cloud company ebook

8/11/2019 Cloud Company eBook

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TEEMU ARINA

SAMI VIITAMKI

E-book no:1May 2011


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Why should you read this e-book?1. Make sense of the cultural and economic implications

of emerging social technologies.2. Understand and shape internal and external digital communication strategies.

3. Design models for thinking and communicating new strategy and vision.

4. Increase e ffi ciency and e ff ectiveness by lowering the transaction costsof doing business in a digital world.

5. Make great products that are more meaningful and valuable for customers.

6. Empower employees in ways that bring greater customer satisfaction.

7. Leverage transparency to gain greater reputation, credibility,and trust in the marketplace.

8. Avoid constant reorganization by being more sensitiveand open to changing customer needs.

9. Redene the competition in a way that expandsthe market opportunity for everyone.

10. Stay focused on improving the bottom line and not becontinuously driven by new tools and technologies.

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Why Its clear that succeeding in today's networked world requires companies to be evermore agile, responsive, and intelligent in a digital environment. Whats not as clear ishow to build these capabilities in a company. Cloud Company seeks to answer thisquestion with a systematic framework.

ForCloud Company is produced for global leaders developing strategy and culture,

management and operations, as well as communications and customer relations toanswer the demanding challenges of everyday business and decisions for the future.

How Through www.cloudcompany.cc , we discuss and develop the fundamental conceptsthrough research, articles, and dialogue with executives and experts. During 2011 wewill develop this material into a comprehensive book illuminating the roots, transitions,and practical issues in designing and building a Cloud Company.

Cloud Company is a book and media project exploring digitally distributed practicesand social technologies for strategy, management, and communications.

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Stay connected:

What?
http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://eepurl.com/cDqZkhttp://eepurl.com/cDqZkhttp://feeds.feedburner.com/cloudcompanyhttp://feeds.feedburner.com/cloudcompanyhttps://twitter.com/cloud_bookhttps://twitter.com/cloud_bookhttp://www.facebook.com/pages/Cloud-Company/101593563233833http://www.facebook.com/pages/Cloud-Company/101593563233833http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/


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Partner and Strategy Director, TBWA\ M. Sc. (Econ.) Degree in International Design Business Management

(Economics, Arts & Technology).

Known and praised speaker on the impact of digital and social practices andtechnologies on marketing, communications, and customer relationships.

Ex-marketing manager and member of group-level social media unit at TeliaSonera,the largest telecom operator in the Nordics.

Key strengths: crowdsourcing, digital branding & marketing, service design & contentdevelopment, social technology & distributed practices in management and marketing.

Public speaker, writer, journalist, and management consultant for digital technologies. Given approximately 100 presentations a year at recognized conferences, business

summits, and universities in Germany, the U.S., the UK, Belgium, the Netherlands,Finland, and Italy.

No. 1 speaker on social media at Speakersforum, the largest speakers agency in Finland. CEO of Dicole Ltd. and award-winning technology entrepreneur for over 13 years. Key strengths: social media, open innovation, net generation, knowledge management,

service design, digital ecosystems, collaborative learning, and e-learning.

Teemu Arina

Sami Viitamki

4

www.tarina.me

www.samiviitamaki.com

Who?
http://www.cloudcompany.cc/http://www.tarina.me/http://www.samiviitamaki.com/http://www.samiviitamaki.com/http://www.samiviitamaki.com/http://www.tarina.me/http://www.tarina.me/http://www.linkedin.com/in/samiviitamakihttp://www.linkedin.com/in/samiviitamakihttp://www.linkedin.com/in/samiviitamakihttp://www.linkedin.com/in/samiviitamakihttp://www.linkedin.com/in/samiviitamakihttp://www.linkedin.com/in/samiviitamakihttp://www.linkedin.com/in/samiviitamakihttp://www.linkedin.com/in/teemuarinahttp://www.linkedin.com/in/teemuarinahttp://www.linkedin.com/in/teemuarinahttp://www.linkedin.com/in/teemuarinahttp://www.linkedin.com/in/teemuarinahttp://www.linkedin.com/in/teemuarinahttp://www.linkedin.com/in/teemuarinahttp://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/


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6

We live in turbulent times...


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Businesses face severaltransitions simultaneously...

organizational

evolvingstructures

transparency

novelmanagement

ideas

information

overload

global huntfor talent

remote

(co)workinggeopolitical

globali-zation

disruptivecompetition

frugalinnovation

vertical &horizontalmobility

decreasedstability

shiftingbalance of

power

economic

networkedeconomy

truesocial

shopping

dealhunters

vanishingmiddlemarket

newforms ofpayment

freeservices &

goods

societal

globalvillage

smartmobs

creativeclass

digitaldivide

educationalreform

agingsocieties

individual

netgeneration

theaugmented

human

continuouspartial

attention

prosumers

end of9 to 5

accidentalentrepre-neurship

technological

cloudcomputing

ubiquitouscomputing

next gen.search &analytics

context-awareness &mobility

socialtechnology &

platforms

openstandards &interfaces


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Management

Employees Customers

8

Executives routinely require new initiativesto prove their potential through a tedious,

time-intensive and watertight process...

...which should in theory lead to more thanthe existing rate of 10% of new o ff erings

surviving in the market place.

Ref: Copernicus Marketing Consulting

80% of leaders, when asked, state thattheyre strategy is communicated

understandably across the organization...

...but according to middle management only15% of them can e ff ectively communicateand thus execute the companys strategy.

Ref: TBWA\ study 2009

When company management are asked ifthey o ff er a superior experience to theircustomers, over 80% claim that they do...

...which is in sharp contrast to customerssaying that only 8% of companies they deal

with really deliver this kind of value.

Ref: Bain & Company (2005)

...while the traditional organization struggles.
http://www.cloudcompany.cc/http://www.copernicusmarketing.com/univers/reasons_for_product_failure.shtmlhttp://www.bain.com/bainweb/pdfs/cms/hotTopics/closingdeliverygap.pdfhttp://www.bain.com/bainweb/pdfs/cms/hotTopics/closingdeliverygap.pdfhttp://www.bain.com/bainweb/pdfs/cms/hotTopics/closingdeliverygap.pdfhttp://www.bain.com/bainweb/pdfs/cms/hotTopics/closingdeliverygap.pdfhttp://www.bain.com/bainweb/pdfs/cms/hotTopics/closingdeliverygap.pdfhttp://www.bain.com/bainweb/pdfs/cms/hotTopics/closingdeliverygap.pdfhttp://www.bain.com/bainweb/pdfs/cms/hotTopics/closingdeliverygap.pdfhttp://www.copernicusmarketing.com/univers/reasons_for_product_failure.shtmlhttp://www.copernicusmarketing.com/univers/reasons_for_product_failure.shtmlhttp://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/



Strategy &Leadership

The situation calls forrethinking and redesigning

9

Management

& Operations

Communications

& Interactions

and

for the digital era.



10

It calls for a

Cloud Companyapproach.



Cloud Services I know...

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1980s - NetworkTCP/IP, ICT, mobile phones, 1G.

1990s - World Wide WebGSM, hypertext, commercialinternet, search engines,mobile internet.

2000s - Web 2.0

Web as a platform, social media, user-generated content,geolocation services, crowdsourcing.

2010s - CloudCloud computing, cloud-based services, application stores,augmented reality, Deep Space Internet, internet of things...



...but what is a Cloud Company ?

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Pre-bureaucratic Post-bureaucraticBureaucratic

Cloud Company

Entrepreunial &cooperative structures

Functional &divisional structures

Traditional &charismaticdomination

Precision, speed,standardization& specialization

Matrixstructures

Vertical and horizontal,multiple roles &

multinational design

Virtual &network structures



In a Cloud Company

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distributed practices and social technologiesplay key roles in transformation on every front...



...Enhancing interaction and bringing results.

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Management

Employees Customers

Utilization of the companys collective intelligencefor better decision-making processes .

Empowerment of workers who manage their ownknowledge for constant, iterative learning.

Intelligence and insight for (co)creatingpropositions more valuable to customers.

Eff ective communications and interactionsfor increased market footprint and sales.

Fast and personal customer service and carethat spur loyalty and recommendations.

Internal resources, partners, and customerseff ectively organized for daily operations.



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So what does a

Cloud Companylook like?


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LEARNING FROMCUSTOMERS& PARTNERS

LEARNINGIN & ONACTION

LEARNINGFROM THE

ENVIRONMENT

The

Triskelion

Co m m u n ic a t i o n s I n t e r a c t io n s

M a

n a g

e m

e n t

O p e r a

t i o

n s

S t r a

t e g y

L e a d e r s h

i p

Cloud Company extends to allareas of business.


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LEARNINGFROM THE

ENVIRONMENT

The

Triskelion


M a

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O p e r a

t i o

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S t r a

t e g y

L e a d e r s h

i p



LEARNINGFROM THE

ENVIRONMENT


It is about deep strategiclearning , constant adaptation,

and change in near real-time.


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LEARNINGFROM THE

ENVIRONMENT

Triskelion

LEARNINGFROM THE

ENVIRONMENT


M a

n a g

e m

e n t

O p e r a

t i o

n s

S t r a

t e g y

L e a d e r s h

i p

SystemsThinking



LEARNINGFROM THE

ENVIRONMENT

The




It utilizes open and distributedpractices, social technologies,

and digital interfaces.

ActiveIntelligence

Transpa-rency

PersonalLearningEnviron-

ment

User-centricdesign

Crowd-sourcing

DIGITALLYDISTRIBUTEDTechnologies

Interfaces Practices


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M a

n a g

e m

e n t

O p e r a

t i o

n s

S t r a

t e g y

L e a d e r s h

i p

Triskelion

PersonalLearningEnviron-

ment

User-centricdesign

Crowd-sourcing

SystemsThinking

ActiveIntelligence



The

LEARNINGFROM THE

ENVIRONMENT




It utilizes open and distributedpractices, social technologies,

and digital interfaces.

A Cloud Company improvesintelligence, agility, and

responsiveness across allareas and business functions.

Transpa-rency

DIGITALLYDISTRIBUTEDTechnologies

Interfaces Practices


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A Cloud Company runs on data

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Social networks, online shops, mobile applications, websites

requiring registration, more sophisticated equipment at factory oor or point of sale, even evolving outdoor advertising allenable us to tap into an explosively expanding ocean of real- time data on human behavior.

In contrast to low-performing companies, industry topperformers are more skilled in applying analytics over intuition inbusiness decision-making on any given area not just the

traditionally analytics-heavy areas such as nanceand operations.Areas such as customer service, sales and marketing, customerexperience management, brand communications, and workforceplanning and allocation are all areas in which sophisticatedanalytics are traditionally not deployed. Yet industry topperformers routinely beat low performers in analytics application

in these areas as well and reap benets as a result.After the more basic needs of operational e ffi ciency and revenuegrowth have been met, analytics on the areas of innovation andlearning should be seen as a top priority. Interestingly, the moreadvanced a company is in analytics, the higher pressure itperceives for coming up with even better data sources and tools.
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A Cloud Company is not overrun by data

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While data capture and analysis is essential for a Cloud

Company, the ways to actually utilize it in actually guidingdaily work and future strategies are where the truedistinctions between winners and losers lie.

But utilizing data in an environment in which we producemore data each year than the whole human history up to

the previous one is not an easy task. A total of 60% ofcompanies readily admit that they get more data than

they know how to use e ff ectively.Managing data in a Cloud Company involves many

considerations new to a traditional company: how do werelate to utilizing others data; how do we approach the

openness of our own; what is the level of perfection andcompleteness we require from the data our actions arebased on; what is the frequency of collating, inspecting

and acting on data; how and in which form do wedisseminate data across the organization and how do werene it into knowledge, know-how, and competitiveadvantage? These are all questions a Cloud Company

needs to answer.However, a lack in understanding and know-how,

adequate resources and skills as well as management

bandwidth among other reasons currently prevents manyor anizations from e ff ective data anal sis and a lication.


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But where to start?

Rethinking, redesigning, and rebuildingstrategy , management, and communications

requires more than a will to get there .

It requires a framework for innovation .


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Enter A.D.E.P.T

A.D.E.P.T .

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ssessment

Domain

Engagement

People

Technology

24

ADE

PT

A.D.E.P.T.


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ASSESSMENT

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The assessment phase means setting the stage for changeand consists of

Environment

Aspiration

Organization

Aspirationneeds &urgency

Organizationstrengths &challenges

Environmentopportunities

& threats

IN SHORT:

Why do we need to change and where do the opportunities lie?

A.D.E.P.T. Framework

The

Directions, goals & schedule


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26A.D.E.P.T. Framework

The

of The Atlantic Magazine. The

here .

ASSESSMENT Case In Point
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Actorsdesires& needs

Objectsshared topics

& issues

Contextssituations

& environments

Actor / context / objectopportunity map

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Domain is about in-depth knowledge about the human actors inthe system gained by examining Actors, Contexts and Objects.

Actors

Knowing the actors means being familiar with the participantsworld and their inherent desires and needs, not merelydemographics or expressed wants. As Alexander Manu hasthoughtfully observed, The whole modern global economywould not exist if it was not for mans irrational desire tobecome something else than what he now is .

Contexts

The contexts represent the situations, frequency, and intensityof interactions and where they currently happen or could takeplace. This can unearth opportunities for meaningful exchangein unobvious situations and environments.

Objects

On the basis of knowing the actors and contexts, we canidentify and decide on the social objects around which togenerate activity. As no activity revolves around links betweenpeople per se, these topics of genuine interest help bringpeople together, converse, and co-create with a shared purpose.

IN SHORT:

Where in the participants lives andminds do we focus to be relevant?


The

DOMAIN


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As a case in tackling customer needs with analytics and

meeting them with a sophisticated, networked solution, wehave Assurant Solutions , a company that sells credit

insurance and debt protection, and faced a 16% retentionrate when customers called to cancel their services good

in the industry but still far from desirable.

What they did was to challenge the conventional wisdomthat customers valued operational excellence metrics low

abandon rates, fast speed to answer above all.

When they brought in IBMs team focusing on deepanalytics to uncover the customers real needs, they

discovered something interesting. Customers were actuallyhappy to wait longer if that meant being paired with a

customer service representative (CSR) best suited to their

needs.Pairing each caller individually and in real time with the

best possible CSR tripled their retention rates and led themto launch a B2B off ering called RAMP together with IBM.

You can get familiar with RAMPhere .


The

DOMAIN Case In Point
http://www.cloudcompany.cc/http://www.assurantsolutions.com/ramp/index.htmlhttp://www.assurantsolutions.com/ramp/index.htmlhttp://www.assurantsolutions.com/ramp/index.htmlhttp://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/


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Modecompetition,collaboration,

or other

Motivationrewards &incentives

Accesstransparency

& commitment

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The engagement phase involves designing the forms of interactionand co-creation most potent for achieving the identied

goals through the areas of Access, Mode, and Motivation.

Access

Access is not a trivial issue even in a time when gurus preach aboutthe virtues of universal openness. Who can interact, on whichterms, how access and privileges are leveled, and other elements ofaccess can all act as powerful accelerators or detractors regardingengagement initiatives and their e ff ectiveness.

Mode

While collaboration is the form of interaction most often springs tomind when talking about social technologies and distributedpractices, other basic forms, such as competition and self-expression, are suited to di ff erent needs and require their ownconsiderations to be successful.

MotivationMotivating participants requires thorough thinking about intrinsicincentives such as pure enjoyment from taking part, creativity,and challenge; extrinsic social incentives such as visibility andauthority; and extrinsic material incentives such as redeemablepoints, products, or cash. Remember that cash is not necessarily thebest participation driver.

IN SHORT:

How to interact fruitfully, e ff ectively,and sustainably?


The

Engagement andphasing plan

ENGAGEMENT


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In 2010 GE launched the Ecoimagination Challenge , a open

innovation experiment for businesses, entrepreneurs,innovators, and students around the world to share their ideasabout a next-generation energy grid as well as electricalapplications. The challenge generated multiple new businessand growth opportunities for GE.

So far the challenge has attracted thousands of high qualityideas, suggestions, and proposals that are elaborately presented

through scientic papers, system descriptions, images, andvideos. The participants range from ten year olds to veterans intheir nineties, and from seasoned professionals to cleverhobbyists. Up to this point, the public has answered to two majorchallenges: one of them focusing on powering up the grid andthe other on powering up peoples homes. More challenges areon the way.

One of the key reasons GE has succeeded in this ambitiousendeavor is that they are o ff ering a serious opportunity forwould-be innovators. They have partnered with known trustsand venture capital rms, and have together with them raised a200 million dollar fund to invest in winning ideas.


The

ENGAGEMENT Case In Point


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Capabilitiesskills &

learning

Flowinteraction &coordination

Empowermentrights &

responsibilities

Resourcing blueprint anddevelopment paths

31

Despite all the technological advancement, the inevitable andextremely critical element in Cloud Companies as in anycompany is the people who ultimately manage all interaction.

CapabilitiesWith new methods of working come new requirements for skillsreadiness and learning needs. These capabilities cant beacquired overnight. It is thus important to assess the currentlevel of know-how, future paths for personal development, andrecruitment and sta ff turnover goals.

EmpowermentCloud Company people need a comprehensive, clear, and simpleset of rights and responsibilities that allow them to acteff ectively act in the best interest of the organization. Accordingto Gary Hamel , people need real-time visibility to performancemetrics and motivation to act, as well as the power to changethings that a ff ect performance.

FlowIt is worthwhile to describe the interaction and coordination owwith di ff erent internal and external actors to a certain degree oftness, so that it is clear who does what in which situation especially in critical situations requiring an added level ofattention. This way interactions, reactions and responses do notget unnecessarily delayed.

IN SHORT:

Who has to do what, what do theyneed for it, and how do they do it?


The

PEOPLE


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Zappos, the largest online shoe store in the U.S., relies in

superior customer service as their competitive advantageagainst lower-cost rivals.

All their employees go through an intensive trainingperiod, after which they will be o ff ered $2,000 to quitinstantly. Even director candidates go through the sameexact program that involves, for example, a period ofpractical front-line customer service.

Those who do pass, get permission to represent Zapposon social media channels of their choice using only theirown best judgment as guidelines. The same applies tocustomer service: every employee is pre-approved by theCEO to do anything within the companys means to o ff ergreat service and build customer satisfaction. That means

no target answer, resolution or cross-selling targets forcustomer support. The result? Even Amazon with all theirmuscle, technology, and prices could not compete, but hadto acquire Zappos for close to $1 billion.


The

PEOPLE Case In Point


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Architectureinfrastructure

& platforms

Solutionsapplications &

features

Deliverymedia &

interfaces

Ecosystem depiction andphased delivery roadmap

33

The nal step deals with how to realize the collaborativeexperience internally and externally. Here we consider theissues of Architecture, Solutions, and Delivery.

Architecture

Todays ecosystem o ff ers many solutions for building aCloud Companys backbone. Architecture can be built onexternal providers cloud services using software-as-a-service, platform-as-a-service, or even infrastructure-as-a-service off erings to set up operations with little or noinvestment to internal ICT capabilities.

DeliveryIn addition to back-end and front-end services, a companyneeds to assess the devices, interfaces, and media requiredto deliver its services and content. In the age of deviceoperating system wars between partly non-compatibleplatforms, this is certainly a non-trivial issue.

Solutions

Ultimately, a Cloud Company needs to craft or acquire theapplications and solutions for the task. Modularity,exibility, sustainability, and openness are considerationsthat need to be taken upon. Where a comprehensive suiteis sometimes e ff ective, some environments require a moreeclectic and shifting set of tools.

IN SHORT:

Which means to use for mosteff ective but sustainable delivery?


The

TOOLS
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34

An example of an innovative use of available tools andplatforms is Best Buy , who noticed that their customerservice people and salespeople were answering the samecustomer inquiries time after time, e.g., about di ff erencesbetween plasma and LCD displays in modern TV sets.

To help both their sta ff and their customers nd the answersmore quickly, they set up Twelpforce, an open and public,24/7 customer service on Twitter, a popular microblogging

service. Anybody with a Twitter account can direct a questionto the Twelpforce with a specied tag and will shortly get ananswer from one of the customer service reps or anothercustomer. Whats more, Best Buy, doesnt force any of itsemployees to sign in and help, but they do it since it is aninvaluable source of information for them as well.

Even before Twelpforce, Best Buy innovated on architecture

and solutions. When facing a multi-million-dollar platforminvestment for an internal social network, they decidedinstead to build the system with internal resources andpeople their sta ff knew. The result is Blue Shirt Nation, one ofthe best working examples of internal SNS solutions surelyin part thanks to ownership and pride in the endeavor.


The

TOOLS Case In Point


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T o o l s

A s s e

s s m

e

n t

D o m

a i n

En g a g e m e n t P e o p

l

e

A.D.E.P.T

W h y ?

W h e

r e ?

H o w ?

W h o ?

W h a t ?

Aspirationneeds &urgency

Organizationstrengths &challenges

Environmentopportunities

& threats

Actorsdesires &

needs

Contextsituations &

environ-ments

Objectsshared topics

& issuesArchitectureinfrastructure& platforms

Solutionsapplications& features

Deliverymedia &

interfaces

Modecompetition,collaboration

& other

Accesstransparency

& commitment

Motivationrewards &

incentives

Capabilitiesskills &learning

Empowermentrights &respon-

sibilities

Flowinteraction &coordination


The35
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Conclusion

36

The cloud is shaping is our forms of organization, intertwined with technology andculture. In technological development, the inuence and importance of culture andpeople cannot be underestimated. Media theorist Marshall McLuhan famously said, Weshape our tools. And then our tools shape us .

We predict that the transition to the cloud will be as dramatic for businesses as the

transition from the xed landline to mobile phone. The shift was not only about thetechnology, such as the disappearance of the phone cord. The mobile phone became apersonal identity device to be used at a point of creative expression.

The cloud will dramatically lower the transaction costs of doing business. As companiesdecentralize various layers, including infrastructure, research and development,marketing, and sales, they eventually allow a new form of organization to emerge: thecompany as a cloud. This transition calls for new approaches to strategy, management,and communications.We would like to continue the dialogue with our readers at www.cloudcompany.cc . Ifyou are an expert, we hope that you will consider becoming a guest author at our blog toshare powerful ideas on how to become a cloud company.

In the Cloud,

Teemu Arina & Sami Viitamki
http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/http://www.cloudcompany.cc/


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This work is licensed under the CreativeCommons Attribution-NonCommercial-NoDerivs 3.0 Unported License. To view acopy of this license, visit Creative Commons .

For licensing alternatives (modications,commercial intent etc.), please contact theauthors at [email protected]

You are given the unlimited right to printthis e-book and distribute it electronically(via email, your website, and through any othermeans). You can hand out copies to everyoneyou meet.

You can use parts of it in your presentations orarticles but you have to display the cloudcompany logo or provide a reference towww.cloudcompany.cc .

However, you may not alter this e-book in anyway and you may not charge for it.

About the AuthorsCloud Company is a joint book and media project initiated by twowriters, consultants, and practitioners of social technologies:Mr.Sami Viitamki and Mr.Teemu Arina.

The authors have a background in technology, media, andtelecom industries. As members of the net generation, theyconsider themselves post-industrial thinkers, pushing hard inorder to discover an alternative view on business and culture.They are successful advisors to leading organizations and havewritten numerous articles and given popular presentations atmajor conferences internationally.

For more information, visit www.cloudcompany.cc

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