Names and Numbers: The Challenges of Social Business in 2014

fortune tellersIt’s the time of year to move from navel gazing to crystal ball gazing, and I was recently asked my predictions for the coming year. There is an abundance already-  my 140 character recap reads:

  • In 2014 (insert subject here) is going to get bigger, faster, newer, more complex, more competitive/collaborative- so get your act together.

I’m being ironic of course. But of particular interest to me is the debate over the next phase of Social Business- and it isn’t clear cut. In a well stated post (which includes a podcast with a discussion on the definition of the term), the Social Business Global Partner for IBM even stakes his career on 2014 being the year of Social Business. And yet 2013 was definitely a year in which its actual survival was being defended. A truly excellent post from Chris Heuer sounded the deathknell of the moniker at least:

“The movement has failed to earn… faith, trust and budgets in a significant way. While the ideas behind the moniker are invaluable in defining the future of work, most large companies simply aren’t buying into or investing in Social Business transformation efforts in more than a piecemeal sort of way.” Chris Heuer

It’s easy to share Heuer’s frustration that deeper meaning is being lost behind a linguistic red herring (or at least something sounding just as fishy). Crippled by a myopic focus on silos and technology, rather than organisational structure and ‘Humans-who-are-called-Resources’. And apathy at every level of the business rather than a collective responsibility to do something to fix the broken system.

Rachel Happe takes a more optimistic view of the same faltering progress of the movements, in her post ’2013 – The Year Social Business Got Real’.

“In reality, big innovations and changes require a lot of tumult and confusion before the new mode of operations becomes normalized and comfortable. Organizational tension increases dramatically before it optimizes.” Rachel Happe

Are we are now merely in what Gartner’s hype cycle would call the ‘Trough of disillusionment’? Is this a necessary stage to endure in order to arrive at the ‘Slope of enlightenment’ and the ‘Plateau of productivity’? Is it merely a plummet from the ‘Peak of inflated expectations’?

Will 2014 be the year that Social Business grows up, gets real, or gets lost? 

Rather than purely tout my own clairvoyance, I’m going to respond to the question in a way which I would like to influence the answer, and agenda. To propose what I think could be helpful next steps in Social Business evolution.

Social Business is rebranded by the Crowd

Too often the word ‘Social’ is either not taken seriously, shrouded in ambiguity, or viewed as another expensive software vendor generated fad. Partly in response to the failure of the term to win hearts and minds on a major scale, we have seen a kind of rapid ‘post-digital enterprise’ etymology of terms- which have also failed to gain traction over the last few years.

I in no way think that should rule out a further attempt. But perhaps it’s now time for a term which, true to the crowd-powered, collaborative, and inverted nature of Social Business philosophy, is not one carved and cultivated by a vendor or big consultancy, but, actually by the crowd. A crowd including the very people whom we have been trying to sell this to. How would it make sense to them? Semantically, ideologically, and practically? Let’s find something which resonates with business imperatives as well as sustainable development… with the leveraging or simply navigation of social technology enabled interaction and transparency, as well as the culture and behavioural psychology which underpin it. That sounds quite straightforward, right?!

The ‘Oh Shit Moment’ gets closer

We have all had ‘OSM’s in our personal lives, in which we have forgotten to do something important with dire or cringe-worthy consequences. Here I refer to the moment at which businesses realise that their reliance on traditional businesses models was misplaced, and that denial is not a futureproof strategy. At which they grasp that that while they’ve been ignoring new work, technology and communication practices, someone else has found a better way to serve their customers. The moment it dawns on them that their lunch has been eaten, and it’s now a question of fighting for the scraps.

Scot McKee, B2B marketing author and head of award winning brand and digital agency Birddog is happy to play the long game when explaining how truly social communication can yield results. He recently reminded me that failure to innovate and keep in touch with your market is not a 21st Century phenomenon. Indeed insolvency practices were busy long before the days of social media, and although organisations now have less time to respond to change, being risk averse has always been a trait valued by shareholders.

I was similarly struck by the resilience of Luis Suarez, Knowledge Manager and Open Business protaganist at IBM. He has been building internal communities and promoting internal collaboration through social computing for many years, and even at the company regarded as being the closest living example of a Social Business, has no expectations of rapid change. Part of his success has been in letting internal colleagues arrive at their moments themselves rather than forcing agendas on them. Having been through some kind of ‘Oh Shit’ Moment  (OSM) themselves, senior executives are much more likely to become active advocates, rather than cynical saboteurs.

While these views give sage perspective to the current dilemma, I do wonder if more can’t be done to communicate the risk of not embracing where your customers and staff are socially, and accelerate the epiphany of an OSM to a point at which all is not yet lost. The risks to reputation and relationships of not engaging authentically and openly through social platforms are substantial, and in no way rocket science. But we need to find a way to communicate them in a way which has enough authority as those more well established risks. We need to demonstrate with more credibility how collaborative and ethical cultures will be essential to creating long term value for our shareholders and stakeholders. There are many books and case studies analysing how new entrants have changed market landscapes and reduced the most established institutions to rubble. But we somehow need to communicate them in more relevant and indisputable business terms.

Ironically, slow adoption of Social Business philosophy of communication, has been caused by, um, a failure of communication. If evangelizing and  prophesying are not getting the message across, other strategies are needed, and perhaps by other bodies. A kind of ‘Dumb Ways To Die’ for businesses perhaps. Or a 1950s Public Safety Announcement, crossed with a ‘Risk’ style computer simulation game which lets you experience the OSM in your sector. Any developers out there fancy the challenge?!

The birth of the Social CFO

bean counterIn my opinion a key reason businesses have not embraced the movement, is that the Social Business discourse has failed to involve, engage and inspire the FD or CFO. Yet I think they are the people who can make or break the adoption of any transformational business practice.

I have been in seminar after seminar in which marketing people discuss the issue of calculating the ROI of Social Media. It’s often seemed a pretty pointless debate; although we need accountability and evidence, I’m far from convinced outdated marketing ratios are the appropriate metric. Something far more complex is required, something which takes into account cross organisational objectives and benefits.

For example, if Social customer service is impacted by say, a community management project originating from the marketing department, what is the financial impact on R&D, on loyalty, on the contact centre, on brand equity, on recruitment, on IT? Possibly nothing, especially if the potential spread of benefits are limited by intra-departmental blinkers. But a digitally knowledgeable CFO focused on financial performance in each of these functional cost centres is equipped to model the cumulative benefits. And imagine if they could use their expertise and work with the CTO etc to spearhead organisation wide initiatives, suggest sharing platforms, re-engineer departments- making savings along the way. That’s even before any extra revenue is generated.

Of course, the issue here is as much one of culture – of politics. Endorsement from a senior and respected figure at board level, would often be a good start to halt tendency of departments to resist initiatives originating in ‘rival’ departments, rather than resist them. I have seen organisations in which one department unilaterally pays for, and uses a tool or platform which could have multiple applications in other areas. Far from being the naysayers of frivolous social technology purchases, the CFO could be developing models to calculate things like how current procurement costs could be cut while free research could drive more marketable products for the future. I have seen first hand occasions in which digital technologies which could easily have saved money at a time when the organisation was in financial trouble, by simply increasing efficiency to the tune of millions. And internal communications systems which could easily have improved service delivery overnight.

But an inability to present this potential credibly to the Finance Department in a terminology meaningful to them, meant that plans were never  properly appraised and considered, never mind prioritised.

The stereotypical personality trait of a traditional accountant does indicate a natural aversion to perceived social ‘chit chat’, even more so if it is publicly conducted.  But if they are the ones who should truly be able to appraise the costs and benefits of Social, in terms of changing resource structure, and distribution channels, revenue models, we need to more intelligently incentivise them to break some molds, and get up to speed enough to help us out.

My second reason for wanting to see more CFOs enter the social community relates to a previous blog post I wrote, advocating that CEOs have a responsibility to have a first hand experience of Social Media so that  they can make important decisions based on their own valuable judgement, rather than the sometimes unreliable Chinese whispers on which get passed into the boardroom.

I was fascinated to get a response from Hughues Pietrini, Orangina Schweppes France President, adding that the barrier CEOs often face is that most of them were once CFOs. And indeed a very small number were once marketers.

We need more senior Finance function leaders get involved in Social communities the exploration of Social Business. To find a common language, to debunk some myths, and to educate marketers on the ratios that drive business performance as a whole.

2014- Resolutions not Predictions

While I don’t seem to have managed to arrive at insightful predictions, either by stroking my beard or analysing data, it seems I have set some action points, some New Year’s resolutions. And unlike ‘cutting back on my hot chocolate intake’, at which I failed miserably in 2013 and no doubt will again next year, I’d like to make some of these stick.

A group of us in London have been working on ideas to tackle some of these issues of semantics, of credibility, of relevance, of communicating risk/benefit. We come from different specialisms, sectors, perspectives and together maybe we can start to build a picture of the elephant which until now we’ve been blindly grasping only a part of. We are selling nothing except ideology- driven by a motivation to facilitate the installation of rigour into evangelism, and help the movement (whatever we call it), to progress with fewer cries of ‘Oh Shit’.

I’m sure I will be fleshing this out more in further posts, but in the meantime can you help? What do you think of terminology? ‘Social Business’- thumbs up or down? Growing up, or on the operating table?

Do you know any FDs/CFOs who could input? Would you like to join or find out more? Do you have relevant experiences or advice to share for 2014?

  • Neil J Fletcher

    Tania, I’m so glad I didn’t rise to your challenge regarding predictions for 2014! Mine would have been along the lines of your ironic ‘bigger, wiser, faster, stronger…’ and not nearly as thought-provoking as this post.

    For me, your article reveals why the whole ‘debate over the next phase of Social Business’ is partly tipping at windmills.

    As you say, the system is broken. It’s broken at such a fundamental level that whether or not Social Business is adopted is almost irrelevant. That may seem harsh but bear with me.

    “…a myopic focus on silos and technology…” – it still depresses me that a lot of people working within a company forget the fact that they are working towards a common goal, that of the company. All of the infighting, backstabbing, bickering and secret-keeping serves only to hold back the company, nothing else.

    “…(CFO’s) are the people who can make or break the adoption of any transformational business practice.” Any company that continues to allow this to happen deserves everything coming its way. Yes, companies need to be run on a financially sound basis but bean-counters, by their very nature, are risk averse. Whilst they should have a voice at the table, it should not be the only voice and it should very rarely overrule the other voices. As Hugues Pietrini points out, the problem is compounded by many CEO’s being former CFO’s so we have a risk averse ‘echo chamber’ being set up with the two most powerful people in the company supporting each others views. That’s rarely going to be a recipe for success.

    I’ve seen first-hand similar scenarios in companies where IT blocks the purchase of software not because they put forward a cogent business argument but because ‘it doesn’t fit in with the way we do things’. Yeah, that’s a great way to operate – let your IT department dictate how the business is run.

    Until these fundamental issues are sorted out, it doesn’t matter what we call ‘Social Business’. Those companies that get it will just incorporate it into their everyday business processes and not care what it’s called.

    Those that don’t get it will continue to find ways to justify what they won’t adopt it wholeheartedly, why it should be called something else, believe it’s ‘somebody else’s problem’ while they circle faster and faster down the plughole.

    The only constant in life is change. Embrace those who embrace change and leave the rest to their own devices.

    • Tania Duarte

      Beware the echo chamber and the plug hole… Nice analogies Neil! I wonder if Finance people tend to be risk averse by their nature, or their focus and responsibility. Either way, we need to understand their pressures closely enough to table the risks of falling behind, or even to get a place at that table in some cases.

  • Adi

    I think 2014 will be the year chickens come home to roost on this issue. There are many companies getting the message on this and trying some of the right things, but they do appear to be scratching at the surface because they’re treating projects in isolation rather than looking at the entire system that is their business.

    For instance, I attended an Innocentive talk a few weeks ago and there were a couple of companies there who had done open innovation contests internally. That’s great. What they hadn’t done however is re-draft their job descriptions so that open innovation or collaboration became something people were given permission or time to do. Their KPIs weren’t re-written to include open innovation as something by which they’d be measured (indeed, there was no way for people in other departments to even contribute to that appraisal process). Their HR teams weren’t doing anything at all with the information they were gaining about a) what hidden knowledge employees had, b) how those skills could be deployed in future, c) what informal teams or collaborations existed they weren’t aware of. So nothing was changing in terms of how employees worked once the challenges had finished.

    So progress is being made, but it’s a fair way yet before social business becomes business, and I think 2014 will be the year companies start to appreciate the kind of systemic changes that are required to become so.

    • Tania Duarte

      Well put Adi, I do hope so. I can’t wait to read your book on the subject when it’s published :)

  • Paul Mayze

    Interesting read – thanks. However, there seems to be an assumption that CEOs/CFOs just don’t get it (even if the fault for that lies with ‘Social Business’ practitioners). I’m sure that’s often the case, but is it not plausible that some do get it and just don’t actually feel it’s right – or more importantly, ready – for their business?

    From personal experience, ESNs can certainly lead to more interruptions and distractions – I think it’s one of the reasons so many retreat into private groups within them. And most research that I’ve seen in support of social business ROI has tended to be self-serving (e.g. published by SB companies).

    Don’t get me wrong – as a ‘social business enabler’ (and for using that term, please shoot me now…!), I very much want you to be right. I just feel we may be doing some of the decision-makers a disservice.

    As for the language of it – for me, the term ‘social’ (like ‘share’) has become almost meaningless, and is too often associated with hollow, narcissistic behaviour. Alongside that, it even sounds a bit dated (‘social’ is so 2007 :) ) – so I definitely think you are right and we should look to distance ourselves from it. When I see the term ‘Enterprise Social Network’ it kind of sounds like a dad gatecrashing the school disco and trying to be cool.

    • Tania Duarte

      Some great points Paul, thanks. I’m with you at that disco, throwing shapes. It is indeed too easy to make dismissive sweeping statements about the C-Suite not getting it, and I didn’t intend to fall into that trap. I do advocate that they are informed enough to make a decision as to what stage of readiness their business is at and what strategy is required, whatever that turns out to be. I also believe that they have a responsibility to get themselves there. The point I make however is that we as ‘social business enablers’ (ok so shoot me too) aren’t always telling them what they need to know in a way which helps that process.

      I also agree that a lot of research has a hidden agenda, and that’s one of the reasons why I would like to engage the Finance wizards in the debate. Applying scrutiny and discipline can only help us separate the fact from the fiction and learn accordingly. We do need more independent research and that’s why I’d like to see some kind of NFP group…