The Fast Learning Organization

Enterprise 2.0

Interview with Willms Buhse and Soeren Stamer, CoreMedia AG

WE: Soeren, you started to transform CoreMedia into a fast learning organization a few years ago. A fast learning organization is your interpretation of Enterprise 2.0. How has your standing/function/work in the company changed with this process?

Soeren Stamer: My function has changed. I still have the same title and same responsibility. As CoreMedia’s CEO I have to make CoreMedia successful – shareholders and the advisory board expect me to be responsible. But compared to the past, I am now more focused on setting the framework for the whole company. Take our product strategy – it’s not top-down anymore. Everyone is invited to participate, to bring in ideas, to blog about it, to share and discuss it. Those who participate make proposals for the CEO and CFO who are the ones who decide at the end of the day. And these proposals are made with consensus among participants. So by acting and performing like this CoreMedia has got rid of departments, and broken down barriers between development, marketing and sales. Everyone is invited to contribute to the decisions. So it’s very democratic but it’s not a democracy.

WE: What about you Willms?

Willms Buhse: My role has changed quite a bit. I see myself more as a coach than as head of marketing. I gave marketing a new definition. Our slogan or motto today is: beauty comes from inside. In other words, it’s not the marketing department that creates the messages and takes the product to the customers. It’s truly all about the people we have at CoreMedia, helping them get on stage and be passionate communicators for their work and their products, with full enthusiasm for what they do. They themselves should transport this enthusiasm to the outside world rather than having a professional communication department to take care of it for them. It’s much more authentic. Statistics show that 30-70% of company value is in communication. So – it’s important to make every employee aware of the tremendous importance of communication for the company’s success.

WE: Is the transformation process about giving up old structures or building up new ones?

Soeren: This structure question is interesting. Why do we all have this clear idea that we have to have a huge static structure for companies? I believe it’s an idea of the past – this static structure, this one hierarchy. What I do is create an atmosphere, a value system, emphasize collaboration. This is the reverse of hierarchy. So the question now is why do we use the term ‘hierarchy’ to describe ourselves? I guess it’s more a convention, a social convention. I am deeply convinced that we don’t need these structures. It’s more about valuing the experts within your own company, valuing competencies and building up reputation!

Willms: I think reputation is really important. Reputation is multi-dimensional. You can’t just say my reputation is only in terms of marketing, it has probably also to do with software, it has probably also to do with motivating people and so on. Only if you have something that is more than one dimensional, it’s very hard to organize. David Weinberger once gave an excellent speech about how to organize or categorize things. I still see a picture with a washing machine with a whole load of dirty clothes lying in front of it. Do you know how to sort them? Do you sort them by socks and shirts, do you sort them by colors, do you sort them by male and female? You have a similar problem when you structure an organization. It’s just as difficult. You might organize by projects you might also try to organize by teams, or by competencies, according to business lines or according to customers. So it’s a multi dimensional thing. How do you structure this? I think the best way is to have a very flexible structure instead of fixed hierarchies. This way we can create teams and build projects precisely tailored to attractive market niches. And that’s what we’re trying to do at CoreMedia.

Soeren: Structure has to be negotiated, defined, redefined – changes whenever we need them. So every team can change its structure. There might be some rules like, for example, transparency or bringing in an external coach since an outside view can see things the team is not able to see. So what we do at CoreMedia is, we introduce a dynamic structure where you have the ability to create projects that motivate people to be part of them and where they can decide who plays a role in the project. Where they can decide – do we need someone to represent us, do we need a project leader, and where they make the decision who that person should be. So we have a dynamic structure that is always evolving.

I really believe we don’t need static hierarchies. We don’t need titles. You have a feeling for the magnificent things Willms can do. Willms can do much more than be the head of marketing. He can inspire people, he can coach people, he knows a lot about trends and the future, but these are all qualities that were never well used in the past because he always had the structure dictating to him.

Soeren Stamer about “we”

WE: How do employees respond?

Soeren: In the beginning it’s frightening for some people to loose structure, to change and act without certainty. Others really love it. They see the potential. We had to make people believe that change is possible. We introduced open spaces as a first step, to let them feel – we can work without hierarchy, this is much more fun. In the second phase, you find out that people have many more abilities, and many more competencies, and are much more creative. You start to explore their full potential and you empower them to bring their potential to the surface.

WE: How do you pay people without having any hierarchies or job descriptions? How do you fix the level for the right salary for the right person, does it change every three months?

Soeren: What is a fair payment model for a dynamic structure? – This is a project we still have to implement. If I take the responsibility for a team to deliver something, is this more important than if I don’t do so? I believe the answer is yes! What happens if I don’t do it again next year? I believe that we will find a solution since we have developed a feeling for different inputs. For instance, we held a workshop last week on our product strategy and asked 40 people in the room, who should be the decision-maker based on his or her competencies? And which competencies are important for decision-making about product strategy? And actually it was pretty easy. People wrote down their opinions and posted them on a wall. This way we got a clear picture of what is important. The people in sales, in marketing, strategy people – they all contributed and gave the developers a broader view. Developers realize that it’s not good if they decide all on their own about product strategy. I guess the same could be done in terms of the salary mechanism.

Willms: People have the chance to expand their reputation, where they can use their strengths. Literally it is a question of supply and demand. And if people feel they don’t get paid well enough in the company they will go elsewhere. Just like freelancers, who can make a decision about whether they want to work with us or not. Whether they think that the prestige value of a project is so high they are prepared to work for less. And this will balance out.

Soeren: I really believe that in future we will see less contracts. It will be more like: a company has a project, would you like to contribute? So it will be an open and more dynamic model.

Willms: And also the other way round: If people are willing to contribute to a project, projects will happen. Otherwise we at CoreMedia will have to look to budgets to let it happen outside of CoreMedia.

Willms Buhse about “we”

WE: And now comes the big question: when will we see the results of all this in CoreMedia’s products? Or let me put it another way – do you already see a bottom line of significant financial results because of the changes?

Willms: Not enough yet. Two years ago CoreMedia was in a difficult situation. 50% of our revenues were based on a product called Digital Rights Management (DRM). As global market leader for mobile DRM, our revenue numbers for this product declined 80% within two quarters when the world suddenly realized DRM wasn’t the right thing.

Faced with this, CoreMedia realized a paradigm shift from control to cooperation. DRM is a very control-oriented tool. I don’t trust you as my customer so I will treat you in such a way that you can’t do bad things. The more you mistrust people the more they will push back. We realized we have to change our own behavior. It wasn’t a near death experience but it was tough enough to drive change.
Secondly, we realized the dynamics in the market. We needed to be faster in adapting to these trends. And that we could hardly do with the “software to own” business model –with strategic platforms that run for 10 years, and mammoth projects that don’t allow for agility. . So we started to work on our product range. We implemented a corporate Twitter – we call it Trillr – micro blogging for enterprises. Within a few weeks, we now have 80 to 90% of CoreMedia employees using this communication platform. And we also have our first partners and customers using it too.

Soeren: The change is visible in the numbers. We were able to really turn around development with DRM. It’s not just about technology anymore – we provide the technology and the know-how to improve the collective intelligence of a company. This is our future business model. With the tools and the new thinking we have implemented at CoreMedia we are now more capable than ever before to face the fast changing environment and make profit from our capacity to adapt to change.

Willms: That’s actually a big chance for us. Especially in larger companies we see two groups that really can drive change – digital natives and top management. Digital Natives grew up with Internet technology, and they want to use similar concepts and similar software when they take up work with a company. And top management should be interested in the development of the company and thus in bringing more transparency to it. So these two groups really drive the adoption of a fast learning company – we call it Enterprise 2.0.

WE: How easy is it for your partners and customers to adapt to CoreMedia’s new structure?

Soeren: We invite them to share our experience. So the really convincing part is that they come to our open spaces and listen to the people and how openly they talk about all the mistakes we make, all the issues and all the ideas we have. And then they go back and start to do the same. You have to experience a culture to adapt it. And when people experience it they just love it!

WE: So maybe this question will be kind of indiscreet. Soeren just said his job won’t become available due to legal restrictions. Probably yours Willms will be available if management structures are changing. How do you feel? How do you handle this?

Willms: Trust me, over the past 4 years we’ve been through several assessment centers and election processes. At the beginning it was really hard for me. But being elected by your team and confirmed by the executive board offers you much more acceptance. Frankly, it almost comes as a relief as I now find that I can do many more things which I’m really interested in. And I feel really fine with dropping things that I don’t enjoy doing because I hope somebody will pick them up. So that’s actually a positive development for me.

Soeren: I am really happy that Willms pointed out that it’s kind of a relief since my impression of hierarchies is that nobody in the hierarchy is really happy about it. The people are kind of not happy to have somebody up there and they feel dependent. However, the managers are in a pretty unfair situation as well. They won’t ever feel and get the reputation and the positive feedback that is out there in the system since there is this fear of the ones who can decide upon their fate.

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