This week saw some shifts at the top of the rankings, as several of the previous week’s top 10 companies made way for newcomers like Wal-Mart and Hansen Beverages. Most notably, Facebook fell to No. 21 – dropping out of the top 3 for the first time in over a month.

Facebook

The reasons behind Facebook’s tumble in the rankings are fairly straight-forward. The company rode a string of product announcements over the last 2 months to earn a spot in the top 2 of the SBI. The reveal of Facebook Timeline at F8, the launch of the long-awaited Facebook iPad app, and improvements to Facebook Messenger gave the company plenty to talk about and an eager audience. After the last of the news-worthy events took place in mid-October, Facebook has had little to say, as evidenced by a lack of activity on their social outlets.

The conversation about Facebook diverged from the company’s own announcements, to talk of Asana, created by Facebook co-founder Dustin Moskowitz, and discussions of topics such as the threat to Facebook from hacker group Anonymous. The lack of content and conversation originating from Facebook, and the noise spurred by external media led to what will likely be a temporary drop out of the SBI top 20.

DirecTV

Moving in the opposite direction last week was DirecTV. After weeks of heated public fighting between DirecTV and News Corp., the two companies signed a deal hours before a November 1 deadline to maintain Fox programming for DirecTV subscribers. In the weeks leading up to the deadline, DirecTV had been vocal and informative about the situation, offering regular updates to their online communities.

As the deadline approached, DirecTV stepped up its outbound communication effort, offering more frequent status updates across their Facebook and Twitter accounts and openly answering questions from customers and other stakeholders. This proactive effort helped to stem the negative commentary from worried subscribers. Social activity for the week culminated with the well-received announcement that the two companies had reached a deal the evening of October 31st. This put the finishing touches on DirecTV’s 42 spot rally in the SBI rankings to end the week at No. 65.

From Facebook’s quick fall from the top, to DirecTV’s strong push up the rankings, digging deeper into the Social Business Index can offer some insightful stories and learnings. Follow us each week as we take a closer look at the factors that influenced the companies making moves in the rankings.

Analyzing signals from over one hundred million social sources globally, the Social Business Index measures the effectiveness of strategies and tactics organizations employ to engage the market through social channels. To learn more about the Social Business Index, visit www.SocialBusinessIndex.com and follow @DGSBI on Twitter.

Even if I was speaking mostly about design, I added some elements of business, strategy and change management as well, because I thought they were relevant.

I admit, this is a quite dense presentation, I would have probably taken out some topics in hindsight at least for UX Conference, trying to be more focused. However, on the plus side, from the feedback I got it was really successful and lots of people asked more. I probably need to do more workshop and less speeches in the future.

One method, two tools, three business tips. This is how I organized the presentation, in order to be not too unbalanced toward design, even if that was the focus, but also not being too high for more hands-on people.

One method

The most important part of Social Experience Design is that it can’t be done without a shift from traditional, deterministic thinking to the different Theory of Complexity thinking. This shift is critical because it’s the only way to deal with complex systems, such as people and social dynamics.

That’s why I talked again of the Dot Loop, because it contains all the factors that needs to be built-in in any design – well, in any company – to be really effective. The Dot Loop is an effective abstraction to deal with complex systems without a banalizing approach to them. Every successful company work that way – even, of course, probably they don’t call it Dot Loop, even if I’m starting hearing about it more often.

Two tools

The first tool is the Motivational Diamond, a very simple comparative visualizations that helps anyone working with social dynamics to focus on the four Relational Motivations (Competition, Excellence, Curiosity, Affection) and compare different services or parts of the service.

The second tool is the Social Usability and its Checklist, prepared to simplify the approach to it and provides an easy mnemonic. Social Usability works on four factors, that are Relations (the other), Identity (you), Communication (the channel between you and the other) and Emergence of Groups (all the emergent dynamics, again a complex system behavior).

Three business tips

These are very simple, but are also a very important part of a real change management process:

1. Be in-the-flow. This is critical in any good design tied to any change management process, but also for startups that are launching a new product: you have to understand that the day of your user is already
2. Be a double-pyramid business. This is a very important aspect, and might be an article by itself. Luckily it is: I wrote about the double-pyramid some time ago. This means that social businesses needs to engage in a different structure and find a balance between hierarchy and socialization, because the solution is in that balance and not in building a full hierarchic company or a full flat company.
3. Be a double double-pyramid business. Plus, you can’t be really a social business externally if you aren’t internally. You might have a unit that does customer service or social media operations, but if the whole company isn’t aligned, the users will get that, and the rewards are going to be lower (not zero, but lower).

The workshop

The extra part I prepared for Digital Accademia’s workshop regarded a couple of exercises to allow people focus a little more on how to use actively Relational Motivations and Social Usability.

I prepared two exercises to stimulate thinking and discussions:

• In pairs, draw a Motivational Diamond
  This is very interesting because it helps clarifying the four Relational Motivations by discussing it with a peer, and then the public discussions allow to clarify even more. As often happens in workshop, I learned something also this time: I have to clarify better that we are talking about traits that trigger relational aspects. For example, when we talk about “excellence” we aren’t talking about an excellent content, but about how we are promoting people’s excellence… and narcissism.
• In isolation, pick an item from the Social Usability Checklist and design an interface for it. Then, merge it with your partner to create a new UI with the two you prepared.
  I liked this one a lot because it shows how very simple solutions and interface can trigger more complex behaviours. One of the participants was worried because her solutions looked “too simple” but actually… that was the value of it!

A small joke

At UX Conference I was the last one of the day, so I had to think of something. That’s why I started with a small design practical joke… but I won’t tell what it was, and I removed it also from the presentation above. You’ll see the next time, maybe.

The first pyramid is the business as it’s usually intended. It is builttop-down, where decisions and strategies are defined at the top level and propagated downward toward a single carefully crafted communication channel, which might even span or multiple media, but still fundamentally ‘broadcast’ in nature.

This kind of approach usually takes its driving force from both the company values and its market strategy, building on them and trying to find the correct way to communicate to an audience.

The second pyramid is the business as perceived and lived by itscustomers, by the people using its services, and it is by naturebottom-up. It is also bigger, of course, and made up by a complex network of discussions, relationships and interactions with the brand itself. This second pyramid is going to exist regardless of any action in this direction from the business itself, because it’s a natural evolution of the interactions between people.

This very simple metaphor means two very important things:

1. The ownership of the social element in a business is a coordination between the top pyramid and the bottom pyramid – one cannot exist without the other. Trying to take complete ownership of that often translates into an alienated audience, while at the same time complete carelessness can lead to blunt surprises when the complex social interactions emerge in a more unified response.
2. The balancing of the top pyramid, the business itself, is simpler if you allow it to “merge” it with the bottom pyramid by engaging the workforce. This means for the business to engage more with its users, allowing the internal people to interact with the external people, as human beings and not behind the company-controlled wall. This process creates an ecosystem with permeable boundaries that translates directly to more permeability, stability and feedback to improve the business itself.

There are various strategies to surface this double pyramid and allow the two pyramids to begin to merge. While the strategy itself may vary a lot between businesses, there are two core elements:

1. The person the business wants to talk and interact with needs to be understood in terms of values and motivations. Failure to understand them leads to a negative ROI, while a correct understanding amplifies the good signals and creates value for both the person and the business.
2. The ecosystem is a complex adaptive system. Complex systems can’t be built, but can be evolved through good social experience design that is able to pick the correct signals and amplify them in the direction that is better for both the person and the company.

An excellent example of this is the Vodafone Lab community, created in July 2008, as an open space to test and get feedback from users and developers on new and innovative solutions coming out of Vodafone’s tech team.

Developers are a core component in these kinds of community, and they are usually driven by a slightly different set of values. They are often highly curious individuals, trying to find optimal solutions for a problem, and they aspire to be recognised for their skills. Money and prizes here are not major motivators, but challenges and responses are very valuable.

Vodafone started creating a very small service, engaging a few people and then constantly evolved its wiki, forum and blog services in order to adapt to the needs that the users were expressing, supporting them with a constant and transparent feedback. Over the years, more and more features were added, but never more than the users required, and today the site supports them with technology news and informative videos as well.

At the beginning of 2011, the site reached more than 200,000 registered users, with a really high level satisfaction, which comes across clearly in the forums and answers, with people apparently happy to help solve problems and provide hints, creating value for both themselves and Vodafone.

This is a good example of a community that evolved its double pyramid, understanding people and designing ‘nudges’ that helped the community to take shape, and integrated the top-down pyramid with the bottom-up one in a seamless social layer.

There’s a certain aura that surrounds an in-person luxury good shopping experience, one that has been carefully designed to exude exclusivity. Historically, luxury brands have struggled to offer this same exclusivity digitally. They’ve questioned how to maintain their allure once they open themselves up to the masses. It’s a valid question, but it’s one that they’ve answered by ignoring the ever-evolving digital landscape.

Last month, L2, a “think tank for digital innovation,” released their second annual Digital IQ Index. The report scores luxury brands on a number of qualitative and quantitative measures across four categories: site, digital marketing, social media and mobile. Here’s what’s great about this report: someone has taken the first stab at measuring luxury brands’ digital presences and consequently, telling them what they are doing well and what they could be doing better.

What’s not great: according to this report, a brand’s Digital IQ is largely dependent on the success or failure of its website and digital marketing efforts. Site and digital marketing make up 70% of a brand’s score, compared to social media and mobile, which account for only a combined 30%. Striking the right balance between driving sales and building relationships is an internal struggle we see again and again. In the end, a business’ goal is to sell product, but for the luxury industry, getting the brand experience right is just as important. That’s where channels like social and mobile step in.

Luxury brands are not only in the business of selling products, they’re in the business of selling a lifestyle. Social and mobile provide a constant communication touchpoint for consumers, and when used correctly, are instrumental in building and sustaining relationships. These relationships are critical if a brand wishes to compete in the new customer-centric landscape.

I understand why the L2 Digital IQ Index is skewed so heavily towards site and digital marketing: luxury brands are still figuring out how to effectively play in these channels, but as traditional digital becomes second nature to them, social and mobile should take a more central role in brand communications. These channels can provide the backdrop for meaningful conversations and value exchanges.

A couple of luxury brands have already recognized success by integrating social and mobile into their overarching digital strategies, without sacrificing their cache:

• Gilt Group’s mobile app enables easy shopping and purchasing on the go, which is critical to their flash sale model. The app is a seamless, streamlined extension of their eCommerce site. In April, Gilt reported that 7% of its weekend sales were made via the iPhone app.
• Affectionately dubbed “retail theatre,” Burberry live-streamed their runway show from their flagship stores. VIPs were invited to view the show and then virtually browse and order from the collection via a bespoke iPad app. It was a smart way to bridge the gap between online and offline shopping. Although Burberry declined to reveal sales data, the site experienced “huge spikes” in traffic.

So, where’s it all headed? Luxury consumers are online in all channels, and luxury brands are beginning to appreciate the benefits of owning their consumers’ digital experience. (Marc Jacobs recently launched an eCommerce site!) Building relationships through meaningful value exchanges will be key. I’m interested to see how the scoring is weighted next year; I’m willing to bet that luxury brands that are serious about their digital presences will focus on making strides in social and mobile. These are the channels where loyalties will be won and lost.

For the rest of us who aren’t there yet, major change is still evident: The Web itself has become pervasively social as we’ve changed both the behavior and expectations of our private lives around so many of the ways that we relate to one another. This includes how much (more) we share information now, actively try to build social capital and our personal brands, as well as how we value others. But make no mistake, we are each still learning much about our newfound ability to directly influence the entire world from our tiny corner of it. The incredible leverage that each of us now possesses in the form of social tools is one of the most potent forces in the modern world.

If the pen was mightier than the sword, social computing is perhaps on an entirely new plane of existence. It has been used in everything from the real-time coordination of escape from natural disaster to permanently archiving genocide so that the perpetrators are held accountable. For businesses, it has revolutionized everything from product design and customer service, to operations.

By a good many measures, the writing is now clearly on the wall about what is happening today: With the data showing, for example, that the reign of e-mail is already over in the consumer world, can (and should) businesses be far behind? In fact, this year we are seeing the broadest changes yet in the way that social tools are being applied to business problems. While social media marketing and customer communities continue to be very hot topics in enterprise social computing, the discussion (and real-world practice) has evolved well beyond these initial activities that were common early adoption focus areas. Organizations are beginning to more deeply understand the ramifications of a highly social enterprise environment and they are beginning to see evidence that their efforts are actually fragmented elements of a bigger picture.

Social Computing + Business = Value Creation

For its part, the business world has begun to wake up to the transformation that is now happening all around it. Decision makers are now carefully weighing the potential benefits of transformation to new modes of work, with the costs and perceived risks. Many of the early social computing efforts that took place in many organizations have gone on to either 1) encountering some of the travails and benefits of genuine change or 2) learning enormously important lessons as they evolve and mature, or both. More importantly, there is now a sober realization that these early experiments and initiatives must turn into serious endeavors that produce results that scale and produce abundant business value. This is not not due to a sense of justifying the work already done, but that the full ramifications of social computing has increasingly serious competitive ramifications.

But the job of aligning an organization with social computing is not an easy one, if it ever was.

Consider the following scenario: You are tasked with sorting out, reconciling, and making sense of your various social computing efforts. You will typically have several online communities, a massive Sharepoint implementation, both a Facebook and Twitter engagement effort, an internal social network, several crowdsourcing projects, a microblogging platform, and multiple social media marketing efforts. All of them engage the same three audiences: customers, partners, and/or workers. But all of them have different owners, strategies, tools, teams, policies, standards, goals, and priorities. Most of them overlap in some way. The solution probably isn’t to combine them. (Not only do legacy efforts add challenge, but the most transformative phase of social computing transformation often isn’t represented by them.)

A better solution is to understand and manage them strategically using a consistent and cohesive approach. And one that doesn’t treat each one in isolation, for they are mostly aspects of the same thing: The intentional creation of a dynamic business culture that directly empowers all of its constituents to better create and exchange value.

I would put forth that it is having both consistency and a cohesive approach towards this goal that organizations are beginning to realize they are lacking. Without it, there is considerable likelihood that you’ll leave much of the potential value untapped and lose the opportunity for market leadership in your industry. As we are starting to see, the big picture here is much more than (just) team collaboration or incremental improvements to the way we market our products or provide customer service. There are order-of-magnitude operational business improvements to be had that will change the very way we run our businesses in the process.

As I explored in detail recently, this bigger picture is increasingly being called Social Business, and consists of the various threads of effort that business have gone through over the last half-decade, such as online communities, Web 2.0, Social Media, crowdsourcing, Enterprise 2.0, and Social CRM.

The Five Value Propositions for Social Business

To address the eponymous title of this post however, let’s ask what, specifically is the value that Social Business provides as a meaningful and enterprise-class framework for social computing:

1. Identification of the fundamental archetypes. What are the essential aspects one must cultivate for a successful Social Business effort, whatever the audience, mode of interaction, tools, etc? In our view, there are four classic archetypes. These are:
   • Dynamic Signal, which represents real-time social interactions and analysis like posts, Tweets, activity streams, feeds, aggregators, etc,
   • Ecosystem, all the functioning elements of a functioning Social Business environment
   • Metafilter, the ability to connect the right information in the ecosystem with the right audience, when it’s needed, and;
   • Hivemind, the collective awareness and intelligence of a Social Business community both in its totality (all participants, everywhere) and all constituent subgroups.
2. Consistency and cohesion across Social Business strategy and implementation(s). While Social Business will always manifest itself as many individual efforts in an organization, now there is a way to attain intellectual and business mastery of the forces and their orchestration at a management level. Social CRM and online communities facing the public are indeed different from internal Enterprise 2.0 collaboration efforts, but not only do the archetypes begin to reveal their core commonality, they allow them to be treated the same way when it comes to building shared value, extracting knowledge, and operationalizing the results as part of the business. They can often be a primary revenue generator in their own right.
3. Cost savings and efficiencies. While many organizations are already understanding the business value of factoring out commonalities and centralizing them, it’s been hard to do up until now until the larger picture was well understood. This is now starting to be possible in a significant way with Social Business, from social media policy to community management.
4. Repeatability and lower barriers to adoption. Different parts of the organization don’t have to completely reinvent the wheel with their Social Business transformation, but can build upon much of the strategy and implementation work that has come before it.
5. High success rates and lower risk profile Because much of the work around issues involving legal, HR, branding, governance, and other horizontal business concerns are addressed broadly and up front, Social Business efforts will have better chance of a high value, high scale outcome with less risk.

I’ll be exploring Social Business in-depth this year here and elsewhere as the concept continues to mature. Please contribute your thoughts below along with any concerns about yet another term for what we previously termed Web 2.0, social media, etc. Now is the time to discuss how all of this is becoming a standard way of doing business in our organizations. You can also read our white paper on Social Business Design.