Revolutionizing organizational cultures for the knowledge economy

■ ■ ■

Lessons in innovation and collaboration

Professor Mark Mueller-Eberstein

The Knowledge Economy Research Institute

CEO of Adgetec Corporation

Bestselling Author

Twitter: @MarkMEberstein

Radical Transformation -

causes or requires revolutions?

Interaction and connection

New and more Knowledge ….

Transformation

The last Knowledge Revolution …

Awesome Library

Bede:

History from Julius Caesar to 730 A.D.

Made “A.D.” popular

Access to “massive” 250 books

And then came “Herr Gutenberg”… … and society never was the same …

200 years of chaos

Feudal 3 casts

Nation classes

Radical transformation, again

Isn’t this cool?

The power in your hand in 10 years

looks like this today

Chaos and high complexity… for at least 20 years to come

Growth markets and global trends

The knowledge economy

More knowledge has been

created in the last 5 years

than in the 5,000 years of

human history before.

And its doubling

every 5 years. (in some fields even much faster)

Competing requires dramatic increases in...

PRODUCTIVITY CREATIVITY

AND

The Playstation generation...

...is the biggest top talent pool

Country A

Country B

Country C

Cybercommunity X

Cybercommunity Y

Cybercommunity Z

Real World Cyberspace

Future power will be web based Young people in one country are more like young people in another than older people in their own

As networks become more mature non-geographic politics will start to dominate

People will belong to a number of network tribes and will identify other members via their augmented reality

Tomorrow will be very different…

CH

AN

GE

Organizations secure

opportunities for their future

The world has changed and

will change even faster

Information, collaboration and knowledge sharing are essential

Flexibility is a success factor in the transforming world

Radical Transformation

New forms of organization!

Fundamental changes happen in weeks, days or even hours

Situation impacts many & people want information

Social networks and friends trusted more than traditional media and government

Facebook users in Thailand

168,720 users in January 2009

2 million users in January 2010

13.25 million users in December 2011

… And today (10/2012) the highest % of people on Facebook

Leadership lessons from global leaders

Agile success in a complex world

Building killer products and organizations

- Continuous improvement and

customer dialog

The “right” way or the “practical” way

From design phase to constant innovation

The $10 Billion Lesson from “Angry Birds”

Experienced and motivated team (52nd game)

Simplicity in execution and communication

Opportunity Aware “Goodbye distribution channel”…

“Welcome global reach & social networking”

ROVIO’s Approach

Total Customer focus—Fans are everything

Franchise and expansion: VERY CAREFULLY!

Angry Birds: Rio, Seasons, Space

Amazing Alex

Bad Piggies

Boomzap

Completely virtual from the start

Best talent

Total transparency

Consistently top supplier of casual games for 7 years

Digital philosophy is a new way of doing business

across all functions (from recruiting to selling)

….. Including marketing ….

Traditional advertising…

…is like “Homeless Marketing.” At best, you get a glance.

YOUR AD HERE YOUR AD

HERE

The evolution of media

One-way media Two-way media Many-way media

Banner ads Search ads

Always on Always connected

And even companies like Nestle or Dell get it

Still going to the office…?

M&Ms

are biggest productivity and creativity killers

Technologies and strategies for unleashing the workforce’s

potential

Tren

ds Mobile work

Remote access

Data and capabilities in cloud

Internet access everywhere

Save 50+% of facility costs

Have employees never want to leave you.

Increase innovation by 10X

How do you do this???

What if you could…

Mobile work: I love my iPad

In a car 73%

In the tub 21%

On vacation 92%

Have you ever used your iPad…

On a date 17%

Naked 34%

Where do you begin? Start with People, Place & Technology

7 “levers” and how ICT can “move the needle”

Office space

Travel

Productivity

Sick Leave

Attract and retain the right people

Total cost of workplace

Cost of communication and collaboration

People

Technology

Place

Lower costs & higher productivity

People

Technology

Place

Office space

-15% -50%

Travel

-5% -30%

TCO workplace

+15% -25%

Cost of communication and collaboration

+10% -30%

Productivity

+10% +40%

Sick Leave

-2% -20%

Attract /retain right people

-5% -15%

*Rotterdam University & Microsoft

Loving 520 and I-90? -

during rush hour?

Commuting sucks

“Home is where the job is” Home-based workers in the USA: from 7.8% to 9.5%

Median Income: $74K (remote only) vs. $65K (on-site) vs. $96K (combination)

People work more effectively from home

Ecology: Energy (commute and office space)

Society: family and friends; social fabric

Reorganisation. Restructuring. Rethinking. Networking

Old School Industrial Organization

Your Business

Support

Suppliers

Advisors

Customers Consultants

Headquarters

Revolutions can be painful…

Transformation is worth it but not easy

Know & understand the

obstacles:

Manage transformation process end to end

Be clear on goals

cultural , historical, hierarchical, medical, technology

The Knowledge Economy

REQUIRES creative approaches

It’s not about manufacturing “things” It’s about the creation of ideas at all levels

Innovate the product Innovate the marketing Innovate the business

The job of a leader is getting maximum output

from limited resources

Easy… People as machines -> Pay people more

and they will do more

Or…. The more radical…. The “MBT” approach…

“Management By Terror”

Getting Maximum Performance

Management by terror…”gun at head”

Existential threat creates total focus and commitment

AND extremely high stress levels that lower mid-term creativity, motivation, promoting a high likelihood of “escape attempts”

SHO

RT-

TER

M

But what about Innovation….?

Do people innovate more

if we pay (or threaten) them more?

Creative problem solving: The Individual

Different job types:

a) perform specific tasks

b) find creative solutions

People are coin operated if just “tasks” are required

Left and right brain are required to find creative solutions

Want prove?

Experiment: does money make people find creative solutions faster?

Which group had better average?

GROUP A

“Experiment to measure average time to solution”

GROUP B

“Top 25% get reward; Top 5% get

larger reward”

Duncker’s Candle problems

Rewards and motivation can serve as blinders for our vision.

Candle Problem “Easy”

Team motivation & success

Source: Hare et al, Science Sept 2007

Toddlers versus chimps

Teamwork beats individual excellence

Great individual minds (mostly a myth…)

Human knowledge and inventions are build on previously created knowledge

Access to more knowledge, creative capabilities and the ability to communicate drive innovation and creative thinking

Building an organizational culture

People like to be:

Part of groups

Get recognized

Compete (with other groups)

Revolutionary Management? -

Willing to consider scientific evidence and change yourself?

No evidence this increases performance

Statistical distribution of performance is a bell curve

- who performs poorly now is

(statistically) likely to be at least mediocre next time

Building a motivational structure

Performance discussions don’t really improve performance

Internal competition kills willingness to take risks and collaboration

BAD PERFORMER GOOD PERFORMER

Do we measure the

right things in our businesses

and in our lives?

The world we all want?

6

6.5

7

7.5

8

8.5

Happiness Wealth Love Health

Importance Ratings Worldwide Source: Diener & Scollon

Money matters…

Huge “Happiness difference” between $5,000 and $50,000 per year

But…..

Hardly any difference between $50,000 and $5 Million

How are people motivated?

“What constituted positive mental health?”: Abraham Maslow 1908 - 1970

Human Motivation

Self-actualization Personal growth, fulfillment

Esteem Needs Achievement, status, reputation

Love and Belonging Needs Family, friendship, affection, relationships

Security and Safety Needs Protection, security, order, law, stability

Biological and Physiological Needs Food, water, shelter, clothing

Motivators in the Knowledge Economy Independence

Self-fulfillment

Recognition

Mastery

Friendship MO

TIV

ATIO

N

Is a “internal – non -competitive” culture

the “right” culture for organizational success in the

Knowledge Economy?

The Playstation generation...

...is the biggest top talent pool

Digital Cowboys the super stars of the PlayStation Generation

Born after 1985 (1990 in China)

Grew up with the Internet

Globally connected & willing to move

Access “data” anywhere & anytime

Openly question & test leaders

More & more older people are behaving like them…

NO FEAR: The PlayStation Generation

Early adapters &

adopters Innovative Networked

Community- oriented

International Expect more

They are of vital importance to companies, organizations and leaders

How Digital Cowboys Make Decisions

Cowboys are independent, decentralized

decision makers.

Digital cowboys are connected,

decentralized decision makers.

Commanders are centralized

decision makers.

Someone goes outside the process

Process-oriented environment

If…then Munich

London Prague

Vienna New York Beijing

Rome Helsinki

Social collaboration environment

Gamification and the cowboy

Human Motivation

Self-actualization Personal growth, fulfillment

Esteem Needs Achievement, status, reputation

Love and Belonging Needs Family, friendship, affection, relationships

Security and Safety Needs Protection, security, order, law, stability

Biological and Physiological Needs Food, water, shelter, clothing

Why “gamification” works?

Perfection

Completion

Justice

Aliveness

Richness

Simplicity

Beauty

Goodness

Uniqueness

Effortlessness

Playfulness

Truth

Self-sufficiency

Wholeness (unity; integration; interconnectedness; simplicity; structure; order)

Delivers on “Being experiences” and a sense of “Self-actualization”

Developing and driving an agile organization

Embracing business flexibility and speed

Agility:

Or applying old school industrial management to new challenges and

opportunities?

Industrial Management

Excellence

Applicable to an

innovative industry?

Old School Industrial Management or Agile Leadership?

Computer Companies Market Cap 2002 to 2012

Dec ‘02 May ‘05 Oct ‘12

Apple $5B $34B $589B

Google $0B $50B $243B

Microsoft $276B $263B $245B

IBM $131B $149B $234B

Tomorrow will be very different…

CH

AN

GE

Organizations secure

opportunities for their future

The world has changed and

will change even faster

Information, collaboration and knowledge sharing are essential

Flexibility is a success factor in the transforming world

A language for culture

Culture transformation?

The 5 stages of creating major change or

managing a revolution

and sometimes scary… Change is difficult….

The Pace of Change

Slow adoption

Acceptance or “The New Normal”

Natural change point Decline

Endings Exploration New Beginnings

Reconciliation Reorientation Recommitment

Denial Anxiety

Shock

Fear Anger

Frustration Confusion

Stress

Creativity

Approach-Avoidance

Skepticism Acceptance

Impatience

Hope

Energy Enthusiasm

Productivity

Morale

Theory of Transition

Schlossberg; 1981 & 1995

Organizations are people, too

Five Stages of Creating Major Change

1. Establish change is needed & why

2. Develop & communicate vision & strategy for change

3. Plan & the change team

4. Manage change by following & rhythm of the business

5. Stimulate continual improvement & change the culture

The Rythm of Change Dramatic change

Organic change

Systematic change

ZONE OF

REVOLUTION

ZONE OF

REFORM

ZONE OF

REJUVENATION

Communication

Amplify Simplify key messages

What about Leadership and Management?

Are you shouting commands from a

safe distance?

…or leading in the front line?

The ability to see things from high enough

The ability to land quickly at any time

The ability to raise up again rapidly

The heart of helicopter ability

New requirements for today’s leaders Frontline management

Transparency

Efficient communication

Information sharing

Celebrate failure

Knowledge is powerful when shared LEA

DER

S

The “digital” organization Takes advantage of innovation & technology

Continuously optimizes & re-invents

Is authentic & trustworthy

Has all levels & functions engaged with the frontline

Is “always on & responsive”

Leverages the best resources for a given task or project

Attracts the best people

What does success look like?

People want to work for and with you

Employees feel like entrepreneurs

Low level of negative attrition

Your org is a thought leader

Employees at every level and in every function are engaging with clients & partners.

THANK YOU!

MarkME@adgetec.com

Twitter: MarkMEberstein

US +1 855.423.4383

Mark Mueller-Eberstein

The Knowledge Economy Research Institute

and

CEO of Adgetec Corporation

Bestselling Author