Originally posted on Britopian.

Social Business isn’t a theory, buzz word or the “Next Big Thing”. It’s simply a natural business evolution. It’s why companies like Accenture, Deloitte, KPMG and others have been in business and profitable for several decades, and in some cases, over 100 years. They help companies change behavior, improve processes and expand into new markets because the dynamic nature of business is consistently changing. And, many of the traditional management consulting firms are now expanding their service offerings to include “social” (fill in the blank) because organizations are now faced with new & improved challenges.

The sole focus of social business, social enterprise, enterprise 2.0 or whatever it’s going to be called tomorrow isn’t just about making business more social because it’s the “thing to do” or to collaborate for the sake of collaboration. Sameer Patel’s latest post sums it up quite well (referencing Professor McAfee) … “organizations are looking to optimize their 9-5 in the face of market chaos, globalization, and seriously inefficient demand and supply chains, and yes, the changing dynamic of the prospect and customer, thanks to the social web.” I would also add that many organizations are looking to bring order to the internal chaos (and in some cases complete anarchy) that social media has inflicted on business as well.

Sometimes people in this space, me included, spend too much time trying to define social business. Heck, some are still arguing about the definition of social media. We often forget that business leaders are looking for solutions and a definition isn’t one of them. At the end of the day, they want to understand the business value that social business planning will bring to their organization.

The sole focus of social business (or socializing a business and its operations) is value creation. And, value can mean just about anything depending on the maturity of an organization:

  • Increase in revenue
  • Decreasing calls in the call center
  • Increase in employee morale
  • Employee retention and hiring top talent
  • Cost savings by improving internal business processes
  • Product (and process) innovation
  • Solving “real” business problems

To my demise of being ridiculed by my colleagues who are “anti marketing”, when I think of social business, I have to consider the brand and the customer as well. All three of these elements … 1) the operational side of business 2) the way it communicates and 3) with whom they are communicating with have to work together to co-create value. Consider this model:

The model looks complicated but it’s quite easy to understand. Sitting at the top is the social customer and they provide value to the brand a variety of different ways. Obviously, sales equals value which in turn equal revenue and market share for the organization. They are also indirectly selling products though customer advocacy (i.e. aiding and influencing their circle of influence down the purchase funnel through organic conversations) – definitely value creation. And lastly, customers are either providing a brand with direct feedback about its products and services or publicly telling others via the social web.

The social customer’s value creation to the business is certainly dependent on if the brand is actually listening and engaging with them.

The social brand provides value to the social customer simply through two way dialogue. Many customers don’t need incentives, they just want to know that the brand is listening. And even then, some customers just have a natural affinity towards the brand regardless if the brand is engaging with them or not. Also, marketing programs like contests, give-aways and product discounts are a huge driver in value creation. Lastly, providing relevant content to customers like solving customer support problems delivers value, long term business value.

The social business creates value to the social customer and also to its external counterpart, the social brand. A fully collaborative social business will enable a brand to scale through governance, process creation and technology enablement. In other words, a social brand and a social business need to be in complete alignment to see true business results and also to close the loop of the value creation model.

If the processes and relationships are working effectively internally, the social business will undoubtedly provide value to the social customer through product (or process) innovation that happens as a direct result of the social brand listening and engaging directly with the social customer.

Some would argue that there is no such thing as a social business, like my good buddy Jacob Morgan; and others feel like certain elements are failing. It reminds me of an excellent post written by Laurie Buczek who said that the biggest “failure of social business is a lack of integration of social tools into the collaborative workflow.” Here is an excerpt:

I believe it will be rare that culture change will be one of the first things accomplished or changed in a short period of time. Culture will change as a result of the pervasive use of social tools. Lack of cultural change is not social business’s biggest failure. The biggest failure is the lack of workflow integration to drive culture change.

I believe that it’s one of those “chicken & egg” type dilemmas. Is it the process and technology that triggers change or does culture change spark technology usage and collaboration? Either way, it’s a challenge that companies need to address. Luis Suarez, from IBM doesn’t use email to communicate internally.  Was this a behavior adopted from others in the organization? Did his manager mandate this or was it his own decision? Or, is there a collaboration system that IBM uses internally that works better than email? Perhaps these are all somewhat true.

I think it’s too early to say that social business or whatever we decide to call it is failing. Of course, business has been trying to tear down silos, improve processes, invest and deploy faster, more efficient technology systems for years now but we are in different times. I won’t get into it too much because we have all beaten this topic to death, but yes … social media has changed the game.

There are certain obstacles in business that prevent it from reaching the “Tipping Point” which Malcolm Gladwell so eloquently points out. Most of the examples in his book are related to external factors of change but the lessons can easily be adopted internally. With social business, that obstacle is behavior change. Let me clarify.

Outside of the enterprise firewall, everything today is changing at the speed of light.

  • There is absolutely NO BARRIER of entry to content creation. It takes less than 5 minutes to create a Tumblr blog and start posting photos directly from a smart phone. It takes even less time to open a Twitter account and criticize a company for bad service.
  • Who watches the news anymore? Breaking news now happens on Twitter, Google+ and whatever is next …
  • Tablets, netbooks and smart phones make media consumption easy, instant; and it’s affordable too.
  • The social customer cannot be ignored anymore because their influence is growing. The 2011 Cone Online Influence Study reported that 89 percent of consumers say they find online channels trustworthy sources for product and service reviews; and, four-out-of-five consumers have changed their minds about a recommended purchase based solely on negative information they found online. Cone reported that positive information has a similar effect on decision making, with 87 percent of consumers agreeing a favorable review has confirmed their decision to purchase. But, negative information is gaining traction and is now just as powerful in tipping the scales against a recommended purchase. Point is, the social customer is impacting the traditional sales funnel, sometimes in a good way and often in a bad way.

With all these changes happening externally, very little is changing internally. Organizations are remaining stagnant, slow and stuck in the “this is how we’ve always done it” mentality.

Image credit: David Armano

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