The Rise of Social Businesses

Courtesy of the Big Trend Hunt

Social media marketing is no longer the preserve of the elite few. More and more companies invest in creating their own Facebook fan pages, blogs, forums, Youtube channels and Twitter accounts in a bid to reach out to their customers. The game is no longer about reach and eyeballs alone, but fans, followers and "Likes".

Increasingly, forward-thinking businesses begin to realise that the principles of social engagement shouldn't just apply to their marketing and PR departments. With almost everybody having an online presence - from the CEO to the office boy - companies can ill afford to ignore the need for the rest of the company (HR, Finance, Procurement, Manufacturing, Logistics etc) to "go social".

Enter the world of Social Businesses. First coined by IBM in 2011, a social business is defined by the Social Business Forum as...

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 the co-created value. 

(Note that this is different from the other more commonly known definition of social businesses by Prof Muhammad Yunus of Grameen Bank related to social entrepreneurship and charity.)

There are four key trends leading to the growth of social businesses, namely:

1) It is no longer feasible to separate the internal and external environments of a company with a China wall. Information should now flow two-ways - inside-out and outside-in, often in realtime.

2) Key decision making and change management responsibilities should no longer be limited to managers or customers. Rather, organisational changes can be driven by customers, empoyees, partners or suppliers, as the roles of these players take on greater prominence.

3) Engagement supersedes communication as the key approach to making the internal/external flow possible.

4) An organisation exists not just to maximise value for its traditional shareholders, but to optimise the exchanged value for all stakeholders throughout the entire ecosystem.

These characteristics can be represented by two diagrams. The first from Energise 2.0 shows how global trends mandate the need for businesses to relinquish control, encourage pervasive social interaction, and shift from the institution to its communities.

Courtesy of Energise 2.0

The second from Intersection Consulting observes at a more micro-level how different players in a social business ecosystem interact with each other, depicting how information flows both inwards and outwards amongst different players inside and outside an organisation:

Courtesy of Intersection Consulting

In thinking about social businesses, companies should align social media to business strategy and look at building policies, practices and systems that impact the following:

1) Market Engagement - how businesses can better understand market needs and desires, create "spot-on" products and services, create greater brand awareness and affinity, and secure new customers.

2) Customer Engagement - how customer service can be improved to increase satisfaction, grow revenue streams, create loyalty and encourage advocacy.

3) Employee Engagement - how platforms like corporate intranets, forums, blogs and microblogs within organisations can encourage employees to openly share ideas, find answers to befuddling problems, and gain support services.

4) Employee Productivity - how social tools like wikis, collaborative applications, and forums can improve communication, boost weak ties, and foster greater collaboration which enhances efficiency and effectiveness.

To successfully implement "social" in business, IBM suggests that a social business "isn't just a company that has a Facebook page and a Twitter handle". Rather, it is one that "embraces and cultivates a spirit of collaboration and community throughout its organization—both internally and externally."

This can be summarised by three key qualities as defined by IBM:

1) Engaged- connecting people (customers, employees, partners) in productive ways.

2) Transparent- removing boundaries to information, discarding bureaucracies, and ensuring that actions are aligned to results.

3) Nimble— accelerating business with information flows and insight on rapidly evolving opportunities.

Let me end with this video by LeaderLab which outlines quite elegantly the basic tenets of social businesses.

Labels: , , , , ,