What is of highest value in today’s business?

A number of posts last week pointed to the rapid changes in the nature of work in American business, partly because of the strategic adoption of social technologies, but also because of more fundamental changes in the larger economy.

Researchers as the New York Federal Reserve sliced a large collection of census data, attempting to explore some basic ideas about the changing nature of work (as I reported in Work is rapidly becoming nonroutine). And what they learned is that since 1975 the number of people engaged in routine occupations and manual work are declining, while the number of workers involved in nonroutine and cognitive work — knowledge work — has increased. The shift is about 20% over that time, as shown here:

This perhaps comes as little surprise to those tracking the changing world of work, but the speed is perhaps the real story. Since the trend is pretty linear we can expect it to continue, given the same economic conditions holding. In a few decades, nearly all work will have become knowledge work, involving the active reasoning by the worker to decide how to carry out the work at hand, because it is becoming increasingly nonroutine.

This accords with the shift away from statically defined roles captured in slow-and-tight business processes, toward more flexible, fast-and-loose work styles based on personal relationships in social networks. In How to value our social participation, I explored a 2008 post by Gia Lyons that raised that question. Here’s where I came down:

I think that in a role-based, process-centric, slow-and-tight business setting contributors are measured on personal performance, almost totally. Making quota, bringing in leads, claims processed, lines of code.

But in a social business, things are different, and people’s value has to be based on what flows through their connections. That means both outflow — what you send along to others — and inflow, too. If a person has spent time and energy building links to people outside and across the business, they may be the first to learn of opportunities for or threats to the business, for example, or they might be the one that introduces two people from different parts of the business, leading to a new product idea.

We do need to determine ways to effectively measure that, but some measures from social networking theory may help. For example, betweenness is a measure of how well-connected someone is within a network. In particular, how many connections away is an individual from all others in the network? People with high betweenness, in effect, make the network smaller: they make the world smaller. So, novel information is likely to reach these people earlier than others, which is immensely important. And they are more likely to introduce people who might work together on something innovative.

Not too long ago, I wrote

In a connected world, the most important decision you can make is who to follow.

And other indicators show that organizations are moving to adopt social technologies, and that they have become increasingly a mainstream aspect of business. A recent McKinsey study (see McKinsey says social technologies are now mainstream, but organizational evolution still needed) had this chunk of meat:

from McKinsey’s Evolution of the networked enterprise

Financially, respondents say social tools contribute 20 percent and 18 percent, respectively, to the revenue increases and cost improvements their companies attribute to the use of all digital technologies. These percentages may appear small but are driven by the extent to which—and the ways in which—companies deploy the technologies. At companies using at least six tools (or half of the tools the survey asked about), executives say this usage amounts to a larger share of financial benefits. Even larger shares at the companies using six or more tools on mobile say so: these respondents report that social tools contribute 32 percent and 26 percent, respectively, to their companies’ revenue and cost-cutting benefits.

Achieving this high level of benefits will likely require substantial organizational changes. When asked about the changes that technologies might facilitate, executives are twice as likely to say these tools could enable entirely or mostly new processes for four of eight business activities at a hypothetical company without the technology-related constraints their own organizations face. Slightly larger shares than in 2011 do expect technologies to facilitate certain changes in their own companies, related to developing strategic plans, allocating resources, matching employees to tasks, managing projects, and determining compensation. But the large gaps between potential changes at respondents’ companies and at companies without constraints, which we observed in the previous survey, suggest that the hurdles could be considerable.

We have a number of trends that are interacting together in the business context to create a moment of enormous transition, with organizational structures and business culture that are antithetical to the adoption of social practices. The issue of how to value participation is one aspect of that.

Today, I wrote a piece about the new trend of the Chief Digital Officer (see The Chief Digital Officer is likely to own social, and IT), which is being driven in part by the frustration of CEOs to get changes made in operations and culture, and reallocating power from traditional IT and Marketing groups into the hands of a CDO charged with forcing the transition to a digital footing: social, mobile, and community-connected.

We should expect more of these stresses, and deep rethinking of the relations between the individual, the business, management, and the work to be done. It is no surprise that the linkage and value of these relations are undergoing a correspondingly great change.

John Finley said,

Maturity of mind is capacity to endure uncertainty.

We’re in a time time where that maturity of mind has the highest value.

Relevant Analyst
Stowe Boyd

Stowe Boyd

Lead analyst Gigaom Research

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