Dion Hinchcliffe at SBS2010

Emerging Social Business Strategies in 2010 What Works And Why Dion Hinchcliffe

Introduction Dion Hinchcliffe • ZDNet’s Enterprise Web 2.0 • http://blogs.zdnet.com/Hinchcliffe • Social Computing Journal – Editor-in-Chief • http://socialcomputingjournal.com • ebizQ’s Next-Generation Enterprises • http://www.ebizq.net/blogs/enterprise • Hinchcliffe & Company • http://hinchcliffeandco.com • mailto:dion@hinchcliffeandco.com • Web 2.0 University • http://web20university.com • : @dhinchcliffe

Opening the SBS to the Web http://bit.ly/97hfp4

The vision • How we run our businesses is changing more quickly than ever before • New technology and expectations have led to results not possible -- or expected -- before • New economic, social, governmental, and cultural models emerging globally • Largely driven by the Web, but changes in us too • A pragmatic exploration of how they promote resilient, sustainable new business models • Using what’s happened recently as a guide, what will this transformation look like?

The network is a big place today • All your customers • All your competitors • All the ideas and innovation • Only a few proven strategies for long-term competitive advantage

The major shifts • In who creates value (the network does) • How much control we have over our businesses • How intellectual property works • Great increases in transparency and openness • Open supply chains, community-based processes and relationships

The motive forces of 21st century business • Network effects • Peer production • Self-service • Open business models • New social power structures

The motive forces of 21st century business tha t we now of so • Network effectsk • Peer production far • Self-service • Open business models • New social power structures

The motive forces of 21st century business ^ tha t we now of so • Network effectsk • Peer production far • Self-service • Open business models • New social power structures

The Social Business Landscape Uniﬁed Comm 2.0 Public Social Networks Interaction and Social Business Worker Us Online Community Trust, Engagement, Reputation Customer Microblogs Communities Community Mgmt Social Web Tech & Standards E2.0 Workﬂow The Social Web 1-2 billion B2C E2.0 Compliance B2B people Trading World Wide Web Business Partners Customers + Public

The Big Questions • How do we build and sustain a connection with a fundamentally new marketplace? • What are the rules for success? • What do social businesses look like? • Are we starting to understand best practices? • Where is this going? Is it part of a larger story?

Edge Businesses: A Larger Context? Always involve people, but may not necessarily be social

The Story of KatrinaList & XM Radio • Hurricane Katrina – Survivors emerged and announced where they were on their blogs – People watching the Web’s syndication “ecosystem” noticed the reports – A small group collected the reports out of the blogosphere and centralized the listing – Over 50,000 survivor reports in the first 3 days after the disaster – Emergent phenomenon – A critical example for how to rethink solutions to traditional problems in a 2.0 world in which we can actually tap collective intelligence • XM Radio • Community for Customer Service

A Few Edge Business Stories • Open Source Software (OSS) • • The Search for Steve Fossett • Innocentive • One Billion Minds •

The Map of Opportunity Innovation Growth Creating new rapid Leveraging Innovation growth public services • Product Incubators powered by: • Open Supply Chains • Peer Production • Product Development 2.0 • Jakob’s Law • Some Rights Reserved • The Long Tail • Blue Ocean • Network Reinventing the Fostering Effects public relationship Innovation to drive mission: • Internal Innovation Markets • Customer Communities • Open innovation •Customer Self-Service • Database of Intentions • Marketing 2.0 Current Change State Driving costs down through Management less expensive, better 2.0 • Transformation Communities solutions: • 2.0 Education • Lightweight IT/SOA • Capability • Enterprise mashups Acquisition • Expertise Location Improving • Knowledge Retention Business Remodeling productivity and and Restructuring access to value: • BPM 2.0 • Enterprise 2.0 • Open APIs • Employee • Crowdsourcing Communities • Prediction Markets • Cloudsourcing • Pull Systems Transformation Cost Reduction

The challenges • Cultural “chasms” • Disruption • Cost • Risk • Difﬁculty (“Digital DNA”) • Repeatability

However, it’s usually a people problem: The biggest challenge is in changing our thinking

Rating social business strategies Challenges Repeatability Questionable Ready for Wide Value Adoption Ideal for Early Adopters Suitable for Strategic Experimentation Industry Play Uncertain Results Proven Beneﬁt

Where Social Business Applies (social me in the dia enterprise ) Enterprise 2.0 & Product Development 2.0 Social Business Models Product Development Marketing Sales crowdsourcing online Customer Service cloud computing mashups community open APIs Line of Business SaaS new development paradigms Operations | IT | Back Ofﬁce

No small system can withstand sustained contact with a much larger system without being fundamentally changed.

The Implications of Social Business • The fundamental re-orienting of the supply chain inputs of most organizations • Network structured organizations instead of hierarchical • New value exchange mechanisms that involve direct value (ideas, work) transfer instead of ﬁnancial transactions • Dramatically collapsed resource models for accomplishing previously very difﬁcult and/or large scale business problems • A steady recasting of the very notion of what a business consists of

Social Business For Collaboration (aka Enterprise 2.0)

Applying the “Web 2.0 effect” at work • Enterprise 2.0 Enterprise 2.0 systems adapt – Globally visible, persistent collaboration to the environment, rather • Employees, partners, and even customers than requiring the environment to adapt to it. • Leaves behind highly reusable knowledge – Uses wikis, blogs, social networks, and other Web 2.0 applications to enable low-barrier collaboration across the enterprise – Puts workers into central focus as contributors – Case studies of early adoption consistently verifying signiﬁcant levels of productivity and innovation

Potential E2.0 Beneﬁts Productivity Competitive Advantage Knowledge Retention Modern Workplace Information Discovery More Transparency Business Agility Less Duplication Cross-Pollination Better Communication Fostering Innovation Cost Reduction

Challenge: The enterprise is not the Web Enterprise • We want to replicate the positive aspects of Web 2.0 platforms in the enterprise • But our infrastructure is usually not very Web-like, creating signiﬁcant impedance and diluted results • Requires augmentation and adaptation to reproduce the same or similar results

Enterprise 2.0 Beneﬁts

Enterprise 2.0: The bottom line • Repeatable • Low Risk • Proven Beneﬁt Ready for Wide Adoption • Rapid ROI • Transunion Enterprise 2.0 case study: $3.5M recoup in 5 months with $50K investment: http://bit.ly/O74W

Open Supply Chains & Open Data

Open Supply Chains & Open Data al so kn own as APIs

Open Supply Chains with partner communities and open APIs Key Point: New online products simply aren’t released today without building a partner community

vs. : The Platform Overtakes the Web Site

“Platforming” Your Business • Requires opening the server-side to 3rd party developers • Allowing the construction of widgets and Web apps offering some or of all of your functionality by external partners • Harnessing the innovation on the network • Generating the greatest potential reach, competitive lock-out, market share, and revenue • This is live, not data ﬁles like at http://data.gov

Open Supply Chains: The bottom line • Good repeatability • Can be costly Strategic • Unproven in Industry Play certain industries • Proven ROI

Online Community

What do online communities do? • Customers and workers ﬁnd and connect with each other based on a common, shared idea • Socialize, communicate, and collaborate on topics that they care about • Share ideas, experiences, stories, suggestions, etc. • Draw others in by word of mouth • Becomes an ideal vehicle for collective intelligence and peer production

Marketplace Partner Customer Community Community Community Community Management support participation Social Business direction business models resources Enterprise 2.0 & Inter n et Social Media ente rprise crossover crossover Worker Community

Online Community Management: A Core Social Business Function Brand Support Brand Management Situation Management Upgrades and Improvements Capture Brand Feedback Software Know-How Advertising & Listen/Join Conversation Feature Selection Platform Management Marketing Marketing Analysis Priority & Schedule Impact Reporting Management Ad Rotation Documentation Project Management Staff Development Recruiting Incorporation of Team Building Experience Product Management Staff Training Product Selection Business Planning Budgeting Outreach Goal Deﬁnition Events Customer Management Business Alignment Incentives Community Control/Management Issue Management Management Moderation & Rule Networking Enforcement Professional Development Elicit Participation Identiﬁcation of Best Content Practices Rewards & Incentives Management Attend Trade Events Content Plan Research & Insight Content “Gardening”

Online Community: The bottom line • Medium repeatability • Can be costly • Proven ROI • Dramatically lower customer support Ready for Wide Adoption costs (10-30%) • Better Customer Satisfaction • New customer relationship

Open Business Models

Network-Driven Open Collaboration Breeding New Business Strategies Methods: Open Source Open network effects Business Methods Open Data peer production • Richest, most up-to-date, and dynamic products & services pull instead of push • Lowest cost of production UGC & Open • Greatest degree of innovation and diversity Content self-service • Ownership, control, and monetization challenges Enterprise 2.0 Online Community

Product Development 2.0

Crowdsourcing Text

Open business models are transforming the market • Product Development • Marketing and Advertising • Operations • Customer Service

Examples • Android • Gold Corp. • Crowdspring • http://netﬂixprize.com • Doritos UGC advertising • http://OpenStreetMap.org

Sourcing Models internally open outsourced sourced sourced direct peer production, Methods assignment subcontracting, crowdsourcing, consortiums open platforms Participants staff contractors, anyone partners Central Control high medium to high medium to low Predictability best good lowest Richness adequate medium high of Outcome corporation, open source Legal structure contracts, copyrights, licenses, Creative & IP protection charters, etc. patents, etc. Commons, etc.

Open Business Models: The bottom line • Medium repeatability • Medium costs • Signiﬁcant cultural changes required Ideal for Early Adopters • ROI and control challenges • Major strategic beneﬁts

How do we re-imagine our organizations for the 21st century?

What Works And Why • Network Effects By Default • Turning Business Processes Social • Partnering with the Network • Giving Up Non-Essential Control • Growing Cumulative Social Capital • Building on the Shoulders of Giants

Challenges to Transitioning to New Social Business Models • Innovator’s Dilemma • “How do we disrupt ourselves before our competition does?” • Not-Invented Here • Overly fearful of failure • Deeply ingrained classical business culture • Low level of 2.0 literacy

Key Lesson: We now have a fundamentally new and better set of lenses through which to look at creating business value...

It’s time to change our DNA • Moving from the 20th century towards 21st century businesses • Deeply understanding the network and its profound potential for creating growth and building value • Putting 2.0 into the core of our modern government design

The rewards are considerable • A business world that is sustainable • Successful transition to a rapid evolving new business landscape • Attaining of better and new type relationships with citizens and workers • Resilience to future change and ongoing evolution of business, culture, and society

Discussion Slides: dion@hinchcliffeandco.com

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Dion Hinchcliffe at SBS2010

by Dachis Group on Apr 20, 2010

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Dion Hinchcliffe at SBS2010 — Presentation Transcript