09/26/2012 03:52 EDT | Updated 11/25/2012 05:12 EST

Do or Die: The Inevitability of Social Business

In Canada, social media is still in its nascency. While many brands are willing to include social media in their marketing strategies, it is still largely a campaign component. The fact of the matter is the phenomena that is social business brings with it inherent business risks, a complete change in mindset, and a cultural shift --none of which will happen overnight.

I had the pleasure of attending a recent Social Business Summit presented by the Dachis Group in New York.

The experience provided me access to some pretty forward-thinking professionals intent on building the next phase of Social Enterprise. The case examples from IBM, Newscorp, Harvard and even FoxNews revealed some pretty significant strides defining implementing social business practices in this new frontier. Coupled with the fact that these are tier one organizations made these examples all the more compelling.

Jeff Dachis, CEO of Dachis Group said it well:

We have moved from an era of mass communication to a mass of communicators... with more people trusting the communicators.

Brand managers now live out in the wild, where their customers are. Dave Gray, Partner at Dachis, points out, "The ever-improving digital infrastructure and social networks are causing profound social change that increases competitive intensity...the only sustainable competitive advantage is the rate at which a company can learn."

This, in turn, elicits two questions:

  • How do we engage with the mass of communicators -- the vendors, customers, consumers -- in a trusted, authentic, and transparent way?
  • How do we, in turn, properly integrate the reams of communication -- more importantly the meaningful data -- and translate that into organizational performance?

But when I look at Social Business as an evolution, it's hard to dismiss traditional practices that have long built and pushed forward processes that have become the mainstay of successful organizations. The eventuality of this emerging service economy brings with it substantial change that many organizations are hesitant to embrace, let alone acknowledge.

In Canada, social media is still in its nascency. While many brands are willing to include social media in their marketing strategies, it is still largely a campaign component. I spoke about Canadian Latency earlier this year at PodCampTO. I'd be hardpressed to believe that a large percentage of business in the US don't share the same mindset.

The fact of the matter is the phenomena that is social business brings with it inherent business risks, a complete change in mindset, and a cultural shift-none of which will happen overnight.

Scott Neumann, IBM's Social Business Evangelist, spoke about the need to "Activate and create a smarter workforce." This entails:

Transforming culture and process:

This means hiring the right people to embrace change. In a sales culture, where individuals are pit against each other to drive performance, the latter is non-existent in this new order. Can we effectively align the workforce to operate cross-functionally, break down silos, and more importantly, come to a consensus? Gray pointed out companies can't easily adapt because of conflicting objectives between departments e.g. profit v.s. sales volume v.s. attrition.

This also means designing a dynamic model that flexes based on customer outcomes. It's not only about technology; it's about culture. We need to create a culture that can share its mistakes as easily as its wins -- and learn from its mistakes. Can we easily embrace failure in cultures where only success has typically been rewarded?

These two factors alone are hard to come by. You need to establish a culture of sharing in order to effectively engage externally. The mind-set shift required to evolve the organization is substantial.

Control becomes another barrier that the C-suite is unwilling to relent.

IBM Social Business presented this viewpoint:

Lead by creating a world of possibilities

  • make everything social and bring your brand to every experience
  • eliminate the guesswork
  • get creativity from everywhere

An organization cannot run effectively if it bows to the whim of the masses at every turn. This iterative model needs process, priority, corporate governance, and an overall mission to ensure proper guidance. A balance needs to be established. And, it relies heavily on analysis of this big data to extract relevant meaning to the organization.

Dave Gray pointed out, "A control system must have as many states as the system it wants to control." This is what he coined, "The Law of Requisite Variety." The way to deal with this complexity:

  • Reduce Variety: provide a scaled-down product/service offering
  • Absorb Variety: reorganize for variety instead of trying to contain it. Here's a great example of Zappos defining customer service
  • Create Autonomous Pods to address real-time needs: groups that have authority to represent the company and are given accountability measures.

Chris Crummy, Worldwide Director of Sales at IBM, indicated:

Social is an organic living breathing layer that you put on top of your existing infrastructure.... Social business fills the gap that traditional business doesn't.

And therein lies the rub: The fundamental disciplines of social business is measurement. As Michael Jones of Dachis points out, it's important to identify constituencies: what motivates them, then measure and understand how they contribute to overall organizational performance. Until we set the parameters to measure this, adoption will be slow.

In many ways, it's a chicken and egg scenario: the current approach to engaging in social is a fail. Brands are failing to scale authentic engagement. The reason: resources. Increased resources will not be committed without proper performance attribution.

The new world would argue:

"Social engagement is the new ROI"

In a space that's evolving rapidly marketers are realizing numbers are slowly taking a back seat to the inherent value of garnering consumer and market insight.

After all, the new world order relies on doing everything right for your existing customers. Service, these days, has become the new economy. Unless we understand our customers more holistically: what motivates them, what makes them happy, how they feel about our products, how they feel about us- acquisition becomes much more difficult.

Social business seems like a "pollyannaish" view of the evolution of business. A totally transparent organization may be unrealistic. Mitigating current organizational politics, siloed structures and internal competition will definitely stifle this evolution. However, changes are already underway. As per David Gray,

There is no way to proceed without dismantling some of that precious infrastructure.

Is your business ready?

Part II of this series will continue to discuss what's required for business to ready themselves for this next evolution.