The Serendipity Economy: How Spontaneity Plus Social Networking Drives Innovation

For one national hamburger chain, internal Yammer talk and listening to Twitter altered a new product. The Serendipity Economy can demonstrate value well beyond improved cycle times or reduced costs. Here's how.

Unlike industrial age activities that can easily be measured in short periods of time with exacting accuracy, The Serendipity Economy’s time-deferred, non-fixed value of outcomes and constantly shifting networks operate in a rather amorphous environment. In The Serendipity Economy any kind of return-on-investment for horizontal investments is a waste of time, given that even the best forecasters cannot anticipate the network effects of tools like collaboration and enterprise social media. No one can know what people will discuss or the ultimate business impact of anything arising from those discussions. That does not mean that value cannot be determined, but it does mean that traditional means of measuring value will not capture meaningful data. And with network effects, once something is determined to be of value, that value will likely be discounted or enhanced by changes in the composition of the network, or the context in which it exists.

The Serendipity Economy offers a new lens through which to view horizontal investments. The Serendipity Economy requires awareness, patience, and perseverance as ideas arise and as innovations gestate, mature, and evolve. Rather than looking always for better, faster, and cheaper, organizations can capture and quantify value that arises from the random encounters of individuals with each other, or with ideas, that lead to innovations that no enterprise architect or ROI calculation could anticipate.

The Serendipity Economy is not an abstract concept. Business leaders can easily see how the following six attributes wreak havoc with traditional ROI calculations, but also how they create a more open, holistic view of value. Rather than measuring everything in short sequential bursts, The Serendipity Economy can demonstrate value well beyond improved cycle times or reduced costs.

The following six areas outline the key principals of The Serendipity Economy.

  1. The process of creation is distinct from value realization.
  2. Value realization is displaced in time from the act that initiated the value.
  3. The measure of value requires external validation.
  4. Value is not fixed and cannot be forecasted.
  5. Looking at a network in the present cannot anticipate either its potential for value or any actual value it may produce.
  6. Serendipity may enter at any point in the value web, and it may change the configuration of the value web at any time.

Case in Point: Red Robin Finds Serendipity in Some Pink.

At the nationally franchised hamburger chain Red Robin, those principals manifest themselves as serendipity arises from their use of Microsoft’s Yammer, an enterprise social networking system.

Recently Red Robin introduced a value-priced offer called the Tavern Double (served with bottomless fries), a $6.99 burger in a $10.99-a-burger restaurant in order to attract customers put off by Red Robin’s pricier fare. Customers can "style up" the Tavern Double into one of three variations: pig-out, cantina, or buzzalo, for a small additional fee. Their social media team created Facebook and Twitter channels to capture consumer feedback. Those channels ended up being pretty quiet. But customers weren’t quiet. They were talking to managers.

And managers were talking to each other, and to the kitchens through Yammer. Though the chain can’t share the feedback, the internal social experience generated an unprecedented response: a kitchen-tested tweak to the menu just four weeks after product launch. Even minor improvements usually take 12 to 18 months before customers see them. This example demonstrates how serendipity creates value. The primary feedback channel failed, the one they invested in specifically to garner customer feedback. Yammer was not part of the equation, but it became the unintended channel for customer insight.

Chris Laping, Red Robin’s Senior Vice President of Business Transformation and Chief Information Officer, says that the company often rolls out ideas using the burger term "some pink" meaning that they aren’t completely done. Their Kaizen-inspired approach to continuous improvement creates a context for anyone in the company to contribute an idea, but the company cannot, as The Serendipity Economy ideas suggests, anticipate where those ideas will come from, or how quickly they will manifest themselves. If Laping and his team weren’t looking holistically at the contributions of their IT portfolio, their Tavern Double story would be yet another anecdote rather than a solid instance of serendipity value attributed to their social networking investment.

In another example, a manager suggested the use of reusable kids cups as a cost-saving measure, which also met other published improvement criteria: It didn’t negatively impact guests or employees, and it was sustainable, not just a onetime improvement. In what Laping calls the "take it, tweak it, share it" culture, Red Robin examines ideas not in days, but in hours. Using Yammer, immediate responses confirm an idea’s viability or point out its flaws within three to four hours. From a pure production point of view, the entry of the idea simply produces a catalyst.

The external feedback loop and socialization of the idea imbues it with value and transforms it from rapidly captured bits into something with sustainable value. And even though the three- to four-hour turnaround looks like a performance metric, it can’t be accurately forecasted, as different ideas produce different results, and most important for The Serendipity Economy model, each idea attracts a unique set of contributors, who also cannot be determined before the idea hits the enterprise networking stream.

Red Robin also finds serendipity a powerful ally in its training program. With 87% of the staff consisting of Millennials, Red Robin abandoned 200-page manuals in favor of 1,000 iPads filled with simulations, games, and videos. The company empowers line employees to challenge the training they receive. If the training doesn’t align with the best of current practice, team members pick up an iPad and shoot a video of a better practice and share it over the Yammer implementation they call Yummerversity, named after the chain’s "yum" slogan. Instant feedback is baked into the system, eliminating disconnects between training and practice—no one knows where these new ideas will originate, or what form they may take.

Collaboration Reveals Value in the Serendipity Economy.

These Red Robin stories may be primarily product or process related, but those are the places where serendipity has delivered value to them. Other Yammer customers have seen serendipity manifested in different ways. In 2011, 7-Eleven stores watched enterprise social networking light up during their birthday celebration as store managers started sharing merchandizing practices after months of low engagement. The managers haven’t stopped talking to each other.

Direct store-to-store communications was rare before Yammer. The new communication paradigm has lead the company to reexamine its field management configuration. The company implemented Yammer with no fixed outcome in mind. Not only have managers started sharing merchandizing insights, but they also share maintenance tips; the corporate offices now regularly tap store manager knowledge to help interpret business intelligence results. These delayed, unanticipated benefits, valued not by the efficiency of the channel but by the outcome, show the power of systematically tracking serendipitous events and assigning them to IT infrastructure investments.

At Deloitte in Australia, a young staffer found a way to navigate the ranks of senior partners to affect a positive customer change that would otherwise have been ignored without enterprise social networking, very similar to Red Robin’s server-based suggestion for reusable kid’s cups. In both cases, without enterprise social networking, those goods ideas would probably be lost, resulting in frustrated young employees jilted too soon by corporate bureaucracy.

The Serendipity Economy and Enterprise IT

Enterprise social media is just one horizontal technology that clearly illustrates the ideas of the Serendipity Economy. All collaboration technology, innovation processes, improvement programs, and most marketing efforts result in serendipitous activity. The outcomes from open, cross-organizational networking can’t be predicted, nor can the time to value or magnitude of ideas generated by such networks be anticipated. Business leaders who actively monitor, document, encourage—and protect—serendipitous activity will be able to attribute much higher returns to their IT investments than those who focus only on reductions in cost and time.

For a deeper exploration of The Serendipity Economy see Welcome to The Serendipity Economy at

[Image: Flickr user Guian Bolisay]