If Social Business Is the Answer, What is the Question?

This article was originally published in 2 parts at CMSWire.

What are the fundamentals of Social Business? Tough question.  Maybe even the wrong question. Maybe the question is “What is different now, and why does it matter?” In fact, I’m still trying to figure out the question, (straining not to use the “42” analogy) and would be most interested in your opinion here. So, while I’m still not sure what the ultimate question is, here are 7 themes that are critically important to understand in order to understand. Interestingly, I’ve seen startling disagreement as to which are the most profound or mundane. [I will be pursing several of these over the next year. If you’re interested in joining me in exploring, researching or writing more on these, let me know.]

The first three themes I cover here refer to the mechanics and driving forces behind social. The next four (published in part two) speak to their implications for business.

1.    Humans, institutions and revolutions.

This is the foundation of the “social business” concept and everything else derives from this. Hierarchies and command and control institutions were society’s brilliant invention to scale and focus human activity toward a goal. This model has roots that pre-date the pyramids. It solves challenges of coordinated communication and will.  (I describe this is slightly greater detail here)

But now two things are happening. First, we don’t depend on hierarchy for communications. Top-down has, in fact, its become a bottleneck rather than an asset in the comms department. Second, the world is moving too fast and competition is too fierce for rigid command structures populated by people who could hardly care less to remain successful.

As a result, people are finding their own voice, their own insight, purpose and ambition – and many businesses are too. In little ways, such as the new social intranet at work, and of course the much, much bigger ways that democracy and freedom are being reexamined, tested and pursued throughout the world. The new organization’s role is to make that a good thing by aligning all that energy and capability with a worthy purpose and a networked leadership structure that learns and enables at the pace of human capability.

Social business is not anarchic, however. Decisions still need to be made and coordination is still critically important. So while the organization as a whole moves from a mechanistic to a humanistic ideal, leadership too, is paradigm-shifting from a patriarchal, omniscient ideal, to something else that still requires a name. “Servant-Leader” has been offered up, but I’m not yet convinced. In spite of new leadership’s namelessness, we do know a few things. Modern leadership asks questions. Modern leadership recognizes that the organization as a whole knows more than he or she as an individual. Modern leadership nurtures and orchestrates the organization around a common purpose, with the confidence to constantly move forward and the humility to look for every opportunity to do better. The modern leader doesn’t hoard power, they cultivate its flow through and accrual to the organization as a whole.

2.    The opposite of social business is fear. No, I am not exaggerating.

The problems of traditional command and control structures are legion, but the most debilitating can also be the most subtle. The 20th century ideal of the organization is the well-oiled machine – one where every part and process is defined and every cog shiny and efficient. Each person within it is expected to stay in their designated box and be perfect. That is, they should never make a mistake. And in this unpredictable, ambiguous and complicated world, predicting the future, and acting perfectly is rather difficult and ‘mistake’ is often just another term for “results”. So a primary motivator at work is being right and not making mistakes. Which leads to two profound problems. The first is that people only do what they know works. That’s an innovation buster right there. The other is that when problems arise, people are incented to HIDE them, both consciously and unconsciously. So all news is good news all the time. Learning and excellence are eliminated by definition. This would be a largely unintended consequence of a system designed to create stability, reliability and scale. Oopsie.

The fear of being wrong, looking foolish, or being rejected drives far too much of human behavior, and the vast majority of business behavior, and it has long been used as the primary motivator of work. If you are afraid of being wrong, you are not likely to ask the questions that hint at uncertainty. You are not likely to listen and look out for disconfirming information. As a result, we walk into failure with arms open and eyes shut. This is normal business. It is wasteful, it is absurd, and it is very unpleasant for its anxious participants.

Incentives are really just the other side of the coin  - the carrot and stick model is a fear based model. The antidote to this is first found in small teams – duoships, even (http://businessinnovationfactory.com/iss/video/bif6-keith-yamashita#). When a few people get together, motivated by a common cause and an intrinsic desire for autonomy, mastery and purpose, fear starts to recede and possibility opens up.

Such a team is incredibly powerful. They can probe the world, their doubts, their aspirations without fear, and with the support of other capable people. Their talents are amplified, their weaknesses diminished. If you have ever participated in such a team (and I hope you have), you understand this. When we have a shared goal, mutual respect and trust, we can deeply engage with our work by leveraging newly critical skills that David Brooks lays out with poetic beauty:

Attunement: the ability to enter other minds and learn what they have to offer.

Equipoise: the ability to serenely monitor the movements of one’s own mind and correct for biases and shortcomings.

Metis: the ability to see patterns in the world and derive a gist from complex situations.

Sympathy: the ability to fall into a rhythm with those around you and thrive in groups.

Who wouldn’t want to be described thus?

3. Collaboration is the only way forward

That is to say, that humans working as pairs groups, teams, organizations and communities are where real value is created. The genius (or lack thereof) in an individual’s mind is an ever smaller (though still and always transcendentally important) part of the progress equation. Even Steve needed a team. This is why the advanced communication skills suggested by David Brooks matter so much. Collaboration has always existed, and we’ve always benefited from it, but now we are absolutely beholden to it. There are many reasons for this, but I think the most compelling explanation for this has two dimensions. The first is the above-mentioned renaissance of self-actualization, and the second is the exponentially-increasing complexity of the work that we do.

Economist Ricardo Hausmann describes this in terms of “Person Bytes”, which may be one of the most important business concepts to be articulated last year. . Hausmann details the phenomenon that as individuals we’re now capable of much less than our ancestors – few of us can build our own house, provide our own food, clothing, etc –  though as a society we can build much more. Toasters, for example, and computers, which are far too complex for any individual to construct entirely from scratch.

I’ve written several posts on collaboration, and there’s no reason to repeat myself here. Complexity is most effectively faced by groups with high collective intelligence. Research shows that a team’s high collective intelligence does not reflect the genius IQs of it’s members, but the excellent attunement and equipoise amongst them. Creativity, in the business realm, will turn out to be a balance between profound individual and group effort, and the possibility-opportunity expansion of multi-disciplinary, multi-perspective, “edge” exploration.

Reaping more than a trivial percentage of your team’s potential requires the kind of deep engagement that can only be derived from collaborative effort. If you’re working in any kind of complex, knowledge based industry, you are here or you are almost gone.

4.    The big ‘Why’ for business

I have recently heard people argue that the only reason for a business to participate in public social networks is to generate leads and revenue. That any “relationship” formed with any kind of businessperson in social networks is by nature manipulative and false. When it was a work colleague of mine saying this, I thought ah – this person needs a bit of re-education. When it was a friend on twitter, I nearly wept. So here is my response.

People invented business for a reason. I don’t want to spend all my time growing, harvesting and milling flour and baking bread. So I pay you to do it for me. I don’t know how to make a car, so I pay you for that too. In other words, people need business and vice versa. This is a symbiotic relation ship that became grossly distorted in the 20th century but is recovering in the 21st.

Business exists to create value efficiently enough that people can pay a fair price for the product while generating enough profit to enhance the prosperity of the people who constitute the business. That is the intention of capitalism.
One unintended consequence of the industrial era, however was that almost all the power of creation, economics and communication ended up with business. Consumers (that is, “people”) could like it or lump it. Marketing – the relationship between the business and the client – became about cold and crass manipulation of people for the purpose of maximizing shareholder value. Shareholders? Where do they fit into this balance? Ah. Well they do play an important role in society and business, but that role has had some unintended consequences as well. I don’t really want to go into it here, but Umair Haque does an eloquent job of it, and there is a cohort of other economists and philosophers who have similar views.

Back to the why. We need to restore this balance. Marketing, sales and business is not about (shouldn’t be about) manipulation or extortion. It is (and shall be) about being valuable. Social media is one of the ways this relationship is coming back into balance. The democratization of communication and the means of production are restoring individuals’ voice, (though they seem now to be most effective at bringing down bad restaurants, not so much on airlines) and enabling businesses to remember that they are, in fact, of, by and for actual people. Social business is the businesses way of participating and remaining relevant in a newly re-democratized world.

The proper social relationship between business and people is one of mutual ongoing value – it is not only “transactional “ (yes, @decodingdress, I’m talking to you). And to you too @jess3/@eloqua.

If you are a business who disagrees with me on this you don’t need raise your hand. We already know.

5.    Patterns, not metrics.

If you have spent any time in the “social business” world, you have been asked the metrics question. Metrics, in short, are trouble. [see this thought-shifting lecture by John Seddon ] On the one hand, few business institutions cause more negative, unintended consequences than metrics. People act to fulfill metrics because they replace meaningful goals. On the other hand, metrics can be very useful tools for learning. Use them wisely.

The key brain buster of social business, however, and social networks in general, is that these are emergent systems, and usually complex, emergent systems, and for the most part, understanding these has not been part the standard American curriculum or career path, so they are a foreign concept to most people.

For the uninitiated, I’m going to take a risky crack at a two-sentence definition of a complex adaptive system. First, it consists of many independent agents (like people or honeybees, or people and honeybees). Second, each agent can independently change its behavior at least to some extent, and third, the system exhibits properties that cannot be predicted from its initial conditions or rules. There is vast literature about these systems in areas of math, computer science, biology, and economics. Complex systems are closely related to Wicked Problems. If you want to change a complex system, you generally have a Wicked Problem.

The thing about emergent systems, is that unlike a mechanical system – your car engine, for instance, or even your iPhone – you cannot predict what will happen or easily discern cause and effect. What you can see and understand are patterns that emerge, and some of the characteristics of those patterns with which you can then experiment.

So – we are being asked and asked again to establish metrics for evaluating our social endeavors. There are three standard responses to this, and I’m not particularly fond of any of them.

Option 1: The only relevant metrics are leads, revenue and cost reduction.  This is the hard-nosed approach. Show me the money or shut the heck [sic] up. This is not without merit, but it can stop a lot of good work and expertise development.

Option 2: What is the ROI of your mother? This is the argument that we know its valuable, so stop trying to measure it and just do it.  This is also a useful model –  at times you just have to do it. There is a downside here too. Do we really wish to be unaccountable? Do we really not want to learn what there is to learn?

Option 3 The ROI is dependent on the goal. Define the goal then you get the metrics/ROI. This seems reasonable – I’ve often said it myself – and its probably the strongest argument, but it has limitations too. One of which is that often the goal is only clear in retrospect. This should improve with our collective experience in the realm, but will always be limited (see “emergent”).

Each of these is simultaneously right and wrong. The problem is this: our traditional use of metrics depends on systems that have generally predicable, linear relationships between cause and effect. Emergent systems are highly resistant to this type of prediction and analysis. You can measure the fever, but it doesn’t necessarily tell you if the patient is sick or well. An incredibly interesting phone call with @rhappe got us to this idea that you need to have faith in emergence, and in its non-linearity and look for signs that it is working. Metrics aren’t necessarily meaningful in nascent social systems, but patterns are. [The discussion of faith in this context is a juicy one, but for later.] [Note that there is an Option 4 that purports to measure things like employee engagement and collaborative-ness. Few executives truly care about these things, however, and even if they do, these are tautologies rather than outcomes.]

Humans detect patterns very, very well. That’s why we see a man in the moon.
What do I mean by a pattern? Well a really basic pattern is one where an interaction with a person creates another interaction with that person. That would be a good pattern. That pattern can be built into something of value for both customer and business. I laid out the basics of how to create a very simple behavior pattern.

This is what Nir Eyal’s notion of habits and “virulence” is getting at. One could say that a pattern that an individual adopts is a “habit” and how compelling that pattern is to people in general could be its viral-ness.

I have a point here and it is this. If you really want to be successful at initiating and nurturing emergent social systems, you need to be both aiming to develop patterns, and then looking for early signs of patterns that emerge. Patterns, not individual metrics. You must accept that to a certain extent, your system is non-linear and unpredictable. We must learn to recognize and embrace this. If nothing emerges, you don’t have a cohesive system, so you must tinker with it. If something emerges, understand it and nurture it.  We need to transition from metrics to patterns. (I plan to do some research here in the next few months, so if you are interested, or have relevant info, please ping me.)

6.  Let me be the first to say it in print (or printish-ness): the sales funnel is over.

The sales funnel was a brilliant framework coeval with knowledge management, cross-functional teams and other “modern” business concepts from the 1990s. It is a framework for understanding that a customer begins as a stranger, that there is a progression of steps to get them from there to purchase, and allows a methodical approach to optimizing this transition.

The profound problem with the Funnel is that not only does it treat good people like so much meat and statistics, but that its object is to filter out those that don’t make it to the next step. In other words, you start with 1000 “leads” (otherwise known as people who might be somewhat interested in what you do) and you instantly lop off 90% of them as you get to suspects, and repeat for prospects, and opportunities. The very language here is predatory, no? Not to mention the fact that you are “wasting” over 99% of the audience who has some interest in you. One thing I’ve learned in my years of marketing: never waste an audience.

What we want is to morph the “funnel” into more of a concentric circle or orbital model. Where you have the tightest, most active relationships with your customers who are in a tight orbit around you, and a few successively looser relationships with broader sets of people in wider orbits to whom you provide value in the form of info, connections, expertise, entertainment, etc, and who may someday become customers, or influence others who may, or give you continued insight into your key markets. The orbital model is a more human model that creates intimacy, insight, and an exchange of ideas and value. It is also a more efficient business model. It retains more audience and preserves and enhances its potential to generate more customers, build brand equity and expand your circle of influence. This is, in a sense, the goal of “content marketing” (which may be my least favorite term since “content”, which was last well used in a sentence by Martin Luther King, Jr when he dreamed of a man being judged only “by the content of his character”). I have much more work to do on this, so please stay tuned.

 

7.    It’s not about understanding social, it’s about understanding you.

So here it is. Why is social business hard? People will tell you its because of culture, habits, technology, blah, blah, blah. And all of that is true. But the biggest challenge in going social is not that its social, its that it is business. A more social approach to business quickly reveals business problems that have been rumbling under the surface. Gaps or deficiencies in your mission, goals, strategy, internal coordination, organization, processes and responsibilities start popping right out. Its disconcerting, and it can be discouraging. (Unless you have an organizational equipoise). Its also quite hard to push the cork back into the bottle, though some do try. In the current model, we’re accustomed to just live with things that aren’t well thought through, aren’t well understood, or perhaps well communicated – see “fear” above. Its not that big a deal that the left and right hands don’t know what one another is doing. Well, it is a big deal, but its easier to ignore what we can’t put our finger on. Social business engagement both inside and outside the organizational boundary forces us to face of all those dust-bunnies and piles that have been hanging around under our metaphorical desks for years. You have to suit up for some spring cleaning.

Take a simple example. A number of companies, from Cox, to United to Best Buy have seen their service organizations get pro-active in social media, and benefited enormously from it. Others have their service people, if they are on twitter at all, say “please open a ticket” to anyone who asks for help. Why? Because they are not allowed to answer a customer without a ticket, and cannot open one themselves. This is because on the one hand, they only get evaluated by management on number of tickets closed (stupid metrics) and on the other, they can only ensure that issues are resolved if they are ticketed. And in many cases, changing this is, for some inexplicable reason (that probably turns out to be a recursive example of the same phenomenon), something that cannot be accomplished in under six months.

The number one thing that keeps people back from participating in social, both inside and outside the company is that they don’t feel they know what is going on, they don’t understand the message or the mission, or don’t believe in it. They are not equipped to represent. This may be the reason behind the surprising and surprisingly rapid shift in analyst-predicted total social technology industry revenue from the marketing use case to the internal use case. The rank and file are clamoring for internal social because they want to do better, and want to be part of the solution.
It is a rare organization that is Purpose-Driven, clear and confident in its value, strategy and path. It is an even rarer organization where that insight and confidence is evenly distributed throughout the organization. And rarer still, one that understands how to transform decision-making into a real-time learning orchestration exercise.

So the key question isn’t “what is social business”, it is “what is your business?” Answer that, and social is a relative piece of cake.

The best is yet to come.

17 responses to “If Social Business Is the Answer, What is the Question?

  1. Great article, thanks. A couple of your points brought to mind Etienne Wenger’s book on Communities of Practice. Social Business must be about engaging communities. Wenger’s “infrastructure for learning” (page 236-239) is useful. Your thoughts on leadership (1) made me wonder about the “learning leader” as Wenger’s key attributes of “engagement, alignment and imagination” and their sub-attributes would seem valuable when considering the leadership values and the patterns of behaviour (5) that would indicate successful social business engagement.

  2. Great Article. One thing … why don’t you put the pictures/drawing like in the CMS version?

    Best – Dominique

  3. Hi Debbie:

    I would add to your perspective that companies are narrowing their focus on what happens outside the organization and how they can interact with other business or the particular with the consumer (where social is more valuated because you can measure engagement). Companies are putting all the meat on the grill, investing on channels, rather on interaction patterns, I mean ( What people do? How people collaborate/interact? What are the kind of relationships? how we humanize?) taking this perspective to inside of the company is also important if we want to help people to reach process outcomes. Structured work always exist and will continue to exist, but people find other ways to work together. Some managers think that this started to happen when e-mail was introduced, but existed all the time.

    Regards

    Alberto Manuel

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  5. I really like this essay…I have some complementary notes here
    http://johntropea.tumblr.com/post/19218788245/a-high-level-view-on-social-busines

    I discovered John Seddon earlier this year (have made notes and will blog soon)…his approach is very realistic ie. patterns/targets…although I do agree with Snowden that his work is more systems thinking rather than complexity. ie he talks a lot about the predictive demand, but we don’t hear many anecdotes on how variation is dealt with and fed back into the system (but he does talk about the engineers having idle time to respond to system demands, and the ability to spend the time it takes to fix something and let the office know about this
    http://johntropea.tumblr.com/post/17079598570/complexity-is-different-than-systems-thinking

    Here’s a couple of links on CAS
    http://johntropea.tumblr.com/post/868853012/key-properties-of-complex-adaptive-systems
    http://johntropea.tumblr.com/post/15011513132/an-essay-on-complex-adaptive-systems

  6. John – its interesting that you bring up systems thinking vs. complexity. In my mind you use systems thinking to deal with complexity. thanks as always for your remarkably well curated links and thoughtful additions. And yes – I’m also a huge Snowden fan.

  7. That’s the thing, complexity science has people approaching it in different ways than systems thinking…some talk about “reducing” complexity…I disagree…I mean yes you can follow John Seddon system thinking and deal with the major predictive stuff based on narrative gathering, this is good stuff…but controlling the world is an illusion…the best you can do is “navigate” complexity.

    Think of an airline pilot – someone has a heart attack on board and you need to land, but then you hit foggy weather and can’t land, and even if you can land it’s a runway you have never landed on before, and by the way the lights on the runway are not working so you have to do it by calculations, then you start to run out of fuel, then your first officer has a communications misunderstanding with the control tower and you get cued behind other planes to land whereas you need to jump the cue (I made that up right now based on a chapter in the book Outliers)

    The point of that example is you cannot reduce complexity, the world just throws stuff at you…you can prepare yourself, but mostly you have to surf it, and use your experience

    Snowden’s approach is sure prepare based on the past, but it’s mostly about living in the present and co-evolving (from anticipation to anticipatory awareness…which you allude to in your post)

    “…we live in a world subject to constant change, and it’s better to blend fragments at the time of need than attempt to anticipate all needs. We are moving from attempting to anticipate the future to creating an attitude and capability of anticipatory awareness” – Snowden http://www.kmworld.com/Articles/News/News-Analysis/Now,-everything-is-fragmented–48949.aspx

    Here’s a good post on this http://jbordeaux.com/dont-connect-the-dots-watch-the-noise/ (also read the excellent comment by Chris Rodgers…if you want more on his thinking read this awesome comments exchange he had with Snowden recently http://informalcoalitions.typepad.com/informal_coalitions/2012/01/self-organization-and-emergence.html )

  8. Ha…I forgot to highlight the differences between systems thinking and complexity approaches…based on a presentation I linked to in an earlier comment (which I think you have read based on your tweet earlier)

    http://www.slideshare.net/jurgenappelo/complexity-versus-lean/34
    http://www.slideshare.net/jurgenappelo/complexity-versus-lean/35

    “For me the main difference is that most systems thinking approaches, in particular those which are shall we say “popular” focus on defining an ideal future state, then seek to close the gap. You can see this in Porter’s approach to strategy, BPR, Sick Stigma and also Learning Organisation. In the latter case the ideal future state may be common values etc so its a little more fluffy than the more engineering approaches but the principle is the same. They also tend to focus firmly in changing individual behaviour; think about the amount of books on competences, leadership behaviour etc. etc.

    Complexity thinking on the other hand, recognising that complex adaptive systems are not causal (in the common meaning of the term) but are dispositional in nature should focus on describing the present, then acting in that situated now to test and enable the evolutionary potential of the system in multiple parallel safe to fail experiments. Complex approaches should also focus on building collective capability through ritualised forms such as crews and network creation with techniques such as social network stimulation.

    So in summary systems thinking is about closing the gap to an ideal future state using and focusing on individuals while complexity thinking is about understanding the present, and evolving through collective action to a future state which could not be fully anticipated but which is sustainable and resilient. Now I know its a lot more complex than that, and also that some of the greats before popularisation are probably turning in their graves, or their emeritus chairs when they see what has happened. However systems thinking is pervasive, and its linked with models and ideas such as memes and Dawkin’s attitudes in general, i.e. we have an emphasis on causality at the cost of evolution.”
    http://www.cognitive-edge.com/blogs/dave/2011/11/babies_should_not_be_thrown_ou.php
    - Dave Snowden

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  10. John – the idea that complexity is present and systems is future is subtle and beautiful and useful. i will be reading/thinking more on this. In general, I think that when we recognize and embrace complexity it enables systems thinking and allows us to act wholistically rather than “reductionistically”. i sense I aint making sense, but you’ve given me something to work on – thanks.

  11. I’m glad I continued through to the comments and read the thinking-out-loud-by-two-people-in-exchange that lead to this summary and ‘conclusion’

    the idea that complexity is present and systems is future is subtle and beautiful and useful. i will be reading/thinking more on this. In general, I think that when we recognize and embrace complexity it enables systems thinking and allows us to act wholistically rather than “reductionistic ally”.

    .. and I appreciate Dave S.’s caution about the ‘emphasis on causality at the cost of evolution”>

  12. I’m glad that you are a trooper to the end, john. The quality of comments here is great. All three of you John’s and Alberto have added depth and clarity.

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  15. For a business to be successful, there should be interaction among the people of the organization. Interaction in a sense, they should communicate with one another and discuss their ideas.

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