How Social Business Turns The Enterprise Inside Out

7 minute read
Stuart Boardman avatar

Being a social business is about unleashing creativity and encouraging engagement both within your organization and between you and your customers/citizens and your partners. It can’t just be equated with deploying social media inside your organization or polling your customers’ opinions via Facebook.

For example, take a look at the thoughts of Dave Gray of the Dachis Group or Rawn Shah of IBM.

Change is Inherent

Inside the organization we’ll see more people involved in strategy development across multiple levels. That will lead to emergent innovation -- new ideas literally emerging out of a serendipitous coming together of ideas from unplanned directions, instead of the old cycle of marketing led R&D. This is all very exciting but clearly it will considerably increase the number of sources of change we need to be able to cater for.

We’ll also see increased interaction with customers and partners. That will lead to increased shared value generation -- value networks. This too introduces more sources of change within a wider ecosystem than enterprises have traditionally had to take into account.

The ecosystem is further extended by the technology we use. Social business is of course enabled by, and to an increasing extent dependent on, the integration of social media and other internet based services. So just like cloud computing, this too extends the value network we’re involved in and increases exposure to change and uncertainty.

Let’s call all these different sources and types of change variety. Ashby’s Law Of Requisite Variety (a piece of serious science) tells us that the more variety we encounter in our ecosystems, the greater our capability to capture and respond to it needs to be. [You can of course choose to strictly limit variety, but then you’re not going to be a social business].

Now hierarchical systems can't cope with variety. That’s pretty obvious if you think of it. If all strategy, planning and coordination is done by “the management,” you’re going to need an awful lot of managers to deal with all that variety.

Time for a New Structure

What is needed is a form of organization structure, which allows autonomy of local operations within the context of an overall strategy. Each operational group is responsible (and accountable) for its own part of the overall operation.

That means instead of carrying out some process defined “higher up,” the group uses its own collective knowledge and experience of its own area of work to determine how best to perform that work. The group will determine how to respond to enterprise wide strategy changes and to external stimuli, how to coordinate all activities within its scope and how to monitor and continuously improve its performance of those activities. This is not anarchy. Accountability means that each group provides feedback on mutually agreed metrics to the enterprise as a whole.

The model that best explains what this new kind of organization would look like is Stafford Beer’s Viable System Model (VSM), which I’ve described elsewhere. This model provides a formalization of what I’ve described above. And it works! More on this in a minute.

As we’ve seen, social businesses are also networked organizations. They involve networks and they are part of networks -- employees, customers/citizens, partners, casual contacts. Collectively they generate value. It’s a value network.

But watch out, there is also anti-value, a term coined by Jack Martin Leithto concretize the result of bad service. Too much anti-value gives you an anti-customer. The term anti-customer (actually anti-client) was coined by Tom Gravesto describe someone who has experienced so much anti-value at the hands of a particular enterprise that s/he actively badmouths that enterprise at every available opportunity. And hey, social media are a great place to do that. So there are also anti-customers in our network.

Outside of our immediate network there’s the rest of the ecosystem, which includes competitors, regulatory bodies etc, etc. These too, apart from any direct effect they might have on us, can also produce changes elsewhere in the ecosystem, which might eventually have a positive or negative effect on us (for example by putting our partners out of business or by creating a more favorable regulatory climate for them).

Learning Opportunities

Modeling for Uncertainty

Wouldn’t it be nice if we had a way of modeling all these sources of change and uncertainty? Not with the impossible goal of eliminating the uncertainty but rather so we had a good picture of what was out there, what might conceivably have some positive or negative effect on our enterprise -- even if the action wasn’t directed at us. Then we’d know what we should be monitoring in what the VSM calls the environment. We’d know where the hot spots were and could consider adapting our strategy to take account of them (again for positive or negative reasons).

There are various techniques that we can adopt and adapt to help us build up such a model. One of them is the VSM itself. The VSM models what the vision, purpose and identity of an organization is, what it does to fulfill that vision and how that is managed and controlled.

We can use the VSM to examine both the whole ecosystem and the individual organizations in it. We can work from the outside in and from the inside out. That’s because of the fractal nature of the VSM. The purpose of the whole system is reflected in each participant. You can build up the big picture of how each participant affects and is affected by the rest of the ecosystem -- including parts it can’t directly “see.”

Then there are techniques and tools that help us to visualize the networks in which we’re involved (both internally and externally). These are usually based around the idea that social networks have a community structure. By visualizing the communities (and identifying the key participants or types of participants) we build up a better idea of who collaborates the most with whom and about what and how that might affect us. In a sense it tells us who’s out there that we might want to care about. Which makes it also a feed into a VSM analysis.

Lastly I want to mention Tom Graves's "This" game. The game lets us start pretty much anywhere in the ecosystem (preferably somewhere we have a reasonable degree of knowledge about) and, by answering various questions about “this,” build up a picture of its immediate environment -- what does it do, what does it need to do that, what does it mean to be successful, what needs to be in place for it to happen, etc.

And because “everything is a service” in Tom’s world, we can jump from one “this” to another “this” at any time, if we feel we need to explore that area some more. In theory we could build up a detailed picture of the whole ecosystem. In practice we’ll focus on our own enterprise and become steadily less detailed as we move further away.

That was a very brief overview of some available techniques. The point here is really that we should be aware that, as we move away from the old certainties, we don’t just have to suffer the slings and arrows of outrageous fortune. Some smart people have provided us with some very clever tools. We should learn to use them.

Editor's Note: To read more about organizational changes in the social enterprise:


About the author

Stuart Boardman

Before finding myself in the world of IT, I pursued a career as a musician (jazz, African music and some pretty weird stuff). Music (and dancing to it) remains an important part of my life.

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