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1
Social – good
for business?
MARCH 2013
2
EXECUTIVE SUMMARY
Four in every five Internet users are on social networks – that’s something like 1.43 billion
users co...
3
For most of us, social networks are still something of a personal affair, something we use at
work but not necessarily f...
4
The term “social business” is not new but it is the use of this term combined with the idea
of a business model that is....
5
http://darmano.typepad.com/.a/6a00d8341bfa9853ef0168eb2e0b4c970c-pi
6
The idea of a community-based business model, where everyone in the company
ecosystem cocreate happily may sound a bit u...
7
There are many possible reasons for poor results in social, however, it is hard to deny the
impact of conservatism, over...
8
Those that have adopted a social enterprise model are undoubtedly ahead of the curve.
IBM has been a leader in social bu...
9
The desire to increase social technology investment is high (46% of companies), but the
surety about the impact of incre...
10
Under the construct of a traditional business, the propagation and development of ideas
can be difficult. Consider that...
11
These options are still funneled, even moderated, by the business but it is the open-
source approach to problem solvin...
12
The value an individual brings to a social business could also be seen as their ability to rally,
contribute, and creat...
13
http://visual.ly/what-big-data
14
More ideas, cocreation, cross-pollination and data management add creativity to a
business. But that is only one part o...
15
And it is the openness of a social business model that can be the most difficult for
businesses to adapt to. Industries...
16
Unfortunately, traditional ROI measures aren’t applicable when assessing the benefits
of implementing a social business...
17
Whether we’re interacting within a social circle, adding our creative voice to a collective one,
or simply scanning, ab...
18
Most businesses today recognize there are benefits to be reaped from a CSR program,
but often the issue is less about d...
19
•	 Institute of Electrical and Electronic Engineers 1978, . C. R. Licklider and Albert Vezza
•	http://socrates.berkeley...
20
About the Authors
Maggie Christie
Director of Integration, Proximity Auckland.
With over 25 years in both client and ag...
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Social - Good for Business?

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Social businesses are arguably the next generation of business; a new model of operating, and interacting. They are businesses where success is based on the participation of all, rather than the outputs of a few. Strategists Maggie...

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Transcript of "Social - Good for Business?"

  1. 1. 1 Social – good for business? MARCH 2013
  2. 2. 2 EXECUTIVE SUMMARY Four in every five Internet users are on social networks – that’s something like 1.43 billion users connecting via wikis, blogs, Facebook, Twitter, Tumblr or any number of other existing or emerging shared spaces. While the purpose of each social site may be different, the reason people use these sites is arguably the same: people want to participate, to be a part of something bigger or to just gain assurance of their place in the world. We play different roles in social too. It’s often noted that less than 10% of people on the Internet are creating or changing content. The rest are watching. Yet whether as a contributor, driver or voyeur, all Internet users are participating at some level. Our participation in online social networks is often for the benefit of our offline world. That dress we saw our friend’s friend wear on Facebook becomes the style we want to wear. Your mate encourages you to sign up on a blog so you can agree to his/her choice of eatery for when you next meet. It’s part of human nature; people want to participate, and that’s true at work just as it is in other parts of our lives Ross Chestney, head of communications services at BT “ ”
  3. 3. 3 For most of us, social networks are still something of a personal affair, something we use at work but not necessarily for work, or at least not in an official manner. We flick between our inboxes and our social networks. We interrupt sometimes more menial tasks with something lighter, like scrolling through Facebook. Many businesses find this interruption a threat to productivity and take the seemingly extreme measure of blocking social networks in the work environment. They assume employees will be more efficient if they are restricted to a more formal set of work tools, such as emails, meetings and PowerPoint presentations. An [enlightened] minority of businesses, however, believe the opposite. They have augmented their traditional tool chest with social networking tools and practices. Rather than seeing social networking as something to be controlled, they embrace the participatory nature of social networks, the collective action it spurs and the transparency that it demands. They create and encourage new connections between employees, suppliers, partners and consumers and are gaining efficiencies of a different kind. Rather than efficiency being measured by silo outputs, a social business gains efficiency by sharing tasks across the business. Ideas are sought from a broader range of stakeholders, with improvements being made to a range of less obvious measures such as turnaround times, speed to market, and customer responsiveness. The culture of a social business is happily suffering from hierarchical anemia. Processes exist to be challenged and the lines between employee, management, suppliers, partners and customers are increasingly blurred. These social businesses endorse cross-pollination and as a result the ecosystem begins to operate more organically. Like every popular mode of communication, social networks have had an impact on how we view or understand the world we’re involved in. The immediacy of social and its content, however, allows that view to be more agile; that understanding, more fluid; the solutions we put in place, more flexible. Social businesses are arguably the next generation of business; a new model of operating, and interacting. They are businesses where success is based on the participation of all, rather than the outputs of a few.
  4. 4. 4 The term “social business” is not new but it is the use of this term combined with the idea of a business model that is. A social business model is one that lives, breathes and accepts social networking tools and practices as the cornerstones of communication, knowledge sharing and interaction. A social business has arguably accepted that collaboration is better than closed doors; that the opinion, insight and drive of every employee, customer or partner are valuable. More than that, it provides assurance and creates virtuous feedback loops, recognizing the value of all contributions made. SOCIAL BUSINESS Time to participate? A social business is an organization that has put in place the strategies, technologies and processes to systematically engage all the individuals of its ecosystem (employees, customers, partners, suppliers) to maximize cocreated value.
  5. 5. 5 http://darmano.typepad.com/.a/6a00d8341bfa9853ef0168eb2e0b4c970c-pi
  6. 6. 6 The idea of a community-based business model, where everyone in the company ecosystem cocreate happily may sound a bit utopian and even proponents agree that theory and reality take time to come together. Fad or not, few can deny that social networks have changed the way people and brands interact. Social media has enabled every brand to become a publisher and to start an online community. Social media is real time. It breaks down the walls between those “inside” the business and invites those “outside” the business, in. Consumers can interact with a brand in ways not seen before. A brand that interacts and is responsive and transparent can quickly become a hero — and just as quickly become a villain if consumers feel disengaged. Yet for many brands the free flow of participation and engagement hasn’t happened and instead, the results in social have been poorer than anticipated. BUSINESS FAD OR SMART REALITY? Only 9% expect to fully integrate social technologies across the business.
  7. 7. 7 There are many possible reasons for poor results in social, however, it is hard to deny the impact of conservatism, overzealous moderation and lack of feedback as reasons why an online community fails. If we think about the way people interact in the real world, we see that communities are usually born of a shared interest. Communities need leaders to inspire and guide them but actual participation is often moderated by instinct and a moral compass. Equally, each community member knows that there will be an exchange of value and will participate within the rules on this assurance. Clever brands know this about communities, which is why there is an abundance of cocreated campaigns. Whether like LEGO Factory, where cocreation is about harnessing passionate loyalists to imagine new block shapes, or Doritos, who sourced advertising content from creative consumers, the customer-made trend is not new. A social business model operates in much the same way as cocreated campaigns, but bigger. The model recognizes how people interact outside of the work environment and understands that if participation is encouraged, the pool of ideas a company can draw from will expand. The more people on the web, the more combinations of possible ideas. Yet despite the plethora of proof points and the accepted appetite for cocreation and open social networking, few businesses seem to have adopted a social business model. If consumers have authority to cocreate products or advertising simply because they use said products, surely those who work in the business, and within the wider business ecosystem, have equal, if not more authority, to cocreate too.
  8. 8. 8 Those that have adopted a social enterprise model are undoubtedly ahead of the curve. IBM has been a leader in social business for years, adopting several different models to satisfy the needs of all stakeholders, from internal employees now preferring social platforms over email, to external tech consultants utilizing such platforms for learning and training purposes. As an undisputed leader, IBM using its 2012 Social Business Study to better understand why the lag in adoption of social business models. The critical finding was a lack of knowledge. A critical gap is apparent between executives’ knowledge of social media and its uses for the company. Ahead of the curve A 2012 study by AIIM indicated that while “two-thirds of businesses are now using social technology for marketing and related functions” only 9% expect to fully integrate social technologies across the business.
  9. 9. 9 The desire to increase social technology investment is high (46% of companies), but the surety about the impact of increasing the reach of social across the business is much less ambitious. Connecting with customers on social networks outside company walls is well understood but bringing that technology within company walls is still the purview of those at the leading edge of the adoption curve. http://zdnet.com/blog/hinchcliffe
  10. 10. 10 Under the construct of a traditional business, the propagation and development of ideas can be difficult. Consider that for every four projects that enter development, only one makes it to market or that at launch, at least 1 in 3 products fail despite high development costs, deep research and planning. New projects are often conceived from lengthy market research and bought to life by the work of a few. The research can become outdated as the development process ensues, and as time is taken to engage individual stakeholders and groups. Rather than gating ideas as “necessary to compete,” or “testing well in research,” a social business uses the amplificatory nature of social to generate a larger pool of ideas. It uses this larger number of ideas and a more ready pool of contributors to test, develop, retest and refine the ideas in real time. “KNOWLEDGEMENT” VS. MANAGEMENT. At launch, at least 1 in 3 products fail despite high development costs, deep research and planning.
  11. 11. 11 These options are still funneled, even moderated, by the business but it is the open- source approach to problem solving (or open innovation) that allows a social business to be adaptive, responsive and even, at times, leading edge, in their market. Like with all social media led activity, the more attuned you are to what’s being said, the more successfully you can find the germ of a great idea. Moving from managing the data to knowing what the data is telling you is key for a social business model to succeed. There are two types of data a social business needs to look out for. Big data — aptly named and referring to identifying patterns amongst the plethora of small data points flowing in on a daily basis. And individualized data – not only acknowledging individuals but understanding how individuals operate within the group that is formed. As with any community, some individuals will speak louder and more often than others. Big data is the navigator: helping to find new routes, provide direction, and steer the business towards the right opportunities. It requires a shift from churning out finished activity to sifting through enormous data points, processing these, and plotting actions to be seeded, discussed and formulated. Individualized data is about appreciating the value of contributors. Value could be expressed as knowing how to tap into the value of members of the ecosystem. Within businesses, there is often a mountain of knowledge, ideas and information — amplified by the increasingly transient nature of careers. Critical business knowledge can be hidden in minds and archived filing systems or lost in printed papers and notebooks. And those gems are known about by a few. Using social tools, this insight and knowledge can be teased out more readily.
  12. 12. 12 The value an individual brings to a social business could also be seen as their ability to rally, contribute, and create action. Either way, individualized data if monitored ensures contributors are recognized. A study by Insites Consulting in 2012 claims that “eight out of 10 consumers want to help in cocreating projects of companies they like. The only thing they ask in return: give us feedback on what you do with our input.” That idea of feedback is also what governs social communities. But more on that later. Having more ideas, greater access to knowledge, and a more traceable timeline of that information is undoubtedly compelling. Trickier is step changing a business enough to be able to take advantage of the benefits offered by a social business model.
  13. 13. 13 http://visual.ly/what-big-data
  14. 14. 14 More ideas, cocreation, cross-pollination and data management add creativity to a business. But that is only one part of implementing a social business model. The right tools, processes and attitudes are needed to truly build a social business model; to take ideas to market and add agility to the equation. British Telecom has implemented a social business model. They saw a shift in protocols, attitudes and culture as adept digital natives, a group of young people used to conversing via social networks began entering the workforce. They used chat and networks more readily for discovery than did their older counterparts, and challenged hierarchical expectations and boundaries. “They function differently; they are informal and will fire stuff off quickly to anyone, they are not scared of picking up the phone and speaking to the most senior manager. This breaks down the traditional business barriers, a culture where people hid comfortably in their silos.” But more than that, British Telecom saw the benefits — not expressed in traditional bottom line business metrics — but in the participation and engagement levels of employees. So they added tools: blogs to test ideas and communicate lessons gained at conferences or external meetings; Sharepoint as a project workspace to enable additional project team collaboration; digital channels to communicate news, announcement or encouraging podcasts of user generated material; and of course social networking tools to connect people through skills and interests. Breaking down silos between teams and encouraging cross-pollination of ideas requires businesses to smash existing expectations of hierarchy. A graduate may just as likely hold the key to a complex business problem as a tenured manager may. BECOMING A MODEL OF SOCIAL BUSINESS
  15. 15. 15 And it is the openness of a social business model that can be the most difficult for businesses to adapt to. Industries have been built around corporate communications, brand reputation, and top-down, need-to-know management styles. Trusting everyone within the business ecosystem can be difficult when transparency is increased. Even proponents agree that there is an increased risk of indiscretions. But the social business needs to balance this with the understanding and belief that few employees actually want to damage the reputation of the brand or business they work for. Most businesses today have already deployed guidelines and/or training in social media, and the most successful social business models used encourage responsible practices and communicate their belief in their employees over deploying stifling control tactics that limit interactions or quash creativity. Equally, the system can be self-policing. Many psychologists have studied the Prisoner’s Dilemma and know that the what-if scenarios plotted by this dilemma can be counterbalanced by assurance: that is, knowing the cost-benefit of each scenario. It proposes that humans are less likely to be simply altruistic in their decisions to signal a cheat or thief, their decision, and more likely instead to weigh up the need for collective action if one or two in the group threaten the security of the others. In simple terms, the feedback loop will be self-policing so long as you provide assurance that you are listening. Toyota is another company employing social business practices across its ecosystem. Breaking down traditional supplier barriers, Toyota began to train suppliers in how to best organize their business to satisfy the industry. This training and openness wasn’t for altruistic purposes. Toyota knew they were benefiting their competitors also. But, they knew they would have the same benefits as their competitors with the added advantage of a highly engaged supplier network.
  16. 16. 16 Unfortunately, traditional ROI measures aren’t applicable when assessing the benefits of implementing a social business model. Those operating a social business model seem simply to cite the value to the business as self-evident. Self-evident, however, is a difficult sell in any culture-changing, technology-dependent business case! Better then is to talk in terms of comparisons. When shifting from offline to online, email businesses measured the move in terms of productivity — or the efficiency of workers. But the definition of productivity has changed since the advent of email. Remote work spaces and an always-on mobilized work-force are efficient. Rather, social businesses look at the efficiency of the entire ecosystem, using measures such as improved speed to market of NPD, response times, customer sentiment, and employee and supplier engagement. Putting a line in the sand as to how much a social business model will improve these attributes is arguably linked to how open and agile the social business model is. SIMPLE METRICS
  17. 17. 17 Whether we’re interacting within a social circle, adding our creative voice to a collective one, or simply scanning, absorbing and commentating offline, for most, social has amplified our ability to imagine more than what we see everyday. Before, we may have accepted what we had heard on the news, but now we can challenge the reported media and investigate new opinions. Before, we may have accepted the town gossip, now we can hear more from the horse’s mouth. Before, we may have struggled to solve a conundrum with a few trusted colleagues, but now we can open source solutions. Participation in social isn’t altruistic; it is arguably driven by self-interest and it is this that makes social such a powerful tool not only in our private lives but also in business. The challenges posed by social media have confounded many businesses. Social media is real time. It does close the gap between businesses and consumers, increasingly placing much of the control of the relationship in the consumer’s hand. A social business model conceivably dilutes this control even further. But a new control arises. Shifting from churning to channeling, from management to “knowledge-ment.” It does sound utopian. But also very efficient. TIME TO PARTICIPATE?
  18. 18. 18 Most businesses today recognize there are benefits to be reaped from a CSR program, but often the issue is less about desire and more about mobilizing your community to act. American Express tackled mobilization through social, creating a multidimensional charitable program that works only if the AMEX community gets involved. Aptly named “The Members Project,” the narrative is simple: change is possible if we take it one step at a time. Using Facebook as the hub, AMEX presented fans with multiple opportunities to make a difference, whether by donating, voting for a charity to receive funds, volunteering or simply telling friends via a social share. To amplify the project, AMEX partnered with Glee, adding an element of celebrity, and, at the same time, introduced multiple channels through which they propagated their cause and intent. From TV to cinema, every reference drove fans back to social channels using interactivity and tangible member rewards to encourage action. Social good came from social networks. Through co-creation, participation and reward, encouraging a broader community to help shape AMEX’s CSR program, this model has resulted in millions being donated to fan-selected charities, chosen from a base of over 750,000 fans. CASE STUDY: AMEX MEMBERS’ PROJECT USING SOCIAL MODELS TO DRIVE SOCIAL GOOD
  19. 19. 19 • Institute of Electrical and Electronic Engineers 1978, . C. R. Licklider and Albert Vezza • http://socrates.berkeley.edu/~scotch/innovation/inventing_email.pdf • http://www.ted.com/talks/howard_rheingold_on_collaboration.html • “Can Social media show you the money’ David Taylor, Market Leader, Q1, 2013 • “Social business: a way to reinvent marketing”, Mahesh Enjeti, Market Leader, Q1, 2013 • http://www.socialbusinessforum.com/what-is-social-business/ • British Telecom Case Study http://richarddennison.files.wordpress.com/ 2008/09/ci-digital-generation-bt.pdf • http://searchenginewatch.com/article/2167518/Worldwide-Social-Media-Usage- Trends-in-2012 • “Social Business Design” Dachis Group: Jeffrey Dachis et al. 2009 • Rick Smolan: Can Big Data Change Who You Are? • http://www.youtube.com/watch?v=8CrwICToUqw&list=PLE50FC91A844EEC33&index=6 • 4 Great Ways to Leverage User Generated Content, Sept 2012 • http://www.postadvertising.com/2012/09/4-great-ways-to-leverage-user-generated-content/ • Co-Creating Brands and Campaigns via Customer Communities, 27 Nov 2012 • http://www.slideshare.net/TomDeRuyck/cocreating-brands-campaigns- via-customer-communities • When Co-Creation becomes the beating heart of marketing, Companies Win, 29 Nov 2012 • http://www.fastcompany.com/3003448/when-co-creation-becomes-beating-heart-marketing- companies-win • http://en.wikipedia.org/wiki/Social_business • http://midsizeinsider.com/en-us/article/struggling-with-social-media-study-find • http://www.gsb.stanford.edu/cldr/research/surveys/social.html • http://hbr.org/web/slideshows/social-media-what-most-companies-dont-know/3-slide References
  20. 20. 20 About the Authors Maggie Christie Director of Integration, Proximity Auckland. With over 25 years in both client and agency sides, Maggie has recently joined Colenso BBDO to help continue the evolution of the Colenso BBDO and the AIM Proximity model. Her experience spans Europe, North America and New Zealand, and across multiple industries – financial services (Lloyds Insurance, UDC Finance, Bank of New Zealand, ANZ), telecommunications (Telecom and Vodafone), Utilities (Contact Energy), Loyalty Programs (Loyalty New Zealand – Fly Buys) and many other industries (Yellow, SkyCity, etc.). Maggie is a passionate direct marketer who was integral in the startup of AIM Direct Wellington (later AIM Proximity) and, more recently, RAPP Tribal. She understands the importance of insights to drive results and ultimately provide effective business solutions whatever the channel. Phone +64 9 361 0100 Mobile +64 27 205 1710 Email maggie.christie@proximity.co.nz Michegro Chisholm Michegro is a Senior Planner and Strategist at Proximity Auckland in New Zealand. She is an experienced direct practitioner with a strong background in both agency and client sides of the business. Michegro is part of the wider Proximity Auckland team; the number-one direct agency in the world for 2013.

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