Open
Management:


The
concept
of
Open
Management
and

exploration
of
the
new
imperatives
for

organizations
and
their
leaders



September
21,
2009















































Haydn
Shaughnessy,
Partner,


haydn@theconversationgroup.com



Ted
Shelton,
Partner,


ted@theconversationgroup.com



Open
Management
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|
1




Abstract



Over
time
certain
theories
of
management
have
had
a
profound

impact
on
the
way
enterprises
are
perceived,
organized
and

managed.
Taylor’s
Scientific
Management
and
Porter’s

Competitive
Advantage
are
classic
examples.
But
much
of
the

intellectual
work
of
developing
organizational
structures
and

management
techniques
has
addressed
only
one
specific
set
of

challenges
posed
by
the
industrial
revolution,
efficiently
scaling
an

organization
of
semi‐skilled
laborers
engaged
in
repetitive
tasks.



While
efficiency
in
the
management
of
labor
remains
important

today,
over
the
past
few
decades
a
new
set
of
imperatives
have

been
forcing
their
way
onto
the
management
agenda.
An

increasing
amount
of
the
productive
capacity
of
our
economies
is

now
dedicated
to
tasks
that
engage
the
intelligence
of
our
workers

‐‐
not
just
their
bodies.
Furthermore,
in
virtually
every
industry

the
role
of
innovation
has
profoundly
changed
the
competitive

landscape.
We
believe
these
two
challenges
call
for
accelerated

change
in
the
governance
model
for
organizations
of
every
size

and
type.
The
idea
of
open
management
encapsulates
better
than

anything
else
what
that
change
should
be.




In
this
paper
we
examine
the
underlying
shifts
in
our
economy
and

explore
practical
illustrations
of
how
specific
organizations
are

grappling
with
this
change.
In
particular
we
look
at
how

technology
is
changing
both
the
nature
of
our
work
and
social

dynamics
in
our
workplaces
and
as
a
result
is
altering
the
manner

in
which
we
must
organize,
manage,
and
reward
employees.
We

also
seek
to
understand
how
these
shifts
are
also
breaking
down

walls
between
“employees”
and
“customers”
and
create
entirely

new
models
of
activity
across
all
of
our
business
processes.



Our
consistent
thesis
is
that
a
more
participatory
and
more

engaged
leadership
style
is
needed
for
post‐industrial

organizations
in
which
the
nature
of
work
has
forever
shifted

away
from
repetition
and
drudgery.
In
this
new
model
where

creativity
and
collaboration
are
needed
from
every
employee,

companies
must
transform
their
policies,
philosophies,
and

organizational
models
to
succeed.
That
is
ultimately
the
objective

of
what
we
call
open
management.
















Open
Management
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Introduction



It
would
be
relatively
easy
to
assume
that
the
challenges
your

business
is
facing
have
nothing
in
common
with
those
facing

Google.

After
all,
Google
has
grown
faster
in
terms
of
employees

and
in
its
geographic
scale
of
operations
than
any
other

organization
in
history.
And
the
business
is
entirely
driven
by
the

logic
of
the
Internet,
with
its
end
product
wholly
digital,
its

customers
connecting
electronically
from
every
part
of
the
world,

and
its
employees
mostly
highly
skilled
and
well
educated.





And
certainly
the
characteristics
of
the
web
(on
which
Google’s

organizational
structure
is
based)
–
its
speed,
transparency,
and

inclusiveness
–
do
seem
to
be
at
odds
with
the
traditional

characteristics
of
organizations;
deliberative,
structured
and
often

secretive.

But
perhaps
it
is
those
characteristics
that
are
holding

organizations
back
from
achieving
the
growth
and
profitability
of

which
they
could
be
capable.



If
there
is
something
to
learn
from
Google
and
other
businesses

that
are
adopting
similar
methods,
the
starting
point
is
to

understand
the
ways
in
which
our
businesses
are
similar
to
Google

and
thus
are
facing
the
same
problems.
The
two
ideas
that
we
will

examine
are
(1)
the
shift
from
manual
to
intellectual
work
and
(2)

the
innovation
imperative.



Brains
vs.
Brawn



Throughout
history,
individual
intelligence
and
collective
labor

have
been
the
defining
elements
of
our
organizations
and
societies.

Economic
systems,
political
structures,
and
individual

organizations
have
all
grappled
with
the
challenge
of
providing
a

single
individual
or
a
small
group
of
individuals
with
the
power
to

make
decisions
and
transmit
the
authority
of
those
decisions
to
a

vast
number
of
others
who
would
then
carry
them
out
through

their
physical
activities.

As
civilizations
have
grown
more
complex

and
more
populous
we
have
required
increasingly
more

sophisticated
structures
and
processes
to
allow
this
model
of
top

down
decision
making
to
scale
across
ever‐larger
organizations.



In
the
second
half
of
the
twentieth
century
two
technological

trends
began
to
transform
the
nature
of
work.
The
first
was
the

increasing
pace
of
development
of
information
systems
that

transformed
a
wide
array
of
organizational
functions,
introducing

a
new
class
of
worker
into
organizations.

Sometimes
called

“knowledge
workers”
these
employees
were
engaged
in
the

creation,
manipulation,
and
dissemination
of
information
through

these
new
systems,
necessarily
increasing
the
intangible

“intellectual”
content
of
products
and
services.

Open
Management
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Secondly,
automation
(and
increasingly
robotics)
is
transforming

labor
altogether,
significantly
reducing
the
number
of
people

engaged
in
the
manual
components
of
business
processes,
thereby

simultaneously
reducing
the
“labor”
content
of
these
products
and

services.
The
phenomenon
of
manufacturing
activities
moving
to

cheaper
labor
markets
such
as
China
is
the
result
of
a
temporary

advantage
of
low
cost
human
labor
(not
to
mention
weak

industrial
pollution
laws
and
enforcement).

Over
the
long
run,
the

cost
for
human
labor
will
exceed
the
cost
of
robotic
labor
for

virtually
every
type
of
physical
activity.



This
transfer
of
value
from
physical
labor
to
intellectual
content
is

transforming
the
people,
activities,
and
management
styles
of
our

organizations
and
forcing
revaluations
of
where
firms
will
find

competitive
advantage
in
the
years
ahead.
Thus
there
is
an

emerging
advantage
of
collective
intelligence
over
individual

intelligence
across
a
wide
range
of
business
activities.
And
in
all

cases
a
significant
part
of
the
new
agenda
is
innovation.



Innovation



Businesses
are
typically
engaged
in
one
or
more
of
three
distinct

activity
categories,
each
of
which
has
an
associated
relevant
set
of

processes
and
people.
Consultant
and
author
Geoffrey
Moore
calls

these
three
groups
“inventors,
deployers,
and
optimizers.”

Ultimately
business
ecosystems
require
all
three
categories
to
in

order
to
succeed,
whether
those
all
exist
in
the
same
company
or

whether
they
can
be
found
in
different
firms
which
then
forge

relationships
with
one
another.
While
just
one
of
these
categories

of
activity
is
tasked
formally
with
“invention,”
Moore
points
out

that
innovation
(as
distinct
from
invention)
has
become
critical

across
all
three
activities.



At
the
tail
end
of
product
life
cycles,
optimizers
innovate
on

methods
for
extracting
the
most
value
from
well‐understood

products
and
markets.

Products
in
rapidly
expanding
markets

require
workers
who
can
adapt
and
develop
new
methods
and

strategies
for
fueling
rapid
adoption
and
the
development
of
new

market
opportunities
(the
group
Moore
calls
the
deployers).
And

finally
future
business
opportunities
require
research
&

development
(R&D)
activities
or
start‐up
cultures
to
fuel

invention.




Open
Management
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Figure
1:
Categories
of
business
activity
in
relation
to
innovation
challenges



Competitive
advantage
across
the
entire
business
cycle

increasingly
comes
from
innovation
and
thus
from
the
intellectual

contributions
of
our
employees.
But
building
organizations
in

which
innovation
is
a
central
part
of
the
culture
requires

significant
changes
in
the
way
we
think
about
the
structure
and

process
of
those
organizations.



Google

Google’s
CEO
Eric
Schmidt
states
the
new
organizational

imperative
simply:




“…smart
people
want
to
work
with
smart
people

and
they
want
to
be
informed.”





(Gary
Hamel
interviewed
Eric
Schmidt
in
May,

2008
for
Management
Lab)



But
a
free
flow
of
information
poses
a
threat
to
traditional

hierarchical
organizations.
Think
of
this
as
a
tension
between
two

extremes,
in
which
each
has
advantages
and
disadvantages.















Open
Management
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 In
the
traditional
organizational
model
we
prize
hierarchy
and

structure
as
serving
the
objective
of
operational
efficiency.
In
this

model
it
is
assumed
that
one
cannot
anticipate
that
the
average

employee
will
make
a
valuable
contribution
to
decision
making

because
he
cannot
be
expected
to
have
the
necessary
intellectual

skills.
Plus
the
cost
of
communication
is
too
high
to
provide

sufficient
information
to
inform
leadership
opinions
or
to
collect

and
evaluate
contributions
from
the
mass
of
employees.



But
Google
recognized
that
the
Internet
vastly
reduced
the
cost
of

communication,
the
single
largest
cost
in
business
coordination,

nearly
to
zero.
And
in
Google’s
business,
the
workforce
was

already
highly
educated
and
thus
could
be
expected
to
have
the

intellectual
skills
to
do
something
with
this
information.




In
what
we
might
call
the
Google
model,
in
contrast
to
traditional

structure
and
hierarchy,
the
organization
prizes
empowerment

and
develops
mechanisms
(mediated
by
technology)
to
exploit
the

resulting
chaos.

In
this
model
there
is
an
expectation
that
every

important
decision
must
be
debated
and
that
the
role
of
a
leader
is

not
to
make
decisions
but
to
ask
questions
that
raise
objections

and
foster
debate
so
that
the
group
arrives
not
at
common

outcomes
but
in
the
best
outcomes
–
all
within
the
limits
of
a

deadline.
As
Schmidt
dryly
notes,
“Without
time
limits
the
model

looks
like
a
university”
–
ultimately
the
difference
is
that

businesses
must
operate
with
speed,
requiring
deadlines
for

decisions.



The
organizational
model
that
Google
is
consciously
evolving

embraces
the
characteristics
of
the
web
–
speed,
transparency,
and

inclusiveness,
which
Schmidt
labels
“porousness.”

And
far
from

believing
that
the
applicability
of
this
model
is
limited
to
Google,

Schmidt
observes
that
this
is
a
characteristic
of
any
high

performing
organization
today.



Best
Buy

In
2007,
in
the
US
electronics
retailing
market,
two
companies

stood
above
the
rest
in
the
scale
of
their
operations,
Circuit
City

and
Best
Buy.
The
way
in
which
these
two
companies
each

approached
the
challenges
of
a
long‐term
shift
in
consumer
buying

behavior
and
the
immediate
challenge
of
an
economic
downturn

provides
a
useful
non‐Internet
example
of
the
value
of
porousness.



While
many
differences
between
these
two
businesses
can
be
cited

for
their
eventual
divergent
fates
(Circuit
City
declared
bankruptcy

in
2008),
we
will
look
only
at
their
contrasting
approaches
to

labor.
Facing
significant
margin
decay,
Circuit
City
attacked
the

cost
equation
for
their
business
by
terminating
3400
of
the
most

experienced
(and
thus
most
expensive)
members
of
their
sales


Open
Management
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 staff.
Reducing
costs
had
a
short‐term
positive
impact,
but
was

immediately
noticed
by
regular
customers
who
could
no
longer

expect
to
receive
qualified
assistance
in
the
selection
of
products

in
Circuit
City
stores.

From
an
article
at
the
time
in
the
Washington

Post:



"I
think
even
though
sales
were
soft
in
March,
this
is

clearly
why
April
sales
were
worse.
They
were

replaced
with
less
knowledgeable
associates,"
said

Tim
Allen,
an
analyst
with
Jefferies
&
Co.



In
particular,
the
televisions
showing
disappointing

results
are
"intensive
sales"
requiring
more
informed

employees,
Allen
said.
"It’s
a
big‐ticket
purchase
for

somebody.
And
if
they
feel
like
they’re
not
getting
the

right
advice
or
are
being
misled
by
someone
who

doesn’t
know,
it
would
be
definitely
frustrating.
They

will
take
their
business
elsewhere."



In
contrast
by
2007
Best
Buy
was
busy
rolling
out
“Blue
Shirt

Nation,”
a
social
network
for
their
employees.
Rather
than
look
at

labor
as
a
cost
that
could
easily
be
reduced
by
terminating
the

most
experienced
employees,
Best
Buy’s
approach
was
to
invest
in

and
celebrate
their
staff,
creating
ways
for
their
most
experienced

sales
people
to
gain
recognition
and
respect
in
the
organization
by

sharing
their
own
ideas
and
experiences.



Blue
Shirt
Nation
has
become
an
engine
for
innovation
within
Best

Buy,
allowing
distant
employees
who
perform
similar
tasks,
but

never
would
have
come
in
contact
with
each
other,
to
exchange

ideas
(and
complaints!)
about
their
working
environment
and
the

company
as
a
whole.
The
results
are
manifold,
with
increased

morale,
efficiency,
service
innovation,
and
profits,
all
coming
from

expanding
the
role
of
employees
as
contributors
to
the
business.



The
Wealth
of
Networks



In
his
2006
book
“Wealth
of
Networks”
Yale
Law
Professor
Yochai

Benkler
provides
an
argument
that
ad‐hoc
groups
can
be
more

efficient
than
for‐profit
enterprises
when
engaged
in
certain
kinds

of
productive
activities,
focusing
on
ones
in
which
there
is
a
large

intellectual
contribution.
Similar
to
how
Adam
Smith
in
his
1776

work
“Wealth
of
Nations”
explored
the
newly
emerging
ideas
of

the
industrial
age,
Benkler
describes
a
set
of
dynamics
that
he

similarly
proposes
will
have
enormous
and
radical
implications
for

the
way
in
which
work
is
organized,
performed,
and
rewarded.






Open
Management
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 Calling
this
new
form
of
activity
“social
production,”
Benkler

explores
how
the
combination
of
cheap
and
widely
accessible

computation,
the
connecting
tissue
of
communications
networks,

and
the
development
of
software
to
provide
facilitation
and

coordination
will
transform
the
way
our
civilization
produces

goods
and
services.



But
while
Benkler
is
particularly
interested
in
the
way
in
which

these
ad
hoc
groups
provide
alternatives
to
the
activities
of

commercial
efforts
(such
as
the
development
of
Linux
as
an

alternative
to
Microsoft’s
operating
systems)
our
experience

shows
that
this
“wealth
of
networks”
is
also
transforming
the

methods
and
organizational
structure
of
for‐profit
businesses.



Companies
as
varied
as
Google
and
Best
Buy
have
discovered
that

social
technologies
create
a
new
set
of
dynamics
in
the
common

processes
of
their
businesses.
While
threatening
to
individuals

invested
in
old
power
structures
or
accustomed
to
existing
work

patterns,
when
embraced
these
new
models
make
significant

contributions
to
productivity.



Social
Production’s
Impact
on
Marketing



For
most
organizations,
the
first
part
of
their
activities
to
be

impacted
by
the
rising
chaos
of
these
new
models
is
in
the

marketing
and
communications
departments.
The
logic
of
the
web

is
already
transforming
media
and
with
it
the
ways
in
which
our

products
and
brands
are
promoted
and
understood
by
customers.



The
marketing
professionals
promoting
our
businesses
today
were

educated
in
an
era
of
one‐way
market
communications.
Develop

high
level
messages,
buy
advertising,
brief
journalists
–
most
of
our

hard
won
knowledge
of
what
works
when
building
markets
is

limited
to
these
broadcasting
models.
But
the
web
is
demanding

two‐way
engagement
and
is
drawing
in
our
employees
with
or

without
our
consent.



The
average
marketer
struggles
with
multiple
channels
of

communications
and
with
the
idea
of
using
everyday
voices
via

blogs,
microblogs
and
social
networks
to
communicate
about
their

product
and
brand.
In
many
respects
that
challenge
is
internal
to

marketing
–
weaning
imaginative
people
off
large
creative
budgets

and
focusing
them
on
many
more
but
smaller
challenges.
But
an

important
part
of
the
resistance
comes
from
the
perceived
loss
of

control
that
these
new
mediums
bring.








Open
Management
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 The
rise
of
the
fourth
estate
has
long
posed
a
challenge
to
the

hegemony
of
corporations
in
constructing
their
own
stories
in
the

marketplace.
“Porousness,”
(see
explanation
above)
was
already

accelerating
the
capabilities
of
media
companies
in
the
1990s
as

improving
communications
networks
made
it
ever
easier
for

employees
and
customers
to
offer
the
market
alternative

perspectives
to
company
sanctioned
views.




Dropping
the
cost
of
communications
to
virtually
zero
has
made

every
individual
into
a
kind
of
media
outlet,
creating
a
cacophony

of
competing
perspectives
around
every
company.
Control,
if
it

ever
actually
existed,
has
been
thoroughly
lost
(or
is
in
the
process

of
being
lost)
by
every
organization.
Marketing
and

communications
professionals
must
embrace
open

communications
strategies
in
order
to
engage
with
these
vibrant

marketplaces.
But
in
so
doing
they
will
bring
change
into
their

organizations
as
well.








Figure
2:
Emergent
organizational
change















Open
Management
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Beyond
Marketing



Once
an
organization
begins
to
recognize
the
power
(and

challenges)
inherent
in
open
communications,
the
content
of
those

communications
will
begin
to
impact
every
business
function
from

product
development
to
customer
service.
External
pressure
on

specific
company
activities
or
product
aspects
will
empower

internal
activists,
eager
to
transform
company‐market
relations.



Customers
will
suggest
product
features
or
improvements,

challenging
the
belief
that
new
product
development
should
be

done
in
secrecy.
Product
support
will
occur
in
ad
hoc
public

exchanges,
threatening
the
notion
that
customer
service

communications
occur
in
private
between
the
company
and
its

customers.
Company
activities
that
raise
quality,
ethical,
or
legal

issues
will
be
debated
openly,
bringing
new
pressures
on
how

organizations
conduct
themselves.



While
some
companies,
like
Best
Buy,
will
embrace
these
changes

and
learn
to
turn
them
to
their
advantage,
others
will
try
to
pick

and
choose
amongst
the
various
elements.
But
an
underlying
logic

binds
these
new
practices
together
and
demands
an
overall

revision
of
management
philosophy,
organizational
structure,
and

business
practices.








Figure
3:
An
evolving
model
of
enterprise
relationships



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Open
Management



Open
management
is
a
term
we
use
to
describe
new
processes
that

allow
companies
to
create
organizational
responsiveness,

innovation
and
growth
in
the
timescales
that
our
current
economy

demands.



In
the
beginning
of
the
twentieth
century,
Frederick
Winslow

Taylor
gave
a
name
to
the
newly
evolving
techniques
of
the
time

needed
to
manage
industrial
scale
businesses.
Calling
his
new

discipline
“scientific
management,”
Taylor’s
ideas
seemed
radical

in
his
day.
Scale
required
the
development
of
forms
of

management
that
have
become
the
legacy
problem
of
the
21st

century
–
command
and
control,
dissociative
hierarchy,
strict

adherence
to
financial
objectives,
and
rigid
reporting
procedures.




The
open
management
hypothesis
is
that
peer
to
peer

communication
and
collaboration
which
uses
increasingly
cheap

and
accessible
computer
networks
will
break
down
the
command

and
control
structure,
re‐associate
distributed
members
of
an

organization
previously
separated
by
hierarchy,
and
even
provide

alternatives
to
rigid
reporting
procedures,
but
nonetheless
allow

organizations
to
achieve
or
exceed
the
same
objectives.



In
addition
to
a
shift
in
thinking,
in
order
to
succeed
the
enterprise

needs
to
introduce
technologies
that
support
this
more
productive

organizational
model.
These
need
to
be
backed
by
incentives,
both

emotional
and
financial,
that
help
overcome
cynicism
and

relationship
roadblocks.




Those
technologies
include:



• internal
social
networks
that
support
collaboration
and

which
blur
corporate
and
social
boundaries



• innovation
platforms
that
create
the
innovation
engine
to

frequently
redefine
core
business



• community
platforms
where
corporations
can
take
a
lead
or

simply
participate



• eco‐system
platforms
and
open
APIs
to
consolidate
rapid

fire
innovation
and
create
open
marketing
channels
that

deliver
to
irrational
markets



• prediction
markets
that
reveal
the
crowds
view
of
progress




Open
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 • ideagoras

to
foster
a
sense
of
open
ideation
where
ideas

are
more
integral
to
corporate
culture



• social
media
tools
such
as
blogs
and
tweets
to
enable

communications
with
customers
across
the
company



• Open
data
platforms
to
collate
data
and
insights
from
the

opinion
and
sentiment
stream
of
the
web.



These
are
the
types
of
technologies
you
can
initiate
on
an

experimental
basis,
providing
a
language
of
change
while
the

emphasis
is
still
on
continuity.




The
changes
these
platforms
bring
are
nonetheless
profound.
Like

any
technology,
the
machine
is
less
than
half
the
story.
Another

part
is
the
degree
to
which
they
promote
a
collaborative

environment
where
value
is
signaled
between
people
and
to
senior

management.
But
perhaps
the
most
important
part
is
the
degree
to

which
senior
management
understands
and
communicates
a
new

direction
and
or
a
context.



We
suggest
leading
with
communications
activities
such
as
this

can
create
a
common
basis
for
engagement
that
can
permeate

organizations,
given
that
many
organizations
are
fundamentally

marketing‐led.
In
fact
“openness”
is
redefining
organizations
and

markets
in
key
areas
of
the
economy.






































Figure
4:
The
evolving
enterprise
model










Open
Management
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 These
types
of
initiatives
could
be
precisely
what
may
bridge
the

return
on
assets
that
many
economies
currently
lack.
But
they

involve
leaders
renouncing
the
crown
jewels
or
at
least

acknowledging
that
the
people
you
employ
and
the
systems
you

manage
need
to
be
transformed.
As
we
move
to
open
management

the
job
of
the
manager
becomes
to
lead
innovative
exercises
such

as
an
open
content
strategy
‐‐
the
job
is
to
persuade
and
lead
staff

in
a
way
they
are
not
threatened
by
the
rebranding
of
the

organization.




That
rebranding
takes
them
away
from
the
certainties
of

hierarchy.
We
thought
a
decade
ago
it
would
lead
them
to
a
non‐
hierarchical
organization.
We
now
know
it
has
to
lead
them
to
an

open,
porous
organization
that
exists
in
a
state
of
flux.




Flux
is:



• An
erosion
of
any
brand
values
that
speak
to
certainty

towards
a
new
set
of
brand
values
that
speaks
to

communication,
connection,
reach,
experimentation,
trial,

trust,
community,
eco‐system.



• An
erosion
of
internal
work
processes
towards
work

processes
that
cross
the
staff‐market
divide
whether
with

suppliers,
new
entrants,
idea
generators,
or
customers.

Once
crossed,
the
combined
community
is
inherently

network
based
and
needs
network
technologies
that

optimize
efficacy
and
capture
value.



• An
erosion
of
internal
hierarchies
and
traditional

messaging
control
towards
organizations
where
the
best

communicators,
advocates
and
networkers
thrive.



• A
transition
to
innovation
processes
where
dependency

switches
from
internal
lab‐based
approaches
to
the
eco‐
system;
it
needs
to
be
accompanied
by
an
“everyone

counts”
attitude
that
requires
great
networking
technology

and
support
as
well
as
responsiveness
to
get
it
right.
The

watchword
is
you
don’t
know
where
your
best
ideas
will

come
from
and
you
cannot
afford
to
miss
them.



• A
transition
to
structures
that
make
organizations
proactive

in
change
processes
and
responsive
in
communications,
i.e.

messaging
that
says,
this
is
our
path
to
the
future;

intelligence
that
allows
immediate
responsiveness
to
the

inevitable
critique
(and
to
be
manage
mistakes
openly
and

honestly).




Open
Management
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 • New
platforms
and
business
intelligence
that
allow
leaders

to
oversee
and
lead
these
new
processes
and
capture
value.





The
Requirements



Once
you
become
more
programmatic
about
this,
rather
than

saying
we
will
adopt
blogging,
twitter
or
social
networks
in
order

to
sell,
then
the
questions
you
ask
change
to:



How
do
we
rapidly
de‐layer,
change
attitudes
to
work
roles,
create

new
responsibility
centers
and
new
job
descriptions,
create

affinity
between
employees,
suppliers
and
customers,
embrace
any

bright
mind
into
the
product
development
and
marketing
process,

and
allow
a
wider
community
to
help
us
ensure
we
are
setting
the

right
goals
for
our
business,
community
or
eco‐system?




These
are
the
kinds
of
questions
you
might
be
tempted
to
ask
en

route:



• How
do
I
retain
some
degree
of
control
over
the
things

being
said
about
me?

• How
do
I
control
what
my
staff
are
doing?

• How
can
I
understand
networks
the
way
I
understand

hierarchy,
i.e.
what
are
the
reporting
procedures?



The
truth
is
you
do
not
control
staff
anyway.
Chances
are
your

industry
is
under‐delivering
in
critical
ways
because
of
HR
issues;

you
cannot
control
what
is
said
about
you
–
you
can
only
pretend

to.




Where
the
future
becomes
more
palatable
for
executives
–
who
do

need
oversight
facilities
–
is
that
computer
networks
can
support

much
of
what
we
have
referenced
here,
software
based

communications
support
and
new
platforms
designed
to
make
the

new
open
and
extended
organization
accountable.


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14




 



Figure
5:
A
three­part
approach
to
change




















Open
Management
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15




 For
example,
platforms
that
help
in
the
community
generation
of

ideas
come
with
built
in
metrics.
Web
conversations
are
inherently

monitorable.

All
data
is
there
to
be
mined.



Employee’s
conversations
with
your
community
are
part
of
your

record
of
value
creation.
Measurement
and
reporting
are
not
the

issues.




The
issue
ultimately
is
change
–
how
quickly
are
you
prepared
to

respond
to
the
need
for
change;
how
well
adapted
are
you
to
lead

it?



The
process,
in
our
view,
is
easily
divisible
into
categories
that

allow
you
maximum
influence.
The
modern
change
processes
is

roughly
divisible
into
these
three
categories
(See
Figure
5).



Communications

How
you
communicate
new
values
internally
coupled
to
how
you

facilitate
employees
to
communicate
externally
to
customers,

prospects,
existing
suppliers
and
potential
suppliers.
The
sum
total

should
be
a
new
bond
of
trust
between
suppliers,
potential

suppliers,
employees,
customers
and
prospects.



Knowledge

How
you
capture
business
intelligence
that
allows
you
to
be
both

proactive
in
communicating
your
new
values
to
the
audiences
that

matter;
and
how
you
are
able
to
respond
along
the
way
as
change

draws
criticism
your
way.
The
sum
total
should
be
a
responsive

organization.



Platforms

The
support
tools
you
need
to
optimize
communications,
generate

new
ideas,
convert
ideas
into
products
that
your
supplier
and

customer
community
buy
into
and
that
let
you
realize
value
–
as

created
by
your
eco‐system
and
employees.
The
sum
total
is
a
trust

system
that
allows
you
to
set
metrics,
monitor
progress
and

generate
reports.


























Open
Management
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Conclusion



We
see
business
and
society
in
need
of
profound
transformation.

At
the
same
time
we
believe
the
tools
exist
to
make
this

transformation
more
profound
and
more
rapid
than
any
we
have

previously
experienced.
Business
actually
thrives
on

transformation.




Organizations
can
adopt
a
change‐oriented
mindset
and
begin
the

process
with
external
communications
initiatives,
understanding

that
a
rapid
feedback
loop
will
carry
this
change
back
into
the

organization
in
a
variety
of
forms.
As
Eric
Schmidt
said
when
asked

whether
the
lessons
he
had
learned
at
Google
could
be
applied
to

any
other
organization:
“Everyone
wants
the
same
thing,
they

want
to
be
heard…
if
you
go
to
a
so‐called
boring
old
company

people
there
want
to
be
empowered
too,
but
the
culture
doesn’t

allow
this…”



Begin
to
change
that
culture
and
behavioral
change
will
follow.



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