Seattle Interactive Conference SIC 2012 Organizational transformation Innovation in technologies are truly revolutionary, but for many organizations the management philosophy hasn’t shifted. We are at the beginning of the "next revolution". And many think, that corporations and nation states are so "yesterday". But institutions are generally the last to innovate themselves and "hold outs" against positive transformation.

1. 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

2. Radical Transformation
-
causes or requires revolutions?

3. Interaction and connection
 New and more Knowledge ….
  Transformation

4. The last Knowledge Revolution …

5. Awesome Library
Bede:
 History from Julius
Caesar to 730 A.D.
 Made “A.D.” popular
 Access to “massive”
250 books

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

7. 200 years of chaos
Feudal Nation
3 casts classes

8. Radical transformation, again

9. Isn’t this cool?

10. The power in your hand in 10 years
looks like this today

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

12. Growth markets and global trends

13. The knowledge economy

14. 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)

15. Competing requires dramatic increases in...
PRODUCTIVITY CREATIVITY
AND

16. The Playstation generation...
...is the biggest top talent pool

17. Future power will be web based
Young people in one country are
more like young people in another
than older people in their own
Country A Cybercommunity X
As networks become more mature
non-geographic politics will start to
Country B Cybercommunity Y dominate
People will belong to a number of
Country C Cybercommunity Z network tribes and will identify
other members via their
Real World Cyberspace augmented reality

18. CHANGE Tomorrow will be very different…
The world has
changed and
Information,
collaboration and
will change knowledge sharing
even faster are essential
Organizations Flexibility is a
secure success factor in
opportunities the transforming
for their future world

19. Radical Transformation
 New forms of organization!

20. 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

21. 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

22. Leadership lessons
from global leaders
Agile success in a complex world

23. Building killer products and
organizations
-
Continuous improvement and
customer dialog

24. The “right” way or the “practical” way

25. From design phase to constant innovation

26. 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”

27. ROVIO’s Approach
 Total Customer focus—Fans are everything
 Franchise and expansion: VERY CAREFULLY!
 Angry Birds: Rio, Seasons, Space
 Amazing Alex
 Bad Piggies

28. Boomzap
 Completely virtual  Total transparency
from the start  Consistently top supplier
 Best talent of casual games for 7 years

29. Digital philosophy is a
new way of doing business
across all functions
(from recruiting to selling)

30. ….. Including marketing ….

31. Traditional advertising…
YOUR AD
HERE YOUR AD
HERE
…is like “Homeless Marketing.”
At best, you get a glance.

32. The evolution of media
Always on
Always connected
Banner ads Search ads
One-way media Two-way media Many-way media

33. And even companies like Nestle or Dell
get it

34. Still going to the office…?
M&Ms
are biggest productivity and creativity killers

35. Technologies and strategies for
unleashing the workforce’s
potential

36. Trends  Mobile work
 Remote access
 Data and capabilities in cloud
 Internet access everywhere

37. What if you could…
 Save 50+% of facility costs
 Have employees never
want to leave you.
 Increase innovation by 10X
How do you do this???

38. Mobile work: I love my iPad
In a car
73% On vacation
In the tub
92%
21%
Have you
ever used On a date Naked
your iPad… 17% 34%

39. Where do you begin?
Start with People, Place & Technology
7 “levers” and how ICT can “move the needle”
Office space Productivity
Place People
Travel Sick Leave
Cost of communication Technology Attract and retain
and collaboration the right people
Total cost of workplace

40. Lower costs & higher productivity
Attract /retain right people
-5% -15%
Office space Productivity
-15% -50% +10% +40%
Travel Place People Sick Leave
-5% -30% -2% -20%
TCO workplace Technology Cost of communication
+15% -25% and collaboration
+10% -30%
*Rotterdam University & Microsoft

41. Loving 520 and I-90?
-
during rush hour?

42. 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

43. Reorganisation. Restructuring.
Consultants
Customers
Rethinking. Networking
Support
Your Business
Headquarters
Suppliers
Old School Industrial Organization
Advisors

44. Revolutions can be painful…

45.  Transformation is worth it but not easy
 Know & understand the
cultural , historical, hierarchical,
obstacles: medical, technology
 Be clear on goals
 Manage transformation process
end to end

46. The Knowledge Economy
REQUIRES
creative approaches

47. 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

48. The job of a leader is
getting maximum output
from limited resources

49. Easy…
People as machines
-> Pay people more
and they will
do more

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

51. “Management By Terror”

52. SHORT-TERM 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”

53. But what about
Innovation….?
Do people innovate more
if we pay (or threaten) them
more?

54. 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

55. Want prove?

56. Experiment: does money make people
find creative solutions faster?
GROUP A GROUP B
“Experiment to “Top 25% get
measure average reward; Top 5% get
time to solution” larger reward”
Which group had better average?

57. Duncker’s Candle problems
Rewards and motivation can serve as blinders for our vision.

58. Candle Problem “Easy”

59. Team motivation & success
Toddlers versus chimps
Source: Hare et al, Science Sept 2007

60. 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

61. Building an organizational culture
People like to be:
Part of groups
Get recognized
Compete (with other groups)

62. Revolutionary Management?
-
Willing to consider scientific evidence
and change yourself?

63. No evidence this increases performance

64. Statistical distribution of performance
is a bell curve
-
who performs poorly now is
(statistically) likely to be at least
mediocre next time

65. Building a motivational structure
 Performance discussions don’t really
improve performance
 Internal competition kills willingness to take
risks and collaboration
 BAD PERFORMER
 GOOD PERFORMER

66. Do we
measure the
right things in
our businesses
and in our
lives?

67. The world we all want?
8.5
8
7.5
7
6.5
6
Happiness Wealth Love Health
Importance Ratings Worldwide
Source: Diener & Scollon

68. Money matters…
 Huge “Happiness difference” between
$5,000 and $50,000 per year
But…..
 Hardly any difference between
$50,000 and $5 Million

69. How are people motivated?
“What constituted positive mental health?”: Abraham Maslow 1908 - 1970

70. 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

71. MOTIVATION
Motivators in
the Knowledge Economy
 Independence
 Self-fulfillment
 Recognition
 Mastery
 Friendship

72. Is a “internal
– non -
competitive” culture
the “right” culture
for organizational success in the
Knowledge Economy?

73. The Playstation generation...
...is the biggest top talent pool

74. 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 &
More & more anytime
older people
are behaving like them… & test leaders
 Openly question

75. NO FEAR: The PlayStation Generation
Early
adapters & Networked Innovative
adopters
Community-
International Expect more
oriented
They are of vital importance
to companies, organizations and leaders

76. How Digital Cowboys Make Decisions
Cowboys are Commanders are Digital cowboys are
independent, centralized connected,
decentralized decision makers. decentralized
decision makers. decision makers.

77. Someone goes outside the process
Process-oriented
environment
Rome
Helsinki
Beijing New York
Vienna
London
Prague
If…then
Munich
Social collaboration environment

78. Gamification and the cowboy

79. 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

80. Why “gamification” works?
 Perfection  Effortlessness
 Completion  Playfulness
 Justice  Truth
 Aliveness  Self-sufficiency
 Richness  Wholeness (unity;
 Simplicity integration;
 Beauty interconnectedness;
simplicity; structure;
 Goodness order)
 Uniqueness
Delivers on “Being experiences” and a sense of “Self-actualization”

81. Agility:
Developing and driving
an agile organization
Embracing business
flexibility and speed

82. Or applying old school industrial
management to new challenges and
opportunities?

83. Industrial
Management
Excellence

84. Applicable
to an
innovative
industry?

85. Old School Industrial Management
or Agile Leadership? Dec ‘02 May ‘05 Oct ‘12
Apple $5B $34B $589B
Computer Companies Market Cap 2002 to 2012 Google $0B $50B $243B
Microsoft $276B $263B $245B
IBM $131B $149B $234B

86. CHANGE Tomorrow will be very different…
The world has
changed and
Information,
collaboration and
will change knowledge sharing
even faster are essential
Organizations Flexibility is a
secure success factor in
opportunities the transforming
for their future world

87. A language for culture

88. Culture transformation?

89. The 5 stages of creating major change
or
managing a revolution

90. Change is difficult….
and sometimes scary…

91. The Pace of Change
Natural change point
Decline
Acceptance or “The New Normal”
Slow adoption

92. Theory of Transition
Endings Exploration New Beginnings
Enthusiasm
Denial Energy
Anxiety Hope
Productivity
Shock Impatience
Morale Fear Acceptance
Anger
Skepticism
Frustration
Creativity
Confusion
Stress Approach-Avoidance
Reconciliation Reorientation Recommitment
Schlossberg; 1981 & 1995

93. Organizations are people, too

94. 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

95. The Rythm of Change
Dramatic change
ZONE OF
REVOLUTION
Systematic
ZONE OF
change REFORM
ZONE OF
REJUVENATION
Organic change

96. Communication
Simplify key messages
Amplify

97. What about Leadership
and Management?

98. Are you shouting
commands from a
safe distance?
…or leading in the
front line?

99. The heart of helicopter ability
 The ability to see things from high enough
 The ability to land quickly at any time
 The ability to raise up again rapidly

100. New requirements for
LEADERS today’s leaders
 Frontline management
 Transparency
 Efficient communication
 Information sharing
 Celebrate failure
 Knowledge is powerful when shared

101. 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

102. 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.

103. THANK YOU!
Mark Mueller-Eberstein
The Knowledge Economy Research Institute
and
CEO of Adgetec Corporation
Bestselling Author
 MarkME@adgetec.com
 Twitter: MarkMEberstein
 US +1 855.423.4383