I spent some time last week with Andrew McAfee at HBS discussing the subject of enterprise 2.0. You can listen to my podcast interview with him on the learning 2.0 podcast blog.

A transcript of our talk is attached here.

The most interesting aspect of our interview was our discussion of management and leadership in the 2.0 enterprise.

We talked about network effects:

Kathleen

Once things are up and running, success has to do with network effects. My next question is can you activate network effects inside the enterprise? Can you manage this process and what does management mean?

Andrew

This is a really fundamental question because there are not managers on the web and web 2.0 has grown and flourished without this constituency that we have inside the corporation called management.

The idea of network effects gets tied closely to the long tail. Even if a small number of wikipedia readers ever make an edit, there are still enough of them that we get the result that we observe, this huge, growing online encyclopedia.

The web 2.0 long tail will not scale down to the enterprise. The .001 percent of people contribute to a wiki. That’s essentially no one contributing to it. The biggest concern people have when they think about network effects: do these network effects still happen when they are not enough actors to activate them? This is where management comes in to create a culture where people are encouraged to contribute. We have a higher ambient percentage of people contributing to these platforms as opposed to just passively consuming them. You don’t need that many contributors before good things start happening.

And incentives:

andrew

There are a variety of things. Most of the smart managers I’ve talked to tend to prefer the soft over the hard when it comes to incentives and motivations. They do coaching; they encourage their people to contribute to these platforms. But they don’t say you must make 20 blog posts or you won’t get any bonus. I did it in my class I’ve got some very busy students. They’ve got too much else going on. Inside a company what they’ve got going on is their jobs. We don’t need to put in place super hard incentives to encourage participation. We do need to do managerial work to create a culture and spirit that this is how we are going to collaborate and share information and knowledge.

And leadership:

kathleen

What does leadership look like in the 2.0 enterprise? Does it change?

andrew

Yes it does. I’m not sure how much it changes. I can see a couple of things. One is that these technologies really put to the test the leadership boilerplate that if you want to gain control overcomes you have to let go of control over people and events. That’s very easy to say. These technologies force you to put that philosophy into practice. When you deploy these things you by definition can’t look over the shoulders of your people and make sure they are doing the right thing. You can’t piegon hole them into participating you want them to, they are going to do it they way they want to — at least at first. It is a test of whether or not the leadership of a company means what they say when they put that in the annual report.

The other challenge to leadership here is it is going to make leaders more as coaches or as shapers of an online culture as opposed to people who get to dictate the online culture or dictate how IT gets used. If you deploy an internal blogosphere you can’t specify in advance what that is going to look like, but there are many things you can do to shape it over time so that it heads in a direction you find productive.

kathleen

Is it a modeling behavior. Do the leaders have to be bloggers?

Andrew

It is not the case that the leadership of a company is at the forefront of everything they want employees to do. I don’t think they have to be bloggers but it falls back on coaching and this vague word of culture which turns out to be incredibly important, and on signaling to the organization the behaviors they want to see. Formal and informal rewards of highlighting the great job someone did and just showing that you consider this new stuff important and that you don’t think all we ahve to do is deploy it and walk away and think the employee base will do it all on its own. That’s a very bad strategy.

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