Cloud Company is exploring digitally distributed practices and social technologies for strategy, management, and communications. Authors: Teemu Arina & Sami Viitamäki

1. TEEMU ARINA
SAMI VIITAMÄKI
E-book no:1
May 2011

2. Why should you read this e-book?
1. Make sense of the cultural and economic implications
of emerging social technologies.
2. Understand and shape internal and external digital communication strategies.
3. Design models for thinking and communicating new strategy and vision.
4. Increase efficiency and effectiveness by lowering the transaction costs
of doing business in a digital world.
5. Make great products that are more meaningful and valuable for customers.
6. Empower employees in ways that bring greater customer satisfaction.
7. Leverage transparency to gain greater reputation, credibility,
and trust in the marketplace.
8. Avoid constant reorganization by being more sensitive
and open to changing customer needs.
9. Redefine the competition in a way that expands
the market opportunity for everyone.
10. Stay focused on improving the bottom line and not be
continuously driven by new tools and technologies.
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www.cloudcompany.cc

3. What?
Cloud Company is a book and media project exploring digitally distributed practices
and social technologies for strategy, management, and communications.
Why
It’s clear that succeeding in today's networked world requires companies to be ever
more agile, responsive, and intelligent in a digital environment. What’s not as clear is
how to build these capabilities in a company. Cloud Company seeks to answer this
question with a systematic framework.
For Cloud Company is produced for global leaders developing strategy and culture,
management and operations, as well as communications and customer relations to
answer the demanding challenges of everyday business and decisions for the future.
How
Through www.cloudcompany.cc, we discuss and develop the fundamental concepts
through research, articles, and dialogue with executives and experts. During 2011 we
will develop this material into a comprehensive book illuminating the roots, transitions,
and practical issues in designing and building a Cloud Company.
Stay connected: Like us on Facebook Subscribe to newsletter
Follow us on Twitter Subscribe to RSS
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4. Who?
Sami Viitamäki
• Partner and Strategy Director, TBWA
• M. Sc. (Econ.) Degree in International Design Business Management
(Economics, Arts & Technology).
• Known and praised speaker on the impact of digital and social practices and
technologies on marketing, communications, and customer relationships.
• Ex-marketing manager and member of group-level social media unit at TeliaSonera,
the largest telecom operator in the Nordics.
• Key strengths: crowdsourcing, digital branding & marketing, service design & content
www.samiviitamaki.com development, social technology & distributed practices in management and marketing.
Teemu Arina
• Public speaker, writer, journalist, and management consultant for digital technologies.
• Given approximately 100 presentations a year at recognized conferences, business
summits, and universities in Germany, the U.S., the UK, Belgium, the Netherlands,
Finland, and Italy.
• No. 1 speaker on social media at Speakersforum, the largest speakers agency in Finland.
• CEO of Dicole Ltd. and award-winning technology entrepreneur for over 13 years.
• Key strengths: social media, open innovation, net generation, knowledge management,
service design, digital ecosystems, collaborative learning, and e-learning.
www.tarina.me
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6. We live in turbulent times...
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www.cloudcompany.cc

7. globali-
zation
shifting vertical & networked
evolving
balance of horizontal economy
structures
power mobility
‘free’ vanishing
remote information
geopolitical services & middle
(co)working overload
goods market
decreased frugal
organizational stability innovation economic
novel new
global hunt disruptive deal
management forms of
for talent competition hunters
ideas payment
true
transparency social
shopping
Businesses face several
transitions simultaneously...
net global
generation village
accidental
cloud aging digital
entrepre- prosumers
computing societies divide
neurship
open context-
individual standards & awareness & societal
interfaces mobility
continuous
end of educational creative
partial technological
9 to 5 reform class
attention
the social next gen.
smart
augmented technology & search &
mobs
human platforms analytics
ubiquitous
computing 7
www.cloudcompany.cc

8. ...while the traditional organization struggles.
80% of leaders, when asked, state that Executives routinely require new initiatives
they’re strategy is communicated to prove their potential through a tedious,
understandably across the organization... time-intensive and watertight process...
...but according to middle management only ...which should in theory lead to more than
15% of them can effectively communicate the existing rate of 10% of new offerings
and thus execute the company’s strategy. Management surviving in the market place.
Ref: TBWA study 2009 Ref: Copernicus Marketing Consulting
Employees Customers
When company management are asked if
they offer a superior experience to their
customers, over 80% claim that they do...
...which is in sharp contrast to customers
saying that only 8% of companies they deal
with really deliver this kind of value.
8
Ref: Bain & Company (2005)
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9. The situation calls for
rethinking and redesigning
Strategy &
Leadership
Management Communications
& Operations & Interactions
and
for the digital era.
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10. It calls for a
Cloud Company
approach.
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11. Cloud Services I know...
• 1980s - Network
TCP/IP, ICT, mobile phones, 1G.
• 1990s - World Wide Web
GSM, hypertext, commercial
internet, search engines,
mobile internet.
• 2000s - Web 2.0
Web as a platform, social media, user-generated content,
geolocation services, crowdsourcing.
• 2010s - Cloud
Cloud computing, cloud-based services, application stores,
augmented reality, Deep Space Internet, internet of things... 11
www.cloudcompany.cc

12. ...but what is a Cloud Company?
Traditional & Precision, speed, Vertical and horizontal,
charismatic standardization multiple roles &
domination & specialization multinational design Cloud Company
Entrepreunial & Functional & Matrix Virtual &
cooperative structures divisional structures structures network structures
Pre-bureaucratic Bureaucratic Post-bureaucratic
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13. In a Cloud Company
distributed practices and social technologies
play key roles in transformation on every front...
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14. ...Enhancing interaction and bringing results.
Utilization of the company’s collective intelligence Intelligence and insight for (co)creating
for better decision-making processes. Management propositions more valuable to customers.
Empowerment of workers who manage their own Effective communications and interactions
knowledge for constant, iterative learning. for increased market footprint and sales.
Employees Customers
Fast and personal customer service and care
that spur loyalty and recommendations.
Internal resources, partners, and customers
effectively organized for daily operations.
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15. So what does a
Cloud Company
look like?
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16. Cloud Company extends to all
areas of business.
LEARNING
FROM THE
ENVIRONMENT
Lea
Str ders
ate hi
y
g p
ic t
Communctaoions
Intera i ns
LEARNING
IN & ON ati nt LEARNING FROM
ACTION
CUSTOMERS
on s
er e m e
& PARTNERS
O p ag
The
an
M
Triskelion

17. Cloud Company extends to all
areas of business.
It is about deep strategic LEARNING
learning, constant adaptation, LEARNING
and change in near real-time. FROM THE
FROM THE
ENVIRONMENT
ENVIRONMENT
Lea
Str ders
ate hi
y
g p
ic t
Communctaoions
Intera i ns
LEARNING
LEARNING
IN & ON
IN & ON ati nt LEARNING FROM
LEARNING FROM
ACTION
ACTION CUSTOMERS
CUSTOMERS
on s
er e m e
& PARTNERS
& PARTNERS
O p ag
The
an
M
Triskelion

18. Cloud Company extends to all
areas of business.
It is about deep strategic LEARNING
learning, constant adaptation, LEARNING
and change in near real-time. FROM THE
FROM THE
ENVIRONMENT
ENVIRONMENT
It utilizes open and distributed Active
practices, social technologies, Intelligence
and digital interfaces.
Lea
Str ders
Systems
Thinking
ate hi
Transpa-
rency
y
g p
ic t
Communctaoions
Intera i ns
Personal
DIGITALLY
Learning
DISTRIBUTED
Environ-
Technologies
ment
Interfaces
Practices
LEARNING
IN & ON ati nt LEARNING FROM
ACTION CUSTOMERS
on s
er e m e
& PARTNERS
O p ag
The
an
User- Crowd-
M
centric sourcing
Triskelion design

19. Cloud Company extends to all
areas of business.
It is about deep strategic
learning, constant adaptation, LEARNING
and change in near real-time. FROM THE
ENVIRONMENT Active
It utilizes open and distributed
practices, social technologies, Intelligence
and digital interfaces.
Lea
Str ders
A Cloud Company improves Agile Planning Systems
& Development Thinking
ate hi
intelligence, agility, and Transpa-
responsiveness across all rency
y
g p
areas and business functions.
ic t
Communctaoions
Intera i ns
Personal
DIGITALLY
Learning
Effi odu DISTRIBUTED
Environ-
Technologies
ment
Pr
cie cti
Interfaces
ea ve
Practices
nt on
on
Cr ti
ti
Pe
e ac
lu er
LEARNING
er
Va Int
IN & ON ati nt LEARNING FROM
ACTION CUSTOMERS
on s
er e m e
& PARTNERS
O p ag
The
an
User- Crowd-
M
centric sourcing
Triskelion design

20. A Cloud Company runs on data
Social networks, online shops, mobile applications, websites
requiring registration, more sophisticated equipment at factory
floor or point of sale, even evolving outdoor advertising – all
enable us to tap into an explosively expanding ocean of real-
time data on human behavior.
In contrast to low-performing companies, industry top
performers are more skilled in applying analytics over intuition in
business decision-making on any given area – not just the
traditionally analytics-heavy areas such as finance
and operations.
Areas such as customer service, sales and marketing, customer
experience management, brand communications, and workforce
planning and allocation are all areas in which sophisticated
analytics are traditionally not deployed. Yet industry top
performers routinely beat low performers in analytics application
in these areas as well – and reap benefits as a result.
After the more basic needs of operational efficiency and revenue
growth have been met, analytics on the areas of innovation and
learning should be seen as a top priority. Interestingly, the more
advanced a company is in analytics, the higher pressure it
perceives for coming up with even better data sources and tools.
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21. A Cloud Company is not overrun by data
While data capture and analysis is essential for a Cloud
Company, the ways to actually utilize it in actually guiding
daily work and future strategies are where the true
distinctions between winners and losers lie.
But utilizing data in an environment in which we produce
more data each year than the whole human history up to
the previous one is not an easy task. A total of 60% of
companies readily admit that they get more data than
they know how to use effectively.
Managing data in a Cloud Company involves many
considerations new to a traditional company: how do we
relate to utilizing others’ data; how do we approach the
openness of our own; what is the level of perfection and
completeness we require from the data our actions are
based on; what is the frequency of collating, inspecting
and acting on data; how and in which form do we
disseminate data across the organization and how do we
refine it into knowledge, know-how, and competitive
advantage? These are all questions a Cloud Company
needs to answer.
However, a lack in understanding and know-how,
adequate resources and skills as well as management
bandwidth among other reasons currently prevents many 21
organizations from effective data analysis and application. www.cloudcompany.cc

22. But where to start?
Rethinking, redesigning, and rebuilding
strategy, management, and communications
requires more than a will to get there.
It requires a framework for innovation.

23. Enter A.D.E.P.T
Developing strategy, management, and communications to respond to challenges
of the networked world requires a comprehensive approach.
We have crafted our A.D.E.P.T. framework through years of exploratory research,
expert discussions, and practical experience with organizations. The framework
systematically addresses essential issues and challenges in designing and
developing distributed practices and social technologies for strategy,
management, communications, and market Interactions.
We now want to open up our approach and thinking for discussion through our
blog and e-books. We do this to share what we have learned so far and to develop
our own thinking further. Ultimately, we aim for the best possible end result in our
framework, the Cloud Company book, as well as the accompanying cases and tools
through interaction with our readers.
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24. The A.D.E.P.T. framework for redesigning strategy, management,
and communications consists of five elements:
Assessment addresses the organizational perspective, analyzing the current
A situation in terms of environmental, competitive, market, and public contexts,
establishing goals and urgency, as well as assessing the organization’s apparent and
hidden strengths and challenges.
Domain emphasizes the human participants’ view: their desires, goals and needs as
D well as their current strategies and methods for achieving those goals, the
frequency and intensity at which participation and interaction are required, as well
as the most potent shared objects and topics around which to generate interest.
Engagement is about designing interaction around the established objects and the
E mode of engagement, openness, and commitment over the course of the interaction,
as well as effectively motivating participants, be they customers, employees, or
other actors.
People comprises the human factors required to build and maintain sustainable
P interaction, assess skills, and realize full learning potential as well as redefine and
redistribute rights and responsibilities, and also support and reinforce daily
interaction loops and flow of information.
T
Technology addresses the technology-related issues in creating an accessible and
sustainable environment for interaction, choosing the right infrastructure and
platforms, crafting or selecting the right applications for different purposes, and
delivering the experience through the right media and interfaces. 24
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25. ASSESSMENT
The assessment phase means setting the stage for change
IN SHORT: and consists of three areas – Environment, Aspiration, and
Organization.
Why do we need to change –
and where do the opportunities lie? Environment
In a world of constant disruption, the environment is never
again a static landscape, but instead is an ever-flowing and
Environment Aspiration changing seascape – usually a stormy one. It is crucial to
opportunities needs & parse, grasp, and rank the most relevant trends and
& threats urgency developments in the market fast enough to be able to
exploit them – and avoid threats and pitfalls.
Aspiration
Organization
strengths & After recognizing the opportunities, current business needs
challenges on all Cloud Company areas – strategy and leadership,
management and operations as well as communications and
customer interactions need to be assessed, prioritized, and
ranked according to urgency and criticality for success.
Directions, goals & schedule Organization
Realistically assessing the company’s strengths and
challenges in meeting the needs of the marketplace and the
The business itself is key for effective development.
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A.D.E.P.T. Framework www.cloudcompany.cc

26. ASSESSMENT – Case In Point
How do you rid yourself of old habits and open up your
eyes for new business opportunities in practice?
Consider the case of The Atlantic Magazine. The Atlantic
was a quality ensemble that had been around for 150
years, but one that had not turned a profit in over a
decade. With the onset of the recession and ever-
increasing shift to digital media consumption, they were
at a low-point in 2008, and forced to admit that if
nothing changed, they would soon face bankruptcy.
What they did was simple and ingenious: they started
looking at their business from the viewpoint of an
imagined Silicon Valley startup that was aiming for
disrupting, cannibalizing, and overthrowing The
Atlantic’s business.
The results? The magazine’s revenues have doubled
since 2005; digital ad revenue is currently 40% –
compared to an industry average of 15% – and most
importantly, after a decade in the red, they turned a
profit of $2 million in 2010.
Read more about it here.
The
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A.D.E.P.T. Framework www.cloudcompany.cc

27. DOMAIN
Domain is about in-depth knowledge about the human actors in
the system gained by examining Actors, Contexts and Objects.
IN SHORT:
Actors
Where in the participants’ lives and
minds do we focus to be relevant? Knowing the actors means being familiar with the participants’
world and their inherent desires and needs, not merely
demographics or expressed wants. As Alexander Manu has
thoughtfully observed, “The whole modern global economy
Actors Contexts would not exist if it was not for man’s irrational desire to
desires situations become something else than what he now is”.
& needs & environments
Contexts
The contexts represent the situations, frequency, and intensity
Objects of interactions and where they currently happen or could take
shared topics place. This can unearth opportunities for meaningful exchange
& issues in unobvious situations and environments.
Objects
On the basis of knowing the actors and contexts, we can
Actor / context / object identify and decide on the social objects around which to
opportunity map generate activity. As no activity revolves around links between
people per se, these topics of genuine interest help bring
people together, converse, and co-create with a shared purpose.
The
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A.D.E.P.T. Framework www.cloudcompany.cc

28. DOMAIN – Case In Point
As a case in tackling customer needs with analytics and
meeting them with a sophisticated, networked solution, we
have Assurant Solutions, a company that sells credit
insurance and debt protection, and faced a 16% retention
rate when customers called to cancel their services – good
in the industry but still far from desirable.
What they did was to challenge the conventional wisdom
that customers valued operational excellence metrics – low
abandon rates, fast speed to answer – above all.
When they brought in IBM’s team focusing on deep
analytics to uncover the customers’ real needs, they
discovered something interesting. Customers were actually
happy to wait longer – if that meant being paired with a
customer service representative (CSR) best suited to their
needs.
Pairing each caller individually and in real time with the
best possible CSR tripled their retention rates and led them
to launch a B2B offering called RAMP together with IBM.
You can get familiar with RAMP here.
The
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A.D.E.P.T. Framework www.cloudcompany.cc

29. ENGAGEMENT
The engagement phase involves designing the forms of interaction
IN SHORT: and co-creation most potent for achieving the identified
goals through the areas of Access, Mode, and Motivation.
How to interact fruitfully, effectively,
and sustainably? Access
Access is not a trivial issue even in a time when gurus preach about
the virtues of universal openness. Who can interact, on which
Access Mode terms, how access and privileges are leveled, and other elements of
transparency competition, access can all act as powerful accelerators or detractors regarding
& commitment collaboration, engagement initiatives and their effectiveness.
or other
Mode
While collaboration is the form of interaction most often springs to
Motivation mind when talking about social technologies and distributed
rewards & practices, other basic forms, such as competition and self-
incentives expression, are suited to different needs and require their own
considerations to be successful.
Motivation
Engagement and Motivating participants requires thorough thinking about intrinsic
phasing plan incentives – such as pure enjoyment from taking part, creativity,
and challenge; extrinsic social incentives – such as visibility and
authority; and extrinsic material incentives – such as redeemable
points, products, or cash. Remember that cash is not necessarily the
The
best participation driver.
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A.D.E.P.T. Framework www.cloudcompany.cc

30. ENGAGEMENT – Case In Point
In 2010 GE launched the Ecoimagination Challenge, a open
innovation experiment for businesses, entrepreneurs,
innovators, and students around the world to share their ideas
about a next-generation energy grid as well as electrical
applications. The challenge generated multiple new business
and growth opportunities for GE.
So far the challenge has attracted thousands of high quality
ideas, suggestions, and proposals that are elaborately presented
through scientific papers, system descriptions, images, and
videos. The participants range from ten year olds to veterans in
their nineties, and from seasoned professionals to clever
hobbyists. Up to this point, the public has answered to two major
challenges: one of them focusing on powering up the grid and
the other on powering up peoples’ homes. More challenges are
on the way.
One of the key reasons GE has succeeded in this ambitious
endeavor is that they are offering a serious opportunity for
would-be innovators. They have partnered with known trusts
and venture capital firms, and have together with them raised a
200 million dollar fund to invest in winning ideas.
The
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A.D.E.P.T. Framework www.cloudcompany.cc

31. PEOPLE
Despite all the technological advancement, the inevitable and
extremely critical element in Cloud Companies – as in any
IN SHORT: company – is the people who ultimately manage all interaction.
Who has to do what, what do they Capabilities
need for it, and how do they do it?
With new methods of working come new requirements for skills
readiness and learning needs. These capabilities can’t be
acquired overnight. It is thus important to assess the current
level of know-how, future paths for personal development, and
Capabilities Empowerment recruitment and staff turnover goals.
skills & rights &
learning responsibilities Empowerment
Cloud Company people need a comprehensive, clear, and simple
set of rights and responsibilities that allow them to act
Flow effectively act in the best interest of the organization. According
interaction & to Gary Hamel, people need real-time visibility to performance
coordination metrics and motivation to act, as well as the power to change
things that affect performance.
Flow
Resourcing blueprint and It is worthwhile to describe the interaction and coordination flow
development paths with different internal and external actors to a certain degree of
fitness, so that it is clear who does what in which situation –
especially in critical situations requiring an added level of
attention. This way interactions, reactions and responses do not
The
get unnecessarily delayed.
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A.D.E.P.T. Framework www.cloudcompany.cc

32. PEOPLE – Case In Point
Zappos, the largest online shoe store in the U.S., relies in
superior customer service as their competitive advantage
against lower-cost rivals.
All their employees go through an intensive training
period, after which they will be offered $2,000 to quit
instantly. Even director candidates go through the same
exact program that involves, for example, a period of
practical front-line customer service.
Those who do pass, get permission to represent Zappos
on social media channels of their choice using only their
own best judgment as guidelines. The same applies to
customer service: every employee is pre-approved by the
CEO to do anything within the company’s means to offer
great service and build customer satisfaction. That means
no target answer, resolution or cross-selling targets for
customer support. The result? Even Amazon with all their
muscle, technology, and prices could not compete, but had
to acquire Zappos for close to $1 billion.
The
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A.D.E.P.T. Framework www.cloudcompany.cc

33. TOOLS The final step deals with how to realize the collaborative
experience internally and externally. Here we consider the
issues of Architecture, Solutions, and Delivery.
IN SHORT: Architecture
Which means to use for most Today’s ecosystem offers many solutions for building a
effective but sustainable delivery? Cloud Company’s backbone. Architecture can be built on
external providers’ cloud services using software-as-a-
service, platform-as-a-service, or even infrastructure-as-a-
service offerings to set up operations – with little or no
Architecture Delivery
infrastructure investment to internal ICT capabilities.
media &
& platforms interfaces Delivery
In addition to back-end and front-end services, a company
needs to assess the devices, interfaces, and media required
Solutions to deliver its services and content. In the age of device
applications & operating system wars between partly non-compatible
features platforms, this is certainly a non-trivial issue.
Solutions
Ecosystem depiction and Ultimately, a Cloud Company needs to craft or acquire the
phased delivery roadmap applications and solutions for the task. Modularity,
flexibility, sustainability, and openness are considerations
that need to be taken upon. Where a comprehensive suite
is sometimes effective, some environments require a more
The
eclectic and shifting set of tools.
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A.D.E.P.T. Framework www.cloudcompany.cc

34. TOOLS – Case In Point
An example of an innovative use of available tools and
platforms is Best Buy, who noticed that their customer
service people and salespeople were answering the same
customer inquiries time after time, e.g., about differences
between plasma and LCD displays in modern TV sets.
To help both their staff and their customers find the answers
more quickly, they set up Twelpforce, an open and public,
24/7 customer service on Twitter, a popular microblogging
service. Anybody with a Twitter account can direct a question
to the Twelpforce with a specified tag and will shortly get an
answer from one of the customer service reps – or another
customer. What’s more, Best Buy, doesn’t force any of its
employees to sign in and help, but they do it since it is an
invaluable source of information for them as well.
Even before Twelpforce, Best Buy innovated on architecture
and solutions. When facing a multi-million-dollar platform
investment for an internal social network, they decided
instead to build the system with internal resources and
people their staff knew. The result is Blue Shirt Nation, one of
the best working examples of internal SNS solutions – surely
The
in part thanks to ownership and pride in the endeavor.
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A.D.E.P.T. Framework www.cloudcompany.cc

35. Aspiration
needs &
urgency
Environment
opportunities
& threats
Organization
strengths &
challenges
Actors
W
e?
desires &
hy
ai n
Ass
er
needs
Delivery
?
Wh
Dom
media & Context
es
interfaces Solutions m situations &
en
s
applications Objects environ-
& features t shared topics
& issues
ments
Architecture
infrastructure
& platforms A.D.E.P.T Engagem
? ent
W hat
To ols How
?
People
Who?
Capabilities Access Mode
skills & competition,
transparency
collaboration
learning & commitment
& other
Empowerment
Flow
The rights & Motivation
interaction &
respon- rewards &
coordination 35
sibilities incentives
A.D.E.P.T. Framework www.cloudcompany.cc

36. Conclusion
The cloud is shaping is our forms of organization, intertwined with technology and
culture. In technological development, the influence and importance of culture and
people cannot be underestimated. Media theorist Marshall McLuhan famously said, “We
shape our tools. And then our tools shape us.”
We predict that the transition to the cloud will be as dramatic for businesses as the
transition from the fixed landline to mobile phone. The shift was not only about the
technology, such as the disappearance of the phone cord. The mobile phone became a
personal identity device to be used at a point of creative expression.
The cloud will dramatically lower the transaction costs of doing business. As companies
decentralize various layers, including infrastructure, research and development,
marketing, and sales, they eventually allow a new form of organization to emerge: the
company as a cloud. This transition calls for new approaches to strategy, management,
and communications.
We would like to continue the dialogue with our readers at www.cloudcompany.cc. If
you are an expert, we hope that you will consider becoming a guest author at our blog to
share powerful ideas on how to become a cloud company.
In the Cloud,
Teemu Arina & Sami Viitamäki 36
www.cloudcompany.cc

37. About the Authors
Cloud Company is a joint book and media project initiated by two
writers, consultants, and practitioners of social technologies:
Mr. Sami Viitamäki and Mr. Teemu Arina.
The authors have a background in technology, media, and
telecom industries. As members of the net generation, they
consider themselves post-industrial thinkers, pushing hard in
order to discover an alternative view on business and culture.
They are successful advisors to leading organizations and have
written numerous articles and given popular presentations at
major conferences internationally.
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