Following up on yesterday's post exploring the mechanics and driving forces of social, today I will delve into the implications for business. And let's just say it now: some of your old sales practices need to be reconsidered.

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 relationship 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:]

Cultural change is free from Mindfields College on Vimeo.

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 of 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 it's 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 it's 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 here.

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.

Lavoy_Funnel.jpg

 

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 it's social, it's 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. It's disconcerting, and it can be discouraging. (Unless you have an organizational equipoise). It's 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 it's 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.

Editor's Note: You may also be interested in reading: