If Enterprise 2.0 does nothing more than electronically mimic everything in Enterprise 1.0, making the old ways of working just a little bit faster, where's the revolution? No, the exciting thing about Enterprise 2.0 is its ability to transform. While email simply made paper mail electronic, microblogging and activity streaming transformed information sharing to make it fluid and transparent.

A similar transformation is now occurring in the traditional business hierarchy, the chain of command.

Now, when the traditional business hierarchy works, it's a beautiful thing. It's good for order and accountability. But it's not perfect. Its weaknesses reveal themselves in various forms: when employees are discouraged from working across departments and divisions; when the CEO's visibility is obscured by his direct reports; when employees advance because of their assertiveness rather than their competence; when individualism squelches team play; and when good ideas die on the vine only because they came from the rank and file.

So, are you ready for a transformation?

'Like' the myriad ways social can improve the way we live (and work)? I do.

Facebook, LinkedIn and Twitter have transformed interactions with friends, family and business contacts. Employees expect the same staggering level of communications efficiency in the workplace. As they've started to get that efficiency, in the form of social computing tools, silos are falling down, knowledge hoarding is fading out of vogue, and the hierarchy is flattening out. Suddenly, wonderfully, merit matters more today than yesterday. Welcome to the Merit-Driven Organization.

The Merit-Driven Organization transforms the chain of command into a web of contribution. Trust, reputation, and career hinge less on self-promotion and more on what the leadership team really needs to see – tangible contributions to the greater good.

Consider a leader trying to select members of a project team for a business initiative. In the traditional hierarchy, project leaders select people they know through their direct experience. In a Merit-Driven Organization, deep collective intelligence is at your fingertips. Searching the enterprise social network for candidates, the project leader discovers rich social profiles and expertise maps (like those in our new Spotlight solution package for NewsGator Social Sites 2010).

Both verbally and graphically, these maps reflect skill and experience, revealing a different view of the org chart – based on talent, not title. The social network has captured each employee's activities, content contributions, peer ratings, self-described expertise areas and connections. You can see who is working closely with whom, whose ideas are most valued, and what you might learn.

Understand the value of social currency in driving employee satisfaction.

Social gaming, too, has a lot to offer the Merit-Driven Organization. Foursquare's popularity proves it's fun to earn an electronic badge for an achievement, even if it's swilling coffee at Starbucks day in and day out. Why not put these badges to work in the workplace?

That's what we thought, so we made badging another new Spotlight capability. At first glance, electronic gold stars may not seem like the kinds of rewards a serious business would distribute, or that a serious employee would seek. The key is to reward value, not mere activity. Everyone should take pride in an achievement aligned with an organization's mission. It means you're contributing to the greater good and, presumably, advancing your career. Some examples of badges are Salesperson of the Quarter, Hero of the Day, Community Leader, Most Valuable Contributor (MVC) and the Edison Award (for innovative ideas, of course). It all depends on what your specific business wants to encourage.

To be effective, badges must be timely – earned and granted – yet scarce enough to distinguish the recipient. Badges should be equally available to all employees. Universal badging allows for the possibility of an intern and the CEO to win the same badge, a nice way to inspire both to keep learning and participating.

Several software solutions automate badging. Organizations should demand flexibility in defining badges, with an ability to set rules, weight criteria as they wish, and override the system to manually deny or grant badges. As this technology evolves, one can foresee badges becoming increasingly solid credentials by which project leaders can make real business decisions.

It's important that a badging environment integrate with third-party applications, e.g., accounting, ERP or CRM. If a marketer runs a wildly successful campaign that generates 1,000 hot leads, that event should show up in the organization's central activity stream and be tracked in the badging application. Maybe that achievement warrants a Marketing Master badge.

'Friend' the social, merit-driven organization.

Expertise maps and recognition badges are just a few of the ways that social computing has given rise to a model that, like the chain of command, may be imperfect but can reinvigorate a business with a shock of positive energy.

Imagine younger, newer, and perhaps timid employees introducing fresh ideas that for the first time will be given a truly equal hearing, as if they were in the top third of the organizational chart. This model is better for innovation, better for morale, and better for the selection of future leaders.

Imagine a new kind of leadership and the emergence of a culture willing – no, eager – to share valuable information.

That would have some merit. And be a true transformation.

PS – If you are going to the E2.0 Boston Conference next week, stop by the NewsGator booth (#419) to see a merit-driven organization in real time!