The Innovation Based Business Case for Social

In management science innovation is typically thought of as a process which results in beneficial changes through novel ideas or solutions. Innovation is about change -- and change, volatility and flux have been the defining features of the business landscape since World War II and especially since the 1970s. As one commentator succinctly put it in 1990, organizations must “get innovative or get dead."

Let's examine four ways social business can be associated with innovation and look at the different ways each measures value.

This is the fifth article in a slow burning mini-series exploring social business. In the last article we examined the argument that social business can deliver productivity gains for knowledge workers. This time it's all about innovation.

Social business can be associated with innovation:

  1. As part of targeted innovation processes
  2. By creating an environment conducive to serendipity
  3. As part of a social learning strategy 
  4. As the foundation for building a "responsive organization"

Innovation Processes: Crowdsourcing and Yam Jams

In the traditional model innovation was confined to product development processes or the R&D department. But according to MIT Sloan Management professor Eric von Hippel, this model is fundamentally flawed because consumers can be a major source of product innovation. Examples such as Nike, Dell’s Idea Storm, and SAP’s Co-Innovation Lab are showing how organizations can leverage social business strategies to involve customers in helping to improve products.

Organizations are also using enterprise social platforms such as Yammer to crowdsource ideas from employees using JAMs. A JAM, or if you’re using Yammer, a YamJam, is an online event during which employees post ideas, suggestions and questions relating to specific business topics and discuss them as a group.

In "Social Strategies in Action: Driving Business Transformation," Dr Bonnie Cheuk reports on the case of a business unit inside a global bank which conducted about a dozen global JAMs in 2012. The topics included spotting opportunities to drive more business in a particular industry sector, formulating global strategy, improving client service, improving risk management, talent management and finding new ways to improve business efficiency.

The case study outlines a number of recommendations for running successful JAM events. First, each JAM is owned and managed by the business. Second, for each event the business owners assemble a team to plan and execute the JAM. Typically this will include a business sponsor, a communication manager, a project manager and around a dozen facilitators. In the planning and conception stage the scope of the event is defined and the business goals identified. A marketing and communications campaign is executed to draw in participants from a defined target audience.

The event starts at a specified time, and during the event messages are sent out to create buzz around particular conversation threads. The event ends with a thank you message from the business sponsor. Following the event, the analytics team reviews the participation metrics and develops a final report with recommendations for the business sponsor.

This is a great example of how to operationalize an innovation process based around social technologies. It shows how to link the use of the technology to specific business problems and focuses on producing a tangible output in the form of a management report. Crowdsourcing through customer networks or JAM events provides the easiest way to track quantifiable returns and results.

Social Learning and Communities of Practice

A Community of Practice (CoP) is a group of people who share a common practice or profession. Research has shown that CoPs are a key mechanism in organizational knowledge and learning processes.

Social and collaborative technologies have long been used to create online environments where communities can find each other and exchange ideas and information. Unisys won awards for their use of SharePoint Portal Server 2003 to create a communities portal, and SharePoint 2013 included the communities portal and community site templates to facilitate Communities of Practice. Yammer groups can also be used to support a Communities of Practice strategy. Whereas a YamJam is an one off event, a CoP is a permanent group.

Recommended practices for successful communities include a clear and compelling purpose, clear alignment with organizational objectives, an agenda of critical topics to be addressed, competent and committed community leaders or core volunteer teams, communication and training plans for members and stakeholders and an up to date dynamic roster of members.

Like JAM events, the value of Communities of Practice (or Yammer groups) can be measured and tracked quantitatively, as long as the group has a specific purpose or agenda to follow.

The Serendipity Argument

Many evangelists claim that social tools such as enterprise social networks lead to serendipitous innovation by connecting employees and enabling information and ideas to flow freely within the organization.

In a seminal article in 1999, Janine Nahapiet and Sumantra Ghoshal argued that intellectual capital (knowledge) was the basis of competitive advantage -- that new intellectual capital, like all forms of capital, is created through processes of exchange and combination, and that the exchange and combination of intellectual capital between people relies on a number of conditions. First, people have to have access to each other. Second, there must be the anticipation of value resulting from the activity of combining and exchanging intellectual capital. Third, people must be motivated to engage combination and exchange. And fourth, they must have the capability to combine and exchange.

Nahapiet and Ghoshal argued that these conditions relied on three dimensions of social capital -- structural, cognitive and relational. The structural dimension refers to the way that people are connected to each other, how strong the relationships (ties) are and the configuration of the interpersonal networks. The cognitive dimension refers to the degree to which people share language and narratives. The relational dimension refers to issues of trust, social norms, and obligations. All three of these dimensions need to be in place for the successful combination and exchange of intellectual capital.

Social technologies can help with the structural dimension by establishing links between people which provide the access for parties to engage in combining/exchanging, but the other two dimensions rely on the wider management and organizational environment. Social Business is about much more than technology.

In the right social/technical environment technologies can facilitate serendipitous innovation, but it’s difficult to quantitatively predict or measure the return or value created by many micro changes. In these circumstances it can be more effective to demonstrate value by collecting qualitative evidence in the form of success stories and positive personal experiences, a technique widely advocated by the Yammer Customer Success Managers.

The Death of Social Business and the Rise of the Responsive Organization

Some commentators have noted that the moniker "social business" hasn't struck the right chord with business leaders -- that the movement has failed to win faith, trust and budgets in a significant way. Social business, it has been claimed, is dead.

At the Microsoft SharePoint Conference 2014 Yammer founder and CTO Adam Pisoni moved away from talk of "social business" -- or in Microsoft parlance, "enterprise social" -- and adopted the narrative of the "responsive organization" for his presentation on the executive track. According to The Responsive Organization website, a responsive organization is one which is

Built to learn and respond rapidly by optimizing for the open flow of information; encouraging experimentation and learning on rapid cycles; and organizing as a network of employees, customers, and partners motivated by shared purpose."

The Responsive Organization is repackaging the social business concept, emphasizing themes of innovation, change and learning.  It shifts the focus away from technology and adopts a more holistic perspective which talks of the shifts across a number of different realms of management. Structures shift from hierarchies to networks, the focus of strategy shifts from efficiency to responsiveness, the focus of human resources shifts from control to empowerment and from extrinsic rewards to intrinsic motivation. Social technologies such as Yammer are important but they are just one element of the mix of strategies from which a responsive organization emerges.

From this perspective social business is a philosophy, a mindset or a management paradigm which recognizes that innovation and change is the essence of the modern business environment. It pervades every aspect of the organization. The ultimate measure of its value is that your organization adapts and survives.

Wrapping Up

We've looked briefly at four ways in which social business can enable innovation, learning and change. We've also seen how it can contribute to business success and commented on the different ways success can be measured. Which of these approaches is best for your organization will depend on the philosophy of the leaders and the prevailing organizational culture.

Coming Soon…

In the next article I’ll be exploring the link between social business and organizational culture and reveal how you can create a knowledge sharing culture in your organization.

If you can't wait until then then, I’ll be presenting five sessions on the SharePoint Evolutions Roadshow in the UK in June.

Hope to see you there … 

Title image by Luis Fernando Curci Chavier /