Social business is one of the biggest shifts in the structure and process of our organizations in business history. It taps into entirely new sources of creative output (everyone on the network), relinquishes structure that reduces productive outputs, and inverts methods of traditional control and decision-making in work processes (anyone can contribute as long as they create value) while focusing on useful outcomes.
As a result, there’s a growing sense in some parts of the business community that traditional power and control will have a hard time continuing in their existing forms. Inﬂuential business thinker and strategist JP Rangaswami has been exhorting businesses for several years to begin ‘‘designing for loss of control’’ based on his experiences as chief information ofﬁcer of British Telecom, one of the largest organizations in the world. Inﬂuence and power are inexorably ﬂowing into everyone’s hands now that all individuals have access to equally powerful tools for self-expression. Every company now has to consider virtual competition with the entire world, not just a few large businesses, as competitors evolve faster and possess better tools, technologies, information, and methods of organization than ever before.
The future of business is turning into a very different one from what it was in the twentieth century. Institutions unwilling to respond in kind with the new sensibilities and types of engagement the marketplace wants and increasingly expects will experience the consequences. For those that don’t, customers and employees will soon come to distrust them, with consequences that vary but inevitably will be undesirable.
Today customers who want to use a company’s products can quickly consult with the collective experience of the world or broadcast their disapproval of the outcome globally for all to see. Prospective workers no longer have to take a company’s assurance of what employment will be like; they can rapidly ﬁnd out from people who already work there.
But this new world is far from the exclusive beneﬁt to consumers; businesses too can beneﬁt. They can now pick and choose new partners in an open marketplace, where business reputations and prior performance are shared and visible for all to see.
New social models and enabling tools, combined with the means to employ them effectively, are remaking the landscape of business, society, culture, and government. This future can appear daunting, uncertain, and decidedly unfamiliar. But more and more, companies are studying what’s happening, absorbing the lessons to be learned, and gaining competency in what’s required to succeed in this new world.
The fundamental principles of social business can be distilled down to three basic ideas:
- Social Business Tenet #1: Anyone can participate.
The processes of product development, marketing, sales, operations, customer support–in short, nearly all aspects of business–will ultimately be open, social, and participative. This applies to employees, business partners, customers, and the rest of the world, and includes all possible uses. Although there must be some constraints and rules regarding who gets to participate and when, in general, the more open the participation, the more superior the result. When people and their friends use the explicit connections they have between each other, participation is most vibrant and useful.
- Social Business Tenet #2: Create shared value by default.
Contributors have intrinsic worth based on their inherent ability to increase overall community value through participation. Building value requires that whenever possible, contributors automatically share content with the entire community in as close to real time as possible. The individual reputations of contributors matter as well, along with the resonance of their contribution with others engaged in similar work to create a virtuous participation cycle. Most shared value is created in simple social connection and incremental contributions such as conversations; however, contributions can be complex and sophisticated as well. Individual additions of shared value are tiny, but when they are aggregated into the output of millions of customers and interested stakeholders, value builds exponentially and accumulates into industry-leading outcomes. Formally, the process of automatically building shared value is called a network effect.
- Social Business Tenet #3: While participation is self-organizing, the focus is on business outcomes.
In social business, it’s speciﬁcally about productive shared outcomes for all involved, as well as the business objectives the organization has for its participation. This tenet requires social media to be put to good business use, even though many other outcomes will result as well.
The ability to apply social business seems to work best in social media, though it’s not required (social business ideas can work in many other contexts as well, such as e-mail, in-person work activities, or even executive leadership). In practice, the actors are identiﬁed very clearly–often through a user proﬁle or other strong identiﬁcation mechanism–and their activities are public and tied directly to this identity. This is a powerful accountability mechanism as well as a way to ensure proper credit and sourcing for contributions. Social networks are grounded in identity and activity-tracking mechanisms that end up causing the three essential tenets to work simply and easily to produce surprisingly effective and robust business outcomes.
Reprinted by permission of the publisher, John Wiley & Sons, Inc., from Social Business By Design: Transformative Social Media Strategies for the Connected Company by Dion Hinchcliffe and Peter Kim. Copyright (c) 2012 by John Wiley & Sons, Inc. All rights reserved.
[Image: Flickr user Hamish Foxley]