Get out your pitchforks, I’m about to commit Enterprise 2.0 heresy.

There’s an orthodoxy in Enterprise 2.0 circles about how you’re supposed to run an implementation. The orthodoxy goes something like this: Start with small-scale pilots, define your business objectives, watch the pilots closely, evaluate their success, make a go/no-go decision. (A good recent articulation of this view is in Chris McGrath’s post on 8 Tips for a Successful Social Intranet Pilot.)

As far as I can tell it’s what everyone thinks. In fact, it’s what I used to think. Unfortunately, it’s dead wrong. The orthodoxy is wrong for a very simple reason: Size matters. By constraining the size of your pilot, you significantly alter the way your company can and will use the tools.

I’m not opposed to pilots for most enterprise IT solutions. Companies like to pilot new technologies with small populations before they roll them out enterprise-wide. That approach makes a lot of sense for transactional systems like order management, project management, purchasing, ERP, and so on. By piloting with a small group, you reduce implementation risk. You get a read on the value of the solution, and you get feedback which you can use to make modifications while those modifications are still relatively easy and inexpensive.

But social software is different from traditional IT. Traditional IT enables individuals to carry out well-defined, highly standardized transactions. Users go into the system to process transactions–to transfer funds, purchase supplies, track inventory, etc. The nature of these transactions, and the system’s ability to enable them, do not vary much according to the number of people using the system. Whether 100 people are entering orders or 10,000 people are entering orders, the transactions themselves doesn’t really change. What that means is that a representative small-scale sample is an accurate predictor of adoption and value at full scale.

But Enterprise 2.0 tools are different from traditional IT systems. Traditional IT enables transactions; Enterprise 2.0 enables interactions.

Interactions and transactions have completely different scale economics. When we use Enterprise 2.0, we’re not transacting with a system; we’re interacting with other people. An interaction is a connection between two or more nodes in a network. And as Metcalf’s Law famously states, the more people there are in that network, the more interactions each individual can have with his or her peers, and the more value that individual derives from participation in the network.

When companies pilot Enterprise 2.0 tools with small subsets of their organization, they’re not testing collaboration with a representative sample. An artificially constrained pilot is always a poor representation of post-pilot collaboration, because the range of potential interactions is so limited. The value delivered to each individual participant is exponentially smaller than it would be at full scale, and the ways that people will use the tool are different.

That doesn’t mean small-scale Enterprise 2.0 pilots can’t succeed. They can, and many do. But even when pilots succeed, they have limited ability to predict how the organization goes on to use the capabilities once they are rolled out enterprise-wide. Pilots typically fall into the lower left-hand corner of the Social Software Value Matrix: improve existing interactions within existing silos. That includes things like project team workspaces, departmental workspaces, and technical knowledgebases. When organizations really embrace Enterprise 2.0, however, they almost always play in multiple sections of the Value Matrix, launching solutions like collaborative intranets, ideation portals, private extranets, Those solutions, almost by definition, require scale.

Scale is the oxygen that feeds collaboration. That’s why collaborative tools like Facebook, and Twitter have taken off so spectacularly on the public web: With over a billion people on the Internet, the opportunities for interpersonal interaction are unbelievably high.

From a practical standpoint, this has a counter-intuitive implication: If your E 2.0 pilot is struggling, don’t shut it down. Make it bigger. Open it up. Invite more people. Tell them to invite even more people. That’s the only way you’re going to find out the real behavior and the real value.

If you’re just starting to launch Enterprise 2.0 tools, throw the doors open wide. Invite your entire company, or as much of your company as you’re allowed to invite without waiting for an act of God or Congress. Give them fun, easy ways to start contributing. (My personal favorite is microblogging.) Ease them into deeper forms of collaboration like wiki workspaces. And support those users who come forward with good ideas on how to use the tools.

Just to be clear, I’m not saying you shouldn’t have clear business objectives. I’m not saying you shouldn’t subject your Enterprise 2.0 implementation to critical evaluation. I’m not saying you shouldn’t learn from your users and incorporate those learnings into your plans. Those are all good and important things to do. But you can only do them if you’re piloting the tools in a way that you’ll really learn from: at enterprise scale.

The design of the R.M.S. Titanic’s hull included watertight compartments that ultimately served against their purpose and sank the ship. The iceberg flooded five compartments when the design supported four, which weighted the bow below the waterline causing further spillover. But this story isn’t about when design is less intelligent than we expect, or how compartments work against adapting to change. Its about the iceberg.

Greg Oxton from the Consortium for Service Innovation (CSI) shared with me a model for understanding how engaged enterprises really are:

• 1% of customer conversations are assimilated as organizational knowledge
• 9% of customer conversations touch the organization, but no learning occurs
• 90% of customer conversations never touch the organization

This maps to a Donald Rumsfeldism, as a way of explaining intelligence, of all things. There are:

• the known knowns,
• the known unknowns,
• and the unknown unknowns

When it comes to Social CRM, we have only discovered the tip of the iceberg.

For your own discovery, you will have to challenge your own thinking, the structure of your systems and the empowerment of people. Like Soylent Green, Web 2.0 is made of people. The most transformative models today, from Wikipedia to Open Source to Twitter, share control to create value. While sharing control is far from the enterprise instinct, it is happening in the places you wouldn’t expect.

In the U.S. State Department, the instigator of their wiki community described the post-911 transformation as shifting to from a “need to know” to a “need to share” culture.” We see this in other organizations, not just those responding to disruption. We see this as a long term trend, in part because the tools to share are becoming broadly available and those that use them are at an advantage compared to those that hoard. We see this as a generational shift as the Net Generation comes to work, the biggest global demographic shift in history. The kids who grew up doing their homework on Facebook, which we called cheating, come to the workforce and use similar tools, which we call collaboration.

Knowledge Management got it backwards. Users were told to fill in forms to reveal their tacit knowledge. Then by intelligent design some algorithm would provide intelligence to the application to codify said knowledge. But people don’t like filling in forms, especially as a side activity. The artificial intelligence failed to map reality. And if you can’t manage knowledge, can you “manage” relationships?

Enter knowledge sharing. With Social Software, users can freely share knowledge through private tweets (Signals), activity streams, blog posts, file and media sharing and wiki contributions. The tool is simple, without the constraints of predefined structure and socially rewarding. But of greater import, sharing knowledge happens as a byproduct of getting work done. In-the-flow of daily work, where collaboration is a goal.

Once shared, people can build upon it. Through conversation, or adding structure as simple and flexible as a tag. Because it can be changed, knowledge can be made recent. Organizations shift from building stocks of knowledge to cultivating flows. Streams that people can tap into to find out what we know right now, or bringing what the organization knew to test and improve what it really knows now.

People are the platform, and when you empower them, great things flow between them. While their abilities can be augmented by automating low level tasks, it is they who best provide the intelligence. Either as individuals or even as collective.

The first place I saw this happen was highly unlikely. Socialtext was deployed by the Howard Dean presidential campaign in a new way to make sense of high volume and changing news content. Traditionally, a campaign does this by forming a news clipping team of about ten people who source by reading a lot and apply an editorial process to produce a briefing book. Similar to how news organizations themselves work. They reinvented, not redesigned, the process.

In a private wiki, they invited 300 part time volunteers, divided up who would read what and had them share news clippings. A core editor scanned through these clippings, and the conversations that emphasized what was important, and prepared a briefing book. At first the book went out electronically to staff members daily, later twice a day. More efficient and more effective by all accounts, but what I found transformative was how the sourced more, tapped into a collective wisdom, and enabled the editor to do his core job — analysis. Later on, we applied these learnings to competitive intelligence use cases for enterprise customers such as SAP.

But before you leap into reinventing your processes for transformative value, step back. You can’t collaborate with your customers before you learn to collaborate with your employees. In the spectrum of risk taking, its best to deploy from the inside-out.

Our VP of Professional Services Michael Idinopulos developed the Social Software Value Matrix, which helped give rise to the Social Media Maturity Model in CRM Magazine that this blogging series is supposed to be tearing to shreds. Most companies start by deploying within a single silo and existing interactions. The more you cross organizational boundaries (towards and in engaging customers), and create new interactions, the more transformative an impact it will be.

For example, at OSIsoft, they deployed Socialtext first within their service & support department to tackle a knowledge base problem for a complex and mission critical product in a distributed way. They unlocked barriers to sharing and documenting knowledge. Then they involved engineering and the organization at large. Now the organization is having vigirous conversations about what the organization actually knows. Now they resolve issues faster and with better information. But the next step, having customers participate, goes beyond the notions of CRM self-service or unsaid goal of call deflection. See the current issue of CRM Magazine for more on OSIsoft, and we will post a case study this week.

Another example. With publicly traded marketing services firm ‘mktg’ they first started using Socialtext for collaboration between sales and marketing. You know, all that unstructured stuff for how people actually generate solutions that get sold to customers and doesn’t fit in a CRM system. Salespeople use outdated or inaccurate materials over half the time according to IDC. There is a need for the core of the organization, in this case marketing, to communicate to the edge, in this case the field. They need to get feedback from the edge to ensure their precious time is spent towards the right thing, while enabling the edge to share directly with others at the edge so they can adapt on their own towards what is working.

People Spend a Day Per Week Looking for People and Information

With ‘mktg’ they needed to tap into the expertise of the broader organization for both what they can propose and deliver. In larger organizations such as Intel, if you measure it, you will find people spending a day a week searching for people and information. This isn’t just a search problem, its a sharing problem. The traditional value proposition of an intranet was saving time looking for information. First they did this through having an editorial process and a webmaster curating internal information in one place. Then they got some software in the form of a CMS or Portal, but that simply increased the amount of technical people you needed to have on hand and added more gatekeeping for the editorial process. Then some personalization so you really got what was relevant when you were bored. Then some search tools, which actually helped because there was one thing to surface many things into.

But still, people spend a lot of time searching inside the enterprise. Mountains of information without backlinks or something else that people can play a role in (we strive to be earthworms in the earth of knowledge).

Fundamentally, its hard to save time looking for information that doesn’t exist. Because the false gatekeepers prevent it from being shared. Because it doesn’t exist, except in someone’s mind, or inbox, or notepad, or .pdf, or other file formats where knowledge goes to die.

When you remove the barriers to sharing and discussing knowledge, new forms emerge to vet that knowledge. Perhaps it is the phantom authority of Wikipedia, or how blogs fact check each other. With the recent election in Iran, it wasn’t that Twitter beat CNN, but that it played a role CNN could not. The editing, the analysis, occurs after someone, nay, many people pushed the publish button. This increases the import of analysis over sourcing, it changes sensemaking and demands greater media literacy.

Fundamentally, they only way we can find information is with each other, and with each other it can be knowledge. Search returns relevant results. Relevancy is good, it saves time. But it differs from answers. Information has no value until it informs a decision, and when it does, you can measure its value. Answers can come from your own judgment upon information, which is only truly possible with information in social context, but you should at least leverage the judgment of others.

Have you ever asked a question on Twitter? Odds are, you got a pretty decent answer if you have a decent sized network. You probably got a couple of answers, mostly from people you know, with real social context. They may have informed a decision, but the amazing thing is how you did it. You didn’t interrupt anyone. You didn’t occupational spam a mailing list, run down your buddy list or worse, call a meeting. You didn’t demand real time interaction from someone, or have them spend 15 minutes cognitively recovering back to the task at hand (the interruption tax). But with Twitter, and enterprise microblogging, it is a reply-optional medium that benefits from brevity. The benefits of being able to get answers from people without substantially decreasing productivity is hard to measure, but should be clear.

People as the Platform

Fundamentally, the only way we can find each other is if our systems treat us as people differently. People are the platform. At the very least, our systems should help us find each other.

A couple of times I have encountered large enterprises who still look towards a physical book that was published about 10 years ago as a directory of employees. That’s right, a book of faces. Those who were around back then have a copy, in paper. And others were jealous they didn’t have a copy. Now, these are the kinds of organizations that still largely have the same people they did back then, and don’t necessarily hoard the resource. But the point is that they haven’t moved beyond phonebooks.

‘mktg’ has expanded its deployment to include 6,000 contractors in their Field Activation Network. New interactions are being created across boundaries to unfold a new capability for retail marketing. The ability to sense how new events beyond the boundary of the organizations are working, make collective and organizational sense of them, decide and respond, means transforming from a seasonal operation to one that adapts in-season. Leveraging People as the Platform goes far beyond what structured transactional systems could enable.

There is something simply wonderful about a directory of people. And then enabling people to make the directory social. You quickly find not only the people, but who they are, who knows who, and who is paying attention to who. You can surface what people are working on. Groups that exist are made visible, and new groups form easily. Now consider the directory that is your CRM system, or the buddy lists and contacts of the people that work with you.

And back to the iceberg. We can grow the 1% of conversations about a brand that a company learns from, most likely to 10%, and do so with systems as the barrier, less time looking for people and information and with more people contributing informing your decisions faster. This 10% should be your goal this year, and you should start working on the other 90% by listening first.

In his post, Michael noted how the four functions of the Maturity Model will converge:

• Marketing: Talk with market about yourself
• PR: Get others to talk with the market about you
• Sales: Talk with prospects about yourself
• Service: Talk with customers about yourself

While the descriptions of these functions may vary, resolving ownership of this convergence will be the most inhibiting factor for transforming the other 90%. Heck, it very may well be that ownership doesn’t reside within the organization for market leaders. Second to that will be systems. Not the lack of innovation from best of breed, but how overcoming legacy is difficult to do in one lifetime. The compartments we’ve constructed won’t help us navigate new waters.

The other 90% starts with listening. Who owns listening can be less political. And in fact such social media monitoring may be owned by a department, but the capabilities expanded far beyond. However, we should first celebrate that these conversations about our brands are so visible. At first it may be a shock, and there may be denial as step one in your Social Media Recovery Model (insert joke here about Social Recovery Management).

Learning it perhaps the most important step in these times. You need to sense changes in this turbulent environment, make sense of these changes, and how you should adapt. Having conversations about the conversations around your brand.

When it comes time to respond and engage with Social Media, it starts with something a little simpler and less risky. First, decide how you will engage within communities where conversations about your brand are happening. Each one will have its own norms, modalities and precidence you can learn from.

Second, you may decide to host a community around your brand, or at least a facet of it. There you will wrestle of with your own issues of goal setting, finding ways to not write the constitution too early, and how to turn conversation into collaboration.

Third, there will be new models of engagement that will unfold. The challenge is these models are still emerging out of an intellectual ferment from Cluetrain to Gonzo to VRM and Personalized Disclosures. This comes back to core issues of sharing control to create value. And to the enterprise instinct to suck in profiling data available regardless of privacy abuse or how it erects new barriers to true intimate engagement with stakeholders.

What I do know is this, we spent the entire industrial revolution dehumanizing not only our employees, but customers in pursuit of ruthless efficiency and profit. We will rediscover the efficiency and profit lost by working together in ways we haven’t yet imagined.