However, in reality these relatively minor tweaks are just the proverbial paving of the cowpath through the addition of limited social features such as collaborative sharing, persistent chat, and perhaps some deeper integration with activity streams. Unfortunately, these actions easily fail the imagination test, which is essentially this:

If you could completely rethink your work in a social business world, what would it look like? How would it be better?

To me, this is the fundamental question that organizations must be asking themselves today. Yet, I also think they should do this while going about the aforementioned incremental improvements such as adding basic social layers to their IT landscape. One reason is that this will happen inevitably as more and more enterprise applications and platforms add social computing features and companies proceed along that vendor’s upgrade path. So, while social impinging around the edges of enterprise applications is worth dealing with from a strategic perspective, it’s going to happen largely whether organizations plan for it or not. As such, it’s not likely to make a huge competitive or qualitative difference in the way most businesses perform. That is, unless they start the process of deliberate and strategic social business transformation, such as what IBM and a few other large organizations have begun.

This process of social business transformation will require both advances in social technology — such as the innovations below — as well as changes to the way we do business. Fortunately, one of the great attributes of the larger social business community is that it generally focuses as much on the business and cultural changes as it does the enabling technology. Some of the best discussions I’ve seen on the people aspect of the transition to the social enterprise are from folks like Luis Suarez, Sameer Patel, Stowe Boyd, and JP Rangaswami, who are just part of a much larger conversation about how we remake our organizations for the 21st century.

So, while there are certainly some companies not tracking the sea changes in the world right now in terms of the way we are globally transforming the way we live and work, we’re also continuing to see fascinating next-generation innovations in social business. Let’s take a look at some of them.

Rethinking Workflow, Manufacturing, and Money in Social Business Terms

In just the last week I’ve encountered several fascinating offshoots of the mainstream social business thread. Social business frequently focuses either on social engagement externally or internally on collaboration and social interaction between workers. This is a limiting view, but it’s also where most of the activity and uptake is today. However, as more and more business leaders and entrepreneurs become digital natives, I’ve theorized that the power laws and principles of social business will encourage them to rethink their traditional modes of business. At the same time, Web startups and large software vendors often put themselves out 2-3 years ahead of the market by predicting where their customers will arrive once current trends reach a mainstream tipping point. Then they adjust their product roadmaps to align with this schedule. The combination of these two trends is starting to give us some interesting new possibilities.

I say possibilities, because unlike social collaboration or Social CRM, the outlook and growth potential for these innovation is still unknown. However, it does give us a sense of what’s coming next in social business.

Social BPM

Last week while I was speaking at Sibos, I had the pleasure of speaking on the phone with Sandra Moran from OpenText Metastorm, a leading workflow/BPM product that recently announced the addition of social computing features to its capabilities. Metastorm now enables workers to engage in real collaborative process design, takes advantage of social profiles to locate needed expertise to plug workers into processes in essentially real-time, and has matching dashboards to provide BPM and social analytics. OpenText had this to say about the new social capabilities, which Sandra told me is now available to over a thousand major customers as a standard part of the Metastorm suite:

These new product enhancements help organizations successfully implement business process improvement initiatives by empowering users to become more engaged and productive. Metastorm’s social collaboration tools provide businesses with a highly personalized workspace and unparalleled access to top contributors, enabling them to drive innovation and increase collaboration and improve efficiency among employees. These tools help employees find other people within their organization with specific skill sets required to help them complete their work. Companies can also route work to the most appropriate employee based on individual skills and workload – ensuring the most cost-effective strategy for work allocation.

I think this is significant for a few reasons. For one, I find that there’s often not enough focus in social tools in collapsing the walls between business processes and social conversations. They often run in parallel, side-by-side, even when they are being used simultaneously for the same piece of work. Putting social in the flow of work in highly process-intensive environments should lead to some interesting outcomes. I pressed Sandra on if there was leverage in Metastorm of existing social graphs and networks, and she indicated there was. What remains to be seen is how easy it will be to integrate the resulting BPM environment with an enterprise’s other social business efforts.

I’ll be exploring the social features of Metastorm in more detail soon on ZDNet, but I think the combination of social computing and BPM has genuine potential. This isn’t the first time social and workflow have been connected but I think it’ll be impactful given their large customer base and how central and useful the features are to the product. I’m hoping to revisit how their customers are faring in a year or so to see what the result has been. I currently believe social BPM technology, combined with the right business and cultural changes, will help companies attain a higher than average level of social business transformation.

Social On The Shop Floor

Earlier this month Derek Singleton over at the Software Advice blog wrote about social manufacturing, what you could call a new subfield of social business that’s focused on improving how companies turn raw materials into finished goods. Discussing Kenandy’s new announcement for improving the efficiency and productivity of supply chain manufacturing, Derek wrote:

Creating accessible and actionable inter-shop floor communication can only work if an entire supply chain and other manufacturers are members of, and logged into, Chatter. In short, it requires organizational change for effective use. While manufacturers using Kenandy wait for that changeover, Chatter can be a useful tool for project management.

For instance, the engineer of an aerospace job shop could notify shop labor that they’ve just finished designing the wing component of an aircraft. The job shop could then begin building the wing while the engineer finishes designing the other components they’ve been contracted to build. This has great implications for just-in-time (JIT) manufacturing – as it frees up labor to work on more value-added activities rather than waiting for the completion of another phase of the production.

In my workshops at Enterprise 2.0 Conference in years past, I’ve had manufacturers and assembly line managers come up to me to say that social tools have been moving into their area of the business, but it’s mostly been horizontal tools or very focused niche solutions. We’re now seeing broader and more strategic use of social tools with the arrival of solutions such as the Kenandy social manufacturing platform, which has garnered attention in the New York Times. I’ll be exploring this further in coming months to see whether social manufacturing leads to tactical or substantive social business transformation.

The Rise of Social Currency

Finally, at Sibos itself last week, I participated in Innotribe, a social media event inside the main financial services conference that explored various aspects of social media in financial services. For a more in-depth look, I wrote up a detailed exploration of the event on ZDNet on Friday. One of the more interesting and visionary topics at the conference was the subject of social currency, the transformation of the very concept of money in social world where reputation, trust, and openness are prized much more than information control, the latter which is how the financial industry is mostly structured to leverage for gain today.

As an experiment, a social currency called Reputone was actually in use at Innotribe, see picture right. In fact, peer-to-peer monetary systems such as Bitcoin were a hot topic at Innotribe and for good reason, it represents a major shift of control in how banking, money transfer, and investment will work in the future. If Paypal was the first generation of digital money, then Bitcoin is the Web 2.0 version. From their Web site:

Bitcoin is a new digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network.

Mark Shead recently provided a good overview to Bitcoin concepts and is worth taking a look at. In the final analysis, Bitcoin falls a bit short of being a true social currency, in that it doesn’t have an explicit capital mechanism based on social graphs or other means that leverages the intrinsic worth of social status and reputation. That doesn’t mean it should be watched closely as money and social reputation appear ready to get deeply intertwined and Bitcoin is at the leading edge of digital currency at the moment. This is a subject that warrants a lot more exploration as companies such as Facebook look at making their global platforms far more relevant from an economic perspective. For additional insight, David Armano posted some useful insights on social currency recently on his Harvard Business blog.

I’ll be exploring all of these concepts in more detail in coming months as social business continues to evolve. I would love your questions and feedback on this emerging social business topics below.

Note: This blog entry was cross-posted from On Web Strategy.

To further highlight that the key to successful social business transformation requires careful balance (and matching strategy), a great post this week by Cap Gemini’s CTO Andy Mulholland, underscored the critical points in this conversation for CIOs:

“Most organizations are looking at a very dangerous situation where even if they turn a blind eye to edge-based activities by business managers around opportunities that don’t need to be integrated to, or delivered from, core enterprise IT there are still two obvious big issues that will inevitably end up damaging the enterprise.

The first is a loss of leverage from the overall strength of the enterprise in terms of experience and knowledge. A successful move in one area won’t be recognized and rapidly implemented in other areas to multiply the benefits, or worse unsuccessful ideas will get repeated adding to the cost and time wasted. That’s where the need to really address the combination of social networking, collaboration, knowledge management and business information is required, and yes, it is a radical task, and yes, currently it is a battle between centralized traditional management and new younger business managers, but it’s key!”

- The CIO is trapped between the CEO wanting innovation and the CFO needing compliance

The discussions around this issue, specifically how to move edge innovation in areas like social business into the core of the enterprise, is a concern that’s been discussed for a couple of years now. While approaches such as emergent enterprise architecture have been proposed, the reality is that major moves by the business must be driven, supported, and resourced by the organization’s leaders. The question is whether the way forward past the issues Andy cites above is known, particularly since social business transformation will ultimately be making everything social that can be social. This is pushing organizations towards new types of organization-level strategies such as JP Rangaswami’s “design for the loss of control” mantra.

Given the tension between these two, where should CIOs take their organization? That’s the difficult question, given that CIOs can only have so many top priorities. Yet the move to social business is increasingly among them as organizations attempt to improve global collaboration, access enterprise knowledge faster and better, and engage with customers and the marketplace far more effectively than in the past.

So, I’ve culled from my conversations with business and IT leaders in 2011 this CIO shortlist of social business strategy imperatives. Obviously the transition to social business applies to all IT and business leaders, but 2011 has certainly been the year where this conversation has moved into the corner office.

The Social Business Strategy CIO Shortlist

1. Organize for social business. Defining the roles, operating models, resources, and solution portfolio will be key to reign in the increasingly competing, diverse, and local social media activities within and across organization’s today. Centralizing coordination and support into a social business unit will also address head-on the issue that Andy brought up of innovating on the edge and moving the successes to the rest of the organization. I’ve previously explored the issues in getting an organization ready, decreasing the madness, and gaining economies of scale while still enabling the grassroots action that makes social more effective and productive than older point-to-point approaches. As I explored this week, most important will be gaining an understanding of the opportunities that social business models offer while building competencies in them. Organizing will need to be an enterprise-wide activity and an internal social community is a great way to draw the entire organization into the planning.
2. Cultivate social business as a strategic IT capability. The tools and technologies of social business are important prerequisites for success. While cultural, organizational, and behavioral change will be harder, it can’t be done without a supporting and enabling infrastructure. This means knitting together and keeping updated the organization’s social business stack, which will increasingly be the loosely coupled backbone through which communication, collaboration, workflow, and business intelligence will flow as worker and customer activity streams are connected together. The CIO’s job? Ensuring that a coherent social business stack is developed and maintained instead of a hodgepodge of local solutions that won’t fit together at an enterprise-level. It also sometimes means empowering local solutions when they work better, as long as they can find a way to reconcile with the rest of the organization, ala CoIT. Skip ahead when possible to the leading edge, which include social app stores and social business intelligence. Finally, lest we forget Andy’s point, it’s also about making the social business capability fully compliant as well.
3. Transition to new systems of engagement. Across the business, in marketing, sales, product development, customer care, and operations, there is a need to improve communication and collaboration with internal and external stakeholders. Social systems of engagement are increasingly augmenting systems of record, often by wrapping a more social intranet around existing IT service delivery points. Because this is all about business value, systems of engagement should be connected directly to the organization’s emerging social business models including Social CRM, social media marketing, etc. Along the way, don’t lose sight of the fact that systems of engagement aren’t just the social applications, just like IT systems aren’t an entire business solution; it’s all about the full context including processes, support, change management, and especially the social fabric of the organization, the people.
4. Identify and focus on the high impact aspects of social business. While ROI accumulates continuously in social systems, with every interaction in a social business ecosystem leaving behind value in open, reusable manner, some areas have more value than others. In particular, measurement, analytics, and business intelligence provides some of the most strategic returns at the enterprise level, provided that it’s applied and there’s a closed feedback loop (managers actually look at the dashboards, reports, trends, and insights and take action based on what they see). One of the things I hear the most from managers and executives is that they’d like to spot trends in their business as soon as they happen, while there’s time to get out ahead of the situation. This is possible in the open information and shared knowledge inherent in social business systems of engagement, particularly when they’re connected to systems of record (i.e. the sales system is connected to the enterprise social network, the ambient buzz from which can identify upcoming deals, issues with existing clients, etc.)
5. “Ungovern” social business. At the leading edge of management theory is the concept of much more loosely integrated work groups that are empowered to work much more autonomously than before. These are Dave Gray’s work pods, based on results from market leaders such as Xerox, Procter & Gamble, AT&T, and 3M, or Ruslan Kogan and The Rise of Unorganizations (link thanks to Andy Mulholland). In this same way, governance itself is becoming a distributed and more open function as well. As business delivery channels and IT service delivery models seemingly proliferate without end, it requires a much more decentralized model to keep in line with concerns and objectives at an enterprise level. In this content, successful governance of social business will look more like work pods charged with the task and less like central committees that slow down the works.

Of course there’s lots more that could be added to this list, but keeping it short and sweet is essential to have the focus on what’s most important. For now, the CIOs I speak with are mostly not looking this comprehensively at social business. No, unfortunately, legacy baggage tends to demand most of their attention and it makes IT leadership largely focused on the past, rather than the future. But as I pointed out in the series, this is a time ripe with opportunity for IT to be a business driver like never before in the history of the industry. In the end, I would now make the modest proposal that the CIOs that can find a way to invest in their future and consequently social business strategy, rolling digital strategy into it, will likely be significantly better off than the other way around. I invite your comments and observations in comments below for discussion.

For additional background, please read Part 1, Part 2, and Part 3 of the Social Business and Next-Generation CIO Series.

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.

Some refer to this position as a Chief Social Media Officer.  I don’t think the social business evangelist necessarily needs a specific title, but I do believe the person to shepherd social business possesses five characteristics.

• Passion for the business
• Appreciation for the organization’s cultural heritage
• Limitless determination and stamina
• Ability to influence
• Skills to maneuver the political landscape

These five characteristics are in addition to excellent interpersonal skills and a passion for social media.

Passion for the business

Passion for social media isn’t enough.  The evangelist has to be passionate about the business and people associated with it.  People who are passionate about the business are deeply committed to it and driven by intrinsic motivation rather than extrinsic rewards according to John Hagel.

Appreciation for the organization’s cultural heritage

Culture makes or breaks social business.  For many large companies, social business requires a cultural shift from traditional structures (command and control, information hoarding) to shared responsibilities and transparent processes.  This shift does not happen overnight because it requires a change in behavior. This also requires new types of motivations.  An evangelist needs to understand and empathize with colleagues who are apt to resist change in order to know how to motivate them.  If colleagues feel the evangelist has blue-sky hopes that are unrealistic for the organization, they will lose faith that the evangelist can impact real change and resume old ways of working.

Limitless determination and stamina

According to Jaime Punishill, Director of Strategic Planning and New Channel Development at Citibank, the time it takes to evangelize social initiatives within an organization should not be underestimated.  During our Social Business Summit, Jaime said he spends 25% of his time giving the same exact speech about why and how Citibank should operate as a social business.  Jaime illustrates the need for an evangelist to keep pushing the vision and maintain momentum through ongoing education, especially when social initiatives lack desired results and disillusionment overcomes initial excitement.

Ability to influence

Evangelists need a vision that gains buy-in and support from the top (C-suite) as well as the bottom (entry-level).  At the end of the day, the evangelist must have the political capital to influence the right people within an organization to make change happen.  This can be as simple as getting as many people as possible within the organization to participate in the socialization process.  When people participate in the process, they feel more invested in the outcome, which increases the likelihood of that outcome occurring.

Skills to maneuver the political landscape

Many businesses are consumed by debates over who owns what piece of the social strategy, especially during a time when resources are scarce.  The evangelist should be able to rise above and maneuver corporate politics without getting tangled by them.  This means the evangelist is best positioned when he or she can operate independently of a specific department or group.  Obviously, this isn’t possible with an evangelist who emerges (versus hired).  To be effective, the evangelist must be aware of competing agendas and demands and find a compromise that will maximize benefits for the whole.

Does your business have a social business evangelist? Are there additional characteristics you would add to this list?