I talked recently with Josh Bernoff, co-author with Ted Schadler, of a wonderful new book, Empowered: Unleash Your Employees, Energize Your Customers, and Transform Your Business published by Harvard Business Review Press. The book talks about the changes in the workplace and the marketplace that are radically transforming management.
1. Empowered suggests that the world has changed, with a shift in power from sellers to customers, and a dramatic transformation in widespread access to cheap and agile technology and information and connectivity. How big a change are we looking at here? Is this a change in degree or a phase change?
Josh: The idea that customers have power has been fashionable for a while, but now it’s a quantifiable reality. In the US alone, consumers influence other consumers 500 billion times per year in social environments like social networks, blogs, and online communities. Every few months a brand gets damaged, whether its Dave Carroll’s “United Breaks Guitars” song with its 9 million views on YouTube, or mommy blogger Heather Armstrong tweeting “DO NOT BUY MAYTAG” to her million-plus followers. Customers are going to choose companies that serve them innovatively in any channel where they want to be served. So this is a transformation in the way companies do business.
2. To what extent are managers in established organizations aware of the scale of the change?
Josh: Some managers in marketing have come to embrace social and mobile applications. Companies like Dell, Intuit, and Zappos run differently because of their view of empowered customers, and because they empower their employees to serve those customers. But at most companies, these efforts are just getting off the ground. Our research shows that at half of companies they’re either paying no attention whatsoever or have just begun piloting a project or two.
3. Do you see any analogies to earlier shifts, such as the battle in the 1980s between mainframes (big, slow, clumsy) and minicomputers and PCs (small, agile and quick), and the outcome of that battle?
Ted: For an IT manager, there are big parallels between the transition from mainframe to minicomputers and from minicomputers to PCs. In both cases, people in the business built new applications that either served customers or solved business problems. Probably the most empowering technology of the 80s was the spreadsheet. For the first time, any business manager could analyze the data that drove the business. What’s different in this current shift to empowering technology is the pace and breadth of innovation. So many empowering technologies are entering the home – mobile devices and apps, video services and communications, socially-driven services, and a huge variety of Internet-delivered services – that it’s no longer enough to address each in turn. Instead, companies need to rethink their approach to technology-based innovation. And that’s what Empowered outlines: new relationship and decision approaches, new governance structures, new security model, and new technology platforms, for example.
4. Empowered talks about HEROes, i.e. highly empowered and resourceful operatives. These are people who are living, breathing, thinking, acting and innovating in the groundswell of the new technology of Twitter, Facebook, YouTube and mobile devices, whether the management wants it or permits it or not. How widespread is this phenomenon?
Josh: Every company has HEROes. To begin with, our research shows that 37% of information workers are already using unsanctioned technology of some kind. You cannot stop people from innovating, or at least imagining innovations with new technology. In our surveys, we find 20% of information workers that are both empowered by their company to innovate and have the technology resources to move forward with those innovative ideas. What varies is what they can get done. In some industries, like technology products and services, these sorts of innovations are routinely identified, supported, and implemented. In other industries (like government), it’s a whole lot harder.
5. Empowered gives many examples of the tension between "management" and the "HEROes". While it recognizes that management and HEROes have much to learn from each other, is it saying that managers should become more like HEROes than HEROes should become more like managers?
Ted: Yes, that’s a good way to characterize it. It’s not helpful or even possible to work at arms’ length. Empowering technologies create much flatter organizations in which a HERO can have huge impact on the organization and managers are also often doers in the player/coach model. This implies a much higher level of trust and engagement than is found in most organizations. That’s what makes the role of leadership – essentially permission and guidance and involvement from senior staff – so important. One of our conclusions in chapter 14 is that if as an employee your organization does not encourage this kind of cooperation, it might be time to look for a company that does.
6. If so, to what extent are managers ready for this transition?
Ted: Every person and industry and company is of course different, but we are seeing a real tipping point happen with empowered. Every organization worries about recruiting and employee retention and productivity. Every company needs to improve the quality of its customer engagement to ensure repeat business and customer advocacy. Every manager knows that their success is tied to the growth of the company. And empowering technology is at the heart of the solution: deploying technology solutions that empower employees to solve the problems of empowered customers. In the last 12 months, I would say that the level of understanding and action has tripled or quadrupled. But it’s early going in the empowered era, and most managers are still trying to figure out how to expand beyond a point success to deliver a more systemic success.
7. What will happen to organizations that don't make the transition?
Josh: Companies that don’t serve empowered customers will be abandoned for their more agile competitors. These organizations will be left with the least connected, least aware customers. And those are certainly not the most affluent consumers!
8. Many of the examples in Empowered are from IT. But the book also notes that there are high proportions of HEROes in fields like sales and marketing. To what extent are we looking at an economy-wide phenomenon?
Ted: The data are clear: there are more HEROes in marketing and sales, organizations that engage directly with customers. We also see more HEROes in engineering, a group that includes lots of product development professionals. So as with many economy-changing forces, this one is more powerful and most important in the parts of the organization that face customers, so we see the impact first in those industries. But empowering technology affects every sector, country, and job type. This is not a B2C-only phenomenon. Every company must also empower employees to work more efficiently with partners and regulators and each other, for example. Figure 8-4 on page 138 of Empowered (embedded below) shows the concentrate of HEROes in each industry. It’s a good map for understanding which sectors are most affected by empowering technology and action today.
ABOUT THE AUTHORS
Josh Bernoff is senior vice president, idea development at Forrester Research, and is responsible for identifying, developing, and promoting some of the company's most influential and forward-looking ideas. Josh is the coauthor of the BusinessWeek best-selling book Groundswell: Winning in a World Transformed by Social Technologies (Harvard Business Press, 2008) a comprehensive analysis of corporate strategy for dealing with social technologies. Groundswell has won critical acclaim: Abbey Klaassen of Advertising Age picked it as the best book ever written on marketing and media, Amazon's editors put it in the top ten business books of the year.
Ted Schadler is Vice President, Principal Analyst, at Forrest Research. With 23 years of experience in the technology industry, Ted advises clients in a wide variety of industries on the effect of technology on the workforce and workforce productivity. His research focuses on workforce technologies, including instant messaging and Web conferencing, smart mobile devices that increase collaboration and team productivity, telepresence and videoconferencing, cloud email and collaboration tools, and the consumerization of IT.
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