creating value beyond the firm's boundaries: networks, social media, and virtual worlds
DESCRIPTION
A presentation on networks, social media, and virtual worlds I made for a group of Swedish journalists as well as the Swedish Public Relations Association (Sveriges Informationsförening) in April 2010.TRANSCRIPT
The Third Industrial Revolution?Creating value beyond the firm’s
boundaries
Dr. Robin Teigland, akaKarinda Rhode in SL
Associate ProfessorStockholm School of Economics
www.knowledgenetworking.orgwww.slideshare.net/eteigland
Photo: Lundholm, Metro
April 2010ww.sse.edu
"...when the rate of change outside an organization is greater than the rate of change inside, the end is near...."
Jack Welch…
Did You Know? Shift Happenshttp://www.youtube.com/watch?
v=jpEnFwiqdx8&feature=fvst
What does this mean for organizations?
http://www.personalizemedia.com/garys-social-media-count/
Growth
Time
Information and knowledge
Human absorptive capacity
Human capacity cannot keep up…
Cohen & Levinthal 1989
”No one knows everything, everyone knows something,
all knowledge resides in humanity.”
networks
Adapted from Lévy 1997
6 degrees of separation Everybody is connected to everybody else by no more than six degrees of separation.
“Small World Phenomenon” by sociologist Stanley Milgram, 1967
Leveraging external resources to find solutions and solve unsolved problems
A shift from being problem solvers to solution finders
The wisdom of the crowd
ClosedExpensiveComplexAccurate
OpenInexpensive
SimpleClose enough
Hinton 2007
Accurate
History tends to repeat itself….Innovation, financial crisis, industrial revolution,
…
Steam engine
Internal combustion
engine
Microelectronics
Late 18th C Late 19th C Late 20th C
Schön 2008
Third industrial revolution?
A new workforce is appearing…
Prensky 2001, Beck and Wade 2004, Mahaley 2008
“Digital Immigrants”“Digital Natives”
Company loyaltyWork ≠ Personal
Learning=Behind the desk
Professional loyaltyWork = Personal
Learning=Fun and games
The older generation of leaders
As of June 2009, of the Fortune 100 CEOS….2 CEOs have Twitter accounts but no activity13 CEOs on LinkedIn but only 3 have >10
connections 19 CEOs on Facebook but <15 friends75 CEOs on Wikipedia but nearly 33% of these
have limited or outdated information0% have a blog
http://www.slideshare.net/shazza/fortune-100-ceos-and-social-media?type=presentation
Facebook: Only for people I have met in real life. Mainly friends but also colleagues and managers
Google Reader/Buzz: All blogs that I read as well as alerts on specific words. A lot of sharing among friends
LinkedIn: My resume online, one of the first links you see in Google
My Blog: Interaction with other bloggers, allow me to write down my own thoughts, makes me pay more attention. A good way of showing who I am
Twitter: I learn new things everyday, people share links to interesting posts, articles etc. Good place to network and get to know people in your field
Enckel 2010
Enckel 2010
Building skills in virtual environments
My CV• Leading a virtual team of 30
individuals from across the globe• Creating and successfully executing strategies under
pressure• Managing cross-cultural conflict
without face-to-face communication
The last generation to “attend” college?
http://features.csmonitor.com/innovation/2009/10/15/the-future-of-college-may-be-virtual/
Increasing pressure on “traditional” organizations
Formal organization/ Hierarchy
Social organization /Heterarchy
Teigland 2003
My company has blocked my computer from
accessing most of the social media sites. But I feel so cut off from my network. So, now I just
connect through my phone.
But management cannot mandate social relationships
Teigland & Hustad 2009
Empower and trust employees
Policies written by IBM employees based on IBM’s
Business Conduct Guidelines
Apply internally and externally
Available on ibm.com“blogging guidelines”
Adapted from Poole 2008
BA
While A and B have the same number of contacts,….
…they have very different access to resources,
BA
….thus impacting performance
BA
Poor creativity and
innovative performance
Highcreativity and
innovative performance
Teigland 2003
Using the social web to leverage external networks
Adapted from FredCavazza.net
My definition of social media
Internet-based technologies that ..- enable communication &
collaboration… - through user-generated
content….- from one-to-one to
many-to-many people…- across all boundaries
Teigland 2010
Companies span the full range of use but….
Organizational use
Employee use
No use
Ban use
One-way “broadcasting”
Allow use
Encourage use
Two-wayconversations
..the majority are
here
Teigland 2010
Organizations primarily use social media for branding…..
Blogs YouTube Facebook Twitter LinkedIn
Branding 30% 28% 23% 12%
Customer relations 24%
Innovation 28%
Networking 25% 25%
Marketing 28%
Employee communications 23%
Learning & training 27%
Business intelligence 26%
Future employees 15%
B2C companies are more active than B2B
Teigland 2010
Positive return on social media for INC 500
companies
Barnes & Mattsson 2009
No
Yes88%
12%
If you use social media, has it been successful (hits, comments, leads, sales)?
$6.5 million as o
f Dec 2009
Where are the sources of sustainable competitive advantage?
#1Innovation
Networks of relationships
Brand & Reputation
FIRM
Kay 1993
Where are the sources of sustainable competitive advantage?
#1Innovation
Networks of relationships
Brand & Reputation
FIRM
From Brand owners to Brand advocates
“Organizations no longer own their
brand…rather they should see their
brand as a relay race baton that people should pick up and pass on to others.”
Berlin, CEO Silver, 2009
Creating value through external conversations
ExploitationImproving
existing value creation activities
ExplorationDeveloping new value creation activities
Adapted from March 1991
BART strengthens public transit and communities through interactive games using Foursquare
http://www.youtube.com/watch?v=Ryne05wiQ_chttp://www.bart.gov/news/articles/2009/news20091022.aspx
What came first – the community or the company?
http://www.youtube.com/watch?v=9VKRbmnqXR4
eZ230+
Partners
30,000+Communitymembers
5,000+Customers in 130 countries
Ez Ecosystem
• #1 open source content management software
• Customers include UN, Vogue, Hitachi, 3M, MIT
• 75 employees in 9 countries (US, Europe & Asia)
The backbone of eZ Systems is supporting networks through social media - throughout the value chain
Innovation in the eZ ecosystem
Here comes the Immersive Internet
O’Driscoll 2009
Around 150 virtual worlds
600 mln users
What are Virtual Worlds?
• Persistent, computer-simulated, immersive environments
• Shared space/co-presence with possibility for socialization and community
• In some cases, ability to manipulate/create content• In some cases, virtual economy and currencyhttp://www.youtube.com/watch?v=wMOqI3hH9Gs
“Clearly if social activity migrates to synthetic worlds, economic activity will go
there as well.” Castranova
http://www.youtube.com/watch?v=-ahqjBeknT0
• USD 3 bln in virtual goods sales in 2009, to grow to USD 12 bln in
2012• Swedish government granted bank license to virtual world Mind Bank
in 2009• USD 330,000 for virtual
space station in 2010• Growing number of
entrepreneurs & millionaires
Gartner’s hype cycle
Virtual World
s today?
What financial crisis?
Increasing members Increasing turnover Increasing companies
Wonderland
Virtual world revenues
USD 3bln in 2009
US spending on virtual goods passes USD 1 bln in 2009
USD 330,000for space
resort
Facilitating the virtual workforce through virtual worlds
• Completely private virtual business worlds offering tools to conduct business and collaborate
• Fortune 500: IBM, Intel, Johnson & Johnson, Motorola, Novartis, Sun Microsystems, Unilever
Improving training and education
Improving virtual teaming and cross-cultural skillsDesigned by Duke CE and SSE inworld
Task: To build a bridge in your virtual team
http://www.youtube.com/watch?v=N8XPmp0qGyg
Finding and recruiting talent globally
• Amazon.com job fair
• Benelux job fair• Accenture island
• IBM island• Entrepreneurs
• Microemployees• Pro-Ams
New possibilities for marketing
Project led by Florida State UniversityNew brands designed and showcased during
annual Miss Calypso on Planet CalypsoResults reveal that VWs enable engaging
brand experiences that go far beyond 2D webpages
Hooker et al. 2009
Redgrave – A virtual boutique in Second Life
• Numerous stores selling all kinds of wares and services in-world
• International customer base• Easy payment scheme: Microtransactions
• Global work force: Microemployees
Will the playing field for SMEs be leveled?
Giovacchini et al. 2009
Innovation workshops bring
together users from across the globe
The University of Texas goes inworld
53
https://blogs.secondlife.com/community/learninginworld/blog/2009/09/15/the-first-statewide-rollout-of-a-virtual-world-learning-environment-the-university-of-texas-system-in-second-life
Which professions and industrieswill not be revolutionized?
From the mobility of goods to the mobility of financial capital to …
...the “mobility” of labor?
Interested in learning more about Virtual Worlds?
So, what does all this mean?
Organizations have to ….develop their employees’ network leadership
skills to build their networks globally - both inside and
out
leverage social media− to win the war for talent
− to innovate for continuous competitive advantage
− to build their reputation and brand
− to build their networks across numerous boundaries
cultivate an open, knowledge sharing culture
Leadership moving forward……
If you love knowledge, set it free…
HierarchyLinear, static, process-
based organization
HeterarchyDynamic, integrated
collaboration networks
Teigland 2010
DNAug 20, 1996
Thanks and see you in world!
Karinda Rhode
aka Robin [email protected]
www.knowledgenetworking.org
www.slideshare.net/eteigland
Photo: Lindholm, Metro