Earlier this week I explored the social business ramifications of Facebook’s IPO in detail and noted the significant opportunities and challenges both. Near-term challenges clearly abound: Successfully shifting the full power of Facebook’s social networking platform to next-generation mobile devices in ways likely to preserve the unique value of the service will be one of two signature challenges of their early public days. So much so that it will likely define their continued growth and success in the next couple of years.

At the same time as the transition to smart mobile, is the second major challenge: Facebook must significantly beef up its business model. Even though the company’s revenue stream was $3.7 billion last year, with an additionally impressively double-digit jump in net profit, it’s clear that much of the value of the social network is being delivered to businesses for free and in a way that can’t easily be charged for. This is a conclusion that GM came to recently and announced this week to considerable coverage and debate: Specifically, it pulled its ads from Facebook’s advertising network. What was notable about this decision was that GM’s formal ad spend only represented about a quarter of what the auto giant actually invests in Facebook, the rest is in staffing, content development, and agency work in order to engage where its customers are today. The lesson: Businesses feel they must significantly engage in social and in Facebook in particular, but the best way to do it probably isn’t the captive push advertising schemes that have been devised so far.

Therein lies the strategic challenge for Facebook: It’s currently sitting on the most significant mountain of personal user behavior and insight in industry history. It’s a dataset that’s much deeper and more relevant even than Google’s, which is still probably larger but not nearly as insightful. If Facebook can help businesses tap into this data ways that also truly protects its users, then there is a real long-term path for them towards a bright future of essentially untold value creation. As I’ve suggested before, there are other, less fraught paths to value for Facebook as well. While successfully leveraging user data in the form of increasingly refined consumer analytics and engagement services is probably the single largest and most valuable way forward for the company, there’s plenty of value in just being a highly effective conduit to that same vast sea of largely captive participants. Plugging into the reinvention of CRM that’s currently taking place in the industry is a great start, and enterprises would pay a lot for better tools to enable improved self-service, customer support, marketing, sales, and advocacy in social channels.

Why would Facebook choose merely to be a conduit to its users and not their data? Because there’s an extraordinarily fine line between trust and any strategy that taps into their users’ data for business purposes. In practice, it’s perhaps too tempting, and frankly, all too easy a line to cross unintentionally, to use their truly invaluable social datasets to fuel products and services to businesses that — in the final analysis — unfairly take advantage of Facebook’s users. Clearly and unequivocally putting users first and unquestionably beyond the realm of exploitation would go a long way towards keeping their network effect alive and healthy long term. But it would also fundamentally blunt the full potential of their business. And so I think we’ll see the company continue to, and certainly investors call for them to, walk that extremely fine line, as difficult as that may eventually become.

The business impact of a public Facebook

So what does all of this mean to businesses currently employing Facebook in all its many forms, from simple Facebook pages to full-blown apps? There are a number of things that I believe will fundamentally change the way most companies engage with the world through the service. These will also ultimately decide how Facebook itself will fare:

• User data experiments. As social analytics and business intelligence move to the core of the engagement cycle (listen, analyze, engage), Facebook will conduct many experiments in how to make the most of the insight they can derive for businesses, while also protecting their customers. The pressure to do this well will be intense once they’re public and so prepare to encounter and evaluate a lot of these beta services until they are able to assemble a portfolio of successful offerings. One wild card will be what users will think of all this, much like the sometimes maligned Promoted Tweets on Twitter.
• Social data protection services. While it’ll take a while to ramp, an industry will likely form to provide people with the ability to see how their social data is being used online. Like a credit bureau protection service, these services will may become the bane of the business models of social networks like Facebook, putting pressure on their financial results as their use of user data creates.
• Government regulation of social data. Many countries already have laws protecting consumer privacy which already affects most social networks today. These are only going to get stricter as the use of social data becomes more embedded in products and services sold to businesses. Ultimately the patchwork of regulation and the restrictions they impose will limit the upside potential of many business models based on social data, again, limiting financial results. Social media can be a “difficult business” in this regard.
• Evolving their social data platform. Ultimately, and the major challenge of digital business today, Facebook will itself never be able to realize most of the innovative ideas that are possible with its platform. Continuing to strategically open up the platform’s data to 3rd party partners through APIs will let them do far more than they could ever do themselves and APIs have become an important business model for Internet firms. While Facebook has largely been successful doing this with apps, these apps are also largely consumer facing. Doing this well so that startups can build highly valuable business-facing apps is going to be harder, yet where the longest term value is. Entrepreneurs should plan for opportunities in extending Facebook’s value chain as the platform continues to open up. Investors should observe these experiments to see which ones will fuel revenue growth for the company. Remember how Amazon ultimately leveraged its platform for record-breaking growth? The same route is likely for Facebook if they can solve the data protection issues.

For now, the book is far from written on how social networks will be turned into highly successful global businesses. While LinkedIn, for its part, has been particularly successful in developing business models around its services, it also has an advantage: It was all about the business world from the outset. It’s simply less clear that there is a safe way to fully take advantage of Facebook’s uniquely compelling industry leading position in consumer social networking. That there is a way forward for them I have little doubt however, but what that path remains somewhat unclear for now.

For more analysis, please read With Facebook IPO, Social Business Becomes Key, which my co-author Peter Kim and I just published on CNBC. For further insight, please see Social Business By Design, our new best selling strategy guide to enterprise social media.

My two biggest takeaways?

Lesson #1: Word of mouth marketing is not free.

Sure, most of us already knew that a major advocacy or ambassador program takes time and money to roll out… But, I didn’t have a good sense of just how much time and money it might take before last Thursday. Todd Spencer of Doe-Anderson led a great case study session on the Maker’s Mark Ambassador Program. He shared several fantastic anecdotes about Maker’s empty bottles for charity, the holiday gifts Maker’s sends to ambassadors, and the business cards those ambassadors can hand out to people they meet. While the entire case study was fascinating, the most interesting thing that Spencer shared was this: rolling out an ambassador program of this scale wasn’t easy. It took 2.5 years to reach critical mass and today the program is supported by 30% of the Maker’s Mark marketing budget. Talk about a reality check.

So, for those of you who are knee deep in an advocacy, ambassador, or influencer initiative, don’t despair if you aren’t seeing the results you want. It can take blood, sweat, and tears (not to mention ample time and $$$) to get the program where you want it to be.

Lesson #2: We need to standardize our vocabulary.
During the 10 sessions I attended, I heard 10 different definitions of advocacy, influence, and clout. How difficult it must be for brands looking to impact their business through fan advocacy and influencer outreach! In one session, we were told that there’s really no real difference between advocates and influencers nor how you utilize them in marketing. In another, that the most important metric to measure word of mouth effectiveness is advocacy. And in another, that utilizing influencers is more effective than email marketing. If I’d attended another 10 sessions, I’m sure I would have heard another 10 outlooks. What it boils down to is that it’s not always easy to generate word of mouth – if it was, then we’d all be singing the same tune. But, from a strategist’s perspective, I think it’s important that we – agencies, consultancies, marketers, and brands – try and speak the same language, especially as we work on, with, and for major brands so that we’re helping to drive outcomes instead of creating confusion.

As a sidenote, if you’re interested in hearing the Dachis Group worldview on advocacy versus influence, get in touch with Lauren Picarello, or schedule a demo of the Social Business Index’s Advocate Insight tool which helps identify and manage a brand’s best advocates.

All in all, WordOfMouth.org put on a great event and I look forwad to seeing how some of the themes of the day evolve over the next year. Thanks again to Andy Sernovitz for having us.

This call to arms was supplemented with behemoth ERP software installation and integration contracts.  Other management disciplines such as TQM (Total Quality Management), Six Sigma, and Strategic Outsourcing spread like wildfire across the cloistered boardrooms of the Global 2000.  It was a field day for management consultants and gurus, whose profits soared with each best-selling book they touted as the key to stabilizing and eventually improving business operations. At the time, there was a widely held belief that the software would make the company smarter, force a tight measure of control on business operations, and align the workforce to produce lock-step in a way that would eliminated surprises and churn out predictable earnings every quarter

The zeitgeist of that day is probably best illustrated by the off beat cult classic, “Office Space.”  Masked in dark humor, the film touched a raw nerve that permeated throughout large organizations: fear, frustration, ennui, a powerlessness and emptiness that everyone was feeling.  Job security vanished, job satisfaction plummeted, employees felt as if they were a cog with no voice and no intrinsic motivation to produce.

Essentially, the command and control mechanization demanded by these monolithic systems and management philosophies had stripped the workforce of its humanity — gone was the heart of the large enterprise and in its place, a large mechanical brain.

And that’s no way to live…or run a company.

What began in the late 90s with the dawn of the Internet age, however, has spawned a Renaissance for the corporate worker that’s just now beginning to expand throughout the Global 2000.  The massive introduction of mobile platforms and devices into the enterprise, coupled with the revolution in social connectivity has spawned a kinder, gentler trend that’s liberating organizations by tapping into workforces’ innate sense of belonging, trust, and passion for doing great work.  Where the 90s stripped the workforce of its humanity, this new era is celebrating it.  And coincidentally, it is very good for business.

Welcome to the age of the connected workforce.  Large social platforms, whether internal or external, are reintroducing what it means to be human again at work.  The philosophies that drive this new era of employee productivity are the opposite of draconian. They’re generous, trusting, motivating, team building, honest and transparent.  They’re breaking down heretofore vaulted power silos and binding corporate cultures by distributing institutional know-how and inspiring ad-hoc conversations on everything from Zombie movies to DNA-slicing. The planks of what is commonly referred to as “Enterprise 2.0” were born out of the tenets of the web 2.0 consumer movement.  Resting on lofty ideals such as egalitarianism, authenticity, and trust, social network platforms are encouraging collaboration on a worldwide scale powered by curiosity, shared goals, and intellectual as well as financial rewards.   Employees are discovering newfound freedoms at work, and it’s helping to increase job satisfaction and loyalty by leaps and bounds.

A report released by McKinsey in December 2010 touted the improvements businesses could experience by using Web 2.0 tools in the enterprise and has since become one of the main pieces of research cited by social business advocates. According to the study, businesses reported a 15% revenue increase in marketing and sales, 20% increased time available in R&D to market and innovate, and businesses also realized 15% increased speed to knowledge and experts in the HR & talent management sector.

Since that study’s release, further advancements have been made by companies already leveraging these tools and more companies are beginning to realize the potential benefits that can be realized as a result. For additional examples, I’d highly recommend taking a look at this comprehensive list of 101 social business ROI examples assembled by my colleague, Dachis Group’s Chief Strategy officer Peter Kim. In the meantime, though, let’s take a look at some businesses that have overhauled their corporate culture or are looking to do so in the near future.

The most progressive of the G2000 executive teams are going full bore with social initiatives.  In one case, Alcatel-Lucent, one of the world’s leading telecommunications providers, addressed an internal communications issue with a personal blog penned by its President of the Americas.  The blog received hundreds of comments, encompassing a broad spectrum of opinions on the topic in question, which the executive addressed directly in the encouragement of open, two-way dialogue.  This mass, open conversation quickly diffused internal misconceptions on the issue at stake, successfully setting the record straight amongst employees.  This open spirit is also reflected by the company’s global CEO who blogs regularly on Alcatel-Lucent’s internal social platform on topics close to his heart.  His comments are always open and honest and, where necessary, critical as part of a dialogue of business improvement. Further, Alcatel-Lucent has incorporated global behavioral KPIs tied to advocacy work in its internal social platform for all employees.

Speaking at the Consumerization of IT (CITE) conference earlier this year in San Francisco, pharmaceutical giant Eli Lilly’s Bryce Williams recalled how social collaboration indoctrinated senior executives into the fruits of crowd-sourcing, co-creation and mass collaboration. An employee blogged internally about his frustration with one of the company’s age-old business processes, referencing published alternatives he’d discovered while leveraging some “innovation time” encouraged by his manager.  The post initially spawned dozens of complaints and pile-on commentary, but eventually led to a constructive conversation about how to improve the process. Employees from the most senior to the least likely rank and file all collaborated to summarize the key themes of the conversation for escalation, resulting in a high level of satisfaction and buy-in from everyone involved. In short, the bottom-up employee voice was heard and openly acknowledged by the very top of the organization. Reflecting on the example during his CITE presentation, Williams offered, “It’s never been easier for the most innovative ideas and the most provocative questions to matter at all levels of the company. Lilly and its employees are realizing the benefits of “Working Out Loud.”

Lexmark International is a Lexington, KY based firm that has traditionally focused on printing solutions and services.  As the company expands into new markets such as content management and business process management, it has begun to closely examine the benefits of overhauling the corporate culture to better align with and reinforce its business strategy.  As this shift occurs, the company has had to ask itself several key questions, namely how to become more innovative and agile as new markets and opportunities emerge. Additionally, after acquiring five companies over a two year span, Lexmark faces another question – how best to bring aboard all of these companies and integrate them into the organization in a seamless fashion.  Dennis Pearce, an Enterprise Knowledge Architect at Lexmark believes that leveraging enterprise 2.0 is at least one feasible approach.

“We see social business as essential to answering these questions,” said Pearce at Lexmark.  “By giving all employees maximum visibility to information and activity taking place across the enterprise, we can generate the raw material for new ideas and the connections that will help us rapidly form the teams needed to take advantage of them.”

The social revolution is just getting underway in the corridors of power among the global elite, but the first shots in this battle are unleashing Fun rather than Fear.  The new 21^st Century management ethos is much more about liberating the workforce to create vast improvements in productivity, innovation, and agility.  New leaderships books such as, “Humanize: How People-Centric Organizations Succeed in a Social World” by Jamie Notter and Maggie Grant are replacing the 90s command and control canons on the executive bookshelf.  The entire management philosophy of how to produce results is pivoting from a dependence on software to suppress creativity to software that unleashes it.  The surge in mobile connectivity and external social sharing only accelerates this trend.

One manager of a leading manufacturer confided anonymously that that success lies somewhere between the old regime and the newer, more social approach. “Companies are realizing Six Sigma isn’t enough,” he said. “It’s time to balance the Quality yang with the Social yin.”

I can highly recommend this conference if you are looking into:

• Enterprise Social Technology (Social Intranets, technical delivery of Social platforms)
• Cultural change aspects
• Challenges to developing a Social strategy
• Enterprise collaboration

Crexia was very kind to extend a 20% discount to Dachis Group (ex-Headshift) blog readers. You can register on the website here http://www.crexia.com/conferences/social-workplace with the promotion code HEADSHIFT20.

Looking forward connecting with you at the event!

Lee – @leeprovoost

A company partner comes to your desk with a request to do something through social media. It may be as fully-formed as, “Hey this new campaign has a Facebook app, here you go!” or more nebulous like, “I want to use social media to connect with more customers.”

You must then translate this request into what they are really asking. “I want to extend the impressions for this campaign through a targeted Facebook experience” or “I want to earn more Facebook fans, Twitter followers, Tumblr followers to expand company communication…”

Then, if you want to measure the success of this effort, you have to establish the key performance indicators. And here’s where things get tricky. Because not all social platforms are created equal, you may be compelled to go back to that company partner with a report that says, “Well, we got 4,367 likes on Facebook, 621 retweets on Twitter, 304 comments, 68 shares, 23 hearts, 16 reblogs…” until their eyes glaze over.

For those of us that work closely with social media, we intuitively understand the difference between the value of a “like” on Facebook versus a “heart” on Instagram or a “retweet” on Twitter. But how the heck do we articulate that to people outside of our department who may or may not be so savvy? At first it was good enough to say, “Well boss, we saw a 25% increase in fans this quarter and that puts us at 10% more than our key competitor.”

“That’s great Johnson, and how much did it cost us?”

“Very little sir. We had an intern run some Facebook ads for $5,000.”

“Keep up the good work Johnson.”

Of course as social media channels get more sophisticated, so does our job. And now we need to prove more value to those who hold the pocketbook so we can get the resources to compete and succeed with social media. In a perfect world, we’d be able to track every action on social media back to a sale for your product, but we’re not all there yet. It’s possible when the social message is “Hey buy this!” and it links to your ecommerce site, but it’s a little harder to measure when you are trying to do something more subtle like shift perception, introduce ideas, or simply engage with people.

Since there’s SO MANY different things a brand can do through social media, and so many metrics to track those actions, it helps to align all these actions with basic business outcomes.

At Dachis Group we’ve started by defining four outcomes: Brand Awareness, Brand Love, Brand Mindshare and Brand Advocacy. Essentially every measureable action that takes place on a brand’s social portfolio can ladder up to these more general categories. Let’s look at some examples:

A company partner comes to the social team and says, “I want to use social media to draw more attention to our brand.” Therefore, the KPIs are an overall increase in subscribers for social accounts and greater interaction with customers through social (read: more likes, more comments, more responding to tweets). In terms of business outcomes, that equals expanded reach and increased conversation strength, which ladder up to Brand Awareness. And wouldn’t it be so much easier to say, “Social brand awareness increased 5%” rather than, “We earned 10,365 new Facebook fans, 562 more Twitter followers, and 74 more Tumblr followers, and we had 102,867 likes, 4,688 comments…”

In another example, the team in charge of brand reputation management realize that there are a lot of negative comments on Facebook and people tweeting customer service complaints out loud without the brand responding. They want to social team to manage these customer service requests and help bring down the noise. To show that this effort is a success, the team would want to measure things like increased satisfaction (customers are responded to and the mood is generally positive) and relative passion (is the social conversation dominated by detractors, or advocates, or something in between?). These ladder up to Brand Love, which the social team could track over time. When the needle shifts into the positive, that’s an easier story to tell than a slew of individual tales of DMs on Twitter and Facebook complaints resolved.

The point here is that while measures are very different between social channels, the outcomes can still roll up into simple, singular business objectives that should be easy enough for anyone at the company to understand. Dachis Group’s Social Performance Monitor slices and dices the data into these four categories for you, but even without this tool, social media teams should make an effort to step back from the granularity of retweets and comments, and start to think about what those actions are representative of on a larger scale. Not only will it help to communicate success within an organization, it might even make it possible to explain to your mom and dad what exactly it is you do for a living.

Employees are ignored as a source of advocacy for a number of reasons. The biggest is the assumption that employee outreach lacks the authenticity necessary for effective transmission of company messaging. Brand marketers assume that employees either feel uncomfortable in an advocacy role or that their friends will tune out anything work related that their friends have to say.

The reality is that is not true at all. People establish significant, visible expertise through their employment. The technology salesman in an office supply store knows more about printers and small business technology than any of her friends – and her friends know it. The floor manager at a clothing boutique knows more about fashion than his friends – and his friends know it. This kind of domain knowledge establishes individuals not just as friends, but as experts in a field. When considered this way, an employee suddenly beings to look like a highly influential advocacy agent in their own right. Brands would be foolish not to consider these employees an asset when planning large scale initiatives.

Does employee advocacy feel like a possible fit for your organization? If so, here are five key considerations to keep in mind:

• Keep it optional

Passion and authenticity are absolutely critical to the success of any advocacy program. The temptation to make participation mandatory is significant, but try to resist. Ten excited and willing participants will trump 200 sullen employees mumbling through the motions.

• Check your culture

Is your organization right for employee advocacy? If the culture isn’t right, if employees are generally unhappy and poorly treated, then the program will be doomed from the start. Use tools like surveys and test groups to gauge the readiness of your organization. If the culture is not a fit, then money allocated to the advocacy program is probably better spent on search engine advertising or a really good television commercial.

• Gamify the program

Gamification works. Whether it is badges, prizes or company-wide recognition, structure your program to reward participation and build tasks around people’s competitiveness as well as group identities. Allow regions to compete with other regions (Boston vs. New York!). Allow functional groups to compete with other functional groups (HR vs. Finance!). Reward the winners.

• Provide executive support

It is rare for an internal corporate initiative to succeed without significant executive support. The executive champion needs to serve a dual role. First, they must be the programs biggest cheerleader providing updates, rallying support (most likely funding it) and maintaining enthusiasm for the duration of the initiatives. Second, in all their messages they must focus on linking the success of the program to opportunities and benefits that are available to employees in a growing and thriving company. Though it may not be immediately obvious, working at a healthy company is A LOT more beneficial to an employee’s career than the opposite environment.

• Provide the tools

Passion and product knowledge go a long way in advocacy, but additional tools are frequently necessary. If your employee advocacy program is part of a particular initiative (perhaps a product launch), then it is critical to educate participants so they are speaking fluently and truthfully. If the program is a referral program, then make it easy for employees to pass along referrals and see their progress in getting redemptions. If it is about spreading a particular marketing campaign, then make it easy to find and share campaign elements or content across an individuals social graph. The point is: make it easy.

The options when launching an employee advocacy program are endless. Vendors exist that focus on gamification exclusively (Bunchball and Badgeville come to mind) and employee referral programs in thousands of permutations have existed for years. Social media now provides breadth and reach to these programs that was previously impossible. The time for employee advocacy is now and large organizations need to seriously consider where it fits in their marketing strategy.

Each event will tackle a core topic, challenge or idea related to this developing field of practice. We’ll share insights, both good and bad, directly from our clients as well as stimulating conversations that help you take forward your own initiatives. There’ll be drinks and networking before and after. We’re aiming for a wholesome mix of theory and practice along with plenty of quality conversation.

Social Business Fundamentals #1: The Social Intranet

Although the term was coined in 2009, we’ve been helping our clients create and introduce them since 2005. The social intranet started as a name for an internal website that anyone could edit, grew to include people profiles and networks and has expanded to mean a digital workspace that facilitates knowledge sharing by allowing people to “work out loud”.

During this session we will cover what a social intranet actually is, the potential benefits for your organisation, and thoughts on where this technology can go in the future. We will also be joined by Andrew Woolfson, Director of Knowledge Management at RPC (the client-centred modern city legal services business) , who will share some of his firm’s experiences of implementing and introducing a social intranet. He’ll talk about the challenges they have faced – particularly the work that went in to winning over partners and other key stakeholders – and the benefits that the firm is starting to see as a result of their award-winning implementation.

The event will take place on 24th May 2012 at 6pm, with drinks beforehand starting at 5.15pm. To reserve your space follow the button to the Eventbrite event page.

Thus, as we laid out in considerable detail recently in Social Business By Design, the business case for the strategic application of social media to the enterprise is now quite strong across virtually all departments and functions. Organizations are reporting they feel increasingly surrounded by social, just as they also realize they must learn to function effectively in a social world. However, they also face significant and inherent obstacles to adoption. These can make it genuinely challenging to truly adapt social in a manner that will successfully tap into what makes it so powerful and effective at creating value.

One of these obstacles is getting social technology to the right place in the business. We’ve learned that it’s actually fairly easy to drop a social network into an enterprise alongside other systems or add a bit of social engagement to a marketing campaign. But it’s quite another to meaningfully integrate them. The former has some value, but it’s not game-changing. The latter is where the rubber meets the road.

In reality, the technology of social business isn’t much of an obstacle, at least once you get beyond the internecine platform battles that are common in many large organizations. No, the problem is a human one, which is ironic because social is all about people. Yet businesses are also a kind of organism in their own way. And like a living organism, they have a defense mechanism in place that acts like an immune system to anything that would disrupt the status quo.

This corporate immune system, as you might have guessed, is known as company culture. It’s a shared set of norms, practices, customs, expectations, and habits that have formed around and perpetuate how a company works and operates. While company culture is great at making the business function as expected and helps foster continuity and order, it’s also astonishingly good at killing off attempted changes to the system; undesirable and desirable both. It’s one reason why the entire industry of change management has emerged, so that companies can keep up with the our era’s ever increasing rate of change, of which technology itself is the most disruptive and high-velocity example.

Adapting Company Culture For Social Business

My colleague Dave Gray notes that we are now aware of much better ways of structuring and managing our businesses in a post-industrial era. We can move from hierarchical to networked models (what he calls podular) that are far more dynamic, efficient, and productive ways of working. Another of my industry colleagues, the always insightful Rawn Shah, has been suggesting that for companies to modernize, they will have to reinvent the company model, throw away the current (and broken) advertising model, and move away from the outdated industrial company model.

All of these are just ways of saying that the company cultures we’ve built up in the 20th century often don’t serve us very well today. Not in the era of social media, pervasive connectedness, and virtually free access to high-scale, world-changing networked tools. And change we must. Our company cultures must adapt and evolve to their times. Beyond the simple need to survive, failure to adapt means we can’t access the benefits of next generation business models, the most important of which are now creating new companies worth hundreds of billions today in historically very short periods of time.

In short, digital and social natives are dethroning the old guard. Dave Gray also likes to point out that the lifespan of an S&P 500 companies has plummeted dramatically in the last couple of decades. The upshot: The conditions under which our companies were created, thrived, and led their industries have changed. The good news is that our organizations certainly can change how they work. The bad news: If we don’t change ourselves as workers, managers, and executives, there’s little point in structural and process changes we can’t possibly enable, lead, or make successful.

So how do we get there? How do we make social business transformation effective? We can change our business processes, switch out our IT solutions, update our intranets, overhaul our marketing, sales, and customer care. But if we resist it, if we can’t think about it in its own terms, if we cannot act in a way that enables it, then we lose access to the promise. The promise itself is clear as I’ve covered many times in the past: More productivity, efficiency, innovation, customer satisfaction, and more. Superficial tacking on of social media to what we already do today isn’t the answer. As Brian Solis pointed out this week, building a social business must be treated as an investment, and one that will pay off handsomely.

Culture Change for Social Business: Stages and Process

In our work with clients, we’ve learned many hard lessons about how to situate social business. Even the need for culture change unfortunately is still not widely understood. The issue is, social business is a different way of working than we did in the industrial age or the post-industrial interlude. If it wasn’t different, we wouldn’t need to work hard at learning the methods and adapting our organizations. No, the networked age is now upon us and it means that the very notion of where value comes from, who creates it, and how it’s achieved at all is up for grabs. This perspective can be somewhat disturbing even while it also unleashes all new possibilities. Just understanding the concept of emergence alone, successfully grappling with the concepts, and then aiming at business problems is a long journey for some. Fortunately, the process of culture change, what the steps are and what the process looks like in general for the typical company is increasingly well documented. As are the issues around social business ROI and maturity.

In the first visualization above, I’ve depict the general stages of culture change across the major areas of an organization: supply chain, customer experience, and workforce experience. The stages themselves are:

1. Augmentation. Partial and non-strategic addition of social to non-critical business functions.
2. Adaptation. More effective use of social in the business. Movement of social business to core functions.
3. Transformation. Remaking in place of business functions using social business concepts.
4. Reinvention. Complete renewal of how the business operates around social business.
5. Singularity. The core operation of the business as a fundamentally social set of constituents with little discernible boundary between them.

The last is one that only a few companies have reached and is possibly controversial, but in my research it’s the inevitable destination of social business. I’ll explore each of these stages in more detail in future posts as I can. For those who currently have a hard time visualizing these changes, sometimes it’s good to look at a more holistic view of digital strategy as a cross-check.

The stages of social business culture change describe the changes in the business in key operating areas, but it doesn’t describe how to get there. That’s in the second diagram on the left. This shows the key activities that drive culture change including executive and community leadership, strategic goals, business process redesign, education and training, risk management, and governance. Note that there is a shift from centralized culture change activities to community-based ones over time. This is an essential part of the process that can only start once vibrant communities and social constituencies have been created. Obviously there is more to each of these and I’ll cover those as soon as I’m able as well.

I’m hoping this provides a broad and high-level picture of many of the moving parts of the real changes that organizations must make to quickly adapt to a business environment that is very, very different than it was even five years ago. Can most organizations change their DNA quickly enough to survive intact? That’s an open question that more and more business leaders are asking. But at least we have a clear sense of what we have to do. Now we’ll find out if most of us can indeed make the journey.

Culture change for social business and other related topics are treated in detail in our new best-selling new book, Social Business By Design, now available on Amazon and in bookstores near you.

]]> http://www.dachisgroup.com/2012/05/getting-to-effective-social-business-results-applying-culture-change/feed/ 3 http://www.dachisgroup.com/2012/05/sharing-social-business-by-design-sbbd/ http://www.dachisgroup.com/2012/05/sharing-social-business-by-design-sbbd/#comments Tue, 01 May 2012 12:01:42 +0000 Peter Kim http://www.dachisgroup.com/?p=92755 Today is the official publication date of Social Business By Design. It’s been a whirlwind three-year journey from the original blog post that introduced the world to “social business” to a full book describing how to make strategy and tactics succeed.



• If you’re starting on your social business journey, this book will provide you with a roadmap explaining the whys and hows. Last week, Dion explained why we wrote the book and outlined its key features.
• If you’re a seasoned social business practitioner, you’ll find value in the frameworks, outlines, and visual thinking. As one early reviewer wrote, “the graphics in this book are worth the price of the book alone.” We relied on the information design talents of our colleagues formerly known as XPLANE to help make the 30+ graphics make sense, in addition to the decades of strategy, technology, and marketing experience incorporated into our thinking.

We’re happy to share parts of the book with you in this excerpt in Fast Company and a download of Chapter 5. If you want more, the book is available at Amazon.com and 800-CEO-READ (< best price).

To support the book launch, Dion and I will be speaking at events around the world. In the near term, we are available to speak at select conferences and private corporate events in exchange for a bulk purchase of Social Business By Design that you keep. We’ll do this, depending on location, in lieu of a traditional fee. Win-win.

For more information, contact us at sbd-at-dachisgroup-dot-com.

]]> http://www.dachisgroup.com/2012/05/sharing-social-business-by-design-sbbd/feed/ 0 http://www.dachisgroup.com/2012/04/announcing-social-business-by-design-the-strategic-guide-to-enterprise-social-media/ http://www.dachisgroup.com/2012/04/announcing-social-business-by-design-the-strategic-guide-to-enterprise-social-media/#comments Thu, 26 Apr 2012 16:23:50 +0000 Dion Hinchcliffe http://www.dachisgroup.com/?p=92747 Our new business strategy book has just been published by Jossey-Bass this week and is now available in print and e-book online. It will also be in bookstores near you — depending on your specific locale — within the coming weeks. Co-authored by myself and Dachis Group Chief Strategy Officer Peter Kim, we have carefully designed the book to be highly accessible to executive audiences who have some familiarity with the topic, but who aren’t themselves experts. We find that business leaders crave a way to quickly get up to speed on the issues involved in transforming how they operate using social media in order to drive what are increasingly extraordinary outcomes. While perhaps somewhat self-serving, we hope that those leading social business efforts will make sure their executive teams and staff have copies of Social Business By Design as the definitive guide to explain, educate, and accelerate their efforts.

Let’s get right to the question of why social business at all. Is it bold to say that applying social media strategically can truly enable extraordinary business outcomes? Probably. Yet, in our years of research and practice, that’s exactly what we found in leading companies as they employed the truly profound and powerful forces of human peer production and collective intelligence deeply to the way they work.

To be sure, some organizations have occasionally seen results that are less impressive. Just as not every marketing campaign, IT project, or business initiative is a runaway success, sometimes the application of a powerful tool doesn’t squarely connect with the problem. In fact, achieving success requires experience and knowledge of what works and what doesn’t in a particular situation. And that is exactly what this book intends to provide: A distillation of experience to create a mature, working foundation for business and technical leaders such that they can effectively apply social business concepts enterprise-wide to drive practical results for their organization.

Peter Kim and I, and those in the Dachis Group team whose ideas are frequently represented here, have spent years in the trenches working on social media within organizations at all levels, in a wide variety of industries, in countries around the world, and in various business functions ranging from marketing, sales, customer care, operations, product development, and support functions like HR, compliance, and legal. We believe this has given us a front row seat that we can share with you about how to think about, design, and successfully situate social media-based solutions in a wide variety of internal and externally facing business functions. Our experience, and the combined knowledge of Dachis Group and our clients as a whole in this space, is instilled in this book. While many companies back into social media unexpectedly or with little upfront plan, we have found that the very best results come from strategic application, intentionally, by design.

The Business Case for Strategic Social Media

The truth is that nobody wakes up in the morning and randomly decides they need to bet their career on a trendy novelty that strikes right at the heart of how they run their business. Yet it’s also true that most executives and managers with decision making authority hunger for better ways to work, to drive returns, to beat the competition, to create a survivable future, and to create a better world. But they need to have the confidence that these new innovations are readily within reach and are highly likely to provide significant returns. We believe social media has become such an innovation and we present the evidence throughout the book in statistics, compelling case studies, and deconstructions of the fundamental power laws that make social media a much more effective way of operating most aspects of a business.

But having strong motivation to move towards more social, connected, and participatory business processes isn’t nearly enough by itself. Organizations need extremely clear comprehension of the objectives in order to reach them and create sustainable value as quickly and directly as possible. To this end, we’ve painstakingly recast the concepts of social business into the clearest and most accessible articulation possible. In the book we lay out the underlying tenets of social business in a way that we believe greatly improves the ability of organization to focus on what is most unique and potent about social media from a business perspective.

The Key Features of Social Business By Design

In fact, we think that the book in general is one of the most succinct, focused, and cohesive approaches to how to enable social business for the large to medium-sized enterprise. A breakdown of its salient features makes the case for how this book can quickly aid organizations in their planning, strategy, architecture, design, implementation, management, and governance of social business at a program and project level.

• A strong business case for social business as a strategic enabler of business outcomes.
• An integrated and holistic view of social business across all major business functions.
• 10 fundamental principles of social business, culled from research into hundreds of efforts.
• Several dozen Dachis Group Xplanations that visually describe key concepts and ideas.
• Explorations of dozens of leading companies’ social business success stories.
• Detailed breakdowns of how to create long term success with adoption, community management, governance, and more.

So far, initial reviews of this approach are promising, such as what Brian Sommer on ZDnet wrote this week, but as more critiques continue to be published we’ll highlight them in order to get feedback for future editions, as well as potential expansion into a series. For now, we’re eager to get your feedback and hope you find the book invaluable in your journey to become a social business.

Finally, I’d like to thank Jeff Dachis for making this book possible by lending his considerable support to this project, our editor Karen Murphy for her help and guidance, as well as the great many industry and company colleagues who helped organizationally with content, ideas, and insight.

Official Book Site: http://socialbusinessbydesign.com

Book Links: Amazon Hardcover | Kindle | Apple iBook

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Related Dachis Group Social Business Resources:

The Collaboratory

Social Business Council

Social Business Index

Social Business Summit

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