This article by Steve Denning on Forbes.com really hit me. Much of it cites Joe Stiglitz, a Nobel Prize winning economist who has an article in Vanity Fair that argues our current economic downturn isn’t just a cyclical dip, but the mark of a significant phase-shift in our economy, similar to the phase-shift that happened around the Great Depression. I am normally one to be skeptical at “this may be the big one” arguments, but the whole Nobel prize thing kept me reading.
And he certainly makes a compelling case. I was kind of embarrassed to face the fact that my understanding of the Great Depression boiled down to random ideas and phrases like “stock market crash,” “dust bowl,” and “new deal.” My analysis: it was really bad and World War 2 (and the manufacturing economy spurred by the war) got us out of it. You’d think after all my education you’d get a more nuanced understanding. No matter. Now I can just point to the article. 
Stiglitz pointed out that the depression was a result of a huge shift in our economy, from agriculture to manufacturing. We HAD to have that depression to deal with the fact that our large portion of our workforce was focused on doing something (farming) that wasn’t going to make money and be sustainable like it used to be. We needed to shift into a phase where farming was much smaller and manufacturing was much bigger. You don’t do that by retraining people over a two year period. You need a structural adjustment. Stiglitz argues that the banks failing, etc. was a RESULT of this shift, not a CAUSE of the depression.
So today we might be in a similar boat. This is the time where we finally have to shift AWAY from the manufacturing economy. Stiglitz says it will be towards a service economy, but Denning suggests it will actually be a “creative” economy.
The Creative Economy is one in which both manufacturing and services play a role. It is an economy in which the driving force is innovation. It is an economy in which organizations are nimble and agile and continually offering new value to customers and delivering it sooner. The Creative Economy is an economy in which firms focus not on short-term financial returns but rather on creating long-term customer value based on trust.
Innovation, nimble, continually offering new value, trust…sound familiar? This is what we talk about in Humanize. We hadn’t thought about it in terms of preparing companies for an entirely new economy, but hey, if that what it takes, we’re game! Denning talks about that:
Most large firms of today are ill-equipped to compete in the emerging Creative Economy, in which globalization and the shift in power in the marketplace from seller to buyer have put the customer in charge. Most big firms still have a factory mindset oriented to economies of scale. They are focused principally on maximizing short-term shareholder value. They are not organized for continuous innovation. This way of managing is unable to mobilize the full creative talents of their employees.
Or their customers. I know it’s hard to believe, given the collective accomplishments of all the large companies in today’s economy, but the power of our existing approach is in decline. And if we really are in an economy-phase-shift, then the rate of decline is only going to increase.
So let’s get started now. Let’s start creating organizations that are more open, trustworthy, generative, and courageous. Let’s not wait for it to get worse. Let’s not wait until we can see a quantitative research study that shows a statistically significant increase in performance in “humanized” organizations before we start to take action. Let’s not wait for best practices.
Let’s start a movement.
Joe Gerstandt and Jason Lauritsen are two of my favorite people. They are consultants and speakers (like me), and they work around issues of diversity, HR, organization development (also like me). But that’s not why I like them. I like them because they are incredibly smart and kind, and (here’s the kicker) through them I have been introduced to a significant number of OTHER people who now qualify as my favorite people. I find myself these days connecting to tons of really smart people, and my life and career are growing because of it. I can’t attribute all that good stuff to Joe and Jason, but I do get the feeling that they are close to the center of the growth of my network lately.
And now I know why! They are masters of social capital. That is the subject of their new book, Social Gravity: Harnessing the Natural Laws of Relationships. The book is not long–it is clear and to the point–but it provides an incredibly valuable understanding of what “networking” really means, particularly in the digital age. As they say in the introduction:
What you know helps you play the game, and who you know helps you change the game.
The book is divided into two sections. The first section breaks down the importance of social networks. We often take the value of “networking” for granted, but they do a great job of revealing the real power of networks. This includes understanding the difference betwen strong and weak ties, the critical importance of diversity within networks, and an understanding the role technology plays in today’s world of social media. The second section presents six “laws” of social gravity:
- Invest in connecting
- Be open to connections
- Be authentic
- Get involved in meaningful activity
- Use Karma as a turbocharger
- Stay in touch.
The laws themselves may seem self-evident, but when I actually read the book I started to see how much on auto-pilot I have been when it comes to developing my network and building my social capital. And in today’s world, we can’t afford to mechanically work through our networking challenges. In Humanize, Maddie and talk about the importance of relationship building, within the context of organizations becoming more “generative.” We emphasize that relationship building is not just interpersonal–these days you have to know how to build relationships with people and their entire networks.
This book is the manual for doing just that. Building social capital requires us to change our behavior. It requires us to pay attention to networking in a new way. This is a critical business skill, even more so now that social media is taking off. But it’s not something we’re taught (enough) and is not (yet) something that is highly valued in organizations, but I think that time is coming. Get this book and read it, and then start being more intentional and skilled in the way you grow your network. Your future self will thank you.
I will also add that in most of our chapters in Humanize, we provided three “must read” recommendations related to the chapter. Joe and Jason were obviously a little late with their book, so if you have a copy of Humanize, get a pen and go to page 216 and write in Social Gravity as a Must Read for the Generative chapter (in addition to the equally awesome books up there by Frans Johansson, Beth Kantor/Allison Fine, and Nilofer Merchant).
I spoke this week at Avectra’s User and Developer Conference (AUDC). It was awesome conference. I can’t even put my finger on it entirely, but the energy and learning and interactions all seemed…accelerated somehow. Well done, Avectra!
Anyway, on Tuesday I did a session on Humanize, and after the session someone came up to me and asked, “So if you had to convince a management team to make their organization more human, could you boil it down to one thing? What could you tell them they would get out of humanizing their company?”
Great question.
My answer (off the top of my head; I hadn’t tried to boil it down to one thing before): agility.
We all say that we want more agility. We want our organizations to be “nimble.” This is particularly true in today’s social world. But we say it as if it’s just a matter of intention. Like no one ever thought of this before. Like up until now we all felt that agility and being nimble was a BAD thing, but now we’re seeing the light. I don’t think so. I think we’ve always liked nimble and agile, but over the years we’ve created organizations that are not. You’re not going to think or “intend” your way out of a problem that you acted your way into.
We need better organizations. We need organizations that are run on very different principles, with cultures, processes, and behaviors that are NOT the norm right now. That’s what we are saying in Humanize. Human beings are innately nimble. That’s why we have thrived as a species. We adapt, change, shift, as needed. Social media has also been tremendously nimble. It changes, scales, shrinks, and morphs just as it needs to.
So now is the time to make our organizations that way. We chose our four human elements (open, trustworthy, generative, and courageous) because they reflect the power of both human beings and social media. These are elements that will enable agility.
Nilofer Merchant, an idol of mine, wrote a book that we listed as a “must read” in Humanize, called The New How. It’s about collaborative strategy. She blogs on HBR (and on her own blog) and she’s writing a series about new rules for the social era. She gets it:
The world has changed; how we create value has changed. Organizationally we have not. It will be wholly insufficient to put the word “social” in front of existing business models and expect things to change. Instead, we need to imagine the fundamental enterprise anew for the social era. Lean, adaptive, community-driven organizations, built for speed, will thrive.
That’s what you get by becoming more human as an organization.
When I first started in consulting, I was on a big project with the U.S. Fish and Wildlife Service. It was an extensive assessment of “organizational issues” broadly speaking. I did a LOT of interviews and focus groups. I remember meeting with one of the senior regional managers who made a point about internal communication that I have since quoted liberally. I thought it was time to put it in the blog. He said (a paraphrase):
“Tell your people. Tell them what’s going on. Tell them everything. Tell them multiple times. Because here’s the kicker: if you don’t tell them, they’ll make it up! And I can guarantee you whatever they make up is likely to be much worse than the truth.”
He’s not the only one to say something like this, of course, but it’s amazing to me how seemingly hard it is to follow this advice.
Let go of the fear. Tell your people.
Mark Shaefer has a nice post about a recent “social media measurement smackdown” he participated in during a social media conference. He was pushing back against a prevailing notion that you can’t measure social media. He’s heard nice sound bites like “What’s the ROI of your mother,” or “You can’t measure the ROI of your receptionist…” He doesn’t buy it. He argues strongly in his post for the importance of measurement, and I agree with a lot of what he says.
But there’s a part of this debate that really bugs me. I don’t think the relevant question is to measure or not measure. Mark’s first point is that you need to measure social media ROI because eventually when budgets get tight, you’ll need a good argument for justifying your work in that area (agree). He then argues that there IS a cost to these “free” social media initiatives–which could total hundreds of thousands of dollars when you count all the staff time (agree). He then argues that you need to measure simply to know if you’re making progress (okay). And his last point is that there is not excuse to NOT measure:
I’m not advocating that every social media effort has a demonstrable ROI. I’m a practical guy. It may be cost-prohibitive or even impossible to determine the specific ROI of your efforts. Sometimes you need to look at qualitative tools for social media measurement. But there is no excuse for not tracking key measures that contribute to your company’s goals.
So here’s what bugs me: that last line. “Tracking key measures that contribute to your company’s goals.” That implies a cause-effect relationship between what you’re measuring and the accomplishment of goals. THAT is the missing piece in this conversation. I agree with Mark that we need to measure. Intuition is not enough. But the point of measurement is not to measure–it’s ultimately to make sure what you’re doing contributes to success, right? So where is the part of the measurement process where we connect what we’re measuring to the goals? That, it seems to me, is the real hard work here, so why aren’t we talking about it?
The only reason you measure something, is because it helps you learn. After measuring it, you know more, you understand more deeply, you have some new insight, maybe even you reach a new conclusion. But it’s only in the simplest of situations that a single measurement leads to a conclusion. Most measurement simply provides “data” that we use in our learning process, but we must combine those with all sorts of other data, usually through some form of ongoing conversation, before we reach any conclusions. That’s learning. In complex systems, data are critically important–yet rarely tell the whole story. So the question remains unanswered: what is our process for learning about our social media ROI?
Should you engage in social media? Probably. Should you measure? Yes. But don’t fall into the trap that measurement is the only part of learning that you need to be working on. Converting those metrics into learning that matters is hard work, and I think is a weak link in much of our management. We’ve been giving lip service to “learning organizations” for decades, but I don’t think we’ve figured it out. In Humanize, the fourth (and most difficult) human element we talk about is being courageous. That means behavior that takes personal development seriously, process and structures that support experimentation, and (drum roll) a culture that finally takes learning to heart.
Social media is illuminating some important realities for us, specifically that our systems are more organic and decentralized than we’re used to. This makes BOTH the measurement and the learning more difficult–and more important.
In December, the cover of Harvard Business Review invited readers in to Gary Hamel’s feature article with the headline “Inside the World’s Most Creatively Managed Company.” This was an interesting headline, given that the real title of the article was “First, Let’s Fire All the Managers.” That one’s a little too provocative for the cover, I guess.
But that points out an interesting problem here. “Creatively managed company” is inviting. We like that idea. That’s something we all could do. But firing all the managers? That’s impossible. That would never work. And that’s one of our biggest problems these days. When we KNOW something won’t work, we become blind to all the examples out there where it is working.
The story documents a company called Morning Star, the world’s largest tomato processor. They do $700 million in revenue a year, so this is not a small company. Two million tons of tomatoes annually. And they do it all without managers. As the article explains, in this company:
- No one has a boss.
- Employees negotiate responsibilities with their peers
- Everyone can spend the company’s money.
- Each individual is responsible for acquiring the tools needed to do his or her work.
- There are no titles and no promotions
- Compensation decisions are peer-based.
This is actually happening. And the company is successful, growing faster than the industry average. There’s a lot that goes into making those bullet points work, of course. And the article talks about it. I promise some blog posts that dig into these ideas, because they are consistent with some of the ideas we talk about in Humanize.
But for now, think about the bigger issue here: impossibility. When it comes to management and leadership, I have no tolerance for the idea that something is impossible. Management is a relatively new phenomenon, and in its short history it has seen very few changes or innovations. We say things are “impossible” mostly because they have never been done before, but given the tiny range of what has been done in “management,” that it is a horrible excuse.
I feel like we should come clean and admit that none of us really knows what we’re doing when it comes to management. We’ve had our experiences and many of us have built successful workplaces, and a lot of what we’ve done is great–but we really can’t say what is possible or impossible. And while I don’t hold up one exception as a perfect “model” to be copied by everyone, I do get excited when I see the impossible happening in real life. It’s inspiration for me to try doing things differently. Because that’s what our workplaces desperately need right now.
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Humanize: How People-centric Organizations Succeed in a Social World takes on the topic of trust in great detail. Buy the book today.
Check out this great interview with Andrew McAfee of MIT’s Center for Digital Business on how to talk to CEOs about social media. He’s got some great tips (like why you shouldn’t use the word “social”…interesting), but what I like most was his conversation about “weak ties.”
When he talks to CEOs about social media (or “Enterprise 2.0″ in his lexicon), he gets push back because social media is percieved as a waste of time. Just look at all the time employees are spending doing “personal” business on Facebook, Twitter, etc. McAfee combats this by explaining the concept of weak ties.
There is a huge amount of work in sociology, really beautiful work, that shows, especially if you want innovation and novelty, or introductions to other social networks, that your weak ties are a better place to go than your strong ties. Your weak-tie network is an extremely valuable thing for you. The problem is that before the 2.0 era, we had terrible tools for building and maintaining and exploiting a network of weak ties.
It’s interesting. We tend to have a fairly black and white view of “relationships.” We either have them or we don’t. But in today’s world, we need to re-think the idea of relationship building to incorporate the idea of networks. It’s not just building relationships with individual people. We have to understand our whole network and how it is maintained. Some people in that network are very strong ties, and others are weak. I doubt there will ever be a black-and-white rule about which individuals should be strong ties and which should be weak, but at the NETWORK level, we need to maintain both sets of groups (and probably more weak ties than strong ones). And we do this because it enables us (and, by extension, our organizations) to be more effective.
I will be writing more about this, by the way, when I finish reading Social Gravity, by Joe Gerstandt and Jason Lauritsen.
Have you heard the buzz about Pinterest yet? It’s one of those new social sites that will either be the next big thing or something nobody remembers in six months. But it is a nice interface, and it turns out to be a great way for me to do something that has been on my to-do list for a while: put down in one place all the books that we mentioned in Humanize as “Must Reads.”
At the end of most chapters, we picked three books related to that particular chapter that we thought were foundational to what we were talking about. I “pinned” them on a Pinterest board so you can see them all in one place (and click through to Amazon if you want to get them).
Edelman’s Annual “Trust Barometer” report is out. Maddie broke the news on SocialFishing, pointing out that trust in CEOs dropped precipitously (50% last year; 38% this year), where trust in the “regular employee” was up by a similar margin (34% last year to 50% this year). That’s big news, and it’s consistent with what she and I have been writing about. Obviously trust is an important issue to us–Trustworthy is one of the four human elements we write about in Humanize.
There is a 32-page slide deck from Edelman that goes over the main points in their report. Here are some highlights from the Humanize angle:
16% trusted information from Corporate sources, and 14% trusted information from social media. That’s low, overall (traditional media was 32%), but notice how corporate and social media are just about the same. That’s huge. And social media was at 8% the year before–a big jump. This actually connects more to the “Open” element in the book. It’s about decentralization. Getting information from the top is not viewed as reliable. We are valuing the periphery more than the center. And with good reason. There’s tremendous power there.
When ranking the importance of certain business activities, the one that scored the highest in importance was “listening to customer needs and feedback” (67% said it was important), but when asked to score how business is doing in that area, only 36% gave business high marks (one of the biggest gaps on the list). Treating employees well also had a high importance score (64%) but low performance (27%). Interestingly, the item with one of the smallest gaps was innovation in products, services, and ideas. 46% said important and 41% said business is doing well.
The lesson with that one? We’re good at the stuff, but not good at taking care of people. We design cool products and ignore our customers and employees. And note that we think the treatment of customers and employees is actually MORE important than innovative products.
And that’s the biggest lesson here for me. We need to pay more attention inside, to the people, to the relationships, to the communication. We’re pretty good at products. We put a lot of attention on the stuff. But the stuff alone is not going to cut it. The Edelman study isn’t called a “barometer” for nothing. It’s signaling a change. The same change we’re signaling in Humanize. Building the better mousetrap used to be all you needed to do. If you also listened to customers and treated employees well, that was a bonus. But it wasn’t required. Or at least it wasn’t perceived to be.
I don’t think that’s true any more. The “stuff” part is a given. If you have bad products, you’re out of the game. If you don’t provide value to the customer, you won’t succeed. But that’s just your entry fee. Once you’re in, you have to pay attention to what’s going on “inside.” Your employees. Your customers. The way people are treated. Trust. I think those things are going to separate the high performers from the merely “relevant” in the coming years.
In the chapter on How to Be Trustworthy we talk about transparency, truth, and authenticity. But the chapter on Open is equally valuable for trust (particularly decentralization and ownership). So where does Edelman conclude on all of this? They have four recommendations:
We agree. Well, maybe not radical transparency necessarily. But these ideas hit what we’re talking about dead on. The first one is simply a rewrite of “Clarity over control.” The focus on “engagement behaviors” has social media and decentralization written all over it. Again, transparency (whether or not you think it’s radical) is key. And note that it’s the “public” discourse on issues that needs to be shaped. Not the internal messages that are broadcast out.
So if you’re nodding your head to all this, then let’s move to the next question: what are you doing about all this?
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Humanize: How People-centric Organizations Succeed in a Social World takes on the topic of trust in great detail. Buy the book today.
At one level, getting a book published is a fairly scripted process. You write it, you publicize the heck out of it, you speak on it, and, if all goes well, a bunch of people buy it. Thousands of authors/publishers do this (in roughly the same way) every single year.
Of course, when it’s YOUR book, it always somehow feels more unique, unpredictable, even magical. When Maddie and I wrote Humanize, we gave it our all. We wrote from our hearts. We put down on paper thoughts and ideas that tied together years of our personal and professional development, both separately and together. That’s a little bit of us you’re reading in that book. We really had something to SAY in there.
So when it’s deeply personal like that, I don’t want to settle for a scripted process. Sure, I want good reviews, good sales, etc. But I want it to MEAN something. I want people to USE this book. As I said over on the SocialFish blog, we’re activists. We want to see change.
So here’s the good news: I think that’s what people are doing with Humanize. There have been dozens of online reviews of the book. Lots are very kind descriptions of the book with a plea for people to buy it. We obviously love those. But the ones that excite me the most are the ones that talk instantly about application.
For example, Holly Ross, Executive Director of the Nonprofit Technology Network, did a great post where she actually asks her readers (staff at nonprofit organizations, generally) to give her feedback on her reactions to the book. She shares her reaction to three of our ideas (that best practices are evil, that decentralization requires everyone to deeply understand the organization, and that “ownership” is easier said than done) and she asks what her colleagues are doing about it:
As your organization has felt the push of technology – social media and otherwise – what has it meant for how your organization is structured? What are you doing to humanize?
What are you doing. I love that. It’s time we made management and leadership more of a practitioner’s art, rather than a ground for theoretical models and cute acronyms. Get out there and do some things differently. Don’t let the fact that there’s not a “best practice” for humanizing your organization out there stop you. Just make it happen.
Jamie is a Vice President at MSP where he leads the consulting division. 
