Social Business and P&L

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A Business Enterprise is always interested in building a healthy P&L. As circumstances change, internally or externally, it looks for new ways to reinvent itself and its offerings.

Social Interventions, or rather, as I like to refer to them, ‘Open/Social/Digital’ interventions can contribute to a much higher sophistication and complexity of designs, both in terms of its value offerings, such as services and the design of its own structure and systems, becoming more agile and responsive in the process.

These interventions therefore are something organizations must look at and examine whether they are applicable to their context, and in particular, whether they can help them with their P&L objectives. I suggest they examine broader models of defining value, but that is another story.

Leading the discussion with a presumed intervention as a solution would be, just as an illustration, similar to asking – “We now have CAT-scan technology – what would it take to get every human to use it”?

If we engage our business leaders in discussions that lead with where it is in their business they have reached an impasse, when they cannot compete effectively, they are losing market share, suffering from a high-turnover, or are not able to attract the appropriate workforce – then it becomes easier to relate that to the P&L, and eventually to how O/S/D could help.

It does not only have to do with critical challenges, the opportunity could also have to do with growth and innovation, which in my opinion is the exciting part of what is happening!

If none of these conditions exist, one will not be able to sell any new paradigm, and perhaps it is not even required.

On the other hand, if you believe that Social Business approaches could help, then I would suggest something in the nature of Education to begin with, if people do not already see the value.

Innovative Capability and Cognitive Excellence

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Innovation is on everyone’s mind these days, and there are just as many opinions on how to become innovative. I was just reading an article on the Technology Review Blog – Four Principles for crafting your Innovation Strategy.

The four principles attributed to Joseph Schumpeter, author of the concept of Creative Destruction, are:

“Think big, start small, fail quickly, scale fast”,

The article goes on to describe the experience of the Netflix founder and CEO Reed Hastings, about how he experimented with a number of business models early on, killing those that were not effective, always guided by a ‘grand vision’ of what he envisages was possible. The article also comments that enterprises do not have a good process to emulate what Hastings did.

That comment got me thinking, easier said than done. What exactly is the capability that can discern what is a worthwhile trail to follow, and, when it does conduct experiments, which of those to ‘nip in the bud’ and which ones to encourage.

The example of Hastings as an innovator, while remarkable, is still the story of one brilliant mind. A lot has been written about the attributes of an individual innovator – the curiosity, the vision, the ability to take risk, the persistence and so on. Most of these processes in an enterprise are collectively managed. The challenge enterprises face is to replicate these very capabilities as a collective entity. And, it is there I believe that it falters.

On the one hand, the enterprise needs a well-honed ability to quickly spot important emerging trends and in particular the confluence of trends that will likely have a significant and interesting impact on its own business models and trajectory. Such an ability would in some cases lead to the ‘grand vision’ that Hastings enjoyed. If it is shared widely enough, it could become the conviction and generate the commitment to provide consistent guidance in the course of its experimentation and initial faltering steps. I see this competence as “Cognitive Excellence”.

Of course, we know that it is not enough to have insight and vision, but an organization then needs the ‘character’, the gumption to take risks and the persistence to work on the idea till it can make it work, and once again, ‘cognitive excellence’, to recognize when a pursuit needs to be abandoned.

So while we admire the abilities of people like Hastings, the urgent work in front of us as enterprises, is to practice and develop a keen sense to identify the big opportunity and to spot early when ones experiments are not on track to lead to the vision.

So what exactly is “Social Business”?

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2013

As the term “Social Business” become more prevalent, there is naturally some confusion about what the term exactly means. In my opinion, the term only has a temporary meaning, since business in my opinion has always been and always will be ‘social’. However, we are now at a juncture where there are some interesting innovations happening in the Enterprise, in Business Value Models and in the way we design functional processes using ‘social’ concepts, that are further accentuated by developments in technology.

There are a number of interpretations of the descriptor “Social Business” in current practice. There is the one that puts emphasis on the ‘social’ aspect of business, as in one whose main aim or purpose is to serve some ‘social’, and perhaps ‘non-commercial’ objective.

There is another context in which the term is also used quite often – that is in the context of for-profit businesses and enterprises. That usage has to do with leveraging the ‘social’ dimensions of an enterprise in order to further its purpose.

The ‘social’ dimension of an enterprise, as the term suggests, recognizes that enterprises are constituted of humans and therefore are social in nature, just as the customers they serve are members of society and therefore social too.

Recognizing the human and social characteristics of the enterprise ecosystem, allow us to better understand customers and the way they behave, are influenced, make decisions, and can act in concert and learn together. These aspects have a bearing on how an enterprise can get their message across by leveraging social networks, use the power of crowds to make better decisions, create a community that is loyal to its brand, etc.

Recognizing the human and social aspects of the members of the enterprise, enables enterprises to engage their employees better, thus enabling them to become more collaborative and therefore in turn enable better sharing and flow of intangible assets and knowledge. Such enterprises can also respond to situations by creating flexible structures rapidly and therefore become more agile.

When enterprise leverage such concepts to create more value for their customers or to become agile and smart, they are using ‘social business’ concepts. Since these are not ideas that are used in isolation, it is hard to say, that an organization that leverages these ideas is ‘social’, since it could also be more ‘digital’ for example.

There are now a number information technologies, that enable the ‘socialization’ of the enterprise. The term ‘social media’ is loosely used as an umbrella term to describe these tools and applications. Enterprises that use those technologies might be referred to as ‘social businesses’.

In any case, the practices I describe above, that leverage the understanding of “social physics” inside and outside the enterprise, whether commercial or non-commercial are also termed “social business”

Is Community Inevitable

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2013

When the topic of discussion is Social Business, it is almost inevitable that the term ‘Community’ will also be mentioned. There was a time when the terms were almost used synonymously. You see people breaking away from the ‘community’ pack now, increasingly talking about ‘social business’ instead.

I was wondering why the term ‘community’ became so popular in the first place. I believe the credit goes to the marketing function/discipline, which has been one of the most pioneering and widespread users of social technologies in the enterprise. Most of their efforts are of course directed externally, to the customer base and markets, whether to drive marketing messages or to create loyalty and retention.

Communities are notoriously difficult to build. Sometimes they already exist and the challenge is mostly to move them to an online environment and then make the transition significantly more interesting and valuable. In other cases, there is no extant community and one must seed, nurture and grow one online.

Since customer communities in most cases are sponsored by an interested enterprise, it must necessarily design them and intervene in their life in order to ensure that they meet the enterprise’s purpose, in other words, exercise some form of control.

The criticality of the role of “Community Managers” follows from this strategic objective, and is linked to the achievement of the stated purpose. However, even though customers do not come in a single form, external customer communities, to a large extent can be considered homogenous, at least in the sense of the enterprise’s objectives, and the role of a Community Manager becomes quite apparent.

The internal perspective is however completely different. If an enterprise has been around for a while, it probably already has a community even though there might not exactly be a prevailing sense of community – two different connotations of the term. The use of social technologies can go a long way in encouraging and fostering this desired sense at a broader and more pervasive level.

However the challenges of implementing social initiatives inside the enterprise are totally different than those dealing with external entities.

An enterprise uses a number of different social forms in the accomplishment of its business purpose. These include teams, groups, communities of practice, communities of interest and so on. Some of these forms are formal while others are informal.

Social business initiatives should not necessarily presume the social form, such as ‘community’. The appropriate form should be the outcome of design, or emerge from the fulfillment of a bottom-up need. Each design, with whatever social form it uses, should be accountable to its business purpose. And, this accountability cannot be delegated to some ‘community manager’ somewhere. It is integral to the management of the business function, just as it was when hierarchical structures were the norm. ( Hierarchies are still an appropriate social form to use in some cases, as are matrices etc!).

So, what does the term Enterprise Community Manager really mean – Is this person then someone who is responsible for driving a new initiative across the enterprise? Perhaps the role then is of a Product Manager and a facilitator. Perhaps this person is more appropriately the fountainhead of a “Center-of-Excellence”. Each definition brings with it a different perspective on what is expected of this role – A driver of Innovation, a Creator of Capabilities or a Program Manager. Sometimes it is the creation of a Community. I have always believed, that calling things appropriately is very important to the realization of purpose and the fostering of a Practice.

I believe today is “Community Manager” day. It would be nice to reflect on what it means and build a larger community of Social Business Champions.

Is being Social conditional?

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2013

On Quora there was a question that was phrased rather interestingly – to paraphrase – “Given that the world’s systems are becoming more intelligent – how should an enterprise become a social business”?

My answer follows:

I would have to start by asking which “world systems” you mean, since there are so many kinds of systems that enterprises deal with or are a part of. Traffic systems, Healthcare Systems, Communication Systems – you can see how ‘systems’ is quite a broad term.

As long as my statement about enterprises being social is true, then their need to be a part of such systems is due to the fact that their being ‘social’ adds value.

Even though there is a significant increase in the amount of information available to systems, and perhaps also there being much more automated ‘intelligence’, there is still a need for humans to be involved.

Such enterprises therefore must necessarily also excel at being social. A ‘Social Enterprise’ performs several activities as part of a system – It makes sense of information, takes decisions, innovates, develops solutions/designs and interventions, acts, often collaboratively or at least cooperatively and learns from its experience. Most importantly it produces value – value that is consumed by other social beings.

As long as this remains true, and I would say that will be the case for a long time to come, all enterprises and businesses must aspire to be socially competent/excellent.

The answer to how enterprise/business should become social has been extensively written about. Where an enterprise starts its efforts depends on its specific strategic context and needs.

It depends on the nature of your enterprise and where the opportunities happen to be. In general if you look at what is happening, the marketing function and its activities are a good place to start, though Customer Services and other support functions are also good candidates.

Others start with various attempts at creating capabilities and becoming a Collaborative Enterprise, with initiatives ranging from Knowledge Management, Product Development, Accelerating Learning etc. Eventually a social business leverages the power of ‘sociality’ pervasively in all aspects of its business, though the extent and degree might differ.

If the enterprise does not have experience with introducing such initiatives, since there are new competencies involved and quite a paradigmatic shift, it is of course best to start small, do a pilot and then learn and scale rapidly.

As maturity increases, the enterprise can take on wider ranging and more complex transformation challenges.As long as their is human activity, there will be Social Enterprises – whether or not this current interest wanes in the near future, the need to be social will remain. And, yes, we will increasingly included online/virtual sociality in the design of our enterprises.

The Synthesis

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2013

Over the course of my career I have had the opportunity to experience and work with a wide number of different approaches to IT-driven innovation in the enterprise. Each new wave brought with it a richer understanding of the enterprise.

The process dimension was perhaps the first that required a substantial revision in one’s view of the enterprise, requiring interventions on multiple facets and levels. When Knowledge Management and Collaboration related developments came about, businesses became aware of and appreciated their social side. Successful interventions necessarily had to go beyond just implementing technology, and incorporate people in the transformation equation.

In my opinion the era of social business re-design began with these developments about 15 years ago.

However, recent developments in technologies, have added several critical dimensions to the social architecture of the enterprise enabling a wider range of possible structures that can be leveraged, taking enterprise sociality to a new level. The social dimensions of the enterprise are once again in the forefront of business consciousness.

As is often the case, a confluence of developments in several domains, creates a tidal wave, and we are now in the midst of one. Opportunities are emerging on several fronts every day in the demand, supply and design chains as well as within other aspects of the enterprise. The realization that there is significant value to be realized through these interventions, is one reason this driver of enterprise transformation is here to stay. Successful enterprises will leverage this opportunity to create new business models, innovate services, and come substantially closer to realizing a long-held aspiration to become resilient and agile.

And while the promise is indeed real, social interventions are also the most challenging to execute. Unlike the other initiatives they demand a new set of operational disciplines and understanding, which perhaps even those involved with social change in the enterprise would not claim to have mastered as a science. Such challenges could easily create discomfort and a loss of interest among many business leaders.

However, we might have reached a juncture in enterprise development, where we have no choice but to explore this frontier or suffer competitively. Enterprise Social Innovation is indeed the next frontier for innovation and creating significant value, and those who master the new discipline will be well positioned to capitalize on the next inevitable wave of IT-driven innovation.

A design expert responds on Social Business strategy

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March 8, 2013

I came across this post by Idrees Mootee on his blog. It is his response to a blog post by Peter Kim of Dachis. I read through Peter’s post, and while I might differ on how I would express what he says, I agree with several of his arguments.

A good Social Business strategy cannot be a ‘me too’ one. As in the case of any substantial innovation, the strategy must be rooted in the enterprise’s own context. A friend used to say it well – “If you want to grow a rose in your garden, you cannot just pluck one from your neighbor’s garden”. That however is true of any strategic effort, and not just particular to Social Business. I prefer to look at Social Technology (more than Information Technology) -driven innovation as part of a larger domain of Enterprise Innovation. Perhaps the whole point of calling it ‘Social Business Strategy’ is to communicate with the larger conversation in the industry, where the term ‘social’ has been badly mauled in my opinion.

Any innovation strategy must be anchored within the larger strategic framework of the enterprise. Misalignment is dysfunctional in all cases, and is not true for Social Business Innovation alone. I advocate the creation of a Transformation Program which manages the Social Design product platform and brings an overall discipline to the prioritization and execution of innovation initiatives. This again is not a new idea. The typical ‘social media’ evangelists perhaps do not have exposure or familiarity with such ideas, so it is not surprising that this needs to be made explicit and emphasized. Given the general culture of the industry, there is a tendency to promise quick returns and discount the complexity and challenges involved in designing solutions that provide enduring advantage.

The other point Peter makes is one I have been advising my clients for a long time now. If this new trend is transformational, and I am convinced it is, then it must become a part of an enterprise’s business practices, just as six sigma or knowledge management have become integral to the way you do business. However, the new paradigm brings with a whole new set of practices that everyone in the enterprise is not proficient in. If an enterprise then wished to accelerate the spread of this innovation widely, it must establish a practice, a Center-of-Excellence, which provides a number of different kinds of value. It helps bring others on line with the new ideas, hand-holds them in their application, provides a place for accelerating learning, etc. Before the practice has reached maturity, an entity such as this can play a critical role in success.

What then is Idrees Mootee so upset about? (I have great respect for him – amazing pioneer in the field of design).

I think I would be upset too – if all this was positioned as something radically new, as something that was happening now. What is radical is the kind of innovation that is possible and the velocity with which new designs are emerging. There is an urgency here, an Enterprise State of Emergency, and people are trying to understand how to go beyond the popular narratives. He is right though, that some of these trends have been going on for quite some time. I have discussed elsewhere that Innovation with “social technologies” is not new – that is exactly what the Knowledge Management and Collaboration initiatives from 15 years ago were all about. I think a reconciliation between the two is possible. Idrees Mootee was most likely not Peter Kim’s audience for his article!

Predictions for the Social Enterprise

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March 8, 2013

There is a heartening trend I notice, where people are stepping off populist soapboxes and starting to look at the true implications of Social Technologies on the Enterprise. This blog post I came across by Boris Pluskowski, affirms that notion.

I am not sure about predictions, and whether these things will come true in 2011. Not all enterprises are at the same level of maturity when it comes to their applications of social innovation concepts. The likelihood of them all becoming Social Enterprises is moot. However, will there be increasing realization now that some of the initial euphoria has started to wane?

It is indeed dawning on people that the promised business outcomes involve a significant amount of work on the social facets of the enterprise, and it takes time for those results to materialize. Anyone who has experience implementing Knowledge Management or Collaboration initiatives knows that. However often one states the mantra, that this is more than technology, there is still hope that, that is all it takes. For, in general, we are still hesitant and perhaps unsure of how to design effective interventions that transform the social side of the enterprise.

This time though, unlike in the past, Enterprise Social Innovation will become mainstream and pervasive. Partly because there are no options, and because it provides a significant business opportunity too, businesses will necessarily do what it takes to incorporate the new disciplines. Will 2011 be the year they do it – of that I am not sure.

MIT and the art of innovation

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March 8, 2013

The title of my post takes from an articlein the Economist. When I saw the post in my Facebook newsfeed, I thought I was going to get some insight into what MIT had discovered were the secrets to innovation. The article begins with this quote by Susan Hockfield, the president of MIT.

“You start with some very bright people, let them hang out with other very bright people and allow their imaginations to roam,”

You might think you are going to be given some insight into the processes which have given the institution such a remarkable track record. As it turns out the article is primarily about an exhibition at the MIT museum that is part of the Institute’s 150th anniversary celebrations. You do not really get any insight into what MIT has discovered about innovation.

Perhaps the one major point I would take away was that MIT was involved or tasked with some real problems, in the process of addressing which its engineers and scientists came up with some interesting and often transformational innovations.

In that same context, it does help to be connected locally, such as MIT being connected with the city of Boston, which gave it some interesting challenges to work with. Perhaps I will go check out the exhibition as well.

Does that perhaps imply, that being local and what that brings in terms of relationships with people might contribute in some way to being able to take on and solve big problems?

Social Enterprise Maturity

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March 8, 2013

The maturity of an enterprise is always related to a Practice. Just as the original notion of maturity came from Software Development, in the case of the Social Enterprise, it should be linked to the ability of an enterprise to leverage the new models in business practices.

Here are a list of practices that I believe an Enterprise needs to master in order to progressively become more mature:

An Enterprise-wide understanding of the potential of Social Innovations – monitoring trends and understanding implications of trends for its own business. In short – Foresight, and Impact Analysis.

An enterprise must be able to build a ‘Case for Change’ – must be able to identify where in its business it makes most sense to use new approaches, what their value is and be able to create a compelling case that motivates all stakeholders. It should therefore have a practice around developing Strategies Road-maps, and mobilizing support for wide-ranging transformation.

Product Management and the introduction of Innovations in the Enterprise. This practice is not unique to Social Innovation, but if this is not a practice and well mastered, all non-trivial initiatives will fail.

Like all innovations, new ideas will need to be marketed and there must be a strategy to ensure adoption through the management of change.

There must be a disciplined approach to spreading successful new ideas throughout the enterprise, including the on-boarding of new segments of the enterprise. There must also be a disciplined approach to managing the overall road-map, ensuring that it is coherent and always aligned with Business Strategic priorities.

The Enterprise will need to master the design of Socially-calibrated solutions. Solutions must necessarily be holistic and systemic.

There are new disciplines such as Design Thinking and Co-design that should be practiced.

There is a new approach to creating Value, leveraging new organizational structures, and among other things it should all result in creating ‘experiences’ that ‘clients’ want.

Technology is just one part of this equation, certainly very important.

There is a new discipline to how these Social Solutions/Design must be Operated:

This goes to the notion of Open leadership, Community Management etc.These are new practices for most enterprises.

Operations is the heart of the value for the enterprise, for it is in Operations that the enterprise will realize intended business outcomes.

These must be systematically measured and interventions designed when desired expectations are not met.Therefore, the enterprise must master the art of designing social interventions that deliver the desired purpose.(Incentives, Motivations, Network Stimulation, Culture Change etc etc)

The entire Life-cycle of the ‘Solution/Design’ must be managed, from inception to growth and evolution.

Governance – needless to say, if this is to be a transformational initiative, then the introduction of Social Innovations must be linked to a strong Governance structure.

This includes the creation of new ‘Design Principles’ that the enterprise operates with and uses to make decisions, and things such as the creation of policies that encourage Open Participation etc.

Finally, the enterprise should commit to the Mastery of these Practices and should have some investment in a Center-of-Excellence or Practice. This practice, whether formal or informal must ensure that the organization learns from its initiatives and is therefore able to accelerate the leveraging of this new way of doing business.

These seven practices, should become the basis of evaluating maturity.