The Evolution of Business


Published on

differences between traditional businesses using social media and social businesses.

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

The Evolution of Business

  1. 1. The evolution of business By Christoph SchmaltzThe social business movement appears to be in full swing. Over the past weeks, Ihave read time and time again that 2012 will be the year of social business (BusinessComputing World, SXSW, We are social). In terms of awareness, I totally agree; interms of achieving our goals, perhaps that is too ambitious in such a short timeperiod.I believe that the notion of 2012 being the year of social business is rooted in amisunderstanding of what social business actually means. I do not intend to godown the slippery road of trying to create a definition.. Instead, some time ago Ipresented four concepts that highlighted the differences between traditionalbusinesses using social media and social businesses. Judging by the comments itreceived it did a decent job at explaining what a social business is. Now, almost ayear later though, I realise that it failed to show the evolutionary process requiredto move from a traditional business into a social business.
  2. 2. In my view, pure disconnected and social businesses represent the extremes of acontinuum. To date they only exist in theory. In between you can plot any businesson this planet. As the continuum suggests there is no such thing as ‘THE’ socialbusiness. It is not black and white but offers shades of grey. As time goes by we willsee more organisations moving closer towards adopting characteristics of a socialbusiness 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/oroutside their firewall. Many of them created corporate presences on socialnetworks adding these channels to their more traditional communication channelswithout changing their business attitude. Success? None! The failure was / isdevastating and a true shock to the system. Nonetheless, most organisations canstill be found in this category – traditional businesses with a traditional businessmindset. No matter which channels and tools these organisations use, let them besocial or not, these companies haven’t freed themselves from 20th century thinkingyet. 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 andconnect with the marketplace. That is why we now see HR departments connectingwith potential talent on Facebook, Customer Service departments helping clients onTwitter or Business Development departments putting out thought-leadershippieces on the company blog. I call these organisations traditional businesses with asocial business mindset. These are not social businesses.I assume and would hope that this comes as surprise to many. Let there be nodoubt: arriving at this level is for most organisations a huge challenge and alreadyan amazing achievement. The way to here is long and thorny, but the rewards areplenty. 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.
  3. 3. Social BusinessA social business is a truly connected business. It connects its employees with eachother and them with the marketplace. Corporate functions are now part of thenetworks rather than owning and controlling the relationships. In my view, a socialbusiness creates intimacy at scale by democratising roles and responsibilities andencouraging employees to build their own brand (no, this is not a definition).Intimacy at scaleHow many connections can a HR department have with graduates, experiencedhires or alumni? Do you think the HR department can ever have as many or moreclose relationships with their network than employees have with theirs? How welldo social business efforts of a HR department scale compared to the company’semployees?What can be said for the HR department is also true for other corporate functionslike Marketing or Business Development and even R&D. Using your employees’networks rather than relying on just your corporate functions will have a muchgreater 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 theircontrol. (Did someone say ‘trust is cheaper than control’?) It is inevitable. We havealready seen it in some pockets of organisations. For example, some companieshave implemented new collaboration and communication tools. Users do not haveto go through IT anymore to set up a group or community: they simply create agroup and invite others. Open innovation approaches have been adopted by somecompanies saving the central R&D department considerable amounts of money.Some managers have adopted an open leadership style openly discussing decisionsand gathering feedback from employees. Experience shows that this does not endin anarchy. IT, R&D, Management and so on provide the boundaries withinemployees and others can engage. However, corporate functions that havetraditionally been outward-facing have shied away from the idea of democratisingtheir role and responsibilities. In a social business, this will change.Encouraging employees to build their own brandThis may be true only for certain industries such as professional services. In thisindustry especially, people are the most significant asset: the industry is aboutpeople, their knowledge and relationships. If you want your employees toparticipate 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 buildtheir own brand under the company’s umbrella. If they have the means to buildtheir own networks and enjoy working for you, they will help to show the human
  4. 4. face of your company, will be willing to amplify corporate messages and even give ita relevant spin for their connections and networks. After all, your employees shouldbe your greatest advocates. As companies evolve, we are beginning to seeorganisations not only encouraging their employees to engage on social networks,but expecting them to do so. (see Grant Thornton UK Social Media PolicyVideo [Disclaimer: Grant Thornton UK is a Dachis Group client. The video wascreated by Grant Thornton UK, not Dachis Group]).When we look at the characteristics of a social business, we will need to answernew questions. Do companies need to incentivise or even reward employees forengaging in social channels? If every employee is expected to become a customerservice agent, how do companies organise for this scenario? Do job descriptions forroles in a social business need to be altered? Can employees with large networks askfor a higher salary? Do employees indeed identify with their company and are theytrue 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 afirst step in the right direction. However, it’s not the end of the journey! Asbusinesses evolve, we will see true transformation supported by organisationaldesign, change management and process reengineering expertise. If you areheading up a company or corporate function and are seeking to create (social)business strategies, ask yourself or your consultancy, whether they scale. If theydon’t, you may be missing a trick.Christoph is a Consultant at Headshift & Dachis Group where he focuses on the legal andprofessional services sectors.