There's no doubt that social business has arrived. In three short years, we've adopted this umbrella concept to encompass function-specific concepts like word of mouth marketing, consumer advocacy and Enterprise 2.0. But what exactly is social business?
As a definition, a social business harnesses fundamental tendencies in human behavior via emerging technology to improve strategic and tactical outcomes. There's a lot more to unpack in support of that statement -- so let's talk about what matters in social business.
First, we need to understand how we got to where we are today. Although social business draws upon fundamental human nature, the opportunities we see for companies today were not feasible at scale until changes came about in work, society and technology. In particular:
A Change in the Cadence of the Workplace
The average length of the workweek has steadily declined as the US economy has shifted from agriculture to manufacturing to services. The average US work week is currently about 35 hours. However, professionals in social business-related roles are exempt employees and their success depends on taking an always-on, always-connected approach to work. The pace of change may be slowed by regulation, such as the law passed last month in Brazil declaring that checking email after hours qualifies for overtime, but global commercial pressure will drive companies to do whatever it takes to win in increasing competitive markets.
Increasing Acceptance of Public Sharing
In the late 1990s, Josh Harris created an art project called "Quiet: We Live In Public" with 100 people living in a terrarium under New York City, with webcams capturing everything. At the time, the experiment was a bold projection about the power of technology over human lives. Just over a decade later, a culture of public sharing has emerged on a massive scale that has facilitated toppling of governments, seen wedding proposals and live-tweeting of births and terabytes of mundane commentary on everyday life‚ which contain a wealth of insight for brands.
The Consumerization of IT
IBM has stated that your smartphone has more computing power than the whole world did in 1950. Moore's law shows us how we got from mainframes in the 1970s to the iPhone today. Metcalfe's law explains why connecting these devices is valuable. Computing capacity for personal and professional uses has never been more affordable, setting the stage for social business to thrive.
Businesses recognized these trends and saw opportunities emerging in the market. Outside the firewall, "viral" videos involving brands like Subservient Chicken and Campaign For Real Beauty got the attention of marketing and PR professionals. Inside the firewall, communications channels were evolving into social networks and collaborative spaces, where increased informal engagement started leading to greater productivity. Taking advantage of both internal and external opportunities is critical to social business success, as shown in:
Businesses must account for how they are building direct relationships with individual consumers. In today's landscape, hundreds if not thousands of examples exist where brands are engaging consumers, striving for the same four outcomes: increases in awareness and mindshare, fostering brand love and activating advocacy. For example, Red Bull manages a Facebook community of almost 27 million fans. CoffeeMate operates an advocacy community called the Brew Crew with thousands of participants and dozens of thousands on a waiting list to get in. US Cellular has leveraged their award-winning customer service to get active in social media channels and increase their volume of issues handled by over 600%.
Although external initiatives generally get more attention than internal, companies can drive meaningful results by applying social business approaches to existing business operations - most notably, cost reductions. For Spanish telecom company Movistar, a customer support community delivers almost $6 million in annual call deflection savings. At reinsurer Swiss Re, an internal community paid for itself in less than 12 months by allowing legacy systems to be decommissioned. At TransUnion, $50,000 spent on a social networking platform resulted in $2.5 million in savings within five months.
[See this link for a list of 101 examples of social business ROI.]
The Challenges Ahead
We have started seeing meaningful social business results, but challenges still remain.
Companies Must Determine How to Organize
Early on, brands looked to a social media superstar model, where one highly visible evangelist led all things social. As large organizations got interested, the model was show to lack scalability; thus, different approaches to organizing came about such as "the dandelion" and the social business unit. The operating environment evolves constantly and organizations must take a flexible and agile approach to value capture from emerging opportunities.
Different industries have imposed varying levels of regulation on social media activity. For example, FINRA has released social media guidelines for financial services companies. Other industries may not be subject to the similarly strict rules, but brands must still comply with internal policies and procedures designed to protect brand equity.
There's a lot to keep track of in social business. Early on, evangelists eschewed attempts to track success or failure -- measurement was deemed unnecessary and illogical. However, as management got serious about budget allocation, funding for initiatives drove an increasing need for accountability. For some social media gurus, the party's over (or at least it should be) -- brands need to see results. Companies that have the right tools to make sense of big data being spun off by social business activities can not only measure performance -- they can learn and fine tune strategy to achieve competitive advantage.
The social business era has arrived and although early, it's clear where businesses must focus their efforts to build the foundation for future success. Eventually "social business" will just be plain "business" and the companies that win will be the ones who have addressed the fundamentals of what matters: acknowledging trends, uncovering opportunities with consumers and workforce and addressing fundamentals including organizational model, governance and measurement.
Editor's Note: You may also be interested in reading:
- Knowledge Management & Social Business: The New World of Work by @seattlerooster
- Using Social to Drive Business Value in 6 Easy Steps by @mediamutt
- Key Steps to Becoming a Social Business by @kimberlymccabe