reading an interesting New York Times article “Turn Off the Phone (and the Tension)”, a new idea and an expression came into my mind: Risk of Missing Out. Let me explain the background first. In the article Anil Dash, a writer and entrepreneur, is speaking about “Joy of Missing Out,” or JOMO. The beauty of sharing and enjoying moments also when not present.

“There can be, and should be, a blissful, serene enjoyment in knowing, and celebrating, that there are folks out there having the time of their life at something that you might have loved to, but are simply skipping,” he wrote.

A beautiful thought. I am often jomoying.

The idea of JOMO was a continuation for FOMO, or the “fear of missing out,” a term coined by the founder of Flickr, Caterina Fake. She wrote about how social media has made us even more aware of the things we are missing out.

From JOMO and FOMO, I did think of ROMO, Risk of Missing Out.

I look at this from the knowledge worker perspective. I believe that any knowledge worker who is not active at all in social media has a huge risk of missing out…the many possibilities of the future work life, lots of learning, and an opportunity for necessary unlearning. A knowledge worker, who is not participating and collaborating in the ocean of social, will face interesting times. At least professionally, and maybe on other areas as well (as in JOMO).

We must change, adopt and adapt: the way we learn, listen, help, discuss, search, collaborate, innovate, combine, produce, and create value. For the sake of the innovation, we need to focus on knowledge flows, instead of knowledge stocks, as John Hagel wisely puts it. You might also like to read my old blog post about Systems Intelligence, by my favorite Professors Esa Saarinen and Raimo Hämäläinen. I do love their thinking.

I am not going any deeper in this right now, but please continue playing with this idea with me. I promise I will.  The value creation, innovation, knowledge work, the attitude of the professionally middle-aged, ROMO.

Can you see the connection between value creation and the social way of working? How do you feel about the idea of Risk of Missing Out, in general and especially in your work life?

Social Business, Power Balance and Trust

A 360 degree attitude on social business and networking gives you wings.  Picture credit Esa Aarnio.

A 360 degree attitude on social business and networking gives you wings. Picture credit Esa Aarnio.

I had the pleasure to be one of the guest speakers at the International Woman’s Day breakfast organised by “The Federation of Finnish Technology Industries“.

As I was speaking on that special day, I chose this topic “Woman, networking and the social technology”.  I started my presentation by making a confession: about five years ago I was pretty close to becoming a software business professional who enjoys a good flow, best practices and nice control, meaning I was stuck in my comfort zone.

I had a great team, processes in place, supporting tools implemented, and lots of ideas. I lived in a lovely illusion of control. Indeed it was working well at the time, but now afterwards it’s easy to say that for a little bit too long I overlooked one thing: huge, disruptive changes that were already in sight.

Luckily I was curious enough and started to follow some of the trends, mostly via research articles and blogosphere: cloud computing, social media and mobility. It soon started my personal transformation process: I realised that I needed urgently to both unlearn and learn.

The topics I briefly covered in my speech were Social Business, Networking 2.0, the power balance between the organisational units, and the triangle of “People, Process, Technology.”  And finally, the role women have in the social business context.

Here’s a short summary of the key topics of my speech.

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Systems Intelligence, Serendipity and Listening for the Better Decisions

A beautiful moment I managed to capture in the Helsinki summer!

I’ve earlier blogged about how I find intuition and seeing the value of the tacit knowledge as very interesting perspectives for the decision-making. As social business and new ways of working are now changing the organizations and the entire business landscape, and further adding to the complexity I’ll find it even more interesting to study decision-making and how understanding is created.

I was looking for something else from my bookshelf and found the good old book by Stephen P. Robbins “Essentials of Organizational Behavior”, and randomly checked out the chapter about individual differences in decision-making.  What I found was an interesting quadrant that describes the leadership styles related to the decision-making, it has two axes: Way of Thinking and Tolerance for Ambiguity. The four styles of decision-making are:  Directive, Analytical, Conceptual, and Behavioral.

Decision-Style Model. Source: A.J. Rowe and J.D. Boulgarides, Managerial Decision Making (Prentice Hall 1992)

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Game Mechanics and Landscape Design for Customer Value Creation

The View of Future

I recently met a marketing professional who had seen the “social light”, or should I say Social Business Light. He was stressed about the fact that most of his colleagues and the management “don’t understand the value of social media and what is happening within marketing communication”. Very familiar set up!

At least some of the common misunderstandings and friction is a result of language we use. Different backgrounds and experiences lead to a situation where mutual comprehension is not easy.  Other challenges are – no news here – results of silo-liked work environments, communication and collaboration gaps, and also some kind of idea “inbreeding”.

All these factors complicate the work of management, business operations, and strategy work. More precisely, complicating the way management is use to manage and lead.

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My Nostalgia Trip to Pre Social Business

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.

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Social Wolf in Sheep’s Clothing, ready for the Social Business?

Supertramp album from 1975 – Photo by me

I recently found my old thesis, and yes, some of its topics and content are (still) relevant, as this one: the evolution of organization and work structures. The very same topic Esko Kilpi is researching. The discussion in my old thesis and Esko’s blog posts inspire me to learn more about this topic.

One chapter in my thesis starts with a quote by Michael Porter:

“Industries are profitable not because they are sexy or high tech; they are profitable only if their structures are attractive.”

Well put. Many industries and organizations are trying to score right under the constant change requiring new type of more adaptable structures. The development has been very rapid and raises increased demand for choice, chance, change and flexibility.

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I am a Knowledge Worker and a Serendipity Hippie

My Serendipity Hippie T-shirt! | Copyright Serendipiteettihipit 2010

Last weekend I attended Professor Esa Saarinen’s seminar, and as always I was touched and inspired by his thinking. Few days earlier futurist Jarno M. Koponen wrote a beautiful blog post about creative future thinking. Both of these gentlemen touched on a question I’ve been thinking lately:

How to be creative in a hectic entrepreneur/knowledge worker life?

I’ve earlier blogged about Esa Saarinen’s theory of Systems Intelligence and the two thinking systems that we all have: the automatic, associative, and intuitive, and rational, systematical one. This theory of Saarinen’s emphasizes how we often have a surprisingly narrow sense of ourselves – meaning that we seldom utilize our associative, intuitive System 1 in our work life, instead we are blocking it by System 2 kind of rational thinking.

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Playing Social with Words

A quick post about playing with words, notions and associations, and about what I did 10 years ago – and in the end of the post I make a promise!

Years ago I was in Supply Chain Management business, and now my startup is developing a SaaS application for businesses, in a #E20 style. That is why I am very curious about Social CRM, SCM and Enterprise 2.0.

Two recent ‘good bits’ started a thought process: 1) Jacob Morgan’s tweet and 2) Seth Godin’s fantastic post.

Seth Godin wrote about “the pleasant reassurance of new words”:

“It’s a lot easier for an organization to adopt new words than it is to actually change anything. Real change is uncomfortable. If it’s not feeling that way, you’ve probably just adopted new words.”

I do agree, seen that happen.

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Entrepreneur: An Adventurer with Inbuilt Crap Detector

Guy Kawasaki’s Note to Me @ Paris 2010

Inspired by an interview of Francis Ford Coppola and by an old article about Ernest Hemingway, I compared their advice to my experiences as an entrepreneur.

I’ve blogged earlier about my favorite topic, tacit knowledge and its role in personal and organizational learning. Francis Ford Coppola’s words took me back to these thoughts. In the web magazine The 99 Percent’s interview  ‘On Risk, Money, Craft & Collaboration’ he describes his working methods and techniques, for example how making notes, e.g. writing down the first impressions of a novel, helps him to find what’s essential in it.

I have a habit of making notes all the time, not only in work related meetings and workshops, but also of novels, TV programs, movies, and discussions. When I look back at my notes I often find a new angle to the subject at hands, and realize that often my notes are implying something tacit, a piece of knowledge, an idea based on the quick unconscious association.

In the beginning of interview Mr. Coppola presents his code of ethics that directs his filmmaking. I’ll find it very interesting:

  1. Write and direct original screenplays
  2. Make them with the most modern technology available, and
  3. Self-finance them.

With little bit of imagination I dare to compare this to mine and my friends’ situation as entrepreneurs. These points tickle my thinking: Firstly, for an entrepreneur it is important to have a clear vision based on your big idea, which in turn should be based on the real customer need you’ve seen, maybe based the weak-ish signals you’ve seen before others have. Anyways, your basic idea must be robust. It is your original screenplay, your starting point.

Secondly, Coppola’s request for the most modern technology: that’s an easy one. In my case it is about utilizing Cloud Computing and during the coming months I need better understanding what part Social Technology have in my business. I have no clear picture of it yet. There’s luckily a very interesting discussion on-going (in Twitter) about social business. Just search #socbiz or #e20 in Twitter, and you’ll see what I mean. Learning new things daily!

Francis Ford Coppola’s third point about financing is one of the key (worrying) issues for an entrepreneur. As both in filmmaking and for entrepreneurship, it is a question about how much independence you have. For Coppola financing must be easy nowadays, but for young entrepreneurs it is often a major pain. It takes a lot of energy and time, which temporarily can cut off some of the enthusiasm.

Learning, Risk Taking and Collaboration as Key Capabilities

All these essential issues points at learning, our capability to unlearn and learn is central. To change and to be able to see what is not visible: the tacit things, the weak signals. One sentence in Coppola’s interview shows how important learning is even with 45 years successful career, he says:

I just finished a film a few days ago, and I came home and said I learned so much today. So if I can come home from working on a little film after doing it for 45 years and say, “I learned so much today,” that shows something about the cinema. Because the cinema is very young. It’s only 100 years old.

His humble quote is very true in any business. As our business environment is in huge change, we need to see it as new every day. For an entrepreneur this means making best guesses and taking risks. Francis Ford Coppola asks a striking question to which every entrepreneur can relate to:

If you don’t take a risk then how are you going to make something really beautiful, that hasn’t been seen before?

Indeed. Further Mr. Coppola shares his idea of collaboration and his role as a director, with wise words:

You must never be the kind of director, I think maybe I was when I was 18, “No, no, no, I know best.” That’s not good. You can make the decision that you feel is best, but listen to everyone, because cinema is collaboration. I always like to say that collaboration is the sex of art because you take from everyone you’re working with.

His words remind me of Mitch Joel’s recent post ‘Market of One’, where he writes:

Just because you do something (or don’t do something) is no indication of how the market actually is and reacts.

A recommended read, you may recognize the pattern in your business environment, among partners, business angels, VCs. For an entrepreneur it is vital to listen to everyone, be curious, to truly collaborate, and not make assumptions based on your personal opinion only.

To me entrepreneurship is about learning, experimenting, collaborating, and taking risks. It is an adventure. And I feel like an adventurer.

We all have our own personal methods and tools to manage the adventure. For me it is a cocktail of many things, the base on my beloved Systems Thinking, but to name one thing that has changed my way of working: social media. After I’ve managed to find ‘my people’, especially in Twitter, social media has opened a new world of knowledge sharing and valuable, most interesting global network of smart people. Whenever I have time to participate I learn.

Another result of intense learning and studying within social media sphere is this blog. I started blogging as I felt that I need to write down the (often unstructured) ideas and thoughts, and get feedback from my network of smart people. The feedback is very valuable for the learning process: when I write I am often developing an ad hoc idea and the feedback makes me think and rethink. I do need that.

Related to this experience of making notes and blogging too, I share a wonderful old article of Hemingway in Cuba (The Atlantic, 1965) which partly inspired me to write this post. Hemingway experienced writing as inventing. Here’s a quote by him which I like very much:

Fiction-writing, Hemingway felt, was to invent out of knowledge. “To invent out of knowledge means to produce inventions that are true. Every man should have a built-in automatic crap detector operating inside him. It also should have a manual drill and a crank handle in case the machine breaks down. If you’re going to write, you have to find out what’s bad for you. Part of that you learn fast, and then you learn what’s good for you.”

That’s basically what every entrepreneur needs too: Knowledge (network) out of which to invent, and a curious, open mind with a built-in crap detector.

I believe I don’t have to explain that.