In this paper, we examine how and why organizational learning is affected by virtualization technologies. The literature onorganizational learning has identified its many constraints, and the influence of information technologies on overcoming
these restraints has also received attention. Little research, however, has addressed how organizational learning is affectedby a new type of technology associated with “virtuality”: the characterization of people, objects, and processes by digitalrepresentations, providing enhanced opportunities for the interpersonal and organizational interactivity and engagement thatstimulates organizational learning. We present an exploratory case study of the engagement with, and use of, virtual worldsat IBM, a leading user of this virtualization technology. Virtual worlds are associated with games; we explore their usein the novel conduct of social interactions in meetings, rehearsals, and brainstorming, and we argue that organizationallearning results from forms of play. We explain how such a playful, game-like technology came to be accepted in aserious for-profit science and engineering organization through a process we refer to as convergent recognition. We findorganizational learning results from the interrelated processes behind the adoption of the technology and its application.By reference to the distinction between technologies of rationality and foolishness, we theorize how their reconciliationoccurs through the mutually reinforcing ways organizations learn to engage with and use new technologies.
Key words : organizational learning; technology of foolishness; IBM; virtual worlds; virtualizationHistory : Published online in Articles in Advance.
IntroductionThe ability to learn is critical to the performance andlong-term success of organizations, and the question ofhow such learning occurs continues to be an importanttopic in organization research (Argote and Miron-Spektor 2011). As well as identifying its nature andsignificance, the literature on organizational learning1
has long appreciated the extent of the constraints tolearning organizations face. Theoretical explanations forthese obstacles include the organizational tendency toelevate exploitation over exploration (March 1991) andchallenges to high-level learning beyond the everyday(Argyris and Schön 1978). A stream of research hasexplored the impact of information and communicationtechnologies on organizational learning and its capac-ity to help overcome such constraints (e.g., Boudreauand Robey 2005, Kane and Alavi 2007, Wang andRamiller 2009). The mechanisms through which newtechnologies interact with organizational learning, how-ever, have not been well explained (Edmondson et al.2001), and research into how such tools affect organiza-tional learning is still in its infancy (Argote and Miron-Spektor 2011).
These latter observations are especially appositefor the new emerging virtualization technologies that
provide enhanced interpersonal and organizationalinteractivity and engagement (Tapscott and Williams2006, Kohler et al. 2009) and therefore opportunitiesfor organizational learning. These tools, which Baileyet al. (2012) describe as virtuality, characterize people,objects, and processes by digital representations. Forexample, in one such technology, virtual worlds, peo-ple are represented by avatars that can take human formor embody highly imaginative characteristics such as,for example, animals or machines that interact, work,and play with one another in graphically rich, three-dimensional, digital environments.
Many virtualization technologies emerged from thecomputer games industry, and they are commonly asso-ciated with play. In contrast, therefore, to many informa-tion and communications technologies such as computer-aided design and management information systems, theirimmediate connection with organizational efficienciesand productivity is less obvious. Despite their connectionwith games, virtualization technologies are increasinglybeing seen as an important organizational tool (Nevoet al. 2011) and are being used, for example, in areasas diverse as medicine (Arvanitis 2006), the design andoperation of city systems (Gann et al. 2011), and newproduct and service prototyping (Brown 2003). Despite
its ability to affect work and organizing—and poten-tially provide a new mechanism to support organiza-tional learning—virtuality nevertheless remains signifi-cantly underresearched by organization scholars (Baileyet al. 2012).
This paper is motivated by an interest in how andwhy organizational learning is facilitated by virtualiza-tion technologies. To help frame our analysis, we useMarch’s (1976) distinction between technologies of fool-ishness and technologies of rationality. To overcomeand counteract constraints to organizational learning andchange, March extols the virtues of technologies offoolishness. Society, he contends, needs processes thatinduce and sustain the craziness of wild ideas (March1999, p. 226), and the technology of reason and ratio-nality that contributes so much to organizational per-formance needs to be complemented by a technologyof foolishness that “escape[s] the logic of our reason”(p. 319).
Technologies of foolishness demonstrate elements ofplayfulness in organizations that question, test, andamend the status quo. For March, “[a] strict insistenceon purpose, consistency, and rationality limits our abilityto find new purposes,” but in contrast, “play relaxesthat insistence to allow us 0 0 0 to explore alternative ideasof possible purposes and alternative concepts” (March1976, p. 77). Virtualization technologies are an archety-pal manifestation of a technology of foolishness becauseof their capacity to induce elements of playfulness intoorganizations.
March recognizes how technologies of foolishnessdepend on technologies of rationality. Technologies ofrationality are not so much enemies of foolishness andexploration, he contends, as they are agents of them, and“revolutionaries in pin-stripe suits” can be instrumentsof exploration hiding behind a façade of exploitation(March 2006, p. 209). This intriguing insight has yet tobe explored. We remain largely in the dark on how tech-nologies of foolishness and rationality combine and howtheir reconciliation facilitates organizational learning.
Our study explores this reconciliation and the waysthat new technologies used to encourage organizationallearning through enhancing collaboration and play are,in turn, shaped by the processes through which orga-nizations engage with them. In theory and in practice,the analysis of tools for organizational learning benefitsfrom understanding the resolution that occurs betweenengagement and use. It is this resolution that helpsexplain the apparent paradox of why technologies dis-playing characteristics of foolishness depend themselveson technologies of rationality to be introduced, seem-ingly counter to organizational rationality.
This process of resolution is revealed in the mismatchbetween potential and reality in the implementation ofa range of new technologies (Edmondson et al. 2001).
The effect of the introduction of a well-established tech-nology, such as enterprise resource planning systems, isknown to be highly contingent and affected by humanagency that resists and reinvents that technology’s use(Boudreau and Robey 2005). Emerging new technolo-gies, such as virtualization technologies, have evengreater capacity for contingent use. Such technologiesdo not emerge fully fledged but evolve along with prac-tice in use and developments taking place in the externalenvironment (Orlikowski et al. 1995, Van de Ven et al.1999, Orlikowski 2000). They are evolving, incompletetechnologies, and their uptake and use is iterative andexperiential.
Rather than complying with well-known models ofinnovation diffusion (e.g., Rogers 1995, Venkatesh andDavis 2000) where users and uses are relatively welldefined, in the case of emerging, uncertain technolo-gies, uptake is piecemeal, speculative, and experimen-tal. Early tentative investments are informed by diverseand often unconnected experiences of use and determi-nations of value, which then affect subsequent invest-ments and technological developments. In Swanson andRamiller’s (1997) depiction, information technology (IT)innovation is an emergent phenomenon that originatesand evolves as a diverse community creates and elab-orates an organizing vision for it. Technology imple-mentation often requires experimentation, using trial anderror to find solutions that work (Thomke 1998), andso learning to engage with and learning through usebecomes blurred: they are concurrent and mutually sup-portive. Such concurrency is likely to be of particularimportance when a technology with strong associationswith play and games is introduced into a highly rational,for-profit, scientific and engineering organization. It wasin such circumstances that we conducted our study.
More specifically, in this article we present the resultsof an exploratory study of the relationship between orga-nizational learning and virtual worlds in IBM. IBM isa company at the vanguard of the corporate use ofvirtualization technologies. Our longitudinal case studyof IBM’s use of virtual worlds, conducted betweenMarch 2007 and November 2009, allows us to improvetheorization of the relationships between organizationallearning and the introduction and use of a new gener-ation of supportive digital tools. It helps us to explainthe processes and context in which serious organizationsembrace foolish, playful, game-like technologies.
The rest of this paper is divided into five sec-tions. First, we discuss how existing theory identifieskey aspects and constraints of organizational learningaffected by new technology, and we analyze some ofthe major features of virtual worlds with the poten-tial to affect organizational learning through playfulness.Second, we describe our research methods and intro-duce our case study. Third, we show how, in its early
experimental uses, the technology was being used play-fully to assist organizational learning in activities suchas brainstorming and rehearsing. Fourth, we present amodel of the formal processes—what we call convergentrecognition—of the ways the company engaged with thetechnology. Finally, we discuss the implications of thestudy for theory and practice and conclude by consid-ering the study’s limitations and implications for futureresearch.
Organizational Learning and TechnologyOrganizational learning is both an organizational processand an outcome (Dodgson 1993), and it occurs as organi-zations build, arrange, and adapt their knowledge, skills,and routines. It has a strongly social component. Indi-vidual learning in organizations is a social, not a solitary,phenomenon (Simon 1991), and problems are solvedand knowledge is shared through the development ofshared meaning among organizational members (Bechky2003). Whereas individuals come and go, organizationspreserve knowledge, behaviors, norms, and values overtime (Daft and Weick 1984). Much organizational learn-ing takes place in the context of social interaction (Kanget al. 2007), and although organizational learning nec-essarily involves individuals, organizational learning ismore than the cumulative effect of individual learning: itinvolves the “systems, structures and procedures of theorganization” (Easterby-Smith et al. 2000, p. 785).
The constraints on organizational learning are welldocumented. In particular, learning is limited by a rangeof group and team dynamics that restrict communicationand shared understanding (Argyris 1995, Edmondson1999). These dynamics are accentuated when groupsare multidisciplinary (Dougherty 1992), are geographi-cally separated (Goodman and Darr 1998), and work indifferent organizations using different tools and meth-ods (Brown 2003). They are particularly challengingfor organizations because learning is encouraged bydissimilarity (Dodgson 1993). Much learning occursthrough the combination of alternative worldviews thatare inevitably distributed throughout various communi-ties (Brown and Duguid 1991) and in groups of peo-ple with different backgrounds who meet for a periodof time to analyze a problem or work on a project(Easterby-Smith et al. 2000).
Organization theory also identifies the constraintsto learning resulting from established routines (March1991) and from the problems organizations have inmaintaining adequate experimentation (March 2006).Organizations learn to improve the things they alreadydo, learn to do new things, and learn about the needto learn (Argyris and Schön 1978). Procedures and rou-tines for learning about what organizations already doare more easily established, but they can inhibit theother two forms of learning (Morgan 1986, March 2006).
Organizations cling to outmoded identities that thwart“higher-level” or radical learning (Brown and Starkey2000), and introspection results from processes of insti-tutional isomorphism (Di Maggio and Powell 1983).March (1991) argues, based on his dichotomy of explo-ration and exploitation in organizational learning, thatthe latter often restricts the former. Focusing on what isalready known produces returns that are positive, prox-imate, and predictable; focusing on the novel producesreturns that are uncertain, distant, and often negative.As a result, from the standpoint of value creation inorganizations, exploratory learning carries both higherpotential benefits and higher potential costs (Hagedoornand Duysters 2002, Kang et al. 2007). This producesa tendency to substitute exploitation of known alterna-tives for the exploration of unknown ones (March 1991).At the same time, organizations must balance exploita-tive and explorative learning despite the temptations ofexploitation (March 1991, Kane and Alavi 2007).
The challenge for organizational renewal thereforelies in encouraging shared learning among people withvarious organizational, professional, and technologi-cal backgrounds and in encouraging higher-level orexploratory learning that questions and changes exist-ing routines (Easterby-Smith et al. 2000, Edmondsonet al. 2001). There are many factors that can explainhow organizations learn, including cultural explanations(Barney 1986) and considerations of power configura-tions (Dougherty and Hardy 1996). Our concern in thispaper lies with the contribution of new technologies toorganizational learning.
New information technology is widely acknowledgedto be a trigger to changing organizational routines(Edmondson et al. 2001). It can compose part of whatBrown and Duguid (1991, p. 54) call the organiza-tional architecture used to “preserve and enhance thehealthy autonomy of communities, while simultaneouslybuilding the interconnectedness through which to dis-seminate the results of separate communities’ exper-iments.” Computer-aided systems are known to havethe potential to enhance organizational learning in dis-tributed environments through their ability to providefast and efficient communication, bridging space andtime; to create an organizational memory; and to pro-vide a mechanism where multiple members can dynam-ically share and update their solutions to problems(Goodman and Darr 1998). Technologies can also act asboundary objects between diverse technical communities(Dodgson et al. 2007).
In an early example of work in this area, Brownand Duguid (1991) analyze the effect on learning ofdigital technologies that support narrative exchanges incommunities. Their focus, as was appropriate in 1991,was email and electronic bulletin boards. More recentdigital technologies have the potential to better inte-grate the various contributors to organizational learning
and assist learning about technology across organiza-tional boundaries (Tuomi 2002, Dodgson et al. 2007).They have the capacity, for example, to represent, visu-alize, and communicate knowledge and coordinate inte-grative tasks across different geographies, organizationaldomains, disciplines, professions, and “communities ofpractice” (Brown 2003, Thomke 2003). Digital technol-ogy can also enable cheap, rapid experimentation, and itallows users to play with, share, and prototype complexideas; users can thus determine the value of these ideasbefore significant investments and disruptions to exist-ing technology and markets are made (Schrage 2000,Dodgson et al. 2005). Virtualization technologies there-fore offer important opportunities for learning.
Virtual Worlds and PlayVirtual worlds are representative of the emergingvirtualization technologies that have important rami-fications for organizational learning because of theircapacity to affect organizational concerns as diverseas business models, process management, collabora-tion, education and training, and marketing and sales(Czerniawska and Potter 2001; Castronova 2005, 2007;Hemp 2006; Au 2008; Nevo et al. 2011). They are ahighly innovative technology that emerged from and arecommonly used to support multiparty collaborative gameplaying. Virtual worlds are a graphically rich medium(Schultze et al. 2008) in which people, representedby avatars, can interact, work, and play. Virtualizationmoves activities that were once carried out by physicalmechanisms to some form of electronic or other non-physical means (Fiol and O’Connor 2005, Overby 2008,Bailey et al. 2012). An example of several avatars hold-ing a meeting in a virtual world is provided in Figure 1.
Researchers (e.g., Fetscherin et al. 2008) have identi-fied a number of features of virtual worlds that are rel-evant for organizational learning. Virtual worlds enablehigh degrees of “presence,” or the feeling on the partof a participant of “being there” (Heeter 1992) and par-ticipating in the virtual experience. Participants can alsoexperience varying degrees of “being there together,”or copresence, with one or more other participants (e.g.,Schroeder 2002). This concept applies to all technolo-gies that allow interaction such as a telephone or instantmessaging (IM) but is most strongly experienced in vir-tual worlds because of the multiple dimensions of inter-action (Hemp 2008). The “richness” (van Dijk 1999) ofthe medium has a strong role to play in the produc-tion of copresence, as does the ability of the system tomanage things such as social cues and object handling.This environment is especially conducive to multipartydiscussions around visual objects portrayed and oftencreated virtually.
The nature of social interaction in virtual worlds hasbeen the subject of a number of studies that address
how interaction proceeds within them, what characteris-tics of virtual worlds affect interaction in what ways, andhow those interactions differ from the real world (e.g.,Sater and Steed 2002, Garau 2006, Jakobsson 2006).The results point to the advantages for communication ofmodes of interaction in virtual worlds that mirror inter-personal interaction in many ways, including the impor-tance of gaze and the central role of body language.Virtual worlds utilize these characteristics in avatars andoffer the capacity for communication by voice and wordas well as the demonstration of presentations and videoclips.
Collaboration in virtual worlds has been the subjectof increasing attention as the awareness of their poten-tial for its facilitation has grown. Participants find virtualworlds to be highly conducive to collaborative activity ofvarious kinds (e.g., Sonnenwald 2006), and research hasshown that virtual worlds allow participants to performmore effectively on a variety of tasks. The use of vir-tual worlds in many collaborative contexts is seen asan extension of other information technologies such asvideo conferencing, social networks, and IM, but theirintense and rich personal “immersive” experiences andvisualization capacities potentially provide new opportu-nities for effective learning and working.
Virtual worlds are a technology closely associatedwith play, and understanding play is therefore necessaryin understanding the potential impact of virtual worlds.Play is increasingly a focus of organizational study(Mainemelis and Ronson 2006) but one that is notori-ously hard to conceptualize (Sutton-Smith 1997). Withinbusinesses it is often associated with juvenilia, and man-agers are commonly suspicious of its fuzzy, inefficient,and immeasurable nature (Kane 2004). Recognition ofits capacity to excite creativity and embrace ambiguity,however, is seen in some organizations as a stimulus tononroutine, higher-level learning (Kane 2004, Dodgsonet al. 2005).
To improve understanding of the features of virtualiza-tion technologies that encourage play and organizationallearning, we draw on insights from Huizinga’s (1955)classic work on play in culture. Huizinga (1955) arguesthat play is “a free activity standing quite consciouslyoutside ‘ordinary’ life executed within certain fixed lim-its of time and place, according to rules freely acceptedbut absolutely binding” (p. 32). It “is not ‘ordinary’ or‘real’ life. It is rather a stepping out of ‘real’ life intoa temporal sphere of activity with a disposition of itsown” (p. 26). Joint participation in play brings “the feel-ing of being ‘apart together’ in an exceptional situation,of sharing something important” (p. 31). Playfulness canthus be conceptualized as involving a temporary sphereof activity to enable exploration and experimentation anda place where people can work and share ideas coordi-nated in space and time by the organization and nature
TCG Project-measuring the attributes of a technical leader
Voting on the attributes
of the technology. Virtual worlds display all these char-acteristics, and their connection to play has importantpotential implications for learning.
Organizational Learning and Virtual WorldsThe literature reviewed above is suggestive of the rolevirtualization technologies such as virtual worlds mightassume in organizational learning. The need to learnfrom multiple and diverse connections and in nonrou-tine ways has provided a circumstance where virtualiza-tion assisting rich collaborative experiences might valu-ably contribute. We still, however, know little about howthese contributions might arise and the role this tech-nology can play. The literature, however, does providesome broad clues.
Three broad factors are considered characteristic ofcontemporary learning organizations: a supportive learn-ing environment, concrete learning processes and prac-tices, and leadership behavior (Garvin et al. 2008). Insupportive learning environments, employees recognizethe value of considering opposing ideas, taking risks,and exploring the unknown. Concrete learning processesinvolve formal methods for generating, collecting, inter-preting, and disseminating information; experimentingwith new offerings and technologies; and identifyingand solving problems. Leadership reinforces learningin the other factors and is seen when leaders demon-strate a willingness to entertain alternative viewpoints
and reflection and when they encourage the legitimacy ofexperiments between diverse communities (Brown andDuguid 1991). Leaders contribute to the “technologi-cal visions” that help motivate and coordinate actionsaround new technologies to encourage organizationallearning (Dierkes et al. 2001a).
These characteristics of organizational learning res-onate with Daft and Weick’s classic (1984) formulationof enacting organizations that respond to turbulence byconstructing their own environments in which new tech-nologies might be introduced. Enacting organizationsgather information by trying new behaviors and see-ing what happens. They experiment, test, and simulate,and they ignore precedent, rules, and traditional expec-tations. This contrasts with other approaches that areconstrained, passive, routine, and formal. In enactingorganizations, a good idea may be implemented to see ifit works by utilizing a trial-and-error learning process.
Another organizational feature identified in the lit-erature that encourages learning is self-organization:the stimulation and support of groups that form theirown communities of interest. Brown and Duguid(1991, p. 50) argue that these self-constituted “mav-erick” communities “evade the ossifying tendenciesof large organizations 0 0 0 .[and offer] a means and amodel to examine the potential of alternative views oforganizational activity through spontaneously occurringexperiments.” The experiments undertaken in enacting
organizations, they contend, occur simultaneously in thetechnology and the context in which it is used. Theydiscuss the case of the IBM Mag-I memory typewriter,whose value was determined both by the product andthe way it was introduced: “The two changes wentalong together. Neither is wholly either cause or effect”(Brown and Duguid 1991, p. 51).
The difficulties organizations face in learning acrossboundaries and in ways that stimulate nonroutine behav-iors, and the role of virtualization technology and itsmode of introduction as a means of overcoming thesedifficulties, provide the background for our research.More specifically, the research question that motivatesthis study is, how and why is organizational learningaffected by virtualization technologies?
MethodIn this section, we describe our empirical study. Wechose to conduct a single, in-depth, exploratory casestudy. Such studies are most appropriate for studyingpoorly understood phenomena (Marshall and Rossman1995) and when “(a) contextualization, (b) vivid descrip-tion, (c) dynamic (and possible causal) structuring ofthe organizational member’s socially constructed world,and (d) the worldviews of the people under study” areimportant (Lee 1999, p. 43). Furthermore, case stud-ies play an important role in research on organizationallearning, and our work here continues in that tradition(Simon 1991).
A case study is therefore an appropriate methodbecause the organizational genesis and impacts of virtu-alization have received little attention in the literature todate (Schultze et al. 2008, Bailey et al. 2012) and becauseour study is exploratory and aimed at theory building(e.g., Eisenhardt 1989, Yin 2003). As researchers, weentered the field to explore a technological and organi-zational phenomenon in its natural setting, “attemptingto make sense of, or to interpret, phenomena in terms ofthe meanings people bring to them” (Denzin and Lincoln2000, p. 3). Our study is therefore interpretive in thesense that it is “aimed at producing an understanding ofthe context of the information system, and the processwhereby the information system influences and is influ-enced by the context” (Walsham 1993, p. 4, italics inoriginal).
Case SelectionWe selected IBM because it has a number of “rare orunique” qualities that make it a logical candidate for“theoretical sampling” and because it displays charac-teristics of a “revelatory case” (Eisenhardt 1989, Yin2003). First, IBM is a leading technology company witha long history of operating in a dynamic and turbulentindustry and of being highly technologically advancedand innovative. It was one of the earliest adopters and
most intensive users of virtual worlds (Reuters 2006).Second, digital technology is at the core of IBM’s busi-ness, making the exploration of virtual worlds a businessimperative. This ensured that the impact of the technol-ogy was a source of considerable interest and attentionat all levels of the organization. Third, IBM has a historyof being receptive and helpful to academic researchers,and members of our research team had extensive pre-vious experience with the company. Furthermore, ourentry into the company was facilitated and supported bythe senior managers responsible for IBM’s introductionof virtual worlds, and they acted as sponsors throughoutthe study. We therefore had excellent access to peopleand archival material for the study.2 Fourth, the use ofvirtual worlds had begun only a few years before thebeginning of the study, and surrounding events were stillfresh in the minds of interviewees.
The CaseIBM is an information technology and services com-pany, employing more than 400,000 people worldwide,including more than 200,000 scientists and engineers.It is a leader in innovation, with a research and devel-opment (R&D) budget of between $5 and $6 billion,and is consistently ranked as the world’s most prolificpatentor. With a history going back to the 19th cen-tury, the company has enjoyed periods of great success,such as following the introduction of the IBM System/360 mainframe computer in the 1960s and the personalcomputer in the 1980s, and marked failure, such as its“near-death experience” in the early 1990s. Its resurrec-tion following near bankruptcy is described in Gerstner(2002), and key to its revival was an improved capac-ity to respond to changes in markets and technologiesby more effectively using its internal technological capa-bilities and external connections. Key objectives wereto improve the flow of ideas internally and to be moreopen to ideas from outside—for example, by embracingopen source approaches. It aimed to break away fromits past introspection and “not-invented-here” syndromeby breaking down its dependence on large, semiautar-kic R&D laboratories and by using social networkingtechnologies to become more “market facing.”
The historical context for IBM’s investment in vir-tual worlds is shown in Table 1. A number of aspectsof IBM’s corporate strategy of relevance that supportthe use of virtual worlds can be determined. First, it isimportant to note the rapid transformation into the busi-ness of IT services and the concern to continually learnabout new ideas to avoid the problems experienced inthe early 1990s.
Second, IBM is characterized by a “research and engi-neering mind-set” that maintains core strength in capa-bilities for exploration and the capacity in turbulenttimes to absorb new ideas from outside (Gerstner 2002).This was encouraged by the development of the IBM
Table 1 Context and Chronology of Events in IBM’sDevelopment of Virtual Worlds
1989 IBM Academy of Technology founded.1990–1992 IBM’s near-death experience.
IBM’s “obituary” printed in the editorial column ofthe New York Times on December 16, 1992.
1993 Lou Gerstner is appointed as CEO and chairman.1995 IBM acquires Lotus Notes.
IBM launches Internet Strategy.2000 IBM launches EBO Strategy.2001 The first InnovationJam is held; 52,000 IBM
employees attend.2002 IBM acquires PWC Consulting and intranet and
related platforms.2003 Sam Palmisano is appointed CEO and chairman.
Irving Wladawsky-Berger becomes chairman ofthe IBM Academy of Technology, increasingfocus on emerging technologies, especially theInternet.
2004 The first GIO is published.2005 IBM sells its PC business to Lenovo.2006 IBM builds a virtual Wimbledon site in Second Life
with a commerce facility for tennis merchandise.VUC emerges from an external blog called Eight
Bar in the summer; it includes five members fromthe Hursley laboratory, UK.
Second InnovationJam is held in September;150,000 attend. This results in the VUC idea ofthe 3D Internet.
Digital Convergence EBO is established withColin Parris as CTO.
VUC grows to 500 members by November and1,000 members by December.
Sam Palmisano presents results on InnovationJamand announces plans to shape the 3D Internet ata virtual town hall meeting in a mock-up ofBeijing’s Forbidden City—the first time aFortune 500 CEO had appeared in Second Life.
2007 Twenty-four virtual world islands are developed byIBM by January.
Virtual world trials identify specific areas ofbusiness opportunities.
IBM creates virtual bars and a pub crawl forDiageo to celebrate St. Patrick’s Day with itscustomers.
IBM opens virtual world Sales Centre in May.Virtual world Code of Conduct is launched in July.VUC has 5,000 members by September.Innov8, a virtual business game for innovation, is
launched in November.2008 Fifty-two virtual world Islands are active at IBM by
August.IBM Academy of Technology holds its annual
meeting as a virtual meeting between October21 and 23, using Second Life and a number ofother virtual communication technologies.
Note. CEO, chief executive officer; CTO, chief technology officer;EBO, emerging business opportunity; GIO, global innovation out-look; VUC, virtual universe community.
Academy of Technology, founded in 1989 and mod-eled after the U.S. National Academies of Scienceand Engineering. The 300 elected fellows of the IBMAcademy—who represent of a diverse range of scienceand engineering—are highly esteemed within and out-side the company. Their objective is to advise IBM’sleaders on technical trends, directions, and issues andto raise awareness about emerging trends throughout theorganization by building and sharing knowledge.
Third, IBM makes extensive use of networks andalliances (Dittrich et al. 2007), combined with a globalperspective (Palmisano 2006), in pursuit of strategicobjectives such as the company’s Smarter Planet initia-tive. As part of its efforts to display thought leadershipin communities of innovators, IBM produces a series ofGlobal Innovation Outlooks (GIOs). In 2007, for exam-ple, IBM published a GIO entitled “Virtual Worlds, RealLeaders,” that focused on the connections between gam-ing and leadership, raising questions about the skills andcompetences leaders would need in work environmentsthat are increasingly virtual and distributed (IBM 2007).
Fourth, IBM makes widespread use of social network-ing and collaborative technologies for service innova-tion, as seen in its use of Lotus Notes and the develop-ment of its intranet, IBM.com. It is not surprising, then,that IBM was an early adopter of virtual worlds andprovides an excellent context for our study.
Data CollectionWe collected data over a 2.5-year period starting inMarch 2007, although members of our research teamhad been in contact with IBM in relation to adja-cent questions of technology development and deploy-ment for several years prior to that. Preliminary meet-ings and workshops involving our research team andIBM employees were held in July, October, andNovember 2007 to explore the potential use of virtualworlds in IBM and the suitability of this technology forfurther study and analysis. They provided essential back-ground information and an invaluable understanding ofthe organizational context in which virtual worlds wereintroduced and used. In each workshop IBM staff wereinvited to make a presentation on the different ways inwhich they engage with other parts of the business andexternal stakeholders. The researchers used a short list ofsemistructured questions to frame the discussion. Duringthis time, we worked back and forth between the exist-ing literature and our developing empirical database tofocus our research question and data collection strategy.
We also assembled and reviewed a wide range ofprimary and secondary sources describing the historyand current activities of IBM. Primary sources includedannual reports, newsletters, presentations, materialdrawn from company websites and virtual world sites,and internal reports supplied by our contacts. Secondarysources included a range of journalists’ accounts, stock
analysts’ reports, and news reports as well as websitesdevoted to virtual worlds.
Armed with this background, we conducted interviewswith IBM employees and managers at various levels inthe organization. We followed a semistructured interviewapproach, exploring their experience of engaging withvirtual worlds and their thoughts on its use and effects(see Appendix A).
With the more senior members of the organization,we focused on the leadership aspects of the technol-ogy, whereas with other members of the organization,we focused more on the technology in use and the expe-rience of encountering and working with this new tech-nology. We interviewed several of the respondents onmore than one occasion and also sent questions to themindividually by email when clarification or further infor-mation was required.
In total, 32 software engineers, technology managers,and senior leaders were interviewed at IBM. Many ofthese were interviewed and consulted on more thanone occasion. Appendix B indicates all the respon-dents, identifying them by the positions they held inIBM and showing the dates and locations of interviews.Interviewees are not identified by name to maintainconfidentiality.
Data AnalysisThe analysis of the data took place in three stages. In thefirst stage, we organized our data into an “event historydatabase” (Van de Ven and Poole 1990). This was doneby chronologically ordering descriptions of events takenfrom the raw data—workshop outcomes, interview tran-scripts, interview and field notes, primary sources suchas IBM documents, and secondary sources such as jour-nalists’ accounts—and juxtaposing multiple accountsagainst each other to ascertain the degree of conver-gence. In the second stage, we worked through interviewnotes and documents for references to the ways in whichorganizational learning interacts with virtual worlds.The final stage involved the search for and identifica-tion of relationships by iteratively moving among data,emerging patterns, existing theory, and research until thepatterns were refined into robust and comprehensiveconceptual categories (Eisenhardt 1989). This permitteda synthesis anchored both empirically in our data andtheoretically in the literature.
FindingsLearning to Use: Enhancing Collaboration andIntegrationBy 2009, it was clear that the most efficacious use ofvirtual worlds in IBM was in the conduct of meetingsand rehearsals. Rather than working, sharing informa-tion, and developing new understanding face-to-face orvia teleconferencing or video conferencing, IBM staff
used the novel means of communicating through themedium of avatars in virtual spaces. We found evidenceof virtual worlds allowing people with different disci-plinary and professional backgrounds and from differ-ent geographical locations to coordinate tasks and shareideas in meetings in new ways in support of organiza-tional learning. One aspect of virtual worlds that encour-aged this sort of collaboration lies in the ways they couldbe used to create interesting and appropriate spaces fordiscussion, i.e., a formal boardroom or meeting roomwith PowerPoint presentations, a comfortable lounge, oraround a log fire. One of the initiators of the use ofvirtual worlds, for example, said,
We were passionate about the opportunities of cocreatingcontent in virtual worlds and created a virtual campfirewhere we met to discuss the possibility of becoming athought leader and developer. (Interviewee 6)
Virtual worlds created a shared, immersive environ-ment where disparate contributors could operate with asense of copresence or being there together. They pro-vided the possibility for exploring ideas in the inter-mediate space between physical meetings and confer-ence calls.
In 2008, IBM’s annual meeting of its Academy ofTechnology was cancelled because of the global finan-cial situation and the need to reduce travel costs. Thedecision was therefore made to hold the meeting in avirtual world. The academy meeting was held over threedays and was evaluated very positively by the four par-ticipants we interviewed in the course of the wider study.Information was shared and new ideas generated by sci-entists and engineers from different disciplines in dif-ferent geographical locations not by conventional meansbut by exchanges between their avatars. The high levelsof interest the meeting attracted led to an expanded rolefor virtual worlds in the company. In addition, by hold-ing the meeting in virtual world, it is estimated to havesaved IBM more than $300,000.
The success of the meeting led to its replicationover four days in November 2009, with an increase toapproximately 800 participants. The experiences of acontributor from Australia (Interviewee 32) are reveal-ing, given the challenges of time shift for his participa-tion; he was “pleasantly surprised” at the meeting, whichwas “interesting and surprisingly engaging” in its combi-nations of talks, meetings, poster sessions, and side con-versations that were often highly technical and detailed.He said it was a “high-fidelity” event. At the same time,some problems arose. In particular, given the differencesin time zones, he said he would have rather attended themeeting in person because he would not have to copewith the demanding and immersive requirements of tele-conferencing at night or juggle between handling inter-ruptions from his young family and having to engagefully with work colleagues during the day.
In another example, in 2009, a group of IBM seniorengineers needed to work together on a project toarticulate and measure the attributes of an IBM tech-nical leader. Travel restrictions precluded the teammeeting face-to-face, so the group decided to hold avirtual session in which eight members participated. Theagenda for the session included brainstorming a longlist of potential leadership attributes, working on thislist through group discussion to collapse or expand cat-egories, and voting on attributes to select and rank thosemost suitable for use in a measurement system.
Using Second Life, a leading virtual world platform,the group met in a purpose-made, virtual brainstormingstudio on September 28, 2009 (see Figure 1). Workinvolved virtual presentations, discussions, and the useof virtual sticky notes to provide new ideas for furtherdiscussion. As can be seen in the figure, virtual stickynotes were assembled on virtual whiteboards. Once ini-tial ideas had been assembled, the team discussed eachpoint, embellishing or rejecting attributes; this helpedsharpen the overall focus of each category. Once cat-egories had been assembled, the team members votedon their individual preferences, explaining why they hadmade their choices. In collating this evidence, it becamenecessary to reorganize categories, and a second virtualwhiteboard was quickly created to allow attributes to beassembled and selected and to visualize and store thematerial. Because all activities were recorded and deci-sions automatically stored, it proved easy to recall whysome categories had been developed and others not. Finalresults were available immediately with digital lists ofthe attributes selected and rejected, ranked in order, andcontaining explanations of the decision process. Accord-ing to participants, this approach also allowed the diversegroup to learn quickly how to work together. The learn-ing outcome was enhanced by the technology and theway it enriched the learning process in a nonroutine man-ner. It allowed the shared learning that is stimulated bythe collaborative development of visual representationsof ideas to be undertaken among a geographically dis-persed group.
Virtual worlds overcome the limitations of existingtechnologies for communicating. Teleconferencing, forexample, imposes a physical restriction on the number ofpeople who can participate. Initial tests in IBM showedthat meetings in virtual worlds had the capacity to con-vey more human signals and engage in richer envi-ronments for social interaction and collaboration thandid teleconferencing. They provided experimental spaceswhere new people could join and allowed people toexpress themselves by gesticulating and handing docu-ments and objects to one another. They created an envi-ronment where people’s representations of themselves asavatars in a community induced a sense of sharing some-thing important. Another engineer suggested that “vir-tual meetings can be engineered to create serendipitousevents 0 0 0” (Interviewee 7).
According to one virtual world user,
In general, 0 0 0 a lot of the value you get from holding meet-ings and conferences here in the virtual world space isn’tthe “attending lectures” part, it’s the “schmoozing andmeeting and greeting” part. (Quoted in King 2007, p. 9)
Virtual worlds allow the construction of environmentsdesigned for specific well-defined purposes, such as aboardroom, or locations for scientific meetings or brain-storming. Their malleability can also create spaces thatencourage social interactions, thus increasing the prob-ability of a chance event. Creativity in the design ofspaces is also seen in selections of avatars. We learnedthat a notoriously well-known, active, and highly glam-orous young female avatar was in fact a middle-aged,bearded engineer.
As IBM pursues its strategy of moving from a tra-ditional multinational to a globally integrated enterprise(Palmisano 2006), there is an increasing premium beingplaced on productive interaction, communication, andcoordination among people of diverse cultures and val-ues (Schultze et al. 2008). Increasingly complex ser-vice engagements, often involving hundreds of people,inevitably require pulling together remotely located par-ticipants into culturally and professionally diverse teams.Virtual worlds used as spaces for rehearsal bring diverseorganizations and skills together to assist collabora-tive learning and innovation in ways that could not beachieved with other technologies.
Rehearsing, which implies practicing ahead of time,is used to produce higher project success rates and canalso be a significant aid in training staff, such as salesteams. To do this, IBM has been developing “rehearsalstudios” in the virtual world. A manager explained,
Rehearsing client engagements was one of the first robustrehearsal environments we built 0 0 0we have continued tobuild some specific environments [for sales rehearsal,etc.] for scalability and building some middleware tomake the design and deployment in virtual worlds aneasier task. (Interviewee 26)
The ability to rehearse virtually has other potentialbusiness benefits. Users can take advantage of copres-ence to conduct research and learn about how diverseprofessionals and users might work with new services,they can explore the use of unstructured data mining, andthey can create instruments for specific data collection.
Learning by PlayingAlthough the computer games industry is a significantcomponent of many economies, the use of games them-selves is commonly associated with frivolity and timewasting, and as a result, it can be difficult to sanction inlarge organizations. IBM couched its use of virtual worldsin terms of encouraging play. This in itself was not uncon-troversial. IBM’s bureaucratic culture in the early 1990s
impeded its ability to explore new fields and adapt (Ger-stner 2002), and such a culture would not easily embraceplayfulness. The resonance of play with games playingand fun at work, where rules are relaxed, may explainsome reported initial reticence toward embracing virtualworlds in certain quarters in IBM (King 2007). Althoughthe concept of play was enthusiastically promoted byparts of the firm, others saw it as one of the barriers touse. As one senior engineer put it,
Tensions exist between the disruptive and incrementalinnovation sides of a business like ours. It’s interest-ing to note that it’s the more conservative/incrementalside of business that has tended to look down on vir-tual worlds as “too much play.” Indeed, the close rela-tionship between virtual worlds and games environmentsonly helps to support this negative view. This is an unfor-tunate view—but it is still held by many. (Interviewee 31)
Virtual worlds were nonetheless recognized in IBMas a technology that facilitates play, including thoseactivities where people experiment, explore, prototype,rehearse, and tinker with new ideas, often in combinationwith others with different skills. The company developeda virtual world strategy document in 2007 that acknowl-edged this; it referred to the importance of collaboration,learning, and play. Through its use, the company recog-nized that virtual worlds provided a space where experi-mentation is relatively quick and inexpensive and whereactivities are built upon the copresence of many peoplefrom diverse backgrounds. They also conveyed fun andenjoyment and allowed the cocreation and codevelop-ment of new ideas assisted by their visual representation.A senior technologist said,
You have to experiment. People learn better through play.They learn through interaction and simulation rather thanby lectures. Simulation is where there is a lot of oppor-tunity. (Interviewee 31)
A repeated factor identified in interviews was thatusers of virtual worlds were given “permission to play.”In IBM’s case, according to a senior manager, peopleneeded permission to experiment and be playful, and itwas provided by the company’s most senior manage-ment, who sanctioned the use of virtual worlds (Inter-viewee 11). Influential reports on innovative develop-ments in games were presented in 2003 to IBM’s mostsenior managers, which helped elicit senior manage-ment’s endorsement for their use. One of IBM’s mostsenior technology leaders explained why they did so:
One of the drivers of innovation in this area will be theability to play games. This will allow us to explore agigantic design space through experimenting together onideas. (Interviewee 2)
As an indication of senior managers embracing theplayful aspects of the technology, the results of the com-pany’s “InnovationJam” were announced by avatars of
IBM’s leaders at the world’s first virtual town hall meet-ing in a mock-up of Beijing’s Forbidden City—this wasthe first time that a Fortune 500 CEO had appeared inSecond Life. The InnovationJam was a massive, online,72-hour, idea-generating event, where tens of thousandsof IBM employees and partners examined key businessand social issues and sought new ideas for innovation(see Bjelland and Wood 2008).
The playfulness the technology engenders is alsoseen in the products IBM develops for its customers.As well as developing a virtual pub crawl to celebrateSt. Patrick’s Day, IBM has designed a digital workspacefor the globally dispersed R&D teams of Diageo, theworld’s largest wine, beer, and spirits company. “Match-ing the mood of the meeting” was central to this effort.In the brainstorming area, members of the team wereencouraged to type up any idea they may have, whichforms a bubble that floats around in the space. The nextcolleague who entered could assess the idea and clickon it if he or she likes it. This makes the bubble growbigger, thus attracting more attention from other col-leagues who enter the space. Participants found this formof interaction both effective and playful, enhancing col-laboration and innovation in novel ways.
Learning to Engage ThroughConvergent RecognitionWe characterize IBM’s engagement with virtual worldsas convergent recognition. It involves the increasing com-bination, integration, and focus of a widespread organi-zational appreciation, acknowledgment, and acceptanceof virtual world’s benefits and limitations. Convergentrecognition sees growing and increasingly collectiveviews in the organization about the benefits and limita-tions of virtualization technologies among the technolog-ical community, senior management, and those respon-sible for new business development and the users ofthe technology, such as marketers and trainers. Throughinterrelated choices about technology, shared experienceswith it, and formal processes that encourage “bottom-up”support for new initiatives and gain commitment of busi-ness leaders, IBM learned to engage with virtual worlds.
Two key aspects of this model that grew out ofour data analysis are the model’s emergent propertiesand concurrency. The management of unpredictable andcomplex technologies cannot be prescriptive because thetechnology evolves and changes along with the marketsin which it is used (Van de Ven et al. 1999). In thesecircumstances, value lies in initially keeping optionsopen and with increasing focus only as applicationsbecome clearer through exploration and testing. Thisform of learning benefits from organizational practicesthat encourage collaborative experimentation and prepa-ration of ideas and from business processes that supportemerging high-potential candidates for future develop-ment. These conditions and processes occur simultane-ously and iteratively: each is informed and influenced by
the others, as shown in the model presented in Figure 2.There is no linear sequence of progression; new ideasare embraced without complete understanding of wherethey are leading.
Organizational Practices2 Developing and SharingExpertise. Virtual worlds spread rapidly in IBM throughthe creation of an internal community of users—the Vir-tual Universe Community (VUC). The VUC grew soinformally and organically that there is some debatewithin IBM on the exact date of its formulation. It tookrecognizable form by September 2006, however, fol-lowing an idea posted on ThinkPlace, IBM’s internalideas development site. The idea of virtual collaborationwas further developed through brainstorming events heldalongside the InnovationJam. This component of the“Jam” was a self-organized collaboration referred to as3D Jam, involving approximately 130 IBM employees.
The idea of exploring virtual worlds and creating theVUC evolved from work in IBM’s emerging technolo-gies group at its Hursley Laboratories in the UnitedKingdom. An external blog was formed by this groupto encourage discussions about the development of vir-tual worlds as a platform for collaboration. Many IBMemployees involved in the VUC learned how to becomeresidents in virtual worlds in their own time, on eveningsand weekends. The community became self-organizing,and according to an instigator of the ThinkPlace post-ing, it was impossible in retrospect to determine whohad done what to promote virtual worlds in the business(King 2007).
By November 2006, the VUC had grown to more than500 members. The VUC idea logged in the Innovation-Jam was voted in the top 10 out of 50,000 entries. By theend of 2006, the community had grown to more than1,000 members. The VUC celebrated its first anniversaryin September 2007 with more than 5,000 members.
The initiators of the VUC quickly identified a rangeof issues and problems that would need to be resolvedif virtual worlds were to flourish and support business.They recognized, for example, that etiquette for using3D environments would need to be developed. They pro-moted the use of trial sites quickly within IBM andthrough its external networks to learn from experiencein use. To progress these issues, and overcome some of
the risks involved in exploring an unknown technology,several of IBM’s researchers created promotional roles,including those of “intraverse evangelists,” who were topromote and support the use of virtual worlds withinIBM, and “metaverse evangelists,” who would promotevirtual worlds externally; one researcher adopted the per-sona of “ePredator,” inhabiting Second Life with thegoal of establishing good behavior.
This concern for appropriate behavior led to the devel-opment of a code of conduct and etiquette guidelines foruse by all IBM staff working in virtual worlds. As oneof the initiators of the VUC said,
The rules of play, these are the virtual world guidelinesdeveloped by those using the system, and the measuresof value are increase in profits, decrease in overload, andimproved employee experience. (Interviewee 6)
These sorts of self-regulation are examples of thenecessity to adapt existing, and to develop new, organi-zational practices as convergent recognition proceeds.
As this self-organizing community was emerging,there were concerns about the use of virtual worlds onthe part of some individuals. Commitment to learningwas required of individual users, and the continuing dif-ficulties of using the technology provided a deterrent.One senior technologist pointed out that “the technol-ogy remains immature” (Interviewee 2). As one seniorscientist said,
People in IBM have not overcome the barrier of how theywill crawl up the learning curve. [They] are struggling togain the level of engagement in virtual worlds that theyare used to in face-to-face events. Some people hesitateto invest the time that is needed to go up the virtual worldlearning curve. (Interviewee 27)
Technology Choices2 Avoiding Technological Lock-in.Technological pluralism emerged as an important themein our analysis. The development and use of virtualworlds in IBM has followed a path of experimentationand the trial of many different virtual world platforms.As one way of dealing with the unpredictable, complex,and potentially destabilizing aspects of such a technol-ogy, IBM’s strategy was not to lock its exploration intoparticular virtual world products. As one manager said,“We are going platform agnostic in developing our tool-ing” (Interviewee 26), and the group’s approach couldbe likened to “creating scaffolding” for other people towork from. She claims this structure allowed other partsof the organization to use the virtual world experimen-tally and allowed business partners to collaborate andcocreate ideas more effectively.
At the time of our study, one of IBM’s most influentialtechnology leaders contended that with virtual worlds,“the hype is over and the hard work has begun. Signif-icant brainpower is now being applied to real applica-tions” (Interviewee 2). Through a process of exploration
and testing, choices about the use of platforms for partic-ular purposes were being made. Convergent recognitionoccurred as the efficacy of particular virtual world plat-forms and focus of their application became increasinglyappreciated. This did not preclude the development anduse of other platforms and applications in the future,and although some narrowing of focus occurred, theirsuccessful use increased their effect on the organization.
The learning process involved using the technologyto assist its further development. According to a seniortechnologist,
Internally we use the 3D environment to help us developthe tool itself. Like any development project, we havelots of requirements and limited resources, so we haveto prioritize and decide which ones we’re going to putin the development pipeline and which ones we’re goingto hold off. This is just a good way to get together withpeople all over the place to visually participate in thisranking process. (Interviewee 31)
Business Processes2 Supporting New Opportunities.Virtual worlds had high-level organizational endorsementat IBM. One of IBM’s most senior technology and inno-vation leaders said they “help to lever the vast creativityin the population of its users” (Interviewee 4). In addition,
IBM is totally dependent on them for the work we do.I believe that the fact that we are so used to collaborativetechnologies and platforms has made it natural to explorevirtual worlds. (Interviewee 2)
Following the identification and support of virtualworlds through the InnovationJam, a formal process forselecting and developing new technological investmentsin them came into use and was identified as being criticalto the company’s successful engagement. IBM’s DigitalConvergence Emerging Business Opportunity providedthe organizational structure for capturing, assessing, andmanaging the opportunities presented by virtual worlds.The Emerging Business Opportunities (EBO) processwas created in 2000 to improve IBM’s capacity to learnabout new technologies and businesses outside of itscore areas. Run by IBM’s vice chairman, the processprovides a comparatively small amount of approximately$2 million to be invested from a central budget in 20or so projects. The Digital Convergence EBO’s objec-tives ranged from the creation of virtual world cell-basedmainframes to 24-hour virtual service desks staffed byavatars. In September 2006, a new senior manager postwas created to lead IBM’s business development in vir-tual worlds. He developed a strategy document on poten-tial business opportunities to be exploited using virtualworlds between 2007 and 2009.
Although IBM is reputed to be one of the largestinvestors in virtual worlds, its actual investment inthe technology to date has not been large by IBM’s
standards. Initial costs were low because of the preex-isting community of people capable of using and devel-oping virtual worlds, whose knowledge had been devel-oped in their spare time. It is estimated that there wasalready the equivalent of several million dollars of workdone before IBM formally committed resources. In thissense, a low-cost experimental strategy has been pur-sued. Once IBM’s research in virtual worlds becamevisible in the organization, other parts of IBM becameinvolved and leveraged what had already been done,creating a low-cost development path. People built andreused components, significantly reducing the amount ofinvestment required and improving the receptivity of vir-tual worlds throughout the organization.
In less than two years, the process of convergentrecognition saw IBM move from a position of earlyexploration of the potential of virtual worlds by alimited number of researchers to one where clear busi-ness opportunities were being determined and pursuedby a large user community. A technology associated withgames had become reconciled with the rational objec-tives of scientists, engineers, and businesspeople in afor-profit organization.
Discussion and ConclusionsOur intent has been to understand the relationshipsbetween organizational learning and the introduction ofnew virtualization technologies, framed in the contextof the reconciliation of technologies of foolishness andrationality. March’s (1976) suggestive distinction has notbeen explored empirically with respect to organizationallearning, and the resolution between technologies offoolishness and rationality deserves further theorization.
Our empirical study of IBM shows how some of thedifficulties of organizational learning identified in theliterature (e.g., Dougherty 1992, Argyris 1995, Good-man and Darr 1998, Edmondson 1999, Brown 2003)can be addressed by the use of virtualization technolo-gies. It shows organizational learning was technologicallyfacilitated and mediated using the decidedly nonroutinemethod of communicating using avatars as a medium invirtual spaces. Because of their immersive nature, visual-ization capacities, and opportunities for serendipity, vir-tual worlds enriched communications, shared understand-ing, and enabled learning across organizational and otherboundaries—disciplinary, geographical, professional—inways other information and communications technolo-gies could not achieve. The technology incorporates andencourages forms of playfulness absent in many large,bureaucratic organizations and that many organizationsfind difficult to manage. These forms of playfulnessincluded new ways of experimenting and exploring withthe social interactions that underlie organizational learn-ing. Examples of dispersed and diverse groups of IBM’sscientific and technical personnel and marketing teams
using avatars to communicate, develop and share ideas,and reach decisions illustrate the nonroutine forms oflearning this technology enables. The opportunity to pro-duce stimulating spaces and uninhibited personae is con-ducive to learning beyond the everyday. The technologyassisted IBM staff to develop new skills, knowledge, androutines for working in virtual environments.
The context in which virtual worlds were engagedwith and used was one of IBM’s significant commit-ments to science and engineering and an organizationalculture based on technology. Organizational learning hasa particular technology focus when, as in IBM, strate-gies for technological accumulation are core elementsof competitiveness (Starbuck 1992). Technologicallysuccessful organizations tend to base their self-imagearound their technology (Schein 1985), and the waysthey manage, organize, and legitimize technologicalchange is also a reflection of their culture. A cultureencouraging open collaboration, experimentation, andsharing ideas by using virtualization underpinned thelearning processes around virtual worlds in IBM. Evenin firms that have cultures accepting of innovation,however, new ideas often fail to be explored becausethey suffer from internal “illegitimacy” (Dougherty andHeller 1994, Leonardi 2011). The case of IBM showsthat acceptance of virtual worlds was facilitated by thethree characteristics of learning organizations identifiedby Garvin et al. (2008)—supportive learning environ-ments, concrete learning processes, and leadership.
A key condition for the use of virtualization technol-ogy to encourage learning in IBM was its emergence ina self-organized community: the VUC. This participa-tive, organic development, especially when it is activelypromoted and guided by both its initiators and top man-agement and self-regulated with codes of conduct, over-comes constraints of innovative technologies such asvirtual worlds. The high levels of motivation engenderedencouraged people to work in their own time, gainingadded learning in the organization of the value of thetechnology.
The formal selection and endorsement brought aboutby a supporting business process for identifying anddeveloping emergent technologies—the InnovationJamand Emerging Business Opportunities program—addedsubstantially to the legitimacy of the idea of usingvirtual worlds, as did endorsement from senior repre-sentatives of the technology community. Playing withdevelopments on the edge of core business providedIBM an opportunity to experiment with and explore newand unusual technologies and their possible applications.This reinforces learning processes and allows organi-zations to engage, test, and share ideas that otherwisemight have become threatening (March 1991).
Substantial corporate backing and support of lead-ers and champions of technology—seen, for example,in the company’s CEO appearing in a Second Life
reconstruction of Beijing’s Imperial Palace—are furtherillustrations of a legitimization process characteristicof learning organizations (Garvin et al. 2008). Lead-ers provided “permission to play” with virtual worlds.IBM’s virtual world strategy is a classic “enacting”model in Daft and Weick’s (1984) sense based on high-level organizational learning in dynamic environments.Its approach has been one of experiment and trial, ofmeasured responses reflecting a desire to keep optionsopen in uncertain circumstances. The convergent recog-nition process provides the means by which technologiesemerging at the boundaries of the organization engagewith supportive organizational and business practicesand structures to turn them into business opportunities.The size and complexity of IBM, which helped cre-ate the conditions for the constrained learning that soaffected the firm in the 1990s (and therefore necessitatedfocused attention to its negation), also provides manyadvantages. The company has the resources and spaceneeded for experimenting and playing with new tech-nologies within its substantial internal market, among alarge population of technology-savvy users.
Implications for Theory and PracticeOur concern lies with theorizing how and why organiza-tional learning is affected by virtualization technologies.Part of the explanation lies with the characteristics andpossibilities of the technology. Although there are stud-ies on the relationship between organizational learn-ing and information technologies, these remain in theirinfancy (Argote and Miron-Spektor 2011) and have yetto consider the technologies of virtuality (Bailey et al.2012). A number of features of the virtualization tech-nologies explain their capacity to affect organizationallearning. Organizational learning is based on social inter-action, and users of virtual worlds were motivated towork and collaborate in a graphically rich, high-fidelity,interactive media that offer presence and copresence, orshared experiences. The sense of “being there together”is enhanced by the technology, providing the capacityto create appropriate spaces for various forms of socialinteraction. These use “locational clues” to constructspaces conducive to different objectives, from creativ-ity to information sharing. Particular types of interac-tions in certain spaces may help to bracket off a space;for example, for play, a conversation around a fire onthe beach—as in the case of the origins of the VUC—has a different feel from a meeting in the boardroom.The use of visual objects, ranging from the character-istics of avatars to the use of virtual sticky notes, addsto the richness of the medium. These interconnectedcharacteristics—copresence, adaptability of space, anduse of virtual representations of people and artifacts—reflect elements of virtuality that differentiate such tech-nologies from other information technologies. Although
these technologies cannot emulate the fidelity of face-to-face social interactions or those provided by high-qualityvideo conferencing, they allow the construction of imag-inative new environments: unbounded and unconstrainedspaces where interactions can take creative, emergent,and playful forms.
Virtual worlds support Marchian exploration by mak-ing it possible to make small experiments with weirdideas and diffusing the ones that prove to be good (March2006). Other practical implications of our study includeidentification of the capacity of virtualization technologyto deal with some of the unpredictability of using inno-vative new technologies to support organizational learn-ing by restricting costs and managing complexity. Costsof coordination between disparate parts of the organiza-tion are significantly lower when the need for face-to-face meetings is reduced. Compared with other Internetapplications or group systems, virtual worlds can pro-vide a more realistic, intense experience, aiding com-munication. They can also deliver time savings, therebyreducing costs. As the opportunities increase to prototypenew products and services virtually rather than physically(Schrage 2000, Thomke 2003), and IBM’s identificationof the potential capacity of virtualization technologies tobe used in collaborative product and service developmentprocesses is increasingly realized, the costs of innovationwill potentially be reduced in the future.
Our study develops theorization of the relationshipbetween technology, organizational learning, and play.Virtual worlds are an exemplar technology of foolishnessbecause of the playfulness they engender. In Marchianterms they can counter the constraints of organizationalimagination that direct efforts toward immediate effi-ciencies rather than future options. They were adopteddespite skepticism about their value as “games” and thehighly exploratory and speculative nature of the theiruse. March argues, “A strict insistence on purpose, con-sistency and rationality limits our ability to find newpurposes,” whereas “play relaxes that insistence to allowus 0 0 0 to explore alternative ideas or possible purposesand alternative concepts” (March 1976, p. 77). Play pro-vides “some temporary relief from control, coordination,and communication” (March 1976, p. 80). By replac-ing physical transactions and moving exploration andexperimentation into virtual, playful environments, vir-tual worlds help overcome difficulties and constraints toorganizational learning identified in the literature. Thecharacteristics of play that assist that process resonatestrongly with those identified by Huizinga (1955). Users’activities in the virtual world are bounded by the possi-bilities of the technology, defined by accepted rules ofbehavior, and executed toward organizational objectives.
Practically speaking, this finding points to how ratherthan being antithetical or complementary to work, thefreedom of action associated with play—albeit bound byestablished rules of behavior—can potentially provide a
model for work by constructing a more fulfilling senseof self than simply doing what we are told (Sutton-Smith1997). In considering actionable suggestions for organi-zations, we emphasize that it is also important that thepeople who work with virtual worlds are given sufficientroom to see this work as play. The name and physicalappearance of an avatar give important clues about therole and identity of the person behind it: a certain play-fulness in the design of these attributes may be vital toestablish credibility in a particular community of inno-vators. An IBM manager asked,
Is the corporate world drawing the boundaries around vir-tual worlds too tightly? What are we losing by excludingplay and fantasy from institutional adaptations of virtualworlds? For instance, in our development work, there isactive and lively discussion as to whether participants ina business meeting held in Second Life can show up asa rabbit (she can, and she did, though the meeting wasabout virtual worlds 0 0 0). (Schultze et al. 2008, p. 361,italics in original)
Our final theoretical contribution lies with developinggreater appreciation of the connections between tech-nologies of rationality and foolishness. As March sug-gests, technologies of rationality underlie technologiesof foolishness. Our paper explains the rationality oforganizational practices, technology choices, and busi-ness processes that provide the conditions in whicha foolish technology is introduced. These categoriesare combined in a model of convergent recogni-tion. Our contribution to understanding the combina-tion of technologies of rationality and foolishness lieswith explicating the mutually reinforcing processes ofengagement and use. Technologies used to encouragefoolish play and exploration result from rational, deliber-ate, and reasoned processes and their resolution derivesfrom an organizational convergence in recognition oftheir utility. The concurrent and mutually supportive pro-cesses of learning to engage with the technology alongwith learning through its use reconcile technologies ofrationality and foolishness.
LimitationsOur study has several limitations beyond its single com-pany and technology focus. We chose to focus on arestricted number of issues: there are other aspects oforganizational learning affected by virtualization tech-nologies, such as the construction of virtual teams, con-duct of training programs, or use in online communities(e.g., Faraj and Johnson 2011), that warrant greater atten-tion. Furthermore, our study was conducted in a companyknown for its leadership in innovation, and other organi-zations may view virtualization technologies differently.
Despite being prompted to record positive and neg-ative responses, interviewees accentuated the favorablecontributions of virtual worlds at the expense of poten-tial adverse consequences, although where these were
discussed (e.g., regarding ease of use, problems oftime zones), they are reported. As the technology fur-ther develops and diffuses, greater negativity may berecorded. We can envisage, for example, that circum-stances may arise where overreliance prevents the devel-opment of highly socialized interpersonal trust, which isso important to many projects. The negative effects of vir-tual worlds on collaboration warrant further exploration.
At the time of our study, virtual worlds were a new andquickly evolving technology, and there remains uncer-tainty on their projected pattern of diffusion and use. Thetechnology was likened by a senior figure in IBM in 2009to being in the same situation as the Internet was 15 yearsearlier in terms of development and use (Interviewee 2).It retains continuing problems in its ease of use, and thereis a cost in learning how to operate virtual worlds. It isdifficult to ascertain their likely pattern of developmentbecause the phenomenon under observation is highlyemergent and its use highly contingent, so it conceiv-ably may be subsumed or replaced by other technologies.The interface problems caused by the use of keyboardsmay be addressed by advances in haptic technologies thatcontrol physical/digital interactions through movement,such as Nintendo’s Wii and Microsoft’s Kinect. Virtualworlds nonetheless provide a useful example of a newgeneration of “game-like” visualization technology thatcan contribute to organizational learning.
Questions for Future ResearchThere are many rich research opportunities yet to bepursued to understand the conditions for effective vir-tual communications. How does the choice of virtualsurroundings affect collaboration and interaction? Whateffect does the form of the avatars chosen by participantshave on their innovativeness? In what circumstances is ameeting facilitator most useful, and what is his or her skillset, especially in culturally diverse settings? How do theseconditions vary when the meeting is with internal versusexternal collaborators? The use of virtuality to assist com-munications between different organizations is of partic-ular interest and relevance. Technologies that simulateand virtualize are continually developing along with theprogress of social networking tools, and researchers facethe continual threats and opportunities of studying newlyemerging and presently unforeseen platforms.
Technologies such as virtual worlds provide an oppor-tunity to test and develop theory on how new practicesbecome institutionalized and legitimized. Virtualizationtechnologies have implications for theories of leadership,especially how leaders respond to potentially disruptivesignals from the periphery of organizations. They pro-vide a particularly rich research field for the study ofthe importance of play and its relationship with work.And they can add to our understanding of the contri-bution of organizational culture, particularly those withstrong technological identification, in affecting attitudes
toward, and use of, new technologies. They provide fer-tile grounds for future research in organization and tech-nology, and by the playful nature of the technology, theymay provide insight into how technologies of foolishnessand rationality come to be reconciled not by March’srevolutionaries in pin-striped suits but by their ingeniousavatars.
AcknowledgmentsThe authors are grateful to the UK’s Engineering and PhysicalSciences Research Council for their sponsorship of the Inno-vation Studies Centre and financial support from Universityof Queensland Business School that enabled this research tobe conducted. The authors thank Samer Faraj for his edito-rial guidance and the exceptional helpful comments providedthroughout two rounds by the three anonymous referees tothis paper. The authors are grateful to all the respondents inIBM who gave of their time to assist them, especially IrvingWladawsky-Berger and Rashik Parmar.
This research has benefitted from close communicationsbetween the authors and senior managers within IBM, whichwas crucial in allowing access to technologically and commer-cially sensitive information. IBM did not financially sponsorthe research, nor did the researchers gain financially from it.No consultancy or other forms of advice were provided tothe company resulting from the research. Like many universi-ties, our respective employers do have a range of research andcommercial relationships with IBM, but IBM had no rights toreview or comment on our research findings. We acknowledgethat our deep engagement with the company as researchers hascontinually affirmed our interest in technological matters thatmay color responses from respondents by emphasizing theserather than other factors.
Appendix A. Consolidated Questions Used Across IBM1. How does IBM view its own readiness to adapt to exter-
nal shocks and adopt new approaches by engaging in newtechnologies?
2. How easy/difficult has it been for IBM to integrate newtechnologies—and specifically virtual worlds—internally?What insight/comments do you have on how it feels to usevirtual worlds? What is the actual experience like, includingpositives and problems?
3. What was the relationship between the previous invest-ments and commitment to other forms of digital collaborationand virtual worlds? Were they seen as complementary or is thisa disruptive technology? What are IBM’s strategies towardsplatform selection?
4. When did you first become aware of virtual worlds, andwhen was it that you decided that this was something that IBMshould take seriously? When did Nick Donofrio (ExecutiveVice President of Innovation and Technology), Lou Gerstner,and Sam Palmisano come on board?
5. What role did the Virtual Universe Community play inraising awareness of virtual worlds, and how did it relate tothe work going on at Hursley? How was the VUC supportedby senior management?
6. Was there an explicit strategy of working with virtualworlds within IBM, getting comfortable with it, before anyattempt was made to work with it with partners and customers?
7. Do you have concrete examples of using virtual worlds inintra- and interorganizational collaboration? What does a vir-tual world allow you to do with collaborators that you couldn’tdo before? How many users of virtual worlds are there in IBM,what is the extent and focus of their use and patterns of change?How many Virtual World Islands does IBM operate?
8. What activities are easiest to “virtualize”? What activ-ities seem to be resistant to moving to virtual worlds? Havevirtual worlds facilitated collaboration between multiple par-ties (different professional and functional groups, geographi-cal locations, clients, suppliers, etc.) and led to new ways oflearning? Is there a virtual world culture developing? A sortof online culture? Is this technology changing the culture ofIBM more generally? We are interested in examples of what
Appendix B. Interview Respondents
Int. no. Position Date of interviews
1 Distinguished engineer 2007–2009 (continuing discussions in London and Hursley,UK, and Armonk, NY, and conference calls)
2 Chairman emeritus 2007–2009 (continuing discussions in London and New York,and conference calls), most recently, March 2, 2009 (NewYork) and October 13, 2009 (London)
3 Director June 2007 (London), August 14, 2008 (conference call)4 Executive vice president November 23, 2007 (London), March 17, 2008 and August 5,
2008 (Armonk, NY), August 12, 2008 (Sydney, Australia)5 Distinguished engineer November 5, 2007 (Hursley, UK)6 Metaverse evangelist November 5, 2007 (Hursley, UK)7 IBM 3D Internet and Virtual Business November 5, 2007 (Hursley, UK), July 21, 2008 (conference
call)8 Vice president March 17, 2008 (Yorktown Heights, NY)9 Director March 17, 2008 (Armonk, NY)10 Executive IT architect March 17, 2008 (Armonk, NY)11 Vice president March 17, 2008 and August 5, 2008 (Armonk, NY)12 Senior vice president March 17, 2008 (Armonk, NY)13 General manager March 17, 2008 (Armonk, NY)14 Director March 18, 2008 (Hawthorne, NY)15 Vice president March 18, 2008 (Hawthorne, NY)16 Research staff member March 18, 2008 (Yorktown Heights, NY)17 Research staff member March 18, 2008 (Yorktown Heights, NY)18 Global director April 17, 2008, May 2, 2008, and September 8, 2008
(conference calls)19 Manager April 17, 2008 (London)20 Executive director August 1, 2008 (conference call)21 Vice president August 5, 2008 (Armonk, NY)22 Senior vice president and director of research August 5, 2008 (Armonk, NY)23 Vice president July 21, 2008 (Hursley, UK)24 IBM Fellow, vice president, and vice chair, Board of
Governors of IBM Academy of TechnologyAugust 13, 2008 (conference call)
25 Chief technology officer and distinguished engineer August 15, 2008 (conference call)26 Manager August 27, 2008 and November 7, 2008 (email
correspondence)27 Distinguished engineer and developer of Virtual World
Academy of Technology MeetingMarch 5, 2009 (Poughkeepsie, NY)
28 Director March 5, 2009 (Yorktown Heights, NY)29 Vice president March 5, 2009 (Pleasantville, NY)30 Chief technology officer March 5, 2009 (Pleasantville, NY)31 Chief technology officer and co-chair of Virtual World
Academy of Technology MeetingMarch 8, 2009 (conference call)
32 Distinguished engineer November 23, 2009 (Sydney, Australia)
we call the “playful” use of virtual worlds—i.e., the way theyencourage experimenting with new ideas in an unconstrainedand fun environment.
9. What about people who are against this? Do some thinkIBM time and money might be better spent somewhere else?Are there competitors for time and money (pervasive comput-ing, Internet of things, 0 0 0)? Are there losers somewhere?
10. What do you envisage to be the next steps in the useof virtual worlds?
11. Do you know of any existing literature on the historyof virtual worlds in IBM or any work that you think capturesIBM’s innovation strategy really well?
12. What do you think the main uses of virtual worlds inIBM will be over the next five years?
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Mark Dodgson is a professor and director of the Tech-nology and Innovation Management Centre at the Universityof Queensland Business School. He received his Ph.D. fromImperial College. His research encompasses innovation man-agement and policy and the changing nature of the innovationprocess.
David M. Gann is the Chair in Technology and InnovationManagement, Head of Innovation and Entrepreneurship andDeputy Principal, Research and Business Engagement, Impe-rial College Business School, London. He received his D.Phil.from the University of Sussex. His research interests include
innovation strategy and its implementation, entrepreneurshipand business model innovation with particular emphasis onorganization, and processes relating to the development of newservices in the digital economy.
Nelson Phillips is the Chair in Strategy and OrganisationalBehaviour, Imperial College Business School, London. Hereceived his Ph.D. from the University of Alberta. His researchinterests include new institutional theory relating to the studyof entrepreneurship, technology strategy and innovation, andthe social dynamics of technology adoption, particularly indigital devices and services.
