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The Evolution of Business

by Christoph Schmaltz

Instead, some time ago I presented four concepts that highlighted the differences between traditional businesses using social media and social businesses. Judging by the comments it received it did a decent job at explaining what a social business is. Now, almost a year later though, I realise that it failed to show the evolutionary process required to move from a traditional b u s i n e s s i n t o a s o c i a l business.

The social business movement appears to be in full swing. Over the past weeks, I have read time and time again that 2012 will be the year of social business (Business Computing World, SXSW, We are social). In terms of awareness, I totally agree; in terms of achieving our goals, perhaps that is too ambitious in such a short time period.

I believe that the notion of 2012 being the year of social business is rooted in a misunderstanding of what social business actually means. I do not intend to go down the slippery road of trying to create a definition.

In my view, pure disconnected and social businesses represent the extremes of a continuum. To date they only exist in theory. In between you can plot any business on this planet. As the continuum suggests there is no such thing as ‘THE’ social business. It is not black and white but offers shades of grey. As time goes by we will see more organisations moving closer towards adopting characteristics of a social business and thus changing the way business is done in a connected world.

Traditional businesses with a traditional business mindsetIn the past years organisations started to experiment with social tools inside and/or outside their firewall. Many of them created corporate presences on social networks adding these channels to their more traditional communication channels without changing their business attitude. Success? None! The failure was / is devastating and a true shock to the system. Nonetheless, most organisations can still be found in this category – traditional businesses with a traditional business mindset. No matter which channels and tools these organisations use, let them be social or not, these companies haven’t freed themselves from 20th century thinking yet.

Traditional businesses with a social business mindsetForward-thinking and agile organisations have learned that in a connected world, business-as-usual is no more. They understand they need to listen to, engage and connect with the marketplace. That is why we now see HR departments connecting with potential talent on Facebook, Customer Service departments helping clients on Twitter or Business Development departments putting out thought-leadership pieces on the company blog. I call these organisations traditional businesses with a social business mindset. These are not social businesses.I assume and would hope that this comes as surprise to many. Let there be no doubt: arriving at this level is for most organisations a huge challenge and already an amazing achievement. The way to here is long and thorny, but the rewards are plenty. However, compared to what could be these rewards might be rather small. The main problem is that at this level corporate functions still own the connections. This simply does not scale.

Social BusinessA social business is a truly connected business. It connects its employees with each other and them with the marketplace. Corporate functions are now part of the networks rather than owning and controlling the relationships. In my view, a social business creates intimacy at scale by democratising roles and responsibilities and encouraging employees to build their own brand (no, this is not a definition).

Intimacy at scaleHow many connections can a HR department have with graduates, experienced hires or alumni? Do you think the HR department can ever have as many or more close relationships with their network than employees have with theirs? How well do social business efforts of a HR department scale compared to the company’s employees?What can be said for the HR department is also true for other corporate functions like Marketing or Business Development and even R&D. Using your employees’ networks rather than relying on just your corporate functions will have a much greater impact on your business. This has fundamental impact on organisations’ social business strategy and programme!

Democratising role & responsibilitiesTo achieve intimacy at scale, corporate functions need to forego some of their control. (Did someone say ‘trust is cheaper than control’?) It is inevitable. We have already seen it in some pockets of organisations. For example, some companies have implemented new collaboration and communication tools. Users do not have to go through IT anymore to set up a group or community: they simply create a group and invite others. Open innovation approaches have been adopted by some companies saving the central R&D department considerable amounts of money. Some managers have adopted an open leadership style openly discussing decisions and gathering feedback from employees. Experience shows that this does not end in anarchy. IT, R&D, Management and so on provide the boundaries within employees and others can engage. However, corporate functions that have traditionally been outward-facing have shied away from the idea of democratising their role and responsibilities. In a social business, this will change.

When we look at the characteristics of a social business, we will need to answer new questions. Do companies need to incentivise or even reward employees for engaging in social channels? If every employee is expected to become a customer service agent, how do companies organise for this scenario? Do job descriptions for roles in a social business need to be altered? Can employees with large networks ask for a higher salary? Do employees indeed identify with their company and are they true brand advocates? These and many other questions will need to be answered, as organisations move to become true social businesses.Starting to adopt a social business mindset and engaging with the marketplace is a first step in the right direction. However, it’s not the end of the journey! As businesses evolve, we will see true transformation supported by organisational design, change management and process reengineering expertise. If you are heading up a company or corporate function and are seeking to create (social) business strategies, ask yourself or your consultancy, whether they scale. If they don’t, you may be missing a trick.

Encouraging employees to build their own brandThis may be true only for certain industries such as professional services. In this industry especially, people are the most significant asset: the industry is about people, their knowledge and relationships. If you want your employees to participate in social media, do not make it about the company, make it about them. People are selfish. Help them understand how they can use social media to build their own brand under the company’s umbrella. If they have the means to build their own networks and enjoy working for you, they will help to show the human face of your company, will be willing to amplify corporate messages and even give it a relevant spin for their connections and networks. After all, your employees should be your greatest advocates. As companies evolve, we are beginning to see organisations not only encouraging their employees to engage on social networks, but expecting them to do so. (see Grant Thornton UK Social Media Policy Video  [Disclaimer: Grant Thornton UK is a Dachis Group client. The video was created by Grant Thornton UK, not Dachis Group]).

This blog post written by me was originally published on the Dachis Group Blog