Deb Gallagher has an interesting article, in the MIT Sloan Review, The Decline of the HPPO (Highest Paid Person’s Opinion). She refers to the work to Andrew McAfee of the MIT Center for Digital Business. He said that the next wave of Enterprise 2.0 will see companies managing decision making and knowledge in very different new ways. This is similar to a post I did a few weeks ago (see Standing Old School Management on its Head). That post reported a study by Bill McCleave that found three characteristics kept appearing as critical to good management: communication, listening and the ability to delegate (aka macro-managing vs. micro-managing).
Deb quotes McAfee, ““The central change with Enterprise 2.0 and ideas of managing knowledge [is] not managing knowledge anymore — get out of the way, let people do what they want to do, and harvest the stuff that emerges from it because good stuff will emerge. So, it’s been a fairly deep shift in thinking about how to capture and organize and manage knowledge in an organization.”
This means looking for good ideas within the ranks of the organization as well as outside the organization. Communities has a great way to provide this innovate, as Catherine shiners writes in Social Business for Executives, “Understanding how to derive repeatable business value from collaborative community is an important senior management skill to master.” This seems to be an increasing trend.
Jon Husband has long talked about this with concept of wirearchy. As he writes, “The new interconnected environment demands new principles for organizing collaborative activity. Traditional hierarchy does not lead and support networked activity as well as newer forms and principles.” Communities become a way to make this new form of decision making concrete.
Deb writes that McAfee adds that the concept that the best minds and the best solutions are often outside our organizations is central to this new mindset. Companies must be willing to seek out those experts wherever they may be.
She offers a great example form Allstate. They offered a competition to see who could beat their current best prediction for which of these cars is going to get into an accident somewhere down the road. Of course the contestants improved on their data. This likely led to better underwriting and higher profits. I am sure we will see more and more of these examples.
Hi – This is old hat. Innovative companies have been doing this for years and years. They use well-established techniques like prediction markets and collective intelligence. Meanwhile, subsidiarity and distributed phronesis have been the foundation of innovative knowledge management (KM) for decades. Thing is, it’s uneven. Sadly, HPPO is still pervasive. Maybe this helps with the real barrier to greater innovation and productivity: culture. -j
Posted by: John Maloney | June 09, 2012 at 07:11 AM