Yesterday, social software maker Yammer announced it has raised $85 million, bringing its total funding to $142 million. Not shabby for a company with an estimated revenue run rate of some $30 million. The real questions though are what happens next, how does it compete with the likes of Chatter, can it remain as an independent software company or will what it does become part of the fabric of new software going forward?

Great post and analysis by Dennis Howlett (no, that's not a typo) where he talks to Adam Pisoni, co-founder Yammer, and discusses where Yammer goes next, which I think also has broader ramifications for all social business software vendors.

One of the big take aways is that there is clearly a big shift within Yammer from a company focused on promoting a viral adoption model towards one which is focused on a more sophisticated active change management and system integration. This has actually been evident for sometime, with lots of community management 101 content coming from the Yammer team and obviously plenty of add-ons appearing that enable better integrating with enterprise systems.

A try-before-you-buy model is perfectly reasonable and isn't entirely unique to Yammer, but while this approach does lower the barriers to entry in reality the software costs are only one part of running a successful pilot or proof of concept (and its worth considering that Jive, IBM Connections, Newsgator, Socialtext etc are being deployed to the enterprise without a freemium model). And as I'm sure Deloitte is finding, flicking the switch on 200,000 global users was the easy bit but replicating success at that scale is whole different order of magnitude from their initial deployment to their Australian practice.

However, overall this is a good thing and reflects my experience of working with organisations where the random, organic approach hasn't worked (regardless of the platform). But it should also be a wake up call for people who've been champions of the viral adoption approach who should realise this is actually quite damaging for some organisations.

Dennis also raises some good points about where solutions like Yammer sit from a vendor management and technical architecture stand point. Personally I think these questions are worth discussing although I don't believe we can jump to any conclusions just yet. After all, this is a different software marketplace (as we've pointed out).

To Dennis's points I would also add that I think the main danger to Yammer is that it becomes a bit like SharePoint, which is extremely popular but poorly deployed by many. I wonder if "Yammer Governance" will become a hot topic in the near future like "SharePoint Governance"?

What do you think?

A study has found that the hustle and bustle of modern offices can lead to a 32% drop in workers well being and reduce their productivity by 15%.

They have found that open plan offices create unwanted activity in the brains of workers that can get in the way of them doing the task at hand.

Open plan offices were first introduced in the 1950s and quickly became a popular as a way of laying out offices.

Having a clean and sterile desk can also leave employees with smaller brains, scientists claim.

The findings are revealed in a programme made for Channel 4, The Secret Life of Buildings, to be broadcast on Monday.

This type of research, IMHO, has implications for both our online and physical workplaces. Implementing a sterile, impersonal intranet is probably as bad as a clean desk policy.

But for physical workspaces at least, why does it always have to be one or other - open plan OR individual offices, work from the office OR work from home?

In an article published in the journal Nature, West and Bettencourt found that up to 85 per cent of the character of a city is determined simply by its size. Only about 15 per cent - perhaps 20 per cent at most - of a city's character is distinctive, and that is often aesthetic or determined by a natural feature such as a harbour, river or mountain range.

''The majority of the organisation, functionality, even maybe its structure and dynamics is, to a large extent, determined, amazingly, independent of the details of the city,'' West says.

This magical 85 per cent is made up of what West... calls ''social networks'' - the clustering of human beings and the social interactions and hierarchies that flow from them. Basically, whenever a bunch of people get together in an urbanised, or even low-density sub-urbanised, form, they operate in a largely uniform way, regardless of culture.

...

''You see the same phenomenon, repeated continuously at all scales,'' West says. ''The history, geography, culture, locality, much of the urban planning, is transcended by these network principles, which tell you it is roughly this 85 per cent level that is pretty much the coarse grain of the city. But there is this 10 to 15 per cent left over, and that is something the mayors and city fathers, designers, architects can influence.''

Organisations, I suspect, are like this too. 85% is all about scale and avoiding bad management practices that break the dynamics of the natural social networks that exist, but only something unique or by working on the remainder will bring innovation, differentiation and better performance.

The hierarchical organization that we see today was invented in the last century, and it is an incredible invention. It can direct and coordinate the actions of thousands of people making and selling thousands of products or services across thousands of miles, and do so effectively, efficiently, and profitably, week after week after week. If you had told an average citizen in the year 1900 what this structure and those sets of processes were accomplishing everywhere today, they would have thought you daft.

But 20th-century, capital "H" Hierarchy (a sort of hardware) and the managerial processes that run on it (a sort of software) do not handle transformation well. And in a world with an ever-increasing rate of change, it is impossible to thrive without timely transformations. The data, case studies, and personal anecdotes to this effect abound

I've written about the history of the hierarchical-organising model and organisational chart the before. Wikipedia has a brief overview of the historical development of management. This is important background for the social business design conversation.

Hat tip to Samuel.

I’ve said before, that its interesting how people latch on to ‘Social Business’ but not ‘Social Business Design’. It reminds me of both the long winded debates in the knowledge management community about the nature of ‘knowledge’ and in other circles when I’ve met marketing folks who only want to talk about promotion. In both cases, my reaction was that they were missing the bigger picture.

Cross posted from the Headshift Asia Pacific blog, my reflections on the Social Business Summit 2011 (I attended the Summits in Sydney and Singapore).

When people talk about Social Business Design, I find they spend a lot of time focused on the “Social Business” aspect but less on the concept of “Design”. But what do we mean by design? The Design of Business by Roger L. Martin goes some way to help answer this question.

Initially, at least, this book reads more like an extended essay. But give it a chance as I found it gradually builds up to a useful crescendo that builds on the foundational concepts outlined earlier on in the book.

At its core, Martin provides a background on the organisational psychological of traditional analytical thinking, which favours reliability over validity. There is good reason for this, particularly in large or complex organisations, as there is danger is relying on intuition alone.

The “knowledge funnel” is presented as a concept for explaining how organisational knowledge - which might be a product or a process - moves through stages from Mystery, Heuristic and then Algorithm.

The trick, according to Martin, is to look at design thinking as a way to seek balance between rigid analytical thinking and risky intuition. Through design thinking and the skill of abductive reasoning, organisations can remain progressive and innovative. In effect, they can continuously feed the knowledge funnel with new ideas that challenge existing ideas that have stabilised into business as usual.

Personally, I found this funnel concept a little simplistic - it serves it purpose in the context of the book, but its probably worthwhile going off to dip into the ideas of people like Gary Klein and Dave Snowden before you start dropping the funnel into every day business conversation.

However, I did enjoy the Research in Motion (RIM) case study, which provides us with the perfect quote:

“Design isn’t just about making things beautiful; it’s also about making things work beautifully.”

I think its a nice idea that we can think of Social Business Design as being about making organisations work “beautifully”.

In the final chapter - sub-titled, Developing Yourself as a Design Thinker - you finally understand why it was worth working through all the background information. Martin employs a model from his previous book, The Opposable Mind, which he uses to describe the design thinker’s personal knowledge system. He then addresses how to work as design thinker with other colleagues who are not design thinkers.

So the final message from Martin appears to be that it is really the design thinkers who are able to successfully navigate the reliability corridors of their organisation that are the real source of competitive advantage, rather than design thinking alone.

If you are interested in discussing open strategy, the challenges of open leadership and becoming a social business then please join us at the Headshift | Dachis Group Social Business Summit - Over 4 weeks - across 4 continents - 4 Summits will be convened. Sydney,  2 March -  Austin, 10 March -  London, 24 March - Singapore, 6 April.

Q. What are your thoughts on collaborative versus top-down management?

A. Collaboration is one of the most difficult challenges in management. I think top-down organizations got started because the bosses either knew more or they had access to more information. None of that applies now. Everybody has access to identical amounts of information.

Q. Why did that shift occur?

A. I would say two things. One is just the massive information revolution. But equally important is the fact that before, while there were global companies, they were really just a collection of very local businesses operating independently from each other. Now a global company means a company composed of teams that are themselves dispersed. So every team can be global in many senses, not just the company.

But with the explosion of information, and flattening technologies starting with e-mail, I think that a C.E.O. needs to focus more on the platform that enables collaboration, because employees already have all the data. They have access to everything.

You have to work on the structure of collaboration. How do people get recognized? How do you establish a meritocracy in a highly dispersed environment?

The answer is to allow employees to develop a name for themselves that is irrespective of their organizational ranking or where they sit in the org chart. And it actually is not a question about monetary incentives. They do it because recognition from their peers is, I think, an extremely strong motivating factor, and something that is broadly unused in modern management.

Q. How do you create that culture?

A. One thing we use is a Twitter-like system on our intranet called Yammer.

Timely interview considering my comments about virtual teams just now, although there is more to this that just enterprise microblogging!

Hat tip to Andrew McAfee, who also highlights some key points if you want the abridged version of this interview.