social media effects

Can social Media Make Big Businesses Smaller?

I read a phrase recently on the Oracle Fusion blog – and I can’t find it again to cite, so apologies. But the essence tickled the question of why big business ocassionally gets knocked out by small business, and how social media might just possibly help big business compete against those agile, tight, “unencumbered” little guys. Personally, I’ve done the 5-guy startup right up through the 20,000 guy behemoth, so this idea resonated with me.

Small companies have advantages and disadvantages. Amongst their disadvantages are the need to get customers fast or die. The need for funding from outside firms, establish credibility, weak brand identity and recognition, and probably a score of others. Individual customers hold tremendous sway and can often derail things (not that this doesn’t happen at big companies).

Small company advantages run a gamut of issues, but I’m going to focus on the cultural and communications issues. They include people who know each other well, every member of the team is tightly connected to every other. Each member of the team is fully bought into and engaged in the vision. Each team member has a voice that is heard, has a personal investment in the outcome, and understands how his or her contribution matters.

In a (typical) big company, vision is diluted. Relatively few people have met the CEO, let alone heard him “unpack” the vision (outside the keynote speaches), the CEO knows few of the 10,000. There’s the appearence of “secrecy” at the top – the workforce believes that there’s a “strategy” and a “reason”, but that they aren’t valuable enough or trusted enough to know what it is. They hesitate to speak on behalf of the company, because they aren’t confident that they know the right thing to say.

At the Enterprise 2.0 conference last week, Marcia Conner of Pistachio Consulting asked “how many of us hire untrustworthy people?” It was a great line, but the fact of the matter is in a big company we often have no idea who we’re dealing with.

So – enter social media. Few companies will adopt social media in order to create a tighter team and culture where people know each other. A few companies will “get it” and invest, some will recognize the value of grassroots efforts and institutionalize them, but most Companies will adopt social media in order to solve a specific, urgent business issue: waste,  inefficiency, travel costs and distributed teams. Military and Intel will adopt because of the urgent need for rapid information diffusion and identification of expertise (that’s another post).

Social media tools will be adopted to solve problems, will do a pretty good job, and then there will be the secondary effects: transparency, faster innovation, a more cohesive corporate culture, employees who are more engaged, and feel they know the leaderships thinking intimately, and a host of other second order effects that we have some anecdotal evidence of, but have yet to really nail down.

If these secondary effects are half as common as we expect, then they may create the ultimate combination of big and small company advantages. Tight, focused, engaged teams who identify strongly with the mission and their contributions, while having the influence, stability an resources of a large company.

I’m not 100% sure if that’s a good or bad thing for the world as a whole, but I’m sure that the people running and working with those large companies, as well as their stockholders will be very happy, and small businesses will again be figuring out how to compete with the big guys.