Can Enterprise 2.0 help companies innovate?

1 1 Two weeks ago, I made a presentation in Paris on how I see the role of Enterprise 2.0 and its influence on innovation. From the beginning, I have decided not to speak about Technologies but more on the factors that could really influence innovation inside a company.

 

The term innovation means a new way of doing something . Davila et al (2006) wrote :

Companies cannot grow through cost reduction and reengineering alone… Innovation is the key element in providing aggressive top-line growth , and for increasing bottom-line results

Two major factors influencing Innovation are leadership and communication. The first factor was not the topic of my presentation and most companies have a strong leadership on innovation ( at least I hope for them).

What is the status of  communication among people inside an enterprise mostly dispersed worldwide ? James Thomas Allen published a book  “Managing the flow of technology” (MIT Press, 1984) where he showed how critical it is to have communication on  technological information in an R&D organization. Recently, he co-authored a new book which  investigates the relationship between space and Innovation. He wrote

"We do not keep separate sets of people, some of which we communicate in one medium and some by another. The more often we see someone face-to-face, the more likely it is that we will telephone the person or communicate in some other medium."

"In the realm of communication for inspiration … visual contact is probably the most important. If people do not see each other, they will not have the opportunity to interact and create that knowledge."

In the same book, Allen expressed his skepticism on the efficiency  of distributed R&D centers since for him even videoconferencing  can not replace effectively a face to face meeting (and I agree with him!). I was making a slide showing the exponential decrease of the frequency of communication Vs distance between the engineers (known as “Allen curve”)  when I realized that the cultural factor could be also important in a distributed engineering environment. I then made  further researches  and found one white paper I have read last year on virtual distance “ Making Virtual Distance Work in the Digital Age” (IIP, December 2007)

In this study, the virtual distance is showed as the sum of the physical distance, the operational distance and the affinity distance. The higher virtual distance is between 2 people the less they will communicate (and therefore innovate).

11 factors influence this virtual distance and this graph shows that the affinity distance has the major impact on virtual distance.

wiertz sebastien - virtual distance graph

Those distances can however have a benefic impact on innovation since they increase the diversity of ideas like demonstrated by Mark Granovetter in his theory “the strength of weak ties”  (1973).

In the following graph, I have tried to represent the impact of the distance between engineers (to be understood as “virtual distance”) Vs the frequency of Communication. We do not have to prove that the more engineers communicate, the more they innovate which gives you the green line in my graph.

wiertz sebastien - distance between engineers

If we understand Enterprise 2.0 as a new social vision of the enterprise and not only as a new technological support, we can imagine it will leverage the curve in the preceding graph and clearly increase the innovation.

My belief is that implementing Enterprise 2.0 should first mean  forcing companies to identify their internal communication problems.  It is clear that most  companies have a distributed network and that it will be inconceivable to regroup them in one physical place. So, start by implementing "Respect 2.0" in your company and do not expect Technology to help you resolve those communication problems since human beings can not be changed by computer technologies (at least not in the world as we know it today).

Comments
8 Responses to “Can Enterprise 2.0 help companies innovate?”
  1. Bill Ives says:

    Nice post. Some companies have found an increase in innovation after implementing social media. These tools can tie together the dispersed bits of thinking in the organization. I like your respect 2.0 as it is more about people than technology.

  2. Web2.0/Enterprise2.0 is about having a 2-way conversation and relinquishing control of the conversation. This threatens most models of corporate hierarchy and certainly a corporate leadership that fears hearing the truth. Yet this truth holds the greatest potential for innovation and growth.

  3. Sunny says:

    Very nice post. I like the concluding comments about “If we understand Enterprise 2.0 as a new social vision of the enterprise and not only as a new technological support”

    Problems that i have noticed is that from business users some will say that this is too technical too them and refuse to understand the benefits of what this brings. On the other side of it, the IT folks thinks that this is their within the realm and they see only as technology. This is not saying that they are not good in their work, but their past training do not include this social aspect of this (I guess at that time there wasn’t a need to).

    So how does one bridge this gap between user and the technical folks.

  4. Very nice post. It’s equal to our thoughts about the usage of Social Media within enterprises. These we have summarized into three presentation on slideshare “Enterprise 2.0 Knowledge Management – The Wikipedia Myth”.
    Link: http://www.slideshare.net/TSystemsMMS/enterprise-20-knowledge-management-the-wikipedia-myth-1135966
    Feel free to have a look on it and visit us on http://www.besser20.de/english

  5. Xiaoli ZHANG says:

    this is a nice post. it just like we have telepone on everyone’s table, but it doesn’t mean everyone is talking or communicating to everyone else. even in the same phyiscal office. so, what can the company do to improve cummication?

  6. Atul Sharma says:

    Nice Post. Social media can bring people closer – but nothing can beat live meeting!

  7. Wiertz Sébastien says:

    I agree.

    Live meeting initiates the connections and Social media keeps those connections alive.

  8. Shanice says:

    Useful info. Fortunate me I discovered your site accidentally, and I’m
    shocked why this twist of fate didn’t happened earlier! I
    bookmarked it.

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    This is a personal weblog. The opinions expressed here represent my own and not those of my employer.