Skip to main content

Fredrickson Communications

John Wooden

John Wooden has worked on a diverse range of web projects for Fortune 500 companies and local, county, and state governments in his role as Fredrickson’s director of user experience services. He has led website redesign and information architecture efforts, and conducted hundreds of usability tests and heuristic evaluations on both websites and applications. Behind the scenes, John has developed usability guidelines and interface design standards for applications and websites.

John has taught classes in usability and user-centered design at the University of Minnesota and has presented dozens of seminars on usability and web-related topics.

John has a PhD in English and is a Certified Usability Analyst and member of the Usability Professionals’ Association. He has been with Fredrickson Communications since 2000.

References

(1) Dave Wilkins of Learn.com has provided links in his blog to several good examples of social learning initiatives, which clearly demonstrate the ways in which social media can amplify knowledge flows and create value for the organization. Wilkins also notes that the initiatives he provides as examples were not led by training departments.

Adjusting to The Big Shift

by John Wooden, UX Director

John Hagel, John Seely Brown, and Lang Davison, all leaders of the Deloitte Center for the Edge, recently published a provocative study called “The Big Shift: Measuring the Forces of Deep Change.” Once I read it, I wanted everyone attending Fredrickson’s July 16 Learning Leadership Summit to read it in preparation. This is an authoritative, data-driven argument to stop managing for a 20th-century environment when we are living in the 21st.

The authors published a summary version of the report in the July-August edition of the Harvard Business Review. An even shorter summary is available in the authors’ blog on Harvard Business.org. The report presents some unsettling findings:

  • The return on assets (ROA) for US firms has steadily fallen to almost one-quarter of 1965 levels. (ROA measures the return a company generates from its total assets.)
  • The ROA performance gap between winners and losers has increased over time, with the winners barely maintaining previous performance levels while the losers experience rapid deterioration in performance.
  • The “topple rate” at which big companies lose their leadership positions has more than doubled, suggesting that “winners” have increasingly precarious positions.
  • US competitive intensity has more than doubled in the last 40 years.
  • While the performance of US firms is deteriorating as measured by ROA, the benefits of productivity improvements appear to be captured in part by creative talent, which is experiencing greater growth in total compensation. Customers also appear to be gaining and using power as reflected in increasing customer disloyalty.

In their June 19 blog entry, Seely Brown, Hagel, and Davison wrote that they began their study two years ago as an attempt “to get our heads around the long-term transformation we saw happening to the global business environment as a result of digital technology and, to a lesser extent, public policy changes [such as free-trade agreements]. We later came to call this transformation the Big Shift.” What they describe is a “new reality” of “constant disruption.” The old cycle of disruption – return to equilibrium – new disruption may well be a thing of the past. Why?

“Today’s core technologies—computing, storage, and bandwidth—are not stabilizing. They continue to evolve at an exponential rate. And because the underlying technologies don’t stabilize, the social and business practices that coalesce into our new digital infrastructure aren’t stabilizing either. Businesses and, more broadly, social, educational, and economic institutions, are left racing to catch up with the steadily improving performance of the foundational technologies. For example, almost forty years after the invention of the microprocessor, we are only now beginning to reconfigure the digital technology infrastructure for delivery of yet another dramatic leap in computing power under the rubric of utility or cloud computing. This leap will soon be followed by another, then another.” (The New Reality: Constant Disruption. The Big Shift blog. January 17, 2009.)

Although many writers have talked about the varied effects on business of the rapidly growing digital infrastructure, The Big Shift attempts to quantify what is happening. The authors set about to track “25 metrics in nine categories across three sets of main indicators: Foundations, which set the stage for major change; Flows of resources, such as knowledge, which allow businesses to enhance productivity; and Impacts, which help gauge progress at an economy-wide level. Together these indicators represent phases of transformation in the Big Shift taking place in the global business environment.” (Measuring The Big Shift.)

“Taken as a whole, the findings portray a U.S. corporate sector in which long-term forces of change are undercutting normal sources of economic value. ‘Normal’ may in fact be a thing of the past: even after the economy resumes growing, companies’ returns will remain under pressure.

To respond to this performance challenge, U.S. companies will need to let go of industrial-era organizational structures (and the reporting relationships, incentive systems, and managerial processes that go with them) and operational practices in favor of the new institutional architectures and business practices needed to create and capture economic value in the era of the Big Shift.

Companies must move beyond their fixation on getting bigger and more cost-effective to make the institutional innovations necessary to accelerate performance improvement as they add participants to their ecosystems, expanding learning and innovation in collaboration curves and creation spaces. Companies must move, in other words, from scalable efficiency to scalable learning and performance [emphasis added]. Only then will they make the most of our new era’s fast-moving digital infrastructure.” (Ibid.)

The relevance to organizational learning

The Big Shift is obviously pertinent to all functional areas of business, but the relevance to those in organizational learning roles is especially clear.

Seely Brown, Hagel, and Davison emphasize that it is no longer sufficient for organizations simply to manage their existing stocks of knowledge. What is becoming more critical is the ability to facilitate flows of knowledge throughout and between organizations. They cite the example of SAP’s Developers’ Network, which includes 1.5 million participants and extends beyond the boundaries of the company. Posted questions are answered in 17 minutes on average, and 85% of the questions posted so far have been categorized as “resolved.”

As the authors note:

“To succeed now, companies (and individuals) have to continually refresh what they know by participating in relevant “flows” of new knowledge. Tapping into and harnessing the flows of knowledge, especially flows generated by the creation of new knowledge, increasingly define one’s competitive edge, personally and professionally.”

The authors underscore the role that social media must play internally in organizations as “amplifiers” of knowledge flows, a point I have been making in presentations over the past couple of years. More organizations are beginning to understand this and to use social media to support both formal and informal learning, but we are still in the very early stages. What is disappointing is that so far many of the initiatives to support knowledge flow in organizations have not been led by learning departments. In many cases, these initiatives have been led by IT or Marketing (1).

So what needs to happen? Organizational learning professionals need to read and share the findings and ideas presented in The Big Shift, to acknowledge the “new reality” that Seely Brown, Hagel, and Davison describe, and to position themselves not only as “trainers” but as facilitators and coordinators of dynamic knowledge flows in their enterprises. This means partnering with IT, Communications, and HR, and thinking beyond the course, module, and other formal learning modes to adopt more amplifiers of informal learning—social/knowledge networking, forums, blogs, wikis, and so on.

Economic recovery will take place and the business cycle will continue, but based on the data presented in The Big Shift, big challenges will remain unless business leaders begin to recognize that the old 20th-century managerial tools and techniques are not all useful anymore. For their part, learning leaders need to shake up their toolbox too.