Six critical success factors to make Web 2.0 work

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McKinsey Quarterly published an interesting article this month how companies can successfully use Web 2.0 tools. McKinsey has studied in the past two years the experiences of more than 50 early adopters of Web 2.0 tools in corporate organizations. The experiences are equally balanced between enthusiastic and dissatisfied. However, basis for success lies in the acceptance of the disruptive characteristic of Web 2.0 and the understanding how to create value with these tools.

Based on these results McKinsey has identified six critical success factors for the use of Web 2.0 technologies:

  1. The transformation to a bottom-up culture needs help from the top
    Web 2.0 projects depend on bottom-up involvement of people throughout the organization. However, involvement of senior management is paramount as they will act as role models that will encourage participation of the rest of the organization.
  2. The best uses come from users – but they require help to scale
    Successful use of new technologies depend on the involvement of the users in the development and implementation of it. Failure is at risk when management tries to dictate their preferred uses of the technologies used. Mckinsey’s research demonstrates that the applications that drive the most value through participatory technologies are often not those that were expected by management.
  3. What’s in the workflow is what gets used
    When developing Web 2.0 applications make sure that the users are able to create the time within their daily workflow to participate in these new collaborative initiatives. Initial enthusiasm will fade rapidly if users experience that participation is another add-on to their already crowded to-do lists.
  4. Appeal to the participants’ egos and needs – not just their wallets
    Financial incentives do not work in collaborative technologies. They create content, but of low quality. More effective is it to bolster the reputation of participants in relevant communities, rewarding enthusiasm, or acknowledging the quality and usefulness of contributions.
  5. The right solution comes from the right participants
    Be sure who to target. To select users that will have valuable contributions takes thorough preparation. Look across the borders of the traditional experts  but also involve other disciplines within the organization. If done correctly, it can create great benefits beyond expectations. Sales forecasts predicted by participants with a more diverse base in operational knowledge were more accurate than those of the company’s experts.
  6. Balance the top-down and self-management of risk
    Web 2.0 by definition is disruptive and stads for authenticity, open and free communication. these factors feed many companies with fear for these technologies. However, Web 2.0 is not equal to total anarchy and some control over the content produced is prudent in corporate environments. Some security functions can, and should, be installed, such as prohibiting anonymous posting. Ultimately, successful participation means engaging in authentic conversation with participants.

Acceptance of Web 2.0 tools in corporations is growing. Spenditure on Web 2.0 technologies is currently estimated at $1 billion by McKinsey, but in the coming five years an annual growth of 15% is expected, despite the current recession. I fully agree with this view. Even stronger, due to the unique characteristics of Web 2.0 (e.g. cost effective, participative, collabrative, very effective harvesting of tacit knowledge) it is the distinctive technology in times of economic downfall. After all, if one thing survives in a recession, it’s innovation. And Web 2.0 is such an innovative technology that makes the difference.

With thanks to Bram Fasseur of Marketingfacts who made me aware of this article.

So how was Berlin?

Just got back from my trip to Berlin. I look back to a fullfilling Web 2.0 Expo. Although not all presentations were equally interesting (that is virtually impossible) and the expo floor was not too exciting, I did gain more insights in some of the Web 2.0 areas where we as a company want to develop ourselves more. I was especially pleased to see that there are many companies providing full-fledged solutions for enterprise-wide social media platforms (blogging, wikis, Facebooks, etc). I do not know which will survive the next 5 years but I sure hope some do.

One of the most professional looking platforms was the ClearSpace platform from Jive. They have some well-known customers using their software such as Nike and Apple (Apple’s support forum runs ClearSpace ans is saving them a lot of phone calls from customers). Intruiging about their platform is that it seems very user-friendly, very important in a time where the risk of a techno-division between the technofoobs and technophiles is imminent (but don’t stereotype; at the airport where I’m writing this post I’m looking at a 70-something year old man wearing white earbuds enjoying the songs on his iPhone).

We are now checking how we can acquire their software for testing purposes. I’m especially interested to see if we can use their platform for our ‘Klant 2.0’-project (no, I won’t reveal anything else, in contrast to the Web 2.0 philosophy). We are also awaiting more information about TamTamy and we have been invited to drop by the office of Telligent in Amsterdam to share some thoughts. Interesting to see that also ‘Big Blue’ is pretty active in the Social Software space, as can be seen here:

With 500,000 employees of which 50% is outside ‘somewhere’ they have understood the benefits of collaborative platforms well. They now sell their platforms now to other interested parties.

The ever present question: what’s in it for business remains valid also now. Many companies are sensibilized by the obvious possibilities of social networks, yet not many know how to monetize them. Especially in the field of pharma, one of our main customer groups, it seems extremely difficult to actually materialize such an idea. What are the risks involved? What can we do from a compliance point of view? For monetizing social networks I refer to a recent blogpost on Marketingfacts.nl from Erwin Blom in which he describes 5 monetization models:

 

  1. Advertisements
  2. Sponsoring
  3. Premium accounts
  4. Data
  5. Decreasing costs

 

 

OK, so may be the use of social networks for external use is a bit tricky (yet not impossible, as Tim O’Reilly would say), the use of these platforms internally is really a no-brainer. It is sometimes frustrating to see so clearly where the future in business in relation to collaboration goes. And yet corporate politics and inflexible IT-related ‘gurus’ higher in the foodchain sometimes hinder the use of these new technologies. These are the same people who fulminated against the use of internet at the workplace 5 years ago and still block YouTube from a ‘normal’ employee’s desktop computer (and guess what, most of these people have opened up YouTube for themselves…). 

I am so convinced that we enter a new era of collaboration in business. Increasing fuel prices, awareness of our carbon footprint, the rise of new technologies and the coming of the ‘Generation Y-ers’ in companies will push the entrance into this new era forward. Innovation must come from many places, so not only from inside the company (and in this case I mean literally inside – physically between the four walls of the company) but more and more from outside. Of course outside from our customers but huge multinational companies should first start by looking ‘outside’ their physical walls. What kind of great ideas are laying around in corners at local company level? What great internal inventions are collecting dust somewhere, someplace because nobody has noticed them? We need to push the boundaries of our current way we work, share, collaborate and explore the possibilities of Enterprise 2.0. We need people, employees who believe in that, and who want to start experimenting. Because you are not alone, looking at a recent study performed by McKinsey:

(Graph courtesy of McKinsey)

By the way, a very interesting survey about the use of Web 2.0 technologies in business, which can be found here.

And exciting times lie ahead. On my return trip I was sharing a taxi with a guy from a major creditcard company. He was responsible for the technological development of the data architecture. When he started four years ago the company had 2.6 pentabyte (that is 2.600 terabytes, which is 2.600.000 gigabytes, which is 2.600.000.000 megabytes) of transaction-data. They want to do more with the huge amount of data they collect. They want to couple it to location-based services such as for example Aka’Aki. Imagine a world in which you just bought a Levis jeans. You paid with your credit card, so the company knows that. You walk around down town, and a Levis store is around the corner. Since ‘the Cloud’ knows you are open for Levis stuff the Levis store around the corner (who receives data from the credit card company) can send you a message with Levis-related promotions. Obviously this would only work if you have opted-in to receive such information, but imagine a world where you would only receive information targeted to your needs (no more commercials of tampons during dinner time). I would opt-in.

Having said that, privacy remains an issue in these cases so it was good that there was at least one lecture about this during the Web 2.0 Expo. For example, who is responsible when a girl commits suicide when she is dumped publicitely through MySpace by her so-called boyfriend who she never met in real life but in reality was the mother of her previous boyfriend who she dumped before? (depending on your intelligence you may have to read that sentence a few times more). MySpace? Whose data in Wikipedia is it anyway? Is that MediaWiki, the underlying company which owns Wikipedia? Or is the data owned by you?

Many questions still need to be answered in this legally misty Web 2.0. Let’s hope the mist condenses to a cloud and dissappears high in the sky, where it belongs.

See all presentations of the Web 2.0 Expo here.

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