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The Web 2.0 revolution promises to be just as important a driver of productivity growth as automation was in the 19th and 20th centuries
 
Corporate bureaucracies are on their way to extinction. A new organisational form is emerging that will break down walls and bring people together, and in doing so, capture new opportunities and develop innovative solutions.

This statement – repeated often as Web 2.0 evangelists preach that corporate adoption of social media tools will trigger an e-ruption of creativity, innovation and productivity at work – was actually made just over 40 years ago by Alvin Toffler in his groundbreaking book, Future Shock. In the intervening decades, one thought leader after another has made similar predictions.

Toffler’s forecasts – about how information technology would soon revolutionise knowledge management in organisation – never lived up to their hype in the 1970s or 80s. That, however, didn’t stop Jim Maxmin, CEO of Thorn EMI, from proclaiming at the end of the 1980s: “In the last decade, excellence in business meant doing one thing well. In the decade to come, you will have to do everything well, and do it everywhere. The image of the corporation as a pyramid is dead. The new corporation will be more like a hologram, with shared information making each person, each part, contain the whole.”

The future has finally arrived. What’s different this time around is that a broader consensus seems to be forming. Web technology has crossed a tipping point and is now truly global and on the verge of becoming accessible to all. What’s more, companies are finally beginning to realise this: following initial foot-dragging, many are now actively embracing Web 2.0 tools. In a recent McKinsey survey, more than two-thirds of respondents admitted to using social media tools in their companies. The revolution, it seems, is finally happening. But revolutions can be as disruptive as they are empowering. To quote Tapscott from Wikinomics: “The new participation (brought about by Web 2.0 adoption) will also cause great upheaval, dislocation and danger for societies, corporations and individuals that fail to keep up with the relentless change.” Clearly, if the e-revolution is indeed happening, then executives urgently need to rethink how they structure, organise and manage their companies. Their success in doing so will determine whether their companies ride the crest of the revolution or are swept away by it.

Towards the Networked Enterprise
The broad adoption of social media tools has the potential to unleash a huge transformation in the way companies operate, resulting in a wide range of benefits including enhanced collective knowledge and greater innovation. Following are four key ways in which Web 2.0 tools are transforming organisations.

Increased collaboration: In its report, McKinsey found that when companies incorporate social media across the organisation, “information is shared more readily and less hierarchically, collaboration across silos is more common, and tasks are more often tackled in a project-based fashion.” This should not come as a surprise. One of the major benefits of the networked structure is that it increases information sharing within-and-among disparate departments and divisions.

A democracy of talents: Deployed across organisations, Web 2.0 software constructs open-ended platforms on which, in theory, everyone is equal. Employees working in such a setting are much more likely to openly share ideas and information exclusively for the benefit of the organisation as a whole – something that is rare in hierarchical organisations.
 
A culture of trust: With the rise of Web 2.0-enabled corporations, workers at all levels of the organisation have a much greater say in the day-to-day running of the company, while also enjoying the benefits of a culture of transparency. This, in turn, engenders stronger feelings of loyalty and trust amongst employees. Sadly, many companies still seem to have an instinctive fear of social media in the workplace. In a 2011 study by Robert Half Technology, more than one out of three CIOs surveyed said that their firms did not allow employees to use social networking sites such as Facebook or Twitter. Some employees are even getting sacked when caught logging onto social networking sites at work. Such blind resistance to social media adoption – while understandable – is not only counterproductive, but also highly risky.

Potential productivity gains: While many companies view social media as a ‘time sink’, the reality is that tools such as blogs, wikis and RSS feeds offer the potential to significantly increase productivity – as was shown by two separate studies by MindLab and the University of Melbourne. The latter research found that productivity increases 9% among employees who are able to access the Internet for fun during work. Ironically, the managers who dismiss MySpace, Twitter and Facebook as a waste of time are frequently the same people who themselves waste valuable time with pointless meetings. Even in the face of such widespread disapproval, employees in most organisations are still managing to regularly access their favourite social networking sites; if they can’t log on via their computer, they will simply connect through their smartphones. A recent study found that 76% of respondents visited Facebook, LinkedIn and Twitter at least once a day. What’s more, much of this social networking activity was work-focused, with many employees reportedly using their social networks to showcase their companies, which builds brand recognition and supports organisational goals, from recruiting to sales. All of which begs the question: if social networks can be deployed for a company’s greater benefit, why isn’t everyone rushing to e-mpower their employees?

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Source : IIPM Editorial, 2013

An Initiative of IIPMMalay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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