The short answer is yes, viral adoption can work BUT only in certain situations. This is my attempt to pin down some of the factors I’ve observed out in the field.

Firstly, let me explain what I mean by ‘viral adoption’:

1. It may involve users by-passing IT (“CoIT“) or the initiative may have corporate sponsorship (to a degree) but the technology is planted without any deliberate effort to facilitate use (and it might even be called a pilot).
2. The expectation is that the network effect will drive exponential growth.
3. The software (and human network) is completely self regulating and requires no organised human oversight – i.e. administration, training, community management or content curation.

Looking at these three points, you can actually extrapolate potential issues. But when I compare those theoretical issues, these are the anti-patterns I’ve actually seen:

• Competing Solutions – someone else has the same great idea, but attempts to solve it with a different solution. Sometimes one solution wins out, but sometimes everyone is a loser.
• Late Adopters – it all goes well for the first wave of users, but there is a group of users who just ignore the invites and don’t participate. Eventually the network starts to lose momentum.
• Works for one, but not another – similar to the Late Adopters anti-pattern, but in this case growth stalls not because people won’t use a solution but because the solution doesn’t actually meet the needs of subsequent groups.
• Lack of Customisation – the solution meets 80% of needs, but can’t be customised to meet that remaining critical 20% that would make a real difference to the organisation. People get frustrated and move on to the next good idea.
• Growing Too Fast – this is probably a situation many people who love to have, but rapid growth can also be killer when it happens. The social experience that worked for a handful of users at the beginning may not be effective for 1,000s or 10s of thousands.
• Internal Politics / Lack of Budget – great idea, but for whatever reason the initiative is killed off. Often the stated reason is an excuse, so its hard to pin point the real reasons. Remember, organisations don’t always make decisions rationally.

Clearly these issues can be managed but the difficulty is that there is a cost to fixing these issues after they happen:

• The organisational culture may not accommodate failure, making it difficult to come back and try again.
• The pure cost and challenge of retrospectively addressing these issues may be considered too high.

I think a completely viral adoption approach is a big gamble when really what organisations need is an iterative approach that allows for the best solution to emerge. An iterative approach facilitates a network-based adoption approach, by steering and anticipating user needs based on social experience design. This allows the right supporting mechanism to be put in place, including the political and budget support that will be needed over the long term.

I wanted to take the opportunity to highlight just one example of how working in a truly social organization delivers benefits that could never have been predicted in an executive conference room undergoing the scrutiny of a hard-core ROI analysis.

The Million Dollar Cry for Help

This vignette comes from our member Andrew Carusone at Lowe’s Companies, Inc. who told the story at our workshop this summer.  Lowe’s on-boarded 100% of its employee base to its collaborative platform, IBM Connections last year.  That’s every executive, store manager, retail clerk, and stock boy on the payroll.  The entire Lowe’s workforce of 289,000 employees have access to Connections.  What’s interesting is that less than 17,000 of these employees are salaried employees, and even less are members of the management team.  The challenge for the Lowe’s social business team is to inspire the employee base to turn to the platform in the course of their normal day’s work.  For some employees, it comes naturally.

During beta tests, an enterprising Paint Department employee decided to try something new to demonstrate the ease of cleaning a Teflon paint tray.  She poured latex paint into it, let it dry, and then peeled the paint out whole.  She left both the paint “mold” and the paint tray on the paint counter.  Customers were amazed and delighted. Suddenly, she was sold out of the paint trays and shoppers were clamoring for more.

The employee turned to all of her traditional channels to get additional inventory.  She accessed the company’s enterprise inventory system, however, like most major retailers, the business process tightly controls the amount of additional inventory employees can request.  After exhausting other traditional sources, the employee then turned to the Connections platform and asked “out loud”* if anyone knew how she could get more inventory.  Funny thing happened.  Although everyone felt her pain on the inventory shortage, they started replicating her paint mold/tray demo in their stores. And guess what? Suddenly other stores were selling out of the paint trays too.  As interest in the thread and the display idea grew in popularity, sales skyrocketed.

When applied on an enterprise level, the unique display idea represented more than a million dollars in additional revenue of the SHUR-LINE Teflon 9″ Metal Tray.  With that single serendipitous public share – employee-to-employee – at the kind of scale that Lowe’s enabled with its full workforce deployment, ideas like this can easily pay in full for the technology platforms that enabled it.  And this is just a single example.  Our Lowe’s members say these examples happen all the time.  I have a few more along these lines from other members I’ll post in the future.

What’s interesting to me in this example is that when the sanctioned business process that the Lowe’s employee was “workflowed” to use failed to deliver, it prompted her to seek out alternatives. (The company regulates how much inventory a store can order and when.)  She also reached out via other channels: email, phone calls, etc., with little success.   It was only after she circumvented the traditional sources and leveraged the power of pull within her employee base, did the company realize this unexpected windfall in revenue.   Not because she was able to order more inventory (her original ask), but because she shared her clever merchandising technique with the employee base creating demand for her idea far beyond her single store.  As Andy says, “What felt like a pebble – landed like a stone!”

It was the innovative idea that went viral in the company, resulting in the huge inventory demand (and subsequent sales) corporate-wide.   Smart employees throughout the ages have always found better ways to accomplish their goals, but these massive collaborative platforms are yielding leapfrogs in productivity and serendipitous wins on a large scale.  Be sure not to overlook this important upside of working socially.  In other words, “Be careful what you don’t ask for, you just might get it.”

*We talk a lot about “working out loud” in the Council.  Try it.  It just may delight you.

One of the biggest challenges these efforts face, whether they are internal or external, is that engagement via social media is generally perceived as a voluntary activity. As in, workers can collaborate and customers can choose to interact with a business through older channels that are often more familiar and better supported by the organization itself. Or they can engage through social channels. For people to choose the social path of engagement as the most suitable one, there need to be motivations and incentives that are aligned with that path.

As companies seek to ensure the highest level of success with their social business efforts, I am seeing that they want a proven, reliable way to drive adoption of their social business strategy, whether it’s an Enterprise 2.0 initiative, a social media marketing program, or Social CRM effort. But social media is not as deterministic and controllable as the channels that have come before it. It’s one of the reasons I say that adoption of social media can only be co-created. It is as much up to the those engaging to create value, sustain engagement, and build community as it is to those that sponsor them. You can’t own a community like you can buy software or a marketing campaign, social business is a two-way street like nothing quite like it. This makes adoption of social business a very different creature from the way businesses used to engage before.

Fortunately, after over half-a-decade of experience in scale, we can see the broad outlines of adoption, which have stages that are very different based on the state of maturity and overall rate of social business adoption in the organization. In other words, as much as we might like it, there is no “one size fits all” approach to it. Fortunately, we can organize around these different stages, which fall roughly into four parts given below. Specifically, these are:

Phases of Social Business Adoption

• Early adoption This is the most nascent and delicate state, where there is perhaps only a seed of community and there is no network effect yet or core membership that can help with the essential work of social business building. The goal is to validate the direction, tools, and social business design. This is often called the pilot phase.
• Critical mass adoption This is transforming a successful early adoption phase into broader uptake that is self-sustaining. I’ve previously observed that this critical mass is around 20% of workers, but has been verified as even less.
• Mainstream adoption There is usually a long pause between the first two waves of adoption and late adoption. Early adopters are often very early and the remainder are often represented by those who have challenges in engaging in a different way, for a variety of reasons. Specific steps must be taken to address these adoption issues.
• Sustainable adoption A successful social businesses contains communities of people, their business activities, and supporting tools. They will largely self-organize and grow on their own once you’re well into the critical mass phase and beyond. However, these communities can also decline over time without appropriate care and nurturing. Employees move on, customers decide to leave, your company changes direction. All of these affect the long term health of your communities, and so specific adoption strategies are required for as long as you have a thriving social business environment.

This post is part of a four part series on social business adoption that will explore each of these phases, with early adoption being examined here. For this effort, I’ve contacted over a dozen experienced social business practitioners, tapped into my research, and aggregated the results of numerous case studies. The outcome is what you see here and while it’s probably as definitive as you’ll find, it’s a necessarily limited view of a rapidly moving new field. Also, in the end, what drives adoption best is whatever actually works for your social business project, and what works best for your project often isn’t what’s in the check lists, no matter how good. Social isn’t as predictable or as deterministic as we might like, and that’s the challenge. Of course, it’s also a large part of the opportunity to drive innovative new outcomes you could never otherwise achieve or imagine. So while your mileage may vary somewhat, the adoption strategies presented here can be a very useful jump start of your social business journey.

Recognizing that that although social business is part of a single continuum across workers, business partners, customers, and the marketplace, that internal use of social business and external uses involve participants that have a very different relationships with the organization. Adoption strategies therefore vary the most between these two groups and so they are presented here separately, though there is often significant cross over, particularly in areas like community management and connecting social business activities to relevant business outcomes and bottom-line benefits.

Note that these adoption phases also take place during the journey of becoming a social business in the large and will be directly informed by that journey. Individual social business efforts, and their adoption strategies, should be loosely connected to what the entire organization is doing and “calibrate” to align themselves in the same direction.

Early Adoption Strategies – Internal Social Business (aka Enterprise 2.0)

While the blur between internal and external communities continues to increase, for now most efforts are still separate. Listed beow are the top adoption strategies for external social business efforts. Begin with these but experiment along the way and find the adoption patterns that are unique to your environment, culture, and constraints.

• Establish a clear purpose. Ill-defined and vague social business efforts end up with a similar outcome. As Susan Scrupski, who formed the active and highly engaged Social Business Council (disclaimer: this is a Dachis Group online community), conveyed when I asked her what the single most helpful action she took to foster adoption was this: “We established a clear purpose for the community, combined with fostering a sense of trust and a culture of sharing.” Clearly stated intents and objectives let participants self-select, join in, and find what they are looking for while contributing more of the same.
• Identify and engage adoption champions. Locate and identify unofficial leaders in your target community and get them involved and participating early. They will ultimately do the bulk of the work during the early adoption phase in drawing in participation using the social networks and good reputation.
• Help leadership set the tone. One of the biggest triggers for adoption is when leadership clearly communicates how they’d like workers to participate in social business. While setting a personal example through participation is best, all it takes is direct, regular, and public involvement by several well-respected executives.
• Communicate clear policies for usage (cans and cannots.) Social media policies have come a long way from the 7 page fine print of years gone by to simple and clear directives. Specifically, the lessons learned over the years have distilled to focus on explaining exactly what employees can and can’t do in the most understandable terms. Bonus points for providing effective suggestions on when they should use social business solutions.
• Test social UX usability with workers. Inexplicably, usability of a social business design is too often under-tested or performed as an afterthought despite it being one of the biggest drivers of early adoption. If you don’t have budget set aside for A/B testing (which is proving to be the very effective, though more expensive) and time in the schedule to fix the biggest usability barriers you discover, you will take an adoption hit.
• Use a consumer-style marketing campaign. How you communicate to workers and the tone you use will set stage for the way its perceived, and in the early days perception of everything. It must be credible but it must also be memorable and convey what’s new and provide motivation to join and try it. John Woodworth of 3M Lab Collaboration used this approach successfully: “Employees already have a preferred product. By using market segmentation and a value proposition for each ‘segment,’ we identified what they would need and how they wanted it delivered. A good customer doesn’t just try your product; they buy it often and endorse it. Focus the sales on finding the ‘good customers’ and the best markets.“.
• Strategic community management. Especially early on, the facility of community management is one of the only real assets you have to drive social business transformation and adoption. Rachel Happe, co-founder of the The Community Roundtable and a world authority on community management, notes that “community building is a critical element of social business success and typically organizations cannot get there by deploying social technologies alone. There are a variety of contextual factors that can increase or decrease the ease of building a community but there are also some common best practices“. I’ll note these best practices in this list.
• Connect to business purposes. This seems obvious stated this way, but many look at social business approaches as a horizontal or general purpose communications method more akin to e-mail to IM than a way to improve a specific business activity. Sometimes this is true of course, but the best results often seem to come from those that aimed their social business design at a specific business opportunity. As Lauri Buczek, social media strategist at Intel, recently noted in Mark Fidelman’s Sure Fire Ways To Become A Social Business, “First, identify the business objectives.” Ken Domen, an enterprise collaboration lead at a large enterprise, conveyed to me that finding a “killer app” that solves a particular business problem better than before is a strong adoption technique. For example, Ken finds that IM and calendaring apps, embedded contextually in his social environment, to be particularly effective.
• Proactively share the adoption process. Communities are built by their members, not companies alone. Time after time, as I see particularly effective examples of social business, I see that this is a core value. The more the process is open and members are encouraged and empowered to provide structure, rules of the road, and spread the word, the more ownership, involvement, and productive work results. Experimentation should be encouraged. A leading example is SAP’s million-plus member Community Network (case study) with their SAP Mentor program.

Early Adoption Strategies – External Social Business

As social business scales up and goes external, successful adoption has a new, though often complementary set of requirements. Some of the differences revolve around motivation in that external participants aren’t typically paid to work for the organization like internal participants and so usually have a very different set of reasons they are involved. Other issues that tend to be unique to external social business includes appealing to a much broader demographic and competing with similar communities elsewhere on the Internet.

• Identify and engage influencers. Enlisting those with strong reputations and contacts related to the purpose of your social business effort has long been understood as an effective adoption pattern. Engagement with influencers takes many forms and should be connected to adoption whenever possible early on.
• Use content as a participation seed. At first, there’s little in a new community to draw in initial participation. Rachel Happe says this is one of her top three adoption patterns: “Create a content calendar that provides members with something they value and creates opportunities for them to interact.” Obtaining seed content can be resource-intensive and can require more investment than expected if influencers are not well-engaged early. This should be sustained until at least the critical mass phase of adoption and usually beyond.
• Go to the audience, draw them in. Building a community on a far corner of the Internet makes it hard for new participants to find it. This is one of the reasons that Facebook pages have become so popular, by going directly to where a vast, already social and participative audience is. There are many approaches to this but it can greatly aid adoption when integrated properly.
• Personal engagement from key business stakeholders. Having the presence of company leaders and providing structured access to them by recognized members of the social business ecosystem provides the deep engagement that’s more likely to both increase participation and lead to useful outcomes. SAP’s Community Network does this proactively (see case study link above.)
• Reward the remarkable 1%. By now just about everyone is familiar with the 90-9-1 rule, where 90% are passive browsers, 9% contribute a little, and 1% account for a disproportionate amount of the value created. These are rough numbers for external social business participation. While the specific technographics continues to fluctuate a little as the market evolves, the key to driving adoption is ensuring that your most valuable contributors are incentivized appropriately to contribute, once you identify who they are. While timing and perceptions of conflict of interest can be issues, rewards typically run the gamut from simple recognition to more formal business relationships.
• Proactive community management. Community management continues to make my top list of what helps define a successful, vibrant social business. Rachel Happe includes this in her top three list as well, noting “allocating a full-time community manager that both encourages member activity and keeps the conversation on track.” The biggest misstep I see many social business efforts make is greatly under-resourcing this capability early on. SAP’s Gail Moody-Bird has observed that resources like this “are not a part time job for everyone.“
• Keep it simple. To be usable and effective for the broadest demographic, simplicity in joining, user experience, and conversation are essential to reduce abandonment and maximize the value being exchanged. This is Rachel Happe’s top adoption point as well, “keep the functional environment simple so new members quickly grasp how to participate.“
• Be authentic, don’t overproduce. Over the years, as I’ve collected best practices for online communities, I’ve noticed a common pattern. The fanciest and slickest social business experiences don’t necessarily achieve nearly the uptake as ones that are simple, basic, and straightforward. Though social media marketing aspects of social business can be an exception, excessive polish conveys a sense that too much lipstick is being put on. As John Hagel has talked about a trust paradox and social business, that being truly genuine and letting human realities be exposed is much more likely to sustain adoption and less likely to actively repel participants.
• Employ the “Us First, World Second” strategy. Time and again, when I’ve spoken to social business efforts, they explained how in the early days everyone was on deck in the organization and helped create the seed of participation. I’ve even heard it phrased that at first “it was 90% us and 10% them, and then later it was 90% them and 10% us.” Driving early adoption in this was is successful but unsustainable at a high level for long and must be timed right. “All hands on deck” may be problematic for your organization for various reasons but it’s a powerful tool for early adoption when it can be used.
• Build trust and a culture of sharing. This is one of Susan Scrupski’s adoption lessons and has been repeated by just about everyone I’ve spoke with over the years. It’s not just enough to build trust, the culture must be one where the free exchange of ideas is valued and encouraged, because that’s the observable value that drives innovation, better decisions, and more. Building that culture requires leading by example and rewarding contributors both.

Note that this list cannot be exhaustive and there are literally dozens of techniques large and small that one can attempt to drive adoption of social business. You should also never forget the fundamental cycle of listen, analyze, measure, and respond. However, these cover the more widely used and repeatable techniques that I’ve seen of the many social business efforts that I’ve examined over the years. I’ll be covered the remaining adoption phases in upcoming posts but welcome your feedback to improve and extend this list.

This week I’ve spent a lot of time looking at one of the next frontiers of social business, the intersection of application software and social networks. As I examined on ebizQ, the next app you use is increasingly likely to be inside a consumer social network such as Facebook or LinkedIn (no solid word yet on how Google+ apps will work.) This trend is also moving into the enterprise as social apps have started becoming available in Enterprise 2.0 platforms, as I recently looked at in detail with Jive Software’s Apps Market for their popular social business platform.

Social applications are increasingly proving to be an effective way to direct community-based activity into useful directions and social networks are a natural home for them. By providing application experiences within the users current social context, applications can lightly structure or orchestrate collaborative behavior at useful outcomes. Driving outcomes like this have proven effective across virtually all the departments and functions of the modern organization.

However, as ripe with potential to reap meaningful ROI from social networking, social apps are just one intriguing examples of the overall evolution of social business. The big picture has been growing clearer in the recent years, even as the landscape keeps moving, as companies have learned to update their digital strategies with social business and begin to genuinely apply what we now understand as the truly transformative power of social media to how they run their businesses.

A Four Step View of Social Business Maturity

The social business ladder, when dealing with the connection of an organization to the broader external marketplace, can be said to have four major steps. Organizations typically start by trying to drive the world to their online presence, a clear extension of their Web sites and typically consists of the addition of blogs, customer discussion forums, and other basic social features. This is effective and useful, to a point, but it’s limited to basic information discovery, high-level awareness, brand messaging, and communication. It is also typically the purview of just one part of an organization, usually corporate communications and/or marketing.

However, companies typically realize there is much more to the social business story than basic social media. They then reach for the second rung of the ladder: Going to the world. This was made easier by large global social networks like Facebook and Twitter — as well as regional social networks in countries where these two market leaders have stiff competition. Driving the market to a social media presence on a corporate Web site is hard work, expensive, and limited in effectiveness compared to just going directly to where the world already is. The second rung is about building reach, establishing network effects, and connecting within the social channels that almost everyone already uses. This is a much more scalable and effective approach and is exemplified by Facebook pages, Twitter accounts, and decentralized badges and Like buttons that connect an organization’s content and experiences that are elsewhere on the Web back into the world’s main social ecosystems.

Going to the world is powerful expansion in the way of thinking about and applying social business, but it’s just halfway there. More mature organizations have figured out how to more deeply engage the world via social business by greatly “turning the knob to the right” in how they listen, analyze, and engage. Scale is the name of the game when companies progress to the third rung of social business maturity. Listening to and understanding where all the important conversations are, tapping into them in a timely fashion, systematically understanding their implications to the organization, and ensure that appropriate responses, from simple information returns to complex marketplace collaboration, take place. All of this drives better decisions and results across all lines of business. The list of areas that benefit from engaging with the world including sales, marketing, innovation, hiring, support, operations, supply chain, and more.

Most companies are on the first two rungs and some companies are now on the third rung of this social business ladder. A few companies however, are progressing to what appears to be the next and most advanced level. This stage of social business is the most transformative of all and the natural outcome of the relentless blur that I hear about from more and more C-level executives as they witness the boundaries of their organization changing under the relentless pressure of the new, often highly social, ways that workers and customers use technology to connect with each other. The broad changes that businesses are experiencing are extensive yet they are also looking to be one of the most rewarding ways that we have to enlist the creative and productive output of the global population in rebuilding and growing our businesses. Businesses are asking “What will power next-generation enterprises?” A large part of the answer lies with mature social business approaches on the right side of the chart above. I’ll be looking at some of the more significant implications in the fourth rung in upcoming posts.

How Do Organizations Get There?

To get there, the enterprises of the very near future will have to be more visionary in an on-the-ground and effective way than they are today. As IBM’s Sandy Carter pointed out recently, based on her many conversations, there’s still work to do to communicate that social business involves far more than just PR or marketing. It requires engagement by the entire organization. McKinsey also recently underscored the inverse point, that “we’re all marketers now“, just further proving the point that we’re all much more involved in everything now as business activities become far more connected. In the end, the companies that can manage risk well while enabling their own disruption by climbing the social business maturity curve will be best situated to take advantage of the very significant and measurable benefits.

Where are you on the frontier of social business and why?

Within my role here at the Dachis Group as Executive Director for the Social Business Council, I’ve often wondered whether it was time for us to retire “Enterprise 2.0″ as well.   After much deliberation, I’ve concluded that we shouldn’t.  The market is still evolving.  It’s still early in the grand awakening that is taking place around the world regarding working socially and collaboratively – most especially for the largest organizations in the world.  Enterprise 2.0 is changing in its scope and refining its mission, but it hasn’t really evolved much.  Of course, when I talk about Enterprise 2.0, I mean the practice of introducing and adopting new ways of working that involve the use of liberating social technologies.  Of course, in order to “do” Enterprise 2.0, you need a massive education, and re-learning that leads to organizational change and to some degree, disruption.  But the root foundation of Enterprise 2.0 is still sound.  It’s a meme that is widely understood and embraced by passionate community of friends and fans who’ve invested career capital in its growth. And that’s not just the Andrew McAfee‘s of the world, but every brave soul who’s stared down glaring faces in a conference room or auditorium using foreign Enterprise 2.0 concepts and ideology.

So.  What then about Social Business?  Social Business is the macro change that’s taking place worldwide — touching every business and organization worldwide regardless of size, industry, or business model.  It flows from the consumer or corporate buyer to behind the firewall, back out to the suppliers and within and without everything that transacts and moves in the global economy.   There isn’t a conference big enough that could hold the exploding growth in Social Business and cover all its facets with authority and relevance.  Social Business is becoming all business.  When the Dachis Group hosts its worldwide Social Business Summits, we strive to bring some of the best leading thinkers to bear on this changing landscape.  It’s an ambitious undertaking and ever-changing.  Jeff (Dachis) describes our events as the TED of Social.  Dachis Group provides these events as a service to our customers and the industry at large.

I’m writing this post on a flight from  Minneapolis to Austin where the Council just held its first Social Business Symposium on site at one of our F100 members’ corporate headquarters, 3M.  We have an eclectic mix of attendees who signed up for the event.  The range of professionals who attended spanned from global digital strategists to knowledge management pros to information architects.  When Peter Kim, who gave our opening keynote, asked me if I had any input to his talk, I told him, “This is probably the first time we’ll see such a unique audience of large enterprise customers sitting side by side who hail from every corner of the Social Business spectrum.  Try to give them an understanding of why they’re sitting next to each other.”

In essence, Enterprise 2.0 is a subset (albeit a critical one) of the Social Business phenomenon.

At the end of the day, everything social that lives and breathes must turn back inward to the Enterprise to create value.  The trouble, as I see it, is there is still a planet of Enterprise 1.0 filled with attached documents, modules, silos, email inboxes, business process, Six Sigma, dogma, and fear.  The time to move beyond Enterprise 2.0 is not today.  We’ve barely made a dent. The shared core beliefs that the Enterprise 2.0 community espouse and continue to drive into the social consciousness of the growing social business community are essential.  Without rich, fertile, open green fields behind the firewall, properly tilled and seeded, the great strides in social media, social CRM, social analytics, social intelligence will never take root and produce the outcomes that will fulfill the promise of social reinvention.

As I often do I’ll fall back on religious parallels to drive home my point.  Just like Ruth, I am loyal to E20.  I will go where Enterprise 2.0 goes. The heritage of the movement and its ideals are still highly relevant (perhaps even moreso), and I will go where it takes me.  This may be to new platforms, new technologies, new organizational change models, new leadership mantras– I welcome it all.   Unlike the popular technology, leadership, and organizational models of the last decade, E20 stands to humanize, rather than dehumanize us.

A final thought. There are superficial changes that are taking place as a result of the socialization of society and commerce, and there are substantive ones.  Both of these will occur, but within the confines of industry, the work that is going inside the enterprise is 100% substantive.  I take great satisfaction being a part of that history-making reincarnation.

However, in the last decade, a few industry observers have noted seemingly diminishing returns on the strategic value of technology to drive additional business value. In fact, towards the turn of the millennium, debates raged on whether IT had become just another commodity (or not) while the the gap continued to grow between companies applying IT well in terms of business performance and those who weren’t. As I pointed out in a recent post on organizing for social business, that the productivity gap looms ever larger. In a closely related trend, my colleague, well known business thinker Dave Gray, has been exploring how companies, becoming ever more global and conglomerated, experience dramatic productivity drops as they grow. This paints a discouraging picture for companies that have either not become digital natives or are dealing with the intense communication and collaboration overhead of today’s massive organizations: Better business performance is increasingly harder to come by as the easiest opportunities are seized.

The reality is, however, that the vast majority of large organizations have been direct beneficiaries of decades of IT investment. To date, the bulk of that investment has been in a category of IT sometimes known as systems of record. These are the well-known bread-and-butter applications (and their databases) that run our firms and contain the business records, electronic documents, and countless other information artifacts that we use to conduct the routine minutia of daily business. It’s safe to say that most firms would go out of business without the data within and automated capabilities of their systems of record. But systems of record are increasingly 1) becoming commoditized by SaaS and the cloud and 2) most organizations have reached the carrying capacity of the approach: There’s very little left to store and automate that isn’t already. So where are new business gains to be had?

Systems of record have matured to the point where there’s only a little strategic advantage to having your own unique capability. Instead, the discussion on strategic technology has shifted to the other 40% of what businesses in industrialized nations do: Knowledge work. These are highly variable, dynamic, and increasingly fast-moving processes that focus on the higher order activities of a business. Knowledge work involves high levels of communication and collaboration amongst the most valuable workers a company possesses. They are also represented in the most strategic activities taking place within an organization.

Thus, using technology to enable knowledge work as a strategic capability has sparked a growing interest in improving what are increasingly known as systems of engagement. As a key part of this, the rise of social media in the middle of the last decade has done a lot to change the global focus on how we look at communication and collaboration between knowledge workers. A corresponding change came when technology innovation and rate of change in the marketplace began to outpace what most organizations could adapt to. This has led to the aforementioned generational shifts in focus, and in certain early instances industry disruption, in the way we apply technology to business problems. Witness what open source has done to commercial software or what the Internet has done to traditional media (music, TV, movies, newspapers, electronic gaming, etc.) to get a sense of what is now also happening to the information technology and communication industries today.

For enterprises, ground zero for the transition to systems of engagement in many companies often centers around any pending update of the corporate intranet. Even today in most organizations, the intranet is much more of a system of record than it is a system of engagement. This is beginning to change and we can clearly see it in discussions that members have in the Social Business Council and in the initiatives that they are taking, which I’ll explore in coming months.

What’s also clear about the changes taking place in businesses today is that systems of record are not going away. They’re a critical element of our business infrastructure and have their rightful place. Instead, we’ve discovered how we’ve often overestimated them and their ability to provide us with the tools to empower the most valuable and highest leverage aspects of our organizations. Watching what’s been possible on the Web, we’ve learned that we’ve correspondingly underemphasized the ability to enable and transform the most important element of business today: How we as humans can best work together to create value and achieve objectives. In last year’s survey of the social business landscape, I explored in detail the many emerging ways this is changing in the large and how enterprises are generally behind the times as the consumer world creates and proves out powerful new ways of tapping into and unleashing human potential. Enterprise 2.0, in the form of internal social networks and other models, are just the beginning here.

New systems of engagement are now receiving considerable attention in the forms of online communities, crowdsourcing, Social CRM, open APIs, and many other means as a way to connect customers and business partners together to achieve useful outcomes with the most cost-effectiveness and largest result. From just one recent example of many of this trend, this week Gartner reported that “within five years we expect that community peer-to-peer support projects will supplement or replace Tier 1 contact center support in more than 40 percent of top 1,000 companies with a contact center.” Social systems of engagement have already become the primary way that we communicate in our personal lives and this is also happening for businesses.

In recent conversations around how IT is changing, it’s been clear that this is part of a larger trend, part of it the move from push to pull systems, part of the move from the center to the edge, but all of it shows how networks and simple, freeform, emergent tools can enable much bigger results than the transactional systems of old. If you are investing in strategic new technologies today to drive your business forward, I believe this is one of the most important investments you can make at this time. Make no mistake, however, that this is very much an unfolding story and we’re all learning from watching the leaders. But as I’ve covered here and many times in the past, it’s a change that very few organizations will be able to skip and survive.

I’ll be exploring systems of engagement in more detail as part of my Why Social Business Is Different series. Stay tuned.

My friend and industry colleague Rachel Happe wrote recently about something she calls A Vision for the Social Organization. In this, she explores the current situation in companies today and what a social organization of the very near future might look like. Reading over this, I was struck both by the clarity of the vision and by how far off many organizations are from closing the gap between what’s now possible in terms of performance improvement and what they can deliver on any time soon. It underscores an essential point that Andrew McAfee has been making for a while now, namely that information technology is a strategic force multiplier that is inexorably “driving the leaders and the laggards farther apart” in today’s business landscape. Like previous generations of IT, this is true of social business as it was once with both the early Internet and personal computing.

At the executive level, the clarion call is here. Deloitte’s new study on using social software for improved business performance has made bold pronouncements for business leaders of today’s organizations, namely that social business offers “unique capabilities to address current operating challenges and improve operating metrics”, but that skeptics will be among the very last to reap them, if they ever do. This observation and many others in top management and business circles is creating the drive to better prepare for social business.

Currently, I see a confluence of core issues holding back executive teams as they attempt to determine what kind of focus on social business they need to have. Though we’re now years into the tactical adoption of enterprise social media, we’re only now seeing widespread strategic adoption that will have real effect on competitive position and long-term financial health and growth of a business. The good news for those long in these trenches is that the social business imperative is indeed being felt by most senior business leaders these days, and there is readiness to invest and make it a priority. But the way forward is too unclear for many still.

From what I’ve seen, the issues, and what you can do about them, are as follows.

Organizing for Social Business: The Top Executive Issues

1. What do new social business models actually look like and how to they apply to our business? Because most traditional organizations tend not to have deep digital roots or connections with emerging technology, there is often a fairly limited understanding of how enterprise social media has impact and could strategically affect the business. Frankly, one cause of this is because internal social business is very closely related but not quite the same as consumer social media. This means there are fewer visible exemplars to point to outside the organization and it requires the ability to adapt outside ideas to the inside of the organization. Consequently, while notions of an ‘enterprise Facebook’ can be elegant shorthand for the first step towards a more effective and better performing organization, it’s too hard for those unfamiliar with the tools and approaches of social business to extrapolate beyond this and clearly understand the bigger opportunities. Fortunately, at this point, there are strong examples in just about every part of the business spectrum to point to, whether that is your industry, or a specific function like workforce collaboration or innovation management. The hardest part about social business is changing your thinking and I encourage to refer to earlier explorations of the fundamentals such as Communicating the Value of Social Business and Social Business: A Case For Disruptive Transformation.
2. Is there a way to determine which social business approaches will have the largest benefits with lowest risk? This is the part where demands are made for case studies, industry comparisons, and executive surveys, and other data to support what is working for other organizations, as opposed to self-determination of what’s best. In reality, the companies that are already getting significant rewards today (and there are quite a few now) aren’t eager to report how they achieved them to their competition. In the meantime, executives will frequently wait until they have enough information to have high confidence in their social business direction. While strategic analysis and careful research can certainly help address this issue, there is little replacement for actually developing capability and discovering how to create value through real-world application in your own business. Yet this also isn’t a recipe for enterprise-wide change. I don’t advocate half-hearted, poorly resourced experiments (see our debate here about failing fast) nor will bet-the-farm, all-or-nothing approaches be acceptable to businesses either. It’s far more likely that supporting and resourcing continuous local change across the organization will result in the most sustained and long-term effect, along with near-term strategic transformation of targeted products and services. For more detailed information, I currently recommend spending some time with The 2.0 Adoption Council, the world’s largest group of firms sharing knowledge and lessons learned on the strategic embrace of social business. Along with this conversation, executives will also want to know the approximate investment required. An estimated cost model for the next budget year for the top social business options is very good to have handy.
3. What are the best tools and technologies for engaging in social business? For companies, and large ones in particular, there is almost inevitably a focus on selecting one social business tool to rule them all. These days, it should be clearer to a growing number of organizations that there just is no one social business tool, just like there is no one IT application. While there are certainly economies of scale and other advantages to a common platform, we are exiting the era of massive application suites and entering an interesting space where social business software will either be 1) true social delivery platforms complete with their own app stores of vertical social software, and/or 2) regular business applications that have forged deep connections to the most popular/relevant consumer and enterprise social networks. Either way, the technology discussion can become a significant management distraction because the technical issues either seem beneath executive purview, there are multiple vociferously competing vendor camps, or the platform issues appear to be beyond the ability for non-technical managers to understand and direct. So paralysis sets in. In fact, it is the organizational, cultural, and behavioral issues of social business transformation that require as just as much attention as the selection of technologies. This is the best place for leaders to focus. It’s also good to keep in mind that the pace of technological change has the potential to overcome any short-term decision on platform. Instead, executives should spend their time preparing for the business part of social business, with attention to technology primarily in terms of whether it will address the capabilities they need to support desired changes.
4. Who should be responsible for realizing social business transformation? This has become one of the most frequent questions I receive: “Where does all of this belong?” There seems to be no natural location in the org chart for social business. Should it be in corporate comms or HR? Or should IT be in charge of it? How about the line of business? Unfortunately, none of these have the combination of organization-wide support capability, expertise in specifically what the business does, and actual experience in social business strategies and tools. I’ve discussed this challenge before in Introducing The Social Business Unit, namely that 1) it’s likely that a new organizational function needs to be created and 2) that social business skills and know-how be driven directly into the broader organization, starting in places where the business is most impacted by external changes in the marketplace. Short answer: Start with an internal social business committee composed of all the stakeholders and spin it off as an internal, independent group when it makes the most sense.
5. How should we reconcile new social business initiatives with [insert existing project or function here] (i.e. intranet, portal, document management, search, HR services, CRM, ERP, supply chain, etc.) One of the biggest obstacles of them all turns out to be that social business will impact existing areas of responsibility and ongoing projects that have deadlines that internal and external customers may be counting on. Decisions and actions that require other strategic decisions to be rethought or undone can have the most chilling effect of all when it comes to driving social business transformation. Analysis paralysis is just one manifestation of this issue. Another is the inevitable power redistribution as fiefdoms and political boundaries are rethought and recast as social business transformation changes the way things work. This can range from how customer care operates and employee hiring takes place to how product innovation and development is realized in a social organization. For this issue, the answers can be tough but often boil down to letting existing projects finish and then reconcile with the social business strategy, while looking for easy opportunities to integrate them earlier. Often, however, the answer is to pause existing investments and move them under growing social business efforts before too much time and resources are spent on outmoded work.

Of course, there are other issues that organization have as well, but I believe this is a useful snapshot of the most common and significant ones that will have to be addressed as organizations plan for their future. I would be very interested in hearing in comments below from those that are encountering their own set of discussions and use this as a starting point to share and work through the fundamental issues the companies are encountering as they begin the strategic voyage to becoming social businesses.

These initiatives are often led by a small team, sometimes a single individual who is driven to help the company work a better way — a more connected, dynamic and socially calibrated way of interacting for business.

The business of transforming a worldwide organization is difficult.  If it were easy, it wouldn’t be as rewarding and meaningful.  It requires a large amount of patience, perseverance, and oftentimes, courage. We are asking a lot of our fellow corporate colleagues and executive leadership when we ask them to embrace working socially.  We are asking them to veer far from their comfort zone and risk more communication, more connectedness, and more transparency in the service of empowering people to do more with less.

In spite of this difficulty, repeatedly we have heard, “This is the most important initiative I’ve ever worked on in my professional life.” The prevailing operational mission at present is to succeed at catalyzing the “ideological reformation” at the root level of the organization that needs to take place before the real business value can be extracted, measured, and fine-tuned.

There’s something extremely inspiring about the people and companies who are leading the charge toward reinventing themselves to become social leaders within their organizations. As you read through these profiles, we hope you’ll come to appreciate that while all of these companies are still early in their process, they all are confident in the success of their long term goals.  Some are realizing early successes, while some are struggling. All are passionate believers that there is a powerful evolution at hand driving change in their organizations, an evolution towards Social Business.

You can download the first set of profiles on People in Progress here:

• Alcatel-Lucent
• Alstom
• Avery Dennison
• The MITRE Corp.
• Nokia
• Swiss Re

We will continue to track the progress of these adopters.

We’d love to hear your story in the comments, or better yet join the The 2.0 Adoption Council.

Join The 2.0 Adoption Council

If you are working to bring social transformation to your large organization, we invite you to join The 2.0 Adoption Council, an influential peer to peer knowledge sharing community made up of other large enterprise adopters who share your passion for opportunities and the difficulties and challenges associated with adopting Social Business inside large organizations. Membership is free provided you meet the eligibility criteria. More information is found on The 2.0 Adoption Council in the section on how to join.

We’d like to thank IBM and MIT’s Center for Digital Business for lending support and sponsorship to this series of cases and profiles. Special thanks to the @20adoption member companies who participated in the series: Alcatel-Lucent, Alstom, Avery Dennison, Eli Lilly, IBM, MetLife, The MITRE Corporation, Nokia, and Swiss Re along with other The 2.0 Adoption Council members providing anecdotal information.

IBM Social Collaboration Software

Market leaders are using social software to get closer to customers and to transform how work gets done, to accelerate innovation and more easily locate expertise. Organizations that establish a social business environment across their internal and external relationships are outpacing their competitors. IBM Collaboration Software empowers individuals within organizations to stay connected, current, and creative any where, any time, so great thinking doesn’t stay locked behind closed doors. IBM offers the broadest, innovative set of secure Social Software and Unified Communications services for creating Web communities, locating subject matter expertise, project collaboration, content and idea sharing. Quickly locate the expertise you need, no matter where it exists inside or outside of your organization to get the job done faster. Smarter Software for a Smarter Planet.

MIT Center for Digital Business

Founded in 1999, the MIT Center for Digital Business (MIT CDB) is the world’s largest center for research focused on the digital economy. MIT CDB has worked with more than 50 corporate sponsors, funded more than 60 faculty and performed more than 75 research projects. The center’s faculty and sponsors represent the leaders in Digital Business research, analysis and practice worldwide. Together with its partners, MIT’s Center for Digital Business is inventing the future of Digital Business.

This past weekend, while watching the Cowboys (alas, another loss) I started thinking about the striking similarities between Social Business and football. Would social business teams be more effective if we thought about them the way we think about football?

First and foremost, the strategic and intentional design of structure is critical to the success of each. Professional football organizations spend significant time and resources putting together a team of talented individuals that will be able to execute on thoughtfully devised plans. The team and their ability to work well together are paramount to success.

At the head of the team stands the coach, or CEO, who oversees all the moving pieces of the organization. Directly underneath him are the coordinators who, much like executives, make the calls and run their respective teams. Their support of an idea, a play, or an initiative are essential to the actual implementation of a new way of doing things. On the offensive side, the quarterback, leader of the offense, takes the mandate from his coordinator, conveys the message to his team on the field, and asks them to carryout their respective tasks. Prior to being given their marching orders, the team needs to know their role, understand their tasks, and be prepared to execute in a coordinated way.

The offense must do this while dealing with an opponent defense that refuses to accept their forward-moving progress. In order to keep their efforts moving in a positive direction, the offense must anticipate and react to any adjustments that the defense might make to thwart their efforts. By learning from the defense’s past M.O., the offense can identify the most aggressive defenders and create a response plan to mitigate their negative impact.

Unfortunately, the reality within a lot of companies is that the dedicated resources for an enterprise social team simply don’t exist. It is impossible for a quarterback to win a game without the rest of his team even if he was playing against a weak defense. Likewise, you can’t expect the leader of your enterprise 2.0 team to successfully implement an enterprise 2.0 program without help. So, as companies make decisions regarding social business initiatives, they should seriously consider dedicating several resources to help their enterprise 2.0 “quarterback.”

How are you helping your internal quarterback to win?

Photo source: en.wikipedia.com

As my colleague Kate Rush Sheehy pointed out recently, forming a company’s social business strategy and resources requires speed and scale — and for some organizations these two qualities don’t come naturally. Many employees fear the departmental silos they don’t understand. The complex processes that don’t always work. And the colleagues they don’t know — constantly concerned these people will object to their ideas, plans, or points of view. This sometimes irrational worry can frustrate employees, but inactivity typically persists within their organizations anyway.  Some companies refuse to let these concerns constrain them, and are trying to do things a little differently.

One example is a social business center of excellence (SBCE); an organizational structure that exposes each of these fears. The people you work with, how you communicate, and perhaps even your role are different. It’s exciting and jarring all at the same time, but slowly each member of this group comes to the same realization. The people you work with share your motivation for creating resources, educating the organization, and innovating to reach business goals.

But herein lies the problem: How do you shift from discussing the ideas you have to executing on them?

• Focus on specific  goals — and how and when you will attain them. Even the best ideas are left inactive without a realistic plan to achieve them. Typically SBCE involvement rests outside of an employee’s regular responsibilities. A clear roadmap marked with a relevant timeline, defined activities, and targeted accountability will decide how many tangible outcomes this group achieves.

• Resist gaining consensus on decisions. Agreement creates comfort no matter what decision you’re making. But this same process can dilute ideas and decrease how quickly the work gets done. For projects that require multiple rounds of input, assign a lead contributor whose job is to facilitate and incorporate group feedback — and communicate the final product back to the team. This way you can protect the group’s progress and ensure the openness initially created stays intact.

• Address member hesitancy early. While information flows within SBCE meetings, members’ contributions stem from the role they perform every day. This inability to see the bigger picture can sometimes cause uncertainty. Combat this feeling early by fully explaining the facts that support your perspective. Sharing provides clarity and gives members fodder to ask questions, ones they might not have felt comfortable asking otherwise.

What do you want to know about centers of excellence as they relate to social business?

Leave your questions and thoughts in the comments and we’ll incorporate them into our SXSWi 2011 panel on this very topic: Social Business Zen: Finding Your Company’s Social Center.