Capital is only one key resource of an organization and is by no means the scarcest one. The scarcest resource in any organization is performing people. — Peter Drucker
Today’s hottest growth companies become tomorrow’s failures all the time. Many organizations that start with the right product at the right time believe the music will never stop. But of course it does. They become serial optimists and fall victim to what Clay Christensen, author of several popular books, calls the Innovators Dilemma, or they become incumbents who are unwilling to cannibalize their cash cows.
The smart companies, companies like 3M, IBM, Google, Intel, and Starbucks, understand that they need to remain adaptive and focus their attention on creating an innovative culture with internal systems to support it.
Dion Hinchcliffe of the Dachis Group asked the question likely troubling most executives, "How can employees and managers best adapt to today’s changing and increasingly social workplace?" This has become a central question as organizations look at social computing as a new primary channel, both among their workers and for their customers and business partners. According to Hinchcliffe: "While we often see traditional areas within companies—such as corporate communications, human resources, or the intranet team—being tasked with making the initial foray into internal social media, many business leaders I talk with are already looking beyond ‘old school’ functions and trying to think through the broader implications as organizations become more social. They are also getting a sense that there is something unique and different about a social workforce."
Successful social business starts with transforming your organization internally. This is often overlooked as a crucial step toward social business. Yet not only does having an internal social business system make businesses more effective at the external effort, it’s often critical for a company’s long-term social business success. External social business alone, without an internal social business component, will not transform the business culture.
Why You Need the Digital Village
Why do we want to recreate a village in digital form? Decades ago, the majority of problems that had to be solved were solved by the local community, and this was a very effective method for taking care of one’s own. Villages that operate in the physical world are no longer tenable given the mobility of society. It’s no longer a given that people will put down roots in neighborhoods that influence what their home looks like, what they do for work, or, indeed, what they think.
Today’s society is such that many more people can be successful by choosing how and where they want to work. They no longer are stuck in the town they grew up in; society has evolved its technical infrastructure to the point where knowledge work can be done from almost anywhere. It has also given us the flexibility to join companies located anywhere in the world. But as society’s infrastructure has evolved, the concept of the village community has gradually waned. And we’re missing out on an important human need to connect and share experiences. Yet it’s not going to remain that way for long.
How will the village reemerge? Today, the primary purpose of a corporation is to reduce the expense of bringing together, in a coordinated fashion, a large number of people to accomplish a set of objectives. Most companies do an adequate job of leveraging their employees offline but either don’t understand or are afraid to extend the model to an online social platform. That’s an egregious mistake.
For much of the last seventy-five years, we understood how a company was supposed to operate. Business leaders went to business school to learn slight variations on the army blueprint model for business operations. The command-and-control leadership model, with a small number of leaders giving orders to a multitude of followers, provided an effective hierarchical structure for businesses to adopt. We assumed all business was conducted the same way. Anything different was considered foolish and frowned upon by board members and Wall Street.
In that hierarchical command-and-control model, information was handled at each level by one person who was tasked to solve problems to his ability. Complex or more difficult problems were sent up a level to people supposedly more skilled and better able to solve the issue. Information was rarely shared or disseminated to other employees so that, if they faced a similar issue, they could solve the problem on their own. Even more challenging, the higher up the command chain you went, the less likely the person was to get the opinions of people below her. Worse, the final decision-making authority was concentrated in the hands of one or two people, typically the CEO and perhaps another top executive. Clearly this model doesn’t work in the fast-moving business environment we now operate in.
Why Enterprises Need an Internal Social Business Strategy and Social Platform
Fifty-six years ago, William Whyte, in his 1956 bestseller The Organization Man, argued that the popular company ethos of the day represented a dismal type of utopian communalism that stripped its employees in spirit and in body. Companies that bureaucratized their innovative potential by stifling individuals through the emphasis of meaningless process over substantive thought. Today, many businesses still suffer from this prejudice.
But as I have argued, this business philosophy is no longer justifiable. Companies must harness the wisdom of individuals while simultaneously dismantling the command and control management apparatus. To ignore this advice will leave you vulnerable to competitors that are more agile, more powerful, more innovative, and, ultimately, more profitable. Here are but a few of the reasons that we encountered in our research that demonstrate the need for internal social business supported by a robust social platform.
- There is now more data than ever and it can’t remain in information silos.
- It makes the organization quicker to adapt, respond, and be proactive.
- It allows us to more easily streamline overflow of information.
- It allows us to better work together and collaborate with employees
- It offers unique capabilities to address operating challenges and
improve operating metrics.
- It improves overall business performance, promoting more effective collaboration between employees and their data sets, and improving employees’ ability to share and push forward creative and practical ideas that meet business objectives.
- Decision making is faster, because the right information gets into the right hands quickly.
During the past twenty years or so, digital technologies have evolved to a point at which we can effectively recreate the village as a corporate digital village. Technology can scale down the complexity of a large workforce while accommodating employees wherever they may live or travel. Technology manages to make an organization feel like a small village, where connecting with people is as easy as clicking on a name in the activity stream or obtaining results from a search. Technology provides immediate answers to problems employees, suppliers, and partners have that day. Technology suggests employees follow other employees with similar interests or documents that they may find interesting. In essence, it’s a digital village.
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Excerpted with permission from SOCIALIZED!: How the Most Successful Businesses Harness the Power of Social by Mark Fidelman (Bibliomotion, 2012).
Mark Fidelman is a Managing Director for Evolve! Inc., which specializes in developing intensely competitive businesses that adapt to market changes to become highly profitable. He has written for such publications as Business Insider and Technorati.
[Image: Flickr user Walt Stoneburner]