Some players at the table became pretty quiet the longer the discussion went. A little while ago we were discussing social networking in a taskforce at a large financial institution. While “Enterprise 2.0” was not an explicit topic, most of the talk was about internal networking applications. “You know that a lot of people would need to change things that they have learned over time and make a lot of sense to them?” one of the silent SVPs spoke up.

With increasing information velocity and networking, organizations are expected to be more open. However, most organization weren’t built for openness. Companies exist (gross over-simplification of the Theory of the Firm) to reduce the fluidity and complexity of work relationships. If these work relationship had be negotiated anew on a case-by-case relationship, the transaction cost involved would make work prohibitively inefficient – at least at the time when firms were established.

Culture goals that look like no-brainers to analysts and technologists – who can object to FLATNESSES? – can actually be deterrents to managers in an actual large company. Those who think that they can do without these managers are far away from a successful pilot.

Is the incumbent culture the problem? Well as they say, today’s problems were yesterday’s solution to yesterday’s problems.

Yesterday’s solutions took years to master. Careers have been built on their mastery. In large organizations, we have seen Enterprise 2.0 efforts face some typical roadblocks:

Free information flow vs. Chain of Command

Free info flow from the frontline to executives? Managers get suspicious when information easily skips a level or two in the hierarchy. Not that they necessarily want to keep the information under wraps. But they prefer controlling the loop – when, how, to whom the communications happens. If it’s good news, take some credit for it; if it’s bad news, let’s add some spin (explanation or blame).

One-way street of transparency

A CEO recently informed his employees that the calendaring system has been changed so that she could see everybody’s calendar – and that he may make use of that capability. While some applauded the honesty, some employees asked if they would be able to see the CEO’s calendar. Well, not really. Cultural lesson learned for the organization: transparency is less required as you get to the top. Why not practice in advance?

The Black Hole Syndrome of knowledge sharing

“Knowledge sharing feels like a black hole. You throw a lot of stuff in, and never hear about it again.” While this typical complaint was probably a good characterization of past KM approaches, many managers are still burnt by this experience. Today’s solution allow for better attribution of authorship, tracking of use, and feedback. However this signal has to get across the noise level.

Too much visibility? Never change a winning team – especially if it’s mine

Good managers spend of lot of energy on building good teams. While they enjoy the visibility into the skills and experience of employees – theirs and those of other organizations – they tend to be protective about their team. “If other managers see the quality (or capacity) I have build in my team, they are tempted to plunder. Good for the other managers’ career, but not for mine.”

Culture of “internal trade secrets”

In an insurance company, a sales manager had figured out a very effective way to sell packages to law offices and accomplished phenomenal sales growth. For quarters, that sales technique would remain the ‘secret sauce’ of her team’s success. It remained a secret because she was pitched against the other sales managers. In an effort to motivate performance, the executive team had established a stack ranking of the company’s sales regions. While collaboration between the teams was possible, the incentives were punishing it. Many reward systems have baked constrains into the culture which are deterrents to Collaboration 2.0.

Talking about secrets:  companies have reasons to keep a lot of information within the boundaries of the organization. Even within the firewall, there are a lot of secrets between employees: salaries, bonuses, performance ratings, health data, succession planning, customer details, emergency contacts etc. While it is worth exploring more openness in even these areas, Enterprise 2.0 adoption has to pick its battles. Opening everything up without consideration for grown cultures would result in unproductive distraction from the real business.

While some technology providers consider adoption barriers irrational, these behaviors are often grounded in some rationality. They need to be treated as such.