GfWM Position Paper Knowledge Management and Enterprise 2.0

Knowledge Management and Enterprise 2.0
Position Paper of the Knowledge Management Association
(Gesellschaft für Wissensmanagement e.V., GfWM)
Version 1.1

Authors of the GfWM Knowledge Management Expert Team (in alphabetical order): Axel
Dornis, Benedikt Scheerer, David Wagner, Gabriele Vollmar, Martin Kimmich, Gerhard
Peter, Simon Dückert

1. About this document
This position paper "Knowledge Management and Enterprise 2.0" was drafted by the Knowledge
Management Expert Team of the Knowledge Management Association (Gesellschaft für
Wissensmanagement e.V. [GfWM]) between April-September 2011 and is released free of charge
under the Creative Commons licence; re-use is expressly welcomed. The latest version of and
information on further developments are available at http://www.gfwm.de/fachteam.

When quoting the source, please use the following text: "Knowledge Management Association
(Gesellschaft für Wissensmanagement e.V.) (Eds.) (2011): GfWM Position Paper on Knowledge
Management and Enterprise 2.0. Downloaded on dd/mm/yyyy from http://www.gfwm.de/fachteam".

2. Introduction
The term "Enterprise 2.0" was coined in 2007 by Andrew McAfee, an academic at the MIT Sloan
School of Management (McAfee, 2007). The term is derived from "Web 2.0", a new way of using the
Internet which was described by Tim O'Reilly in 2005 (O’Reilly, 2005). Although the term Enterprise
2.0 actually suggests a new type of company, it is currently used as a synonym for "Web 2.0 tools in
companies" and therefore has largely technological connotations:

 2006 (spring): Andrew McAfee explains Enterprise 2.0: "I use the term Enterprise 2.0 to focus
only on those platforms that companies can buy or build in order to make visible the practices
and outputs of their knowledge workers" (McAfee, 2006a).

 2006 (May): Andrew McAfee publishes a second version of his definition: "Enterprise 2.0 is
the use of emergent social software platforms within companies, or between companies and
their partners or customers" (McAfee, 2006b).

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 2010: The European Commission's Enterprise 2.0 Study establishes "The application of Web
2.0 technologies in the enterprise" as the definition on which most of the participants surveyed
agreed (Osimo et al., 2010).

Thus, until now, Enterprise 2.0 has focused more on the technical platforms. Other important factors,
such as trust, cultural change and real support from top management, have been largely ignored. In
this position paper, the Knowledge Management Association (GfWM) would like to put forward a
broader definition of Enterprise 2.0. The view of Enterprise 2.0 presented here is influenced by the
definition of knowledge management as "targeted creation of conditions and processes in an
organisation with a specific focus on knowledge as a production factor" (GfWM., 2009).

As a result, GfWM distinguishes between the conceptual approaches of "Introducing Enterprise
2.0" and "Being Enterprise 2.0" and backs the second approach, as the first generally merely results
in the introduction of IT systems. The Knowledge Management Association Expert Team drafted the
following definition of Enterprise 2.0:

An Enterprise 2.0 is a learning organisation,
which reaches its goals via actions which promote learning and
by using social media.
A learning organisation is an organisation with the ability to
develop, obtain and distribute/share knowledge, and to modify its
behaviour based on new knowledge and insights.

Fig. 1: GfWM Enterprise 2.0 definition

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The following statements clarify the contents of the definition:

 Enterprise 2.0 involves more than just the use of Web 2.0 technologies in an
organisation.

 Enterprise 2.0 affects innovations in the technical, social and management system of the
organisation.

 Being Enterprise 2.0 changes the organisation's culture, values and management style.

 Like knowledge management, Enterprise 2.0's ultimate objective is the learning
organisation.

 Enterprise 2.0 requires dialogue, learning and innovative work forms using social
media.

 Enterprise 2.0 not only refers to companies, but to all kinds of organisations.

 Enterprise 2.0 affects all areas of a company.

 Enterprise 2.0 blurs the borders between the company and its environment.

 You cannot introduce Enterprise 2.0, you can only be Enterprise 2.0.

 Enterprise 2.0 is a risk, but a necessary risk for organisations.

Fig. 2: Statements clarifying the GfWM definition of Enterprise 2.0

We encourage all organisations to consider these definitions and statements on their journey into the
2.0 world, so that they don't experience the same disappointment as with the last IT hype in knowledge
management at the beginning of this century, for "a fool with a tool is still a fool".

3. History and trends
Where exactly does the history of Enterprise 2.0 start? The term Enterprise, or company, indicates its
origins are organisational. The version number, 2.0, indicates a connection to the software or Internet
industry. As described above in the definition, the term was primarily created to describe the use of
Web 2.0 tools or social media in company environments. Therefore, it is these technological
developments in particular that will be examined more closely.

From Memex to Facebook & co.
As early as 1945, there was a visionary by the name of Vannevar Bush, who foresaw the development
of a machine called Memex (Bush, 1945), which would allow individuals to collect, store and rapidly
and flexibly access all books, notes and written correspondence of all kinds. Today, we are not too far
away from Bush's vision, now that computers allow us to perform most of these tasks. Since then
technology has developed at a frantic pace. The first e-mail was sent in 1966, and the first newsgroup
was established in 1979. In 1990, Tim Berners Lee developed the precursor to the modern Internet. In
1997, the first social network, sixdegrees, opened its doors on the Internet. Two years later, in 1999,
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the first blog platform was introduced. Ward Cunningham presented the first Wiki in 1995. However,
it was Jimmy Wales who actually started the Wikipedia online encyclopaedia in 2001, even though he
had already failed with a similar project once before. The predecessor, Nupedia, was developed based
on an academic model. All articles were written by experts, and the creation process entailed a
complex revision system (Cowan, 2011). The reasons for the failure of Nupedia and the overwhelming
success of Wikipedia lead us to ask about the new concepts in the context of Web 2.0, which will be
discussed below. The business networks LinkedIn and OpenBC (now Xing) went online in 2003,
followed by the YouTube video portal in 2005. Twitter and Facebook have been in operation since
2006, whereby the latter had already been available for a few years in a restricted form. Today, hardly
any companies work without computers, software or the Internet. Microsoft, SAP and Google are
among the most important technology corporations in the world. The overall IT and communications
industry makes a major contribution to the growth and wealth of the developed world. According to a
study by McKinsey, the industry accounted for roughly one fifth of economic growth in the last five
years (McKinsey Global Institute, 2011). Figure 3 shows the development described above in graph
form.

Fig. 3: History of social media (Source: Edudemic, 2011)

Social media in a business context today
The use of social media in the business environment ("web-based software systems which facilitate
networking and the interaction of users" as per the definition in the D-A-CH glossary) is a more recent
development. The most popular applications are blogs, RSS, videos and Wikis (McKinsey, 2009a).
Rapidly growing companies were particularly quick to introduce these technologies comprehensively,
while corporate blogs, Twitter accounts and Facebook fanpages are commonplace even in more
conventional companies (Barnes, 2010). Access to knowledge, reduction of communication costs and
the identification of experts are the most commonly mentioned advantages of the tools for use
internally and with partners. This shows a clear link to the topic of knowledge management. In
external communication, marketing and customer orientation play a greater role, while learning effects
are also involved (McKinsey, 2009a).

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Where does this road lead?
Reid Hoffman, CEO of LinkedIn, and Tim O’Reilly, the founder of O’Reilly Media, spoke about the
development of the third generation of the Internet, or "Web 3.0", in an interview (TechCrunch, 2011).
They predicted an explosion of data to be analysed and used. It appears likely that data will be linked
or connected more and more to people and places. Scientists will then be required to analyse and
interpret it. Hoffman and O’Reilly also assume that production and consumption will take place at a
decentralised level, resulting in new business models (such as e.g. Groupon or Zipcar). However, they
emphasise that not only the media industry benefits from data use, it is also advantageous for
producers in classical industries. Gartner, one of the leading IT research and consulting companies,
confirmed the increasing tendency toward interpreting network data (Gartner, 2010a). Areas such as
Cloud Computing, mobile applications, online collaboration and finding figures for evaluating
interactions on the Internet currently have a particular strategic importance (Gartner, 2010b).

4. Areas of application and benefits
Based on the definition that Enterprise 2.0 companies are to be viewed as learning organisations which
achieve their goals via new ways of behaving and using social media, the following section shall
discuss the use of social media in an organisational context and its effects on these contexts on the
basis of practical examples.

A tool is only as good as its positive effects in use. We distinguish between Business to Business
(B2B), Business to Employee (B2E), Employee to Employee (E2E) and Business to Customer (B2C)
applications. Two alternative classifications are presented in Social Media Prisma (Ethority, 2011),
which focuses on the primary function of a tool, and McKinsey (McKinsey, 2009a), who distinguishes
12 types of knowledge employees and attribute the tools to the respective activities.

Each application will be illustrated with an example. Two examples reflect the experience at Festo AG
& Co. KG. The two others (Börse Berlin AG and ABB AG) were taken from the Enterprise 2.0 case
studies (Back et al., 2011) and are reprinted in highly abridged form.

Each case clearly shows that the tools differ in their suitability for the relevant needs. It is also clear
that a certain fundamental attitude by the company is required if the tools are to be used. For example,
Festo already committed to the concept of the learning organisation in the eighties, and it has been
developed continuously since then. It has also been found that the benefit differs depending on the
individual case. (For a general overview of the benefit arguments, see the McKinsey Web 20 Survey
(McKinsey, 2009a)).

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External communication (EC) Internal communication (IC)

Business Business Business Employee
to business to customer to employee to employee
(B2B) (B2C) (B2E) (E2E)

Festo Webcast Berliner Börse ABB Blog and Festo knowledge
(Berlin Stock Wiki network
Exchange)

Fig. 4: Classification of Enterprise 2.0 areas of application

Festo knowledge networks (IC, E2E)
The markets have changed fundamentally in recent years for performance and innovation leaders in
industry. In addition to globalisation, an increasingly dynamic environment and ever greater
diversification of customer requirements, efficient processes have become a key unique selling point
when faced with the competition. This makes the ability to cooperate at a global level particularly
important. The example of Festo AG & Co. KG, the automation expert from Esslingen, Germany,
shows how international innovation can be implemented successfully using knowledge networks as
the knowledge management method. At Festo, knowledge networks are based on the community of
practice approach (CoP), one of the most prominent knowledge management tools. While CoPs
generally focus on self-organisation and voluntary participation, the knowledge networks are an
organisational aid for networking experts on strategically important topics, thus facilitating virtual
collaboration. In addition to putting content in writing, the focus is on collaboration to create an
Enterprise 2.0, i.e. with the objective of joint learning facilitated and supported by social media
between experts spread around the world.

Here is an example from the automotive industry management. Knowledge networks are established
systematically for important strategic topics in line with the company's business development. The
functions of a knowledge network can be shown clearly using the automotive industry - an important
industry for Festo - as an example. Decade-long partnerships have been established based on
application-optimised components and systems for factory automation. In accordance with the global
structures of automotive customers, a global network of automotive expertise must be provided.
Focused and long-term use of the knowledge network method promotes international processes in the
sales and engineering divisions. Continuous and transparent communication, with increasing use of
Web 2.0 tools, is particularly key to global value creation and innovation.

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Global collaboration is made possible through the precisely coordinated interaction of the following
communication tools:

 Web-based collaboration site: Central access to all relevant information in a single location
(single point of information). This allows employees worldwide to find the latest relevant
documents in a clear structure.

 Annual competence meeting: Its workshop-type character and interaction enable activities to
be defined and implemented with global cooperation. Each country manager presents
information in a compact form; potential synergies are then defined and appropriate activities
are drawn up.

 Monthly newsletter: The monthly newsletter is an important channel for communicating
success stories and important market, product and customer information globally.

 Regular web and video conferences: As face-to-face meetings are only occasionally possible
and almost all automotive manufacturers are global players, web and video conferences are
used frequently.

At Festo, knowledge networks are created using a holistic approach consisting of face-to-face
meetings, efficient virtual communication, structured documentation and team-building exercises
designed to build up trust. A further success factor is the realisation of participants that only personal
commitment can make a contribution to the corporate goals and that networking does not happen
automatically. It is also becoming increasingly clear that such a communication process can be more
long lasting if it is moderated externally due to the lack of familiarity with the subject matter.

ABB blogs and Wikis (IC, B2E)
The scenario is familiar: in geographically dispersed organisations, experts have trouble networking
themselves. One reason for this is that very little is known about the work of others or there is no way
of obtaining information on it. As a result, the wheel is reinvented again and again, and there is no
mutual learning. The more projects are implemented in international and interdisciplinary teams, the
greater the problem.

ABB AG is a globally active company with over 100,000 employees which faces these very questions.
In a project which initially addressed only the communication departments in Central Europe, but was
accessible for everyone, solutions for efficient virtual collaboration were to be studied (Steinhüser and
Räth, 2010).

The project pursued the following targets:

 More efficient organisation of the work, resulting in cost savings.
 Reduction of the information overload by allowing employees to obtain relevant, task-specific
information.
 Use of synergy effects by providing best practices.
 Putting a more creative working environment in place (exchange of knowledge across
departmental and national borders is intended to allow new ideas to be generated and
developed further via discussions).
 Preserving expertise (where possible)
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 Creating an image of an innovative and open company, not only in the industry but also on the
labour market

The solution chosen comprised three elements: Wiki, blog and newsletter. Before the rollout, initial
texts, links and contacts were inserted in the Wiki. In order to allow more sensitive topics to be
covered, access to specific areas of the Wiki can be protected. However, all ABB employees can
generally still post, edit and discuss texts in the Wiki. Above and beyond its function as a simple way
of storing information, the Wiki also provides support for virtual collaboration and during face-to-face
meetings. This allows employees to exchange information and agree on discussion topics. They work
together on projects (in access-protected areas, if necessary). The ability to review who updated what
and when, when something was discussed and the results of earlier agreements via the History
function supports the work and acts as a basis for generating a final document at the end of the project.

The blog is used to publicise and comment on new content in the Wiki, publish up-to-date information
from relevant areas and tips from the communication department. Write access to the blog is restricted
to members of the "creative hotbed" and corporate communication department. All employees can use
the comment function.

In order to allow new content from these two tools to be passed on to employees in good time, a
newsletter is produced and distributed on a regular basis. It is sent out via e-mail, on which the
company relies quite heavily, while employees gradually get used to the new tools.

Comprehensive information (e.g. to raise interest before the project) and the individual motivation and
advice of potential multipliers were also found to be success factors. In addition, expert employees
ensure that the information is valid and act as Wiki “gardeners”. This not only increases trust in the
content, it also shows employees what kinds of information can and should be published and how. The
relatively open corporate culture and existing experience of communicating via a (partially) public
platform had a positive influence on the acceptance by the users. A further positive effect was that
management set a good example, e.g. by reacting to contents and writing articles themselves. Finally,
the fact that Web 2.0 is frequently reported on in the media ensured that many employees were
interested in and open to the topic.

However, there are several barriers to success. On the one hand, many employees are hesitant to
communicate publicly (unwillingness to divulge private knowledge, or fear of making mistakes in
public). In addition to this, some department/division managers, who were afraid of losing control of
their departmental knowledge and internal communication, offered some resistance. This shows that a
relatively open corporate culture at a group level is essential, but is not something that can be
transferred to all areas and departments. Spelling out the advantages of Wikis and blogs also proved to
be one of the greatest challenges. Anyone who is already under considerable stress from their daily
work could view the new tools as an additional workload and be unwilling to invest time.

In short, the three step solution using Wiki, blogs and newsletters proved a highly successful way of
shepherding employees gradually towards an Enterprise 2.0.

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Festo Webcast (EC, B2B)
Webcasts are interactive, live presentations via the Internet. While communication is “one2many”,
there are still interactive elements such as a chat function and the ability to record and re-use them as
video files. A sample application is the online press conferences that Festo has been organising since
2009. As every year, Festo planned to hold a press conference at the Hanover Trade Fair in 2009.
However, many editorial teams replied that they would not be able to attend the trade fair, as a result
of the significant decline in advertising. The company immediately re-thought its approach and invited
members of the press to an online press conference before the trade fair. Festo brought together
interested specialist journalists for this multimedia web event, using software for webcasts, and
provided them with information on innovations at the trade fair without any of them having to leave
their desks.

Festo sent invitations via e-mail to specialist journalists with a direct link to the Festo website where
the web conference was to start at the time announced. The Chairman of the Executive Board, Dr.
Eberhard Veit, and two product specialists spoke at the online press conference. Both the speakers and
the presentation slides were shown live. Festo broadcast videos to present the innovations. A presenter
started the presentations and videos, announced contributions, read chat messages and led the
subsequent discussion. Over 20 important specialist writers took part in the online press conference
and asked questions during the chat.

Berliner Börse (Berlin Stock Exchange) (EC, B2C)
Companies are not always in direct contact with their customers. Sometimes this is done by agents or
intermediaries. This makes an adaptation of the product range to suit the customer more difficult, and
can even prevent it entirely.

The Stock Exchange in Berlin was faced with just such a situation. As banks form the interface to
private investors, there is a lack of demographic data and not enough data on the preferences and
needs of their own customers. The hypothesis is that social networking software can contribute to
bridging the existing communication gap in the stock exchange area (Stieglitz, 2011).

A new communication channel was to be established between the Stock Exchange and the private
investor customer segment to obtain knowledge on their preferences, increase customer loyalty, take
customer ideas into account and integrate them in internal value creation processes. The technical
basis for this was provided by an online discussion forum, a chat system and weblogs.

Three target areas were determined: market research, communication policy and market and product
policy. The number of members and articles published in the forum were identified as the key
variable. As a result of a change in the company strategy, the project was cancelled in mid-2008 after
roughly 1 1/2 years. Valuable findings were gained during this period.

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 Market research: 740 people had registered by mid-2007. A questionnaire was used to gather
demographic data and statements on their preferences.

 Communication policy: The discussions in the forum and the services offered such as RSS
feeds and expert chats were used to provide customers with product information. This led to a
long-term communication relationship with customers.

 Market and product policy: The constant dialogue via the platform and a systematic analysis
of the contents generated by members allowed the company to identify and analyse the
participants' preferences for the stock exchange. This information was used in designing the
market and product.

Support from management and the departments involved was one aspect which guaranteed its success.
However, closer interaction through existing channels and customer contact points (website, call
centre, seminars) would have made sense.

5. Organisational culture, principles and values
So what makes a company an Enterprise 2.0, other than the use of Web 2.0 technologies? The
hypothesis presented in this position paper is that Enterprise 2.0 is characterised by a new form of
organisational culture, and, linked to that, a new type of management. Based on the definition by
Edgar H. Schein (Schein, 1997), we define organisational culture as follows: "A pattern of shared
basic assumptions that the group learned as it solved its problems of external adaptation and internal
integration, that has worked well enough to be considered valid and, therefore, to be taught to new
members as the correct way you perceive, think, and feel in relation to those problems". Accordingly,
an organisation's culture consists of an appropriate trial-and-error approach (allowing rapid problem
solving), implicit routines, standards as well as values and opinions, which influence the selective
perception and interpretation of information by their members and their actions.

In order to represent what is new in an Enterprise 2.0, the development over the last approx. 100 years
from an Enterprise 1.0, defined as a company focusing on Taylorist methods, to an Enterprise 2.0 will
be outlined below. Taylorism does not refer to the actual concept of scientific management founded by
Frederick Winslow Taylor (Taylor, 1911); in this context we use it to mean its interpretation and
implementation in the majority of companies. The diagram (Fig. 5) refers to the three dimensions of
culture, values, principles and artefacts according to Schein. The values shown in the diagram along
the time axis are not intended to represent the actual first occurrence or disappearance of these values
or a significant change in their meaning for and in organisations. For example, the principle of
measurability did not disappear entirely from organisations, but became less important as knowledge
work became more prevalent (Fig. 5).

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Knowledge based work Knowledge-intensive work Knowledge work
P a tria rc h a l P a rtic ip a tive m a n a g em e n t
m a n a g em e n t

Company suggestion
system
Artefacts Bonus payments Target agreements
Knowledge balance
Stopwatch Quality circles
PDCA Idea management
CKOs
KPIs Codetermination Wikis

Incremental Trust
Authority
improvement
Freedom
Creativity
Control
Values Measurability Openness
Emergence
Democracy Innovation Interactivity
Efficiency
Constant Individualisation
Autonomy
change
Individual responsibility

Work preparation TQM
Division of labour Kaizen/KVP EFQM
Job norms Toyotism Systematic
Fordism thought
Principles Process-oriented
Result orientation customer focus
Learning
organisation
Taylorism

Fig. 5: Knowledge-based work, knowledge-intensive work, knowledge work

As shown above, the outlined development is related to the development of work which relies heavily
on knowledge. The terms "knowledge-based work", "knowledge-intensive work" and "knowledge
work" replace the more frequently used dichotomy of "manual labour" versus "mental work", which
we believe to be too simplistic, as manual labour always involves knowledge and mental work also
involves routine elements which do not strictly speaking qualify as knowledge work.

The three terms are defined as follows:

 Knowledge-based work: Work which involves experience and knowledge (ultimately pretty
much all human activities)
 Knowledge-intensive work: Work which involves comprehensive training or many years of
experience in a particular field
 Knowledge work: Work in which expertise obtained on a one-off basis is not sufficient. It
requires "that the relevant knowledge (1) be continuously revised, (2) be constantly considered
improvable and (3) be viewed as a resource rather than an absolute truth and irrevocably
linked with ignorance, with the result that knowledge work is associated with specific risks."
(Willke, 2001).

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Knowledge work differs from knowledge-based or knowledge-intensive work as follows:

Knowledge-based/Knowledge-intensive work Knowledge work

Defined results Varied, largely unpredictable results

Continuity, defined labour process Spontaneity, flexibility, adaptability

Dependence on available information Low dependence on available information

Organisational structures with fixed Dynamic cooperation and communication
responsibilities and no room for manoeuvre relationships

Fig. 6: Knowledge-based/knowledge-intensive work vs. Knowledge work
(cf. Vollmar, 2007)

However, the distinctions between these categories are not clear-cut; the transitions – in particular
between knowledge-intensive work and knowledge work – can overlap. As a result, these categories
cannot be clearly attributed to specific professions, as to some degree every job entails both phases of
knowledge-based and phases with knowledge-intensive work, as well as knowledge work. It is equally
true that the work of an engineer is not exclusively creative (knowledge work), but also involves
having to format Excel tables (knowledge-based work), and that skilled workers can always rely on
the knowledge they learned on a one-off basis (knowledge-based or knowledge-intensive), but are
always faced with new challenges which require creative action (knowledge work). This
understanding of (knowledge) work in all its variety thus rules out a simple separation into blue collar
workers and white collar workers. Thus, a knowledge worker is someone whose work is dominated by
knowledge-intensive work or knowledge work (Tiemann, 2009). According to the definition in the
GfWM D-A-CH Knowledge Management Glossary, knowledge workers are people "...who primarily
develop, apply and share knowledge as part of their professional activities in the value creation
process. Knowledge workers are generally faced with barely or unclearly defined tasks, missing
structures in the labour process and no clearly predictable result."

In fact, the importance of knowledge work compared with more knowledge-based or knowledge-
intensive work has increased everywhere as the value creation focus has shifted from the production of
series products to individualised complex services, and innovation and development times have
shortened. (Zukunftsinstitut, 2006). Against this background, the Enterprise 2.0 concept and the
characteristics of a knowledge work-promoting environment described below should also be
considered a response to the challenges associated with this.

But what are the new characteristics of Enterprise 2.0? The clearest paradigm shift is the loss of
control due to the loss of objective measurability because of the nature of knowledge work compared
with more knowledge-based work (see above) and thus the increased importance of freedom and trust.
The motto "You cannot manage what you cannot measure" is no longer applicable, as quantitative
measurement methods become less and less applicable in learning, networked, self-organised and

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complex Enterprise 2.0 organisations. Trust increasingly takes the place of control. This conflict gives
rise to further characteristics of an Enterprise 2.0 organisation:

• Polyphony and bottom-up: The classic dichotomy of "labourers" (blue collar) and
"managers" (white collar) is replaced by cooperation, making the most of crowd intelligence,
i.e. the use of collective intelligence in an organisation and an appreciation of different
individual voices. Initiatives do not necessarily come from management, but from any part of
the organisation.
• Self-organisation and autonomy: As a result, the members of the organisation also feel
responsible for the bigger picture and have the freedom to fulfil themselves and work towards
this bigger picture. According to Charles Ehin, this is very much a human need (Davey, 2011):
"Consequently, people need freedom to explore and interact with individuals who are part of
their immediate surroundings in order to find their specific footing regarding their unique
talents, skills and experiences. Discovering what roles they can meaningfully play in varying
social settings is an important continuous effort for everyone."
• Networking: The organisation members are not (only) linked along a clearly structured
hierarchy, they are also integrated in a complex network, not only within the organisation, but
also beyond its borders.
• Provocation and willingness to change The organisation can be provoked, i.e. pushed into
making changes (by contrast to the necessary stability of 1.0 companies). This requires
openness at all levels (individual, team, overall organisation). The borders between internal
and external company areas are becoming blurred.
• Meaning and fun: Work is viewed as meaning full and fun (intrinsic motivation)

In the introduction we linked Enterprise 2.0 with the term learning organisation. We will therefore
briefly discuss this term. In organisational development, it refers to an adaptable organisation which
reacts to internal and external stimuli; the degree of capacity to learn and adapt is the organisational
intelligence. Peter Senge defined 5 disciplines which make up a learning organisation (Senge, 1990):

1. Personal Mastery - This focuses on the personal development of the members of the
organisation.

2. Mental Models - Explicit and implicit basic assumptions are revealed and thus become a
subject of learning and development.

3. Shared Vision - The members of the organisation understand and internalise the shared goals.
Visions often also have a significant emotional component.

4. Team Learning - The members of a team learn together, whereby the team is more than the
sum of its individual parts.

5. Systems Thinking - The organisation is viewed as a complete system in terms of its
mechanisms (and not as a linear mechanism) (Senge, 1997).

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These five disciplines of a learning organisation and the abovementioned characteristics of an
organisational culture 2.0 also affect the management concept of an Enterprise 2.0 in our opinion:

• Focus on clear visions and goals: Orientation is no longer the result of specifications and
control, but of shared goals and visions. The manager's responsibility is to impart them.
• Joint goal setting processes, participation: However, these goals are not specified, they are
developed collaboratively. The manager is a moderator in this process.
• Supporting new ideas: Ideas are no longer produced at management level and only
implemented at lower levels, they are created in a bottom-up process. This process must be
supported by appropriate conditions and suitable behaviour (appreciation), which includes
rewarding commitment and tolerating errors.
• Establishing conditions: Managers lose their interpretation authority to crowd intelligence,
and instead become the active creators of conditions which facilitate creativity,
communication, autonomy and learning at all levels.
• Moderator and coach: This includes moderating the various flows of communication
logically and meaningfully or developing teams and employees by coaching (personal
mastery, team learning, see Senge).

6. Development into an Enterprise 2.0
Enterprise 2.0 cannot be viewed as the introduction of software
We have already shown that the current popular definitions of Enterprise 2.0 are largely characterised
by technology. According to GfWM, Enterprise 2.0 encompasses those companies which use social
media to develop, obtain and distribute knowledge and to change their behaviour based on new
knowledge and findings. Linear workflow models such as the waterfall model by Winston Royce
(Royce, 1987), which is appropriate for classic software, are not sufficient for the development into an
Enterprise 2.0 as it involves more than just software. The process consists of a complex organisational
development where the use of tools cannot be separated from the abovementioned cultural changes
and the objective of organisational learning. The interconnection of the underlying principles of the
social media to be introduced, e.g. self-organisation, trust, and the existing company and management
culture are not taken into account by classic introduction strategies.

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Three aspects of an Enterprise 2.0
GfWM defines an Enterprise 2.0 as a learning organisation which reaches its goals by taking new
actions and using social media. The chapter on organisational culture, principles and values already
showed that effective use of social media for organisational learning requires a change in management
and corporate culture. Accordingly, three aspects must be incorporated in the development into an
Enterprise 2.0:

Management and corporate culture

Based on the previous chapter on corporate culture, the following aspects are required among others:

 Orientation towards clear visions and goals
 Shared goal setting processes and participation
 Self-organisation

Use of social media

According to Ross Dawson (Dawson, 2009) there are five particularly elementary aspects for ensuring
that employees use social media:

 Acquiring skills during training courses
 Presentation of personal benefits
 Generating critical mass
 Removing fears
 Embedding the use in everyday work

Organisational learning

Garvin (Garvin et al., 2008) describes four elements of a supportive learning environment in a
company:

 Security and tolerance of mistakes
 Support of different opinions
 Openness for new ideas
 Time for reflection and discussions

These three areas for action in the development into an Enterprise 2.0 must be viewed holistically and
systematically, and their interactions must be taken into account in the continuous change process. If
employees are only enabled to use social media, this will not automatically improve organisational
learning. In order for this to happen, initiatives to facilitate a supportive learning environment must be
put in place at the same time. In turn, organisational learning can only reach its full potential if
management and the decision makers are prepared to change the management and corporate culture. A
management and corporate culture characterised by increased participation, self-organisation and
openness can only evolve continuously if an environment which promotes learning is created, and
employees are empowered to use social media. As already shown in previous chapters, social media
themselves are based on the principles of self-organisation, participation and transparency. The use of
such social media therefore intrinsically influences corporate culture; however, management is the
limiting factor in this respect.

15

These three areas of action must be tackled in parallel and in an integrated fashion, not sequentially.
People with different professional backgrounds are required to facilitate the long-term development
into an Enterprise 2.0. It would be preferable to have a dedicated project team to ensure this happens
but this is only of limited practical value in the long term. The major challenge, organisationally and
operationally, is to facilitate such a development.

The necessity of practice and repetition
As already mentioned, GfWM believes that Enterprise 2.0 cannot be simply introduced, it requires a
continuous development of the three dimensions referred to earlier. According to the GfWM Expert
Team, the Deming or PDCA cycle (Deming, 1982) can be used as an approach as it is already used in
project management and quality management for continuous improvement processes. It is particularly
suitable for the development into an Enterprise 2.0 since that cannot be planned exhaustively from the
outset; it is necessary to go through continuous cycles of repetition and learning loops (Argyris,
Schön, 2002) in order to identify mistakes and develop corrective measures. The cycle comprises the
following four elements.

 P - Plan: Enterprise 2.0 measures are developed in the planning phase.
 D - Do: The planned measures are implemented throughout the entire company.
 C - Check: The measures are checked and evaluated for efficiency.
 A - Act: On the basis of the result, any corrective measures required are introduced.

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Through practice, participation and communication of successes (Quick Wins), an organisation can
develop into an Enterprise 2.0. By repeatedly applying all the principles, the maturity of the
organisation as an Enterprise 2.0 (Schönefeld, 2009) increases continuously, as the following diagram
shows:

Developing management
and corporate culture

Facilitating
Use social organisational
media learning
Maturity

Act Plan

Check Do

Time

Fig. 7: Development into an Enterprise 2.0 by practice and repetition (own representations)

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7. Negative scenario
It is 2016. Five years have passed since ItsAlwaysBeenThatWay Ltd.'s management decided to give
Enterprise 2.0 a try. At the time there were good reasons for this: protecting its own brand (e.g. against
criticism); protection against losses of intellectual property; fear that employees will spend too much
time on Facebook etc. during working hours; manager's fear of losses. And hadn't the traditional media
and procedures already fulfilled their purpose?

When compared with the competition, in retrospect, many opportunities were lost as a result. And we
could have known better. Analysts (e.g. Gartner (Gartner 2010)), systems companies (e.g. C-suite
studies by IBM (IBM 2010)), institutes (e.g. Zukunftsinstitut (Rauch, Horx 2010)),universities (e.g.
UMass Dartmouth (Barnes 2010)) or associations (e.g. BITKOM (Bitkom 2008)) pointed to the
increasing importance of Enterprise 2.0 in their studies.

Five applications (“use cases”) will be used as examples to show where the opportunities were missed:

1. Brand monitoring – Discussions on the company/our products go unnoticed. Not
participating in social media does not mean that no-one is speaking about a company.
Customers still report on their experiences with ItsAlwaysBeenThatWay Ltd.'s products and
employees express themselves anonymously in forums, both positively and negatively.
Communication can only reach its goals if you monitor your own brand. Especially negative
comments require speedy reactions.

2. Dialogue with customer and partners – Potential innovations are not fully utilised.
Innovations are not acts of an individual genius. They are always the result of many people's
work. Open dialogue with customers and partners – whose triggers are often found in social
networks (see above) – creates additional potential. In particular companies from high-wage
countries should utilise this potential (moving from standard products to customer-specific
solutions). Modern IT is both a blessing and a curse. On the one hand, it increases
transparency and comparability of companies and their (standard) products. On the other hand,
it forms the basis for collaboration.

3. Human resources – Not the best people were employed. The war for talents is underway. In
particular, small and medium-sized companies will have trouble finding suitable applicants in
future. Enterprise 2.0 offers companies new and low-cost opportunities:

a. Job adverts: There are more and more channels (e.g. Twitter, Facebook, LinkedIn,
XING) via which adverts can be posted; personalised adverts (AdWords) permits
focused contact; and virtual careers fairs facilitate dialogue with potential candidates.

b. Applicant selection: Professional social networks (e.g. XING or LinkedIn) offer an
opportunity to gain an initial impression of applicants.

c. Arouse interest in the company: Potential applicants are to be given the impression
that we are an attractive employer. However, glossy presentations are less and less
suitable. What is required is authenticity. Take for example the videos on starting an
apprenticeship at Krones AG. They provide an authentic impression of the life of a
trainee. The target group not only includes those who are actively searching for a job;

18

the interest of employees in other companies can also be awakened. Key words such
as corporate culture or work-life balance play an increasingly important role.

d. The discussions on platforms such as kununu [German recruitment marketing
platform] or glassdoor, where employees evaluate their employers, must also be
monitored. This is where Enterprise 2.0 meets brand monitoring.

e. Finally, young employees in particular expect their companies to provide them with
tools similar to those to which they are accustomed from their private lives - this must
be taken into consideration. Anyone who is used to communicating rapidly and simply
via Facebook etc. would view the use of e-mail alone as outdated. The slight shock of
some applicants at this communication culture is understandable. A company like
ItsAlwaysBeenThatWay Ltd. would simply not be perceived as an innovative
employer. As a result, promising applicants choose the competition.

4. Employment culture and management – A lack of trust leads to a lack of commitment.
Enterprise 2.0 needs autonomous employees. Autonomy has two aspects: employees must be
trusted to express themselves responsibly on the company in social networks. Social media
guidelines can provide help. The same level of trust must also apply to the company. This is a
condition for employees contributing to internal networks, e.g. writing Wiki entries,
publishing a blog or creating their own profile. This means that management has to create a
culture of trust. At the same time, there must be enough freedom for employees to use the trust
accorded to them. Anyone who, like ItsAlwaysBeenThatWay Ltd., thinks and acts in strict
hierarchical terms is in no position to complain about a lack of initiative by their staff.

5. Finding experts – Important expertise is hidden. Organisational structures present an
insufficient picture of which employees have expertise in a given field. They can rarely be
described in a few words. Instead, employees can gain expertise by performing everyday
tasks. The (implicit) assumption is that no-one will write a blog or Wiki article unless they
have the necessary knowledge; that no-one will assign tags on topics they have not researched;
that no-one twitters (microblogging) on activities which do not involve them. This activity
stream is more up-to-date than any (manually updated) directory of expertise and thus
provides a good basis for the search for contacts.

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8. Conclusion
From our point of view, a development into an Enterprise 2.0 company is inevitable, especially for
knowledge-intensive companies as Enterprise 2.0 is about organising oneself in a way that best
supports and promotes the implementation of a learning organisation. It also ensures competitiveness
in a knowledge-based market environment which is becoming ever more dynamic.

However, it is not just labour, organisations and their markets and environments that are becoming
more knowledge-intensive. Society as a whole is inexorably moving from being an industrial to a
knowledge society and this paradigm shift to a "Society 2.0" is similar to that of an Enterprise 2.0. It
includes the desire for greater participation (the Stuttgart 21 movement [public involvement in a large
urban development and transport project in German]) and democracy (the Arab spring) and the
demand for an increased degree of autonomy, responsibility and self-organisation, e.g. in the voluntary
sector (where commitment is moving more and more away from the classic structure of associations to
temporary initiatives). And much of this benefits from Web 2.0 tools like Twitter, Facebook etc., as
the revolutions in Arab countries, among other things, have shown.

And so we not only experience comparable developments at various levels – individual, organisation,
society (local and global) – they also affect one another. Just as much as the borders between internal
and external aspects – between the organisation and its environment – are becoming blurred and
members of an organisation apply private experiences and expectations to work tools and management
structures in their organisations, experience acquired in an organisation also affects life outside of it.
For example, anyone who has experienced participative or collective management structures as an
employee in a multinational corporation, is less and less willing to accept them in their social and
political worlds.

Given that Enterprise 2.0 is not an isolated development, but is embedded in deeply rooted and
indispensable social changes, a rejection of "Enterprise 2.0 - Not with us!"is untenable in the long
term.

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9. Literature and links
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• Davey, N. (2011). Relating information sharing and organisational sweet spot dynamics.
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• Dawson, R. (2009). Implementing Enterprise 2.0: A Practical Guide To Creating Business
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• Deming, W. E. (2000). Out of the crisis. MIT Press.

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• Garvin, D. A., Edmondson, A. C., & Gino, F. (2008). Is yours a learning organization?
Harvard Business Review, 86(3), 109.

• GfWM, PWM, SKMF, AK Wissensbilanz, BITKOM AK KEM, & Wissensmanagement
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CH+Wissensmanagement+Glossar.
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• Manyika, J. M., Sprague, K. L., & Yee, L. (2009). What Matters: Using technology to
improve workforce collaboration. Downloaded on 26 September 2011 from
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• McAfee, A. P. (2006a). Enterprise 2.0: The Dawn of Emergent Collaboration – The Magazine
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• Osimo, D., Szkuta, K., Foley, P., Biagi, F., Thompson, M., Bryant, L., Bradshaw, D., et al.
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• Schein, E. H. (2004). Organizational culture and leadership. John Wiley and Sons.

• Schönefeld, F. (2009). Praxisleitfaden Enterprise 2.0: Wettbewerbsfähig durch neue Formen
der Zusammenarbeit, Kundenbindung und Innovation. (Practical Guide to Enterprise 2.0:
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Hanser Verlag GmbH & CO. KG.

• Senge, P. M. (2006). The fifth discipline: the art and practice of the learning organization.
Random House Business Books.

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• Tiemann, M. (2009). Wissensintensive Berufe. (Eds.: Bundesinstitut für Berufsbildung).
(Knowledge-Intenstive Professions, German institute for vocational education) Downloaded
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