Can Enterprise 2.0 help companies innovate?
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.
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.
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).