Turning handheld power into enterprise clout

The cloud you don’t know: An engine for new business growth The smartphones, tablets, and other handheld devices your employees already own are productivity drivers. Seize the opportunity.

By Bo Parker and Alan Morrison

D7, a construction consulting firm in Southern California, threw its hat in the ring when it heard that Box.net, a cloud storage provider, was seeking a partner to test business applications on the Apple iPad. Before long, about 20 field workers at D7 were using smart tablets to diagnose quality assurance issues on-site; to relay audio, documents, and digital photos; and to store and share the material via Box.net.

By using this approach, D7 has accomplished something that had previously eluded it: digital workflow from customer sites. In the past, workflow involved paper documents “that weren’t very usable,” says Aaron Levie, CEO of cloud collaboration company Box.net. Joseph Daniels, D7 president, says tasks that took a week or longer can now be done the same day. “That’s what people want. They want it now or yesterday,” he says. With a mobile digital workflow, the D7 team eliminated a major bottleneck.¹
  • By using smart handhelds and the cloud, employees can improve business processes in ways they couldn’t before.
  • Consumer-grade tablets, smartphones, and supporting technologies are more powerful than ever and are now becoming secure and reliable enough for enterprise use.
  • Applications don’t need to be sophisticated to produce immediate business results.
  • With the help of mobility, the knowledge economy is expanding to include more traditional industries.
Enterprise mobility is clearly a growing resource for enterprise agility, giving organizations access not only to standard cell phone communications, but also to wideranging collaboration capabilities at low cost. Many of the newest mobile applications are relatively simple, but the collaboration they enable is at a higher, more complex level, because it cuts across organizational boundaries. Yet this new resource presents a challenge unfamiliar to business executives who are accustomed to controlling enterprise technology: how do you take advantage of an asset that most of your employees already have in their pockets?

The answer to that question has many layers. It requires an understanding of what drives knowledge workers— especially Millennials, those digital natives born after 1980—and of the implications for attracting and retaining talent. It involves innovative organizational change to manage the flat, sprawling network of individual nodes defined by workers and their devices. And it requires more imaginative uses of IT resources, sourced internally and externally, to move closer to where the action is—the edge of the enterprise—and to deliver application and information power that’s been elusive until recently. This first article examines the business implications of these issues.

The article, “Mobile technology’s journey from peril to promise,” on page 20 examines the issues of application development, the limits of these devices in replacing PCs, and the security risks of handhelds—which turn out to be not as insurmountable as many say. The article, “How to exert leadership on enterprise mobility,” on page 36 offers insight into governance and other risks.

At this stage of enterprise mobility, the biggest risk for many companies would be inaction.

A phone in your pocket, or an enterprise IT asset?

Knowledge workers want nothing less than perpetual connection to the information they need, and today more of that information is increasingly accessible via handhelds. The smartest of these devices, as futurist and interactive media consultant Mark Pesce points out, offer the same power as a 1980s Cray supercomputer² and are optimized to work on wireless networks suited to high-volume data exchange. Smartphone subscribers account for more than 60 percent of US mobile application use and more than 55 percent of mobile Web browser use, according to comScore.³ Early adopters are using their phones to become an integrated part of the information landscape. This is the beginning of the realization of a cybernetic vision in which humans and their devices, wherever they are, are part of a more integrated whole.

Figure 1 As Figure 1 points out, traditional knowledge management hearkens back to an era in which the enterprise information system was all that was online. Employees had access to only internal IT resources. Now, in the era of the smart handheld, employees have anytime access to external resources. Not only that, but those resources change in response to an employee’s input. As information in the cloud becomes more adaptive, the result will be a cybernetic system, a symbiosis, and an interworking of man and machine that’s been theory for a long time but is now finally becoming reality.

The new smartphones and tablets take advantage of new classes of applications that allow easier use of knowledge and information sources on the public Web. The best of these applications can improve processes incrementally in areas such as field support and sales with the help of small, agile collaboration tools suited to the new handhelds. What has emerged is a form of cloud-based collaboration and file sharing that emphasizes ease of use rather than expansive feature sets.

Few IT departments are currently in the decision loop for acquiring the mobile devices and applications for enterprise use. When IT departments are in the loop, they clear a path for sales forces and other knowledge workers to use leading-edge smartphones and tablets. “When the CEO shows up with an iPad, you [the CIO] are forced to look at it whether you want to or not,” says Larry Herrmann, manager of global IT customer support at DJO, a medical device manufacturer. Herrmann compares the current trend to what happened with BlackBerry devices in the mid-2000s. “We got our first BlackBerry devices about six or seven years ago, and the CEO at that time said there will never be more than 25. Now we’ve topped 900 globally.”

Some IT organizations are building on recent technology improvements to refine efforts they had already started. “We are sought after by the business and are viewed as consultants,” says Tom Conophy, CIO of InterContinental Hotels Group (IHG). “We profess the art of the possible.” His team offered mobile applications in the past and is enthusiastic about capabilities that began to appear at the end of the decade. “IHG was one of the first companies to actually put out a mobile app that did booking, but it was pretty lame,” he admits.

Conophy’s point: The technology has only recently become enterprise ready. “The phones themselves were not that great, and the infrastructure was lacking,” he says. “The rendering capabilities were not super.” Conophy describes the current environment as “a perfect storm.” After lagging for years, more of the capabilities IHG and others need have at last materialized.

Too often, though, IT is slow to capitalize on the mobility opportunity. And as a result, individual executives, business units, and employees do what they want with smart handhelds and the myriad mobile applications available in the cloud. The individual results may be useful, but a potentially powerful enterprise IT asset is not yet being tapped organization-wide.

Smart worker, smart device symbiosis

Figure 2 Mobile phones aren’t just more powerful; broadband connectivity, 3-D sensors, and enhanced geolocation capability have turned the devices into intelligent, humanassisted network nodes on the public Web. (See Figure 2 for a comparison of network intelligence between laptops and smart handhelds.) The symbiosis mentioned earlier happens with the help of a constant flow between these nodes and the changing information in the cloud. Blend that capability with social networking, and you get an emerging form of large-scale, contextually aware mobile networking that many enterprises have dreamed of—the kind that research and development (R&D) labs such as the Palo Alto Research Center (PARC) are exploring.4

The art of the possible in enterprise mobility in the 2010s

What is an “intelligent network node” and why is it important to enterprise mobility? An intelligent node is basically Nova Spivack’s “human as sensor” concept, with each human carrying and interacting on the Web via a smartphone filled with a Global Positioning System (GPS), sensors, a powerful processor, and lots of memory.* These nodes and the networking that connects them create the opportunity for applications to learn more about you and others in your business network in real time and provide more of the information you need in your context at the moment. For example, a salesman about to visit a prospect’s headquarters office can learn about mutual friends and connections before walking in the door. Some of the main enablers for this kind of contextually aware computing include the following:

Better locating capability: Smartphones and cellular networks that are GPS enabled are more precise about location these days. Together with other sensors and details about each person, applications will be able to make educated guesses about what information will be relevant.

More capable sensors: Smartphones already have sensors that detect motion. That’s how Apple iPhone devices can have displays that respond to the device tilting, or games that take advantage of the phones’ motion detection capabilities and build that into a user interface. New barometers in phones will add to motion detection and geolocating capabilities, making it possible for applications to learn what floor a person is on in a building, tell them someone they know is in a meeting down the hall, or indicate what printer is closest to them.

Faster networking: 3G is finally commonplace, although the average speeds US users experience on mobile devices are sometimes as low as one-quarter of the average speeds advertised, according to the Federal Communications Commission (FCC). This implies downloads in less than optimal circumstances of 100 to 500 Kbps or lower. In the best conditions, users get from 1 to 1.5 Mbps in the United States. Network upgrades (to the Long-Term Evolution [LTE] standard, for example) promise improvements two or three times what users are experiencing with 3G. That’s network throughput. On the data throughput side, back-end storage system speeds are improving substantially, with higher-speed solidstate storage becoming available and caching performed more cleverly now than ever. Overall, users experience better performance than they did three years ago, and they can expect an additional cycle of improvement to occur during this decade.

During the next three to five years, intense development activity and experimentation will continue. Look for lots of targeted applications intended to solve practical problems. The end result will be a different kind of application environment for enterprises—one where business units are more closely involved in development or even doing some development themselves, not to mention a rich but rather confusing and difficult-to-navigate application environment externally. The first few years will be a time to focus on the fundamentals and to capture what’s most essential from an application perspective.

*Nova Spivack, “Nowism,” TTI Vanguard Shifts Happen conference, San Francisco, CA, February 23, 2010.

The problem for the enterprise is that adoption of this powerful but unfamiliar networking capability is happening on the consumer Web and then bleeding over into the enterprise. Enterprises are having difficulty deciding what to allow and what to curtail. They also need substantial organizational flexibility to take advantage of this new capability. Remnants of command-and-control or even carrot-and-stick approaches, which exist in many organizations, are not supportive of this capability. Because the idea of participating in the cloud is so compelling, many companies are conducting pilot projects and pondering what policies they might need to change, but they haven’t gone much further. Others that have managed some degree of comfort in a somewhat more flexible organizational structure have embraced the new medium.

It’s not just organizations that are changing; the individuals in them are changing, too, especially the younger, more adaptive generations. It’s not news that the workforce has changed in response to technological improvements, but it’s worth pondering what specific changes have resulted.

Take manufacturing as an example. Factory output per worker in industrialized countries has risen dramatically since the 1970s. This productivity boost is a primary factor behind factory employment declines.5

The need for fewer workers in industries that previously required more physical labor is one of the reasons today’s economy is characterized as a knowledge economy. A significant share of that increased productivity is due to the improved ability to generate, retain, share, and—most importantly—leverage information. More workers will do more knowledge work, even if their job category remains otherwise steady and stable.

Handhelds are becoming powerful at precisely the same time that the knowledge economy is becoming predominant. One implication: enterprises must make more room for the creative nature of a handheldwielding workforce. This is especially true in an environment that requires enterprise agility.

Enterprise agility’s demand for workforce creativity

The most knowledge-intensive segments of the workforce already understand the value of fostering creativity in this new environment. Standard Chartered, for instance, is setting up a mobile applications development unit that emulates a Silicon Valley startup, to the point that it is located in San Francisco’s South of Market new media district and staffed by a small group of locals. Never mind that Standard Chartered is headquartered in London and most of its branches are in Asia, Africa, and the Middle East. Todd Schofield, who heads the unit, says the idea is “to stay very small and nimble, and be able to bring in new ideas, deliver quickly, and then move on to the next thing.”6

The unit’s approach reflects the way digital natives tend to operate and underscores why they are capable of contributing to enterprise agility. Because they are accustomed to the tools that allow agility, digital natives are more apt to iterate quickly and to continually refine their access to information via handhelds. And because they collaborate so readily on an ad hoc basis, they’re accustomed to participating in change efforts—an aspect of their character that enterprises need to take greater advantage of.7

Several companies interviewed for this issue focus on smartphone and tablet innovation precisely because of the growing influence of digital natives. Their development groups exemplify how the workforce as a whole is changing in response to the need for accelerated innovation. IHG’s Conophy has set up informal R&D groups to hash out ideas. “You have to give people outlets,” he says. “They have their day jobs, and then they have their passions. The idea is to try to turn on some of those passions.”8

Figure 3In job categories where workers traditionally have used their hands (construction trades, for example), the information component is increasing and more creative approaches are emerging. As construction tools and techniques become more sophisticated (as in the D7 example) and the need for precision increases, more effort shifts to planning, measuring, calculating, resourcing, machine setup, maintenance, and quality control, where each worker now has management responsibility and autonomy over an important part of what can be, in essence, a small, ad hoc, on-site building factory.

That’s because the iPad, the iPhone, Android-based handhelds, and similar devices have opened up a new category of interaction with digital content for companies such as D7. Before, that interaction essentially was limited to content creation (with a desktop or a laptop) or consumption (also with a laptop, but more recently with a smartphone or an e-reader). Now, a category for engagement has emerged. (See Figure 3.)

Construction is just one industry example. Car dealerships, insurance companies, and hospitals, among many others, are all poised to incorporate more tablets into their workflow. This trend is consistent with how mobile workflow is becoming more information rich and has ramifications for how business leaders choose to manage.

Table 1 All of the fastest-growing job categories over the next decade will have a heavy information component, judging by information from the U.S. Bureau of Labor Statistics. (See Table 1.) Today’s skilled jobs are already information rich; tomorrow’s jobs will be more so considering the power of collaboration using mobile devices and the cloud. The two job sectors the Bureau of Labor Statistics predicts to grow fastest are professional (including science, engineering, law, and teaching) and services (including healthcare workers, firefighters, detectives, and cooks). Each will feel the impact of the emerging Web-based collaboration environment that the networked intelligent nodes noted in the sidebar will enable.

Empowering the knowledgedriven workforce

What should business leaders do to empower digital natives and others so they can succeed in the knowledgedriven workplaces of the 21st century? The first thing is to remove obstacles to motivation, including limitations on access to tools and networks that knowledge workers need. In general, knowledge workers are not as motivated by traditional reward systems as by an environment that ensures their autonomy and ability to make a creative impact. Knowledge workers are also motivated by the opportunity to develop their talent. It’s primarily talent that creates career security today—jobs and companies come and go.

Business leaders also need to recognize that digital natives are the most engaged knowledge workers online, more so than knowledge workers as a whole. Digital natives need autonomy and creative channels that extend outside the enterprise. The extended, virtual organization they work within is a patchwork quilt of internal and external resources.

Take the example of a new sales executive who uses his personal smartphone for work. He’s accustomed to using Foursquare and other social media to find opportunities to meet prospective clients and build personal relationships with them. He depends on the consumer applications his friends and acquaintances are using. That phone is part and parcel of his workspace. He creates value with it in significant ways that his managers may not recognize and do not directly measure.

As pointed out in the article “Embracing unpredictability” (Technology Forecast 2010, Issue 1, pages 6–10), organizations are complex systems that create value in two ways: incremental and fundamental innovation. Incremental innovation can benefit from a conventionally managed approach, but fundamental innovation demands that organizations protect and nurture the unpredictable, creative effects of complex interactions that increasingly take place on informal networks made possible by smart handheld devices.

In an earlier era, 3M’s Post-it notes became a success after an engineer in one group suggested the note application for what started as an adhesive invented by an engineer in a different group. Without a culture that fostered the freedom to invent and collaborate in what constituted a marketplace of ideas, 3M would have missed an opportunity that turned out to be crucial to its long-term success.

With the Post-it note innovation, the 3M engineers demonstrated in the 20th century what Dan Pink calls a 21st-century style of motivation.9 Instead of using carrots and sticks, leaders of the most-effective knowledge enterprises motivate by allowing autonomy and by encouraging mastery and purpose (AMP). This was true for 3M then, and it is more so for all in this new era. Business executives who foster mobile handheld freedom will encourage employees to reach out through their own networks to innovate and get things done, and in the process reinforce an enterprise’s support of Pink’s AMP principles.

Pink’s studies, and those of others, suggest strongly that research has proven something that businesses haven’t taken consistent advantage of yet: the better way to motivate helps employees to achieve three personal goals:
  • Autonomy—The urge to direct our own lives
  • Mastery—The desire to get better and better at something that matters
  • Purpose—The yearning to do what we do in the service of something larger than ourselves10
Pink elaborates on the previous work of others, of course. For example, in 2007, author Gary Hamel addressed the issue of developing an innovative, creative corporate culture to attract talent.11 Culture is at the core of the issue Pink addresses, and culture certainly has been the focus of executive concern generally. Companies that already embrace these values will have a far easier time with enterprise mobility than others.

Figure 4 From Pink’s standpoint, a broader compensation model is central to effective cultural change. Enterprises should pay employees fairly, but enterprises also need to understand that what drives many knowledge workers goes beyond monetary compensation. A work environment that fosters self-actualization (psychologist Abraham Maslow’s term for AMP) can ensure effectiveness and solid results. In contrast, the carrot-and-stick method may have worked well during the industrial age, when consistent output from laborintensive mass-production lines was more important than agility. But it’s not well suited for the current age, when rapid knowledge creation and its application provide the competitive advantage necessary for agility. Even more knowledge sharing in the future implies a greater need for AMP-style motivation, particularly in the cybernetic era, as Figure 4 illustrates.

Conclusion: 21st-century work as cybernetic craft

Consider what AMP implies for the 21st-century workforce armed with smart handhelds. Digital natives, as Kim Woodward, vice president of corporate marketing at Citrix Systems, points out, “aren’t used to being as constrained as older generations were.” They assume the ability to reach out to other geographical areas for talent. When it’s possible with the help of virtualization to do work on any device in any location, the recruitment model opens up. Mobile device freedom is emblematic of this open recruitment model, not to mention a direct recruitment tool.

“A couple of banks that we talked to said it’s actually a recruiting tactic for them. They can tell fresh graduates that they are hiring, ‘You can bring in whatever device you want and we will support it,’” says Srinivas Krishnamurti, senior director for mobile solutions at VMware.

With these new capabilities, work is becoming more of a craft again. Businesses are enjoying a renewed ability to craft solutions for the challenges they face, tapping a larger percentage of their employees, now that application development and mashups are easier.

“In the past, you had the one-size-fitsall sort of mentality. Now companies are starting to break down services so that they can access almost all of their capability through an application store,” says systems engineer Ed Jimison of Intel.

Futurist and interactive media consultant Mark Pesce12 underscores the fact that application development is becoming simpler, which empowers business units and allows IT to play the role of craft master training the apprentice. “When you get tools like Titanium (for the iPhone) or App Inventor (for Android), you significantly decrease the barriers to entry,” Pesce says. “Over the next 10 years, those tools are going to become more pervasive, the quality will go up, and the ease of use will go up.”

In essence, work itself has changed because what constitutes the workforce is more a blend of individual and social networks mediated by highly personalized devices, bound together by software. The work itself has become more cybernetic. This cybernetic capability offers enterprises a built-in feedbackresponse loop of the kind that Gap recently discovered when it launched a new brand identity and had to react to a negative response on Facebook.

The Gap example suggests an opportunity for companies to solicit feedback publicly on initial ideas, which will reduce the risk inherent in high-cost initiatives such as a brand update. Particularly when it comes to consumer goods and services, the customer community is a much more frequent and active participant in enterprise workflow. The youngest generations in the workforce can help executives anticipate and respond to this kind of change. The rise of the smartphone ecosystem and its challenge to IT traditions of company issued standard devices and company dictated controls over applications must be understood in this context.

Smartphones extend IT to the edge of the enterprise because they are mobile, and they are always with the employee when the important work is happening. But the most significant “edge of the enterprise” is the individual employee, seeking the autonomy to contribute to enterprise goals through mastery of everchanging knowledge and processes. Increasingly this is happening through personalized mobile devices.

Resistance to the organizational flexibility that enterprise mobility requires and IT prohibition of device use will inhibit the value-creating variability, because they reduce autonomy, self-directed mastery, and commitment to enterprise purpose.

“Over the next 10 years, [application development] tools are going to become more pervasive, the quality will go up, and the ease of use will go up.” — Mark Pesce of FutureSt Consulting

¹ Ian Hamilton, “Construction firm tests iPads: Company pairs cloud software with Apple tablet to try to boost productivity,” The Orange County Register, July 16, 2010, Factiva Document OCR0000020100717e67g0001h; Mike Schramm, “Box.net’s 20 iPads arrive at D7 Consulting,” The Unofficial Apple Weblog (TUAW), http://www.tuaw.com/2010/07/08/ box-net-ipads-arrive-at-d7-consulting/; PwC interview with Box.net CEO Aaron Levie, August 18, 2010; and “Box.net’s iPad campaign: Real-world tests,” Box.net YouTube video, http://www.youtube.com/watch?v=YzQZmzFZ1UM, accessed October 7, 2010.
² See the interview with Mark Pesce on page 48.
³ “Smartphone Subscribers Now Comprise Majority of Mobile Browser and Application Users in U.S.,” comScore press release, October 1, 2010, http://www. comscore.com/Press_Events/Press_Releases/2010/10/ Smartphone_Subscribers_Now_Comprise_Majority_of_ Mobile_Browser_and_Application_Users_in_U.S, accessed October 5, 2010.
4See a description of PARC’s focus area “Context-aware computing & mobile interaction” at http://www.parc.com/ work/focus-area/context-awareness/, accessed October 27, 2010.
5 Jay Bryson and Tim Quinlan, What Really Drives Growth in the Industrial Sector? Wells Fargo Fixed Income Research, July 2010, https://www.wellsfargo.com/ downloads/pdf/com/research/special_reports/What ReallyDrivesGrowthintheIndustrialSector_ July2010.pdf, accessed October 5, 2010.
6 See the interview with Todd Schofield on page 32.
7 See Michael S. Hopkins, “The Digital Natives, and You,” MIT Sloan Management Review, April 1, 2010, http:// sloanreview.mit.edu/the-magazine/articles/2010/ spring/51317/the-digital-natives-and-you/, accessed October 27, 2010.
8 See the interview with Tom Conophy on page 16.
9 “Dan Pink on the surprising science of motivation,” TEDGlobal 2009, July 2009, http://ca.ted.com/talks/dan_ pink_on_motivation.html, accessed November 19, 2010.
10 Ibid.
11 Gary Hamel, The future of management (Boston: Harvard Business School Press, 2007), p. 182.
12 See the interview with Mark Pesce on page 48.