For the second half of the 20th century, business leaders aggressively pursued a strategy based on becoming the most efficient, most productive player in their industry. In an age where many companies were bureaucratic and lazy, out-of-shape competitors were numerous. Those companies who were first or best in advancing the most well-oiled, machine-like structures often enjoyed a distinct competitive advantage.

But one can argue that productivity is now more of a commodity. Fat organizations are hardly the norm. The competitive landscape has changed.

When conditions change, strategy must change. And as Peter Drucker warned, so, too, must structure. If the ‘machine model’ is to be replaced, what will replace it?

Many of us believe the answer lies in innovation. Not innovation as technology. Or innovation in the form of walled-off ‘experts’ in a sterile laboratory. But open innovation. Culturally-driven creativity. True entrepreneurial activity. Practical, dynamic innovation, strategic at the core.

It makes sense then that executives and their human resources departments should employ a strategy to compete based on their ability to identify, recruit, hire, train and retain an innovative— more creative— work force. The bad news is that virtually everything businesses and business leaders do in terms of management and corporate leadership, research shows, is the polar opposite of those things they should do to build a creative work force. And the experience of this misalignment is devastating to creative workers.

Creative people are different. They insist upon being different.

In Aesop’s classic fable— The Ant and the Grasshopper— the ant works hard all summer putting up grain for the winter. The grasshopper plays and enjoys the summer. He concentrates on fun and entertainment. Music, wine and love command his attention– he celebrates the summer feasting on the fresh grass that’s freely available.

Winter comes soon enough and the grasshopper finds himself at the ant’s door begging for shelter and food. The ant explains that he barely has enough to get his family through the winter. He enjoyed the lovely music all summer, but he can’t help his friend. The grasshopper freezes to death. And Aesop warns us “It’s better to prepare for the necessities of life.”

It is easy to view creative workers as grasshoppers– unconcerned with the realities of business competition, lacking commitment to the hard work required to compete and having no respect for the waste of unproductive and inefficient play. Unfortunately, accepting this point of view causes a serious conundrum for business leaders in need of innovation. This leader has to adopt a different point of view.

That should be easy. Because the truth is that creative workers are, in fact, ants. When they are engaged, no teams or individuals work harder, less selfishly or more passionately than creative workers. In a sense, they are really /ants/ who think they’re grasshoppers.

But when creative workers are not engaged, no amount of executive proclamations, management control initiatives, structural re-orgs, documented processes, metrics, money, company events, or internal ‘communications’ campaigns will motivate them.

Sticks and carrots don’t work on grasshoppers. Even the fear of death doesn’t motivate them. Because they know a secret– Aesop’s grasshopper would have been fine if he could have just caught a flight to Rio.

When creative workers are not engaged, they will leave; the best and most talented exiting first. And they will start again somewhere else.

I drive a Toyota Highlander. The Hybrid. I once detested SUVs but bit the bullet a couple of years ago when my son began playing on a travel hockey team. Those 200+ mile weekend trips and a huge equipment bag changed my world view. The hybrid helps me rationalize the decision. But, I must admit— recall and all— I love my Highlander.

One thing I love is the GPS. It makes use of a map provided on a CD available when I bought the car two and a half years ago. As good as the map is, it is out-of-date and incomplete. Occasionally I’ll look at the map and see that the illustrated roads have disappeared and my car appears to be traveling through space like a triangular spacecraft from the original Asteroids video game. I am a modern day Lewis or Clark. I love it when that happens.

Maps are like plans. They’re great when they tell us where we want to go and what we want to do. But things change. Conditions change. Needs change. New options reveal themselves. We have to be prepared to fly into the unknown.

Recently, Peter Bregman blogged about this in Harvard Business Review— Don’t Get Distracted By Your Plan. He relates a lesson he learned getting lost hiking a trail:

… a dangerous thing happens when we follow a trail: we stop paying attention to the environment. Since the trail is so easy to follow, we allow our minds to wander and neglect to observe where we are.

Then we forge ahead, moving with speed and purpose, right to the point where we look up and realize, like I did that day, that the environment around us is no longer recognizable. Our focus blinded us.

We live in a time when our competitive environment can change so quickly and profoundly that it means blindly following a plan can be a very risky business behavior. Maps, plans and spreadsheets are only valuable when they are in service to people who have somewhere to go— not when those people are slaves to the plans.

As we create organizational culture, we have to make sure that our work forces are prepared and comfortable looking up from their plans, evaluating the environmental changes that are occurring around them, and adjusting their path.

Lately we’ve been working with the public sector on some community building efforts. In a recent session we introduced a team to open source principles, general use of collaborative web technologies, and the latest on-line civic participation work. Then, we asked them to do some searching on their own for public sector platforms or campaigns for participation.

Here’s what they came up with during the short span of time. You may have seen most of these sites, and many more are out there. The team was quick to point out that some organizations are definitely doing it better than others. If you have stellar, or not-so-stellar, examples share them.

Open Government Innovations Gallery
Santa Cruz Budget
Wikified Army Field Guide
CDC IdeaLab
Regulations.gov
Apps for Democracy
Massachusetts Open Data Initiative
Data.gov
Kansas Transportation Online Community

Clearly, it’s no longer groundbreaking. And, as people make that necessary switch from evangelist to practitioner, the question should be: Are we paying attention and doing things as effectively as we can?

Not all these efforts have the same aim, and with the ever-maturing taxonomy of all things open it’s important to know what model is best suited for the situation. But, what we’re interested in is community building. The most basic distinction we can make is the difference between the two often-thrown around terms crowdsourcing and open source, as David and Chris each wrote here and here, respectively.

This is where the real work and next frontier for practitioners exists. It’s not just technology, press releases, or prize money. Rather, it’s the overall strategy, design, and message of the platform (loosely defined) constructed and carried out as a coherent method for creating and engaging a community.

There are some things to pay attention to here. They might be brushed off as questions and challenges, but more importantly they’re opportunities to do things well.

-Is what we’re asking of the community in line with interest and ability?

-Are there clear goals; ones either agreed to or developed by the community?

-Is this platform reinforcing or improving a representative democracy and all that comes with it, rather than replacing or detracting from it?

-How sustainable is the community, should it be a short-term or a long-term effort?

-Do we have a way to measure the health of the community and the know-how and tools to guide it when needed?

-Are the legal and technical dimensions set appropriately so that innovation happens within and external to the community?

-Do we bring the right physical world characteristics, attitudes, and norms that we want and maybe discourage the ones we don’t want?

-Do we have an idea of even what this “we” means and where that “we” should fall on the spectrum from free-for-all to facilitator to despot?

These are just a handful of the things we work on and pay attention to daily (along with my collaborators at Georgia Tech). Anyone embarking on a community building or participation project, especially in the public sector, needs to be, too. Community building like many things will always be more of an art than a science, but with the growing examples out there we need to do a better job generalizing knowledge from both successes and failures.

Tinkering with a brand, whether public or private, and requesting the participation and precious time of others, is not something where you just roll out a platform and hope. We can and should get to the point where there is a degree of certainty in practice. And, of course, share the knowledge.

I was going to write a blog, but just watch this.

Famed social ecologist and the “father of modern management,” Peter Drucker once advised that the only purpose of a business is to create customers. That type of thinking lead companies to conduct marketing research, determine who their customers are and what their customer want to hear. They created positioning platforms, messaging, advertising— the whole nine yards— in an effort to create customers. For the second half of the 20th century, that model kicked ass. At least for the advertising and marketing firms who did it well. Or could convince their clients they did it well.

Today’s world is different. Duh. Customers are in control. They don’t believe authoritative voices. They don’t trust their messages. They no longer trust the media such companies employ. They don’t have to; they now connect to more authentic voices that they trust via the internet and other social media. It’s second nature.

The broad and rapidly growing consumer preference for networked media means that traditional advertising is now suspect.  The media of advertising comes with an underlying meaning— an agreed upon contract that the advertiser may bullshit you if that helps them make a sale.  That’s the meaning. We all know it. The medium is the message.

So what’s a company to do? Branding is about building credibility. About establishing and scaling your reputation. So, why use social or networked media— such trendy media— to build brand?

Networked media isn’t important because it’s trendy. It’s important because it creates customer-driven innovation. It creates brand evangelists. It can help build a collaborative internal culture and engaged work force. It demands authenticity— especially in the form of customer experience.

So can Twitter really save brands that don’t provide good experiences? That’s the question asked by Fast Company blogger Rupa Chaturvedi, who cautions companies against relying on social media to influence customer behavior when the brand doesn’t live up to the hype they’re trying to create.

These networks can be a highly effective way to build your brand externally. But there’s a catch. It only works when the messages are true. You know they’re true when they’re open. And transparent. And valuable. You know they’re successful when the network grows organically.

But Twitter, Facebook, etc. are the media. They are not the strategy. The strategy is community building. Community building is the ‘new’ marketing.

Some historians don’t like using the term ‘revolution’ when discussing the Industrial Age. Their point is that the transitions between Ages was more evolutionary. Chronologically speaking, I agree with this point of view. But I still prefer the term revolution as it refers to the social effects humans experienced.

With change came an unwritten contract. As people accepted the idea of spending their lives doing machine-like work, their expectations for security grew. Increased power of the worker manifested itself in the form of unions. And over a few hundred years of ardent and often violent interaction, advances on the behalf of the Industrial Age’s laborers continued to improve the workers’ standard of living. Businesses did pretty well too, history shows.

It became easier for individuals to accept the sacrifices of personal freedom. Over time, workers began to feel loyalty to many of the companies who employed them. Thirty and forty year careers with one company became common. Good paying jobs and benefits created safe families and opportunities to better the lives of future generations. Children and grandchildren often looked to follow their parents into the same companies, trusting in the status quo.

But a funny thing happened on the road to efficiency and productivity. Labor unions drove great improvements. But power corrupts. Labor unions were no exception. Soon, one ‘top-down’ boss was replaced by another. The influence of labor unions quickly began to wither.

In 1981, when newly inaugurated president Ronald Reagan fired every striking air traffic controller across the nation, the death knell rang. Corporations began in earnest to redraw the lines. They increased pressure on unions by moving jobs off shore.  As mothers entered the work force in far greater numbers they added substantially to their families’ fortune thereby postponing the real experience such consequences bring. But the writing was on the wall.

Today, the consequences are plain and painful. Mathematics proves that changing one side of an equation necessitates an equal change on the other side. Working conditions— where work still exists— have declined. Yet, over the past 28 years, executive compensation increased from 40 times the pay of the average worker to more than 360 times the pay of average workers by 2007. No one should be surprised that employees are less loyal than they were a generation ago.

While the power of well-organized unions has greatly diminished, workers are now discovering the power of networked associations. Bottoms up. Transparent. Authentic. Power is spread between groups and individuals alike. Nimble. Immediate. Scalable. Regardless of how you label it, we live in a new and equally revolutionary Age. Loyalty to any big power is dead.

‘Engagement’ is the new word. If you believe in meaningful data, take a look at the work Gallup has done in this area. Gallup presents a new kind thinking aimed at the most relevant business management practices for today’s work forces. It is non-intuitive to most current corporate leaders and managers. One key survey question they ask of workers is “do you have a best friend at work?’ The answer is a key indicator of corporate success.

They’ve titled their thinking Human Sigma. Here are the five basic principles:

* Employee and customer experiences must be managed together — not as separate entities.
* Emotions drive and shape the employee-customer encounter.
* The employee-customer encounter must be measured and managed at the local level.
* Employee and customer engagement interact to drive enhanced financial performance. This interaction can be quantified and summarized with a single performance metric.
* Sustainable improvement in the employee-customer encounter requires disciplined local action coupled with a company-wide commitment to changing how employees are recruited, positioned in roles, rewarded and recognized, and importantly, how they are managed.

When the media is the message and your company must be innovative to compete, any leadership discussion of loyalty will be viewed as propoganda. That includes ‘accountability’ and ‘responsibility’ and ‘commitment.’ If it is not transparent that these conversations are two-way processes, then leaders and managers who try to force these messages will lose credibility and relevance.

Loyalty is dead. Love live engagement. Thanks Gallup.

” Organizations are ill prepared for the arrival of a new breed of uncompromising consumer and maverick employee…If organizations do not keep pace, they will cease to exist.”  — Gary Hamel

Yesterday I concentrated on the first part of Hamel’s equation— uncompromising consumers. Today I want to visit his second but equally important factor— the maverick employee.

Why are organizations facing this growing challenge? I believe there are at least three important causes.

1. the end of the industrial age
2. loyalty doesn’t pay
3. we are all connected

I’ll take a look at the first cause in today’s blog:

Most historians agree that the Industrial Age started in the late 18th century. As the scientific advances of the Renaissance met with the economic theories of Adam Smith and the democratic revolution was made real in the United States, the conditions were set.

Businesses found new ways to compete. Freed from the limits of monarchical governments and religious influences of previous generations, new competitive businesses formed anywhere plentiful natural resources found populations willing to trade their desperate existence for the security of machine-like jobs. Soon, educational systems and societal norms changed to create cultures supportive of the new technological advances. A new human paradigm emerged.

The successes of these times is well chronicled. By the end of the 20th century, the industrial age found perhaps its ultimate expression. Efficiency and productivity advances lead to the creating of ever-more-segmented and analyzed processes. Those organizations too ‘fat’ and unproductive failed to keep pace. Eventually, they ‘failed to exist.’

In a few short decades, efficiency and productivity tools became commodities. Today, they are simply the cost of doing business. Like the ante in a poker game, they only get you in the game. You still have to play the hand. Organizations are again forced to find new ways to compete.

The humans still necessary to ‘do the work’ are less and less interested in playing the role of machines. Having moved up Maslow’s triangle, they are unsatisfied and unfulfilled with their roles as machine parts. Baby boomers are leaving the workplace and taking their domain knowledge with them. And the ‘Millennials‘ who replace them will not play by the same rules.

While the current financial crisis may cause organizational leaders to feel more confident that their workforces will be frightened into submission, I’m afraid they will not be happy with the long term results. These leaders would do well to remember the old adage: be careful what you wish for.

Because workforces ‘treated in the manner’ and who stay with the company will be increasingly unfulfilled and unhappy. They will give the least amount of effort and do the least amount of work necessary to keep their job. They will be unlikely to think through challenges on behalf of the company or the customer. They will not take risks. They will not solve complex problems. The dysfunctional play of internal politics will only grow more stifling over time.

Clearly, such work forces are hardly the builders of the competitive brands and innovative cultures necessary to compete in the 21st century.

More tomorrow…