A New Era of Leadership - From Hierarchy to Network

A NEW ERA OF LEADERSHIP From Hierarchy To Network PASI MÄENPÄÄ Executive Vice President, Corporate Customers

ALL SERVICES THAT MATTER ALREADY HAVE SOCIAL FEATURES RATE VOTE COMMENT SHARE ON

FINLAND 40% are on Facebook. Source: Facebakers 5/2010

FINLAND 86% look for information on the web about products and services. Source: Tilastokeskus

FINLAND 5 OUT OF 10 top websites are social media services. Source: Alexa

FINLAND 19 20 (except nordea.ﬁ) OUT OF 20 top websites include social media features. Source: Alexa

SOCIAL MEDIA = DIGITAL MEDIA

DIGITAL MEDIA PHYSICAL MEDIA

LEISURE & FREE TIME CHANGES OUR CULTURE MEETINGS SERVICE SALES MANAGEMENT COLLABORATION

MANAGEMENT IS OFTEN DEFINED AS COMMUNICATION COORDINATION RESPONSIBILITY

COLLABORATION IS ALSO COMMUNICATION COORDINATION RESPONSIBILITY

COMMUNICATION ✖ COORDINATION ✖ RESPONSIBILITY ALL EFFECTIVE MANAGEMENT & COLLABORATION TODAY IS DIGITALLY DISTRIBUTED

CLOSED INNOVATION → OPEN INNOVATION Henry Chesbrough OUTSOURCING → CROWDSOURCING Jeff Howe MASS PRODUCTION → MASS COLLABORATION Clay Shirky CENTRALIZED PRODUCTION → COMMONS-BASED PEER-PRODUCTION Yochai Benkler

? HOW DID WE GET HERE

1 EFFICIENCY

BACK TO THE INDUSTRIAL REVOLUTION

ABSOLUTE CENTRALIZATION VLADIMIR LENIN Soviet Union, 1917-1924 Let’s run the country like a big factory!

CENTRALLY PLANNED ECONOMY TOP-DOWN DECISIONS ABOUT RESOURCES

ABSOLUTE DECENTRALIZATION ADAM SMITH Wealth of Nations, 1776 From mercantilism to free market economy!

THREE FORCES Rational Self-Interest Competition Supply and Demand CREATES ECONOMIC BALANCE

Theory of transaction costs RONAL COASE The Nature Of The Firm, 1937 Vs. CD-Rom Spotify

Internet reduces DECENTRALIZATION CENTRALIZATION transaction costs CLOUD COMPANY

Infrastructure Infrastructure: Foundation PaaS

Storage: Information Dropbox S3

Computing: Automation Virtual Desktop Infrastructure

Workforce: Collaboration Meeting Center

Ideas: Innovation

... ... ... Sales, Marketing, CS: Customer interactions Viihde

CLOUD COMPANY ... ... ... Sales, Marketing, CS: Customer interactions Ideas: Innovation Viihde Workforce: Collaboration Computing: Automation Virtual Desktop Meeting Center Storage: Information Infrastructure S3 Infrastructure Dropbox PaaS

2 PREDICTABILITY

F=ma IF WE HAVE GOOD ENOUGH MEASURING INSTRUMENTS, WE CAN UNDERSTAND THE LOGIC OF NATURE. Isaac Newton

Plan Do Act PDCA Check MANAGEMENT IS PREDICTION. W. Edwards Deming

MEASUREMENT AND PREDICTABILITY. THIS IS WHAT COMPANIES STRIVE FOR.

THE N-BODY PROBLEM HENRI POINCARÉ Mathematician (1854-1912)

INTERACTION ENERGY KINETIC (UNPREDICTABLE) ENERGY (PREDICTABLE)

THERE IS ALSO INTERACTION ENERGY BETWEEN PEOPLE AND ORGANIZATIONS.

SHOULD WE UPDATE OUR MANAGEMENT WORLD VIEW?

COMMUNICATION PARADIGM SHIFT PAST TODAY • Point-to-point • Context based • Linear • Temporal • Pre-deﬁned • Emergent • Prediction • Responsiveness LINEAR WORK CREATIVE WORK WHAT IS THE SEQUENCE? WHAT IS THE CONTEXT?

FOLLOW LOGIC MANAGERS CHOOSE THEIR FOLLOWERS. NET GENERATION CHOOSES WHO TO FOLLOW. BARACK OBAMA 4 MILLION FOLLOWERS

FOLLOW LOGIC MANAGERS CHOOSE THEIR FOLLOWERS. NET GENERATION CHOOSES WHO TO FOLLOW. TONY HSIEH 1.7 MILLION FOLLOWERS

DO WE ALLOW MISTAKES AND CAN WE LEARN FROM ALL PRACTICES?

“ PLANS ARE NOTHING; PLANNING IS EVERYTHING. ” – Dwight D. Eisenhower

DO WE INCLUDE ITERATION IN ALL OUR PLANS AND ACTIONS?

FOR MOST COMPANIES LEARNING IS A SEPARATE ACTIVITY CARRIED OUT BY HR DEPARTMENTS.

ARE LEARNING AND RESPONSIVENESS INHERENT IN ALL OUR PROCESSES?

MANAGEMENT IN AN UNCERTAIN ENVIRONMENT = ENABLING & EMPOWERING THE INTERACTION OF PEOPLE.

3 RESPONSIBILITY

IN ALL PHYSICAL MEETINGS THERE ARE MORE OR LESS THE WRONG PEOPLE PRESENT.

IN DIGITAL WORKING ENVIRONMENTS THERE COULD BE MORE OR LESS THE RIGHT PEOPLE PRESENT.

DO WE ENABLE EMERGENT COMMUNICATION PRACTICES? Meeting Center TelePresence

100 000 CANCELLED FLIGHTS 10 MILLION STRANDED TRAVELLERS

ALL EFFECTIVE TEAMS TODAY ARE DIGITAL & DISTRIBUTED. VIRTUAL TEAMS ARE AS REAL AS PHYSICAL TEAMS. Image: Halo Wars, Microsoft

IN ONLINE GAMES RESPONSIBILITY IS TAKEN, NOT GIVEN. • 10 minutes • 2 hours • for today • ... Image: World of Warcraft, Blizzard Entertainment

WHAT NET GENERATION IS SAYING IS THAT WORK TODAY IS A BADLY DESIGNED GAME.

INTRODUCTION OF GAME ELEMENTS 2009 2010 Ref: Alexa.com LOCATION-BASED SERVICES COME AND GO. UNTIL THE GAME GOT PROPERLY DESIGNED.

STATS BADGES LEADERBOARD

WORK IS A COLLABORATIVE AND COMPETITIVE GAME.

WHAT MATTERS IS HOW THE NETWORK RESPONDS TO INDIVIDUAL ACTIONS. Measure: INTERACTION ENERGY IN ADDITION TO INDIVIDUAL OUTPUT

WORK TOMORROW IS DIGITALLY DISTRIBUTED EFFICIENT COORDINATION HIGH QUALITY COMMUNICATION WIDE TAKING OF RESPONSIBILITY

FOLLOW ME. From Hierarchy To Network Designed by: PASI MÄENPÄÄ Executive Vice President, Corporate Customers

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A New Era of Leadership - From Hierarchy to Network

by Teemu Arina on Jun 24, 2010

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