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Let's Get Rid of the Social Enterprise

No More Social EnterpriseWhen asked about illustrating the evolution of organizations, I often come up with the famous scene from Steven Spielberg's Raiders of the Lost Ark, in which Indiana Jones casually shoots a swordsman with a single bullet. This, according to me, perfectly shows the inefficient and dysfunctional nature of our traditional assumptions about how business should be done in today's world.

Then, because a quick sketch, and a good laugh, are worth many words, I show this parodical version of the same scene.

A technological fallacy

"Social," as we hear about it more and more and begin to see it on executives' agenda, has more to do today with skillful technology-enhanced swordsmen than with the change of paradigm embodied by Harrison Ford. The "Zero Email" (trademarked) initiative loudly heralded by Atos, for example, might for a long time have no further side-effect than untying employees from the computer screen where they consult their inbox to tie them back to another screen to follow an activity stream.

"If I had asked people what they wanted, they would have said faster horses."

Quite ironically, one of the most iconic quotes from the industrial age, attributed to Henry Ford, while embodying the failure of applying push-to-market methodologies in an era dominated by customer versatility, is the trap in which many social business initiatives are falling with gusto.

What do you think businesses want? Faster, more efficient employees. Faster, leaner horses … Don't they want to transform themselves? Assuredly they want this, but we all know changing behaviors is difficult, and so we rely on the fact that technology will enable the change. This is such a common belief that I won't link here to any blog or paper, you know where these are.

But this is a fallacy. Technology has nothing to do with enablement, technology is about affordance. In the hands of autonomous and voluntary employees (provided they feel entitled to act in such a way, which is a different story), it affords new opportunities for knowledge sharing, ad hoc relationships building and network weaving. In the hands of result-driven managers, in the midst of our hierarchical structures, it affords new levers to enforce a command-and-control mindset.

An economic nonsense

Transforming organizations will neither come from the evolution of technology, nor from the new behaviors we are adopting in our private life. We live in a co-evolutionary world, as Sir Winston Churchill once stated: "We shape our buildings, and afterwards our buildings shape us." To survive, our organizations have to take care of their own evolution to be able to take advantage of the deep changes at work in our lives and in technology.

Let us, for today, step away from the crowdy discussion about leadership, and consider a deep, often overlooked in the "social business" context — reality. Organizations are economic entities, and thus their “purpose” is to make money. In his seminal 1937 paper, The Nature of the Firm, Ronald Coase analyzed why entrepreneurs created and grew business by hiring individuals to work together under the aegis of a single entity. His theory, which earned him the Nobel Prize in Economics in 1991, was that by doing so, organizations minimized the transaction costs related to accessing and organizing resources, and thus were a more efficient and cost-effective alternative to markets.

Today's organizations have lost the play against markets, whether they trade tangible or intangible assets. At the bottom, work has been commoditized, short-term contracts, freelance work and outsourcing have become much more cost-efficient and knowledge-intensive than the closed organization of resources that prevailed during the Industrial Revolution. At the top, firms are now transactional and tractable goods in the hands of shareholders, and have evolved into objects of Recreative Destruction (may Schumpeter forgive me the pun) on financial markets. By becoming, internally and externally, enslaved to the markets’ mechanisms, organizations have not only lost their leeway, but their purpose: making money for money’s sake is no more relevant, as they are no more in line with their “raison d’être,” i.e. a credible production alternative to markets. Organizations, as economic entities, are turning into economic nonsense.


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