The new edition of the Financial Times Digital Business podcast is out, and it includes, among other things, a commentary from me on the contrast between formal business software applications and informal social networks like Facebook and MySpace. It seems increasingly clear to me that the social networking phenomenon will, in some yet-to-be-determined form, invade corporations. Here’s the text of my remarks:
If you scratch the surface of any business, you’ll find two very different organizations. There’s the formal organization – the one that can be represented by the boxes of an org chart. And then there’s the informal organization, the one shaped by the day-to-day interactions of employees – conversations in hallways or in airport lounges, exchanges of messages through email and voicemail, glances and whispers in meetings.
The formal organization is important, if only because it tends to determine how much one gets paid. But it’s nowhere near as important as the informal organization. It’s the informal one that governs the real flow of information and influence in a company, that defines who’s in the loop and who’s not, what’s important and what can safely be ignored.
Most corporate IT systems, unfortunately, are geared to the needs of the formal organization and ignore the informal one. Designed through elaborate, top-down processes, these so-called enterprise applications usually end up as rigid, cumbersome systems that are disconnected from the everyday jobs of workers. The informal organization is served, instead, by simpler, personal software programs like email, PowerPoint, and Excel. As a result, most of the really useful information that flows through a company never gets captured in corporate databases or broadly shared by employees. It ends up scattered across scores of individual hard drives.
That brings me to MySpace, Facebook, Bebo and the various other social networks that have become so popular on the Web. It’s easy to make fun of these sites. Used mainly by kids and students, they often resemble the junkyards of popular culture – crude, silly, and disposable. But don’t be fooled by the garish surface. Social networks are popular – and powerful – because they are constructed in response to, and through, the actions and conversations of their members. In stark contrast to corporate IT systems, social networks shape themselves to their users rather than forcing the users to adapt to preset specifications.
Because they seem so natural to use, the social networks end up being incredibly sensitive mechanisms for recording the real life of a human organization. They serve not only as a flexible communications medium but as a means for identifying, refining, and recording valuable information. They do what corporate systems so often fail to do: they make the codification and sharing of valuable information easy.
Given their benefits, I think that social networks will inevitably be adapted to corporate use. Of course, that’s not going to be easy. Matters of data security, for instance, need to be worked out, as do protocols for sharing sensitive information within and between organizations. And the implications for corporate politics will be, to say the least, interesting. Just imagine what will happen when the informal organization suddenly becomes as visible as the formal one. I suspect that some people at the top of the org chart will be less than pleased.
Nick,
I agree that social networks will become more prevalent in the business world. But I think that there will still be many challenges in acquiring the this informal data. I believe that the social network will capture the data but finding it may still be difficult. I have seen many companies start wikis, and have the same problems. The wiki captures the data, but without structure the data cannot be found.
Thanks,
Allen
I have often wondered about the phenomena of institutional biography. When looked at from a distance one can often recognize phases of early unfolding corporate systems, the troubled rebellious years, institutional maturation and finally the onset of crusty years. Microsoft’s Vista might serve as an example where the structure has become so calcified, overblown, so far removed from those who they wish to serve that the product ends up being well, useless!
The informal organization ties together both personal and professional biography into a working whole. When those two paths converge . . . . . . . . . . I suspect that all the elements that one struggles to define, the life blood for success, warm the institution proper!
Alan.
I’m surprised you omitted LinkedIn. It’s by far the most commonly used social networking solution in the corporate settings I work in.
These solutions have one immense advantage over, say, corporate Sharepoint social networking.
They survive the employment relationship.
I have to agree that the social utility shape will be amazing for a work environment: users will at last be able to have the choices the CIO used to make (poorly) for them.
An illustration in the real world : Serena Software Adopts Facebook as Corporate Intranet, http://www.serena.com/company/news/pr/sPR_11022007.html
Emmanuel, from France
>> It’s the informal one that governs the real
>> flow of information and influence in a company ….
Back in the day,this function was performed by people milling around the water cooler and in the break room. Are you guys saying that Facebook will replace that personal interaction at the POS level? Most employers want their employees to work and then get lost, NOT spend company time socializing on Myspace or Facebook. Doesn’t instutionalizing the “informal” network just make if formal?
“Listen, this old system of yours could be on fire and I couldn’t even turn on the kitchen tap without filling out a 27b/6… Bloody paperwork.”
— Brazil 1985
I’m sure we’ll see the adoption of Facebookesque applications in other large companies, if only because they don’t know what else to do. Hierarchy and bureacracy just isn’t the best way to accomplish many objectives. This is what’s important, not MySpace.
Read my full reaction to this post at:
http://www.robbyslaughter.com/blog/?2007-11-29
I don’t see Facebook being used in large companies. Especially after all the recent discussions around privacy and where a user cannot control what information is broadcast to his “friends”. As you mention, security concerns will be high for these corporate IT departments. There are so many companies that are barring access to Facebook, that googling “facebook blocked at work” returns about 400,000 results with recipes for working around IT restrictions.
However we are seeing more and more corporate social network products flourishing. Companies like SelectMinds, AdpativePath, or even IBM (with LotusConnections) are now proposing social networks targeted for the corporate world.
These are used in different areas: for managing alumni, for recruiting, for building communities around minorities or women, for on-boarding new hires, …
So Social Networks are already invading corporations. It’s just not the same networks as the one you’re using as a non-employee.
And for the ones who are already complaining about the lack of integration between all those social networks, OpenSocial promises to fix all that. It will be interesting to see whether it delivers.
There will always be formal and informal networks in a company; the tools we use to document and transact in those networks may change over time, and the information available to those networks certainly will change over time, but just as important to how/what information is shared is who is sharing with whom. Personal relationships, no matter how they’re formed (e-person or in-person), are the core of what information I pay attention to, use, and trust.
There’s more information available to me than ever before and as a result, I’m more dependent on my social network(s) than ever before to help me make sense of it all.
Most successful project managers understand how to get things done using the informal organization, but the best organizations to work in are those where the formal and informal organizations are the same or very similar.
However, formalizing the “informal organization” is not in the best interest of those who have “formal power” dilutes “formal power”. As such, there will be significant resistance in from people whose power chiefly derives from their title or designation within the organization.
I agree with most of you, in that informal networks serve a significant purpose and if you isolate the aspects that can be leveraged by the formal network of a company you reach the win. The problem with people wanting the 2 networks to collide is this. The informal network is where ideas in their infancy can be formulated, adapted and gain traction before presented. If that whole process is on display, like it or not, the social networking environment will fail and people will find other ways to nurture ideas and thoughts. Not everything needs to be on display because the informal network has a way of sifting through and only helping the valid thoughts, inputs, etc… make its way into the corporate structure.
That said, if you actually leverage the network for gorilla marketing, outreach programs, recruiting, testing, etc and provide the ability for this informal network to reach beyond the corporate walls then you have something. The speed of which a company can gain feedback, new ideas, and find the right people will be invaluable. The key, those in the informal network must trust the social network infrastructure not to be big brother watching, but a way to be engaged to promote the company they work for. It will happen, look where we are today versus 2 years ago!