The Economist goes Social - and gets it (almost) right.

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The Economist dedicates a special report to Social Networking this week. Even though I find the focus of the report to be a bit narrow, they are to be commended for taking social networking out of the consumer space and start examining the impact on business. They reach this conclusion:

"... social networks are more robust than their critics think, though not every site will prosper, and that social-networking technologies are creating considerable benefits for the businesses that embrace them, whatever their size. (...) this is just the beginning of an exciting new era of global interconnectedness that will spread ideas and innovations around the world faster than ever before."

Amen. Couldn't agree more!

Yet in my view, they could have extended their piece a bit further along two dimensions:

1. Social Networking is but a sub-domain of Social Media. Reviewing the whole range would have covered a wider range of socia tools & technologies, such as social bookmarking (think Delicious, Digg, etc.), pix and video sharing (Flickr, Youtube, etc.),  (micro-)blogs (Blogger, Typepad, Twitter), search (increasingly a social tools now the Google's new social filter roll-out), wiki's (who would argue Wikipedia is not social?).

Where social networks are aimed for a large part at connecting people, the other tools empower additional social activities as contributing, collaborating, conversing, categorizing. None of these activities and behaviors are new to us, we have been doing this since the dark ages. Clay Shirky in his terrific book on this subject "Here Comes Everybody" has called this our "native talent for group action". With the advent of social technologies, available for free and easy to use, we feel empowered to enhance and accelerate this social behavior. The logical result from our increased adoption of and comfort with using social media (and a whole new generation of Digital Natives growing up with them and not knowing any better!) is that we are starting to incorporate social media 'mindsets' and 'values' into our everyday life - both in the private context and the work context. Participating, sharing, co-creating, self-organizing - we are applying these inherent social behaviors to a larger extend in what we do, in what we create, in how we interact. The Economist:

But arguably the most important contribution that the sites have made is to offer a free and immensely powerful set of communication and collaboration tools to everyone on Earth who has access to a broadband internet connection. This democratisation of technology is driving the socialisation of the web and fundamentally changing the way that people interact with one another, as well as with businesses and governments. (highligts by me)

Our interactions are guides by new rules and new values that were formed by our exposure to and experience with social media: open-source vs. proprietary; transparency vs. opacity; trust vs. suspicion; lateral networks vs. vertical hierarchies; peers vs. authority; engagement vs. persuasion, etc. etc.

This is al true - at least for those of us that have been infected by the social media bug and felt its power. The rest of the world, our family, friends and colleagues who still operate under the 'old rules', are still skeptical though. Who can blame them? As Frederick Nietzsche famously said:

“And those who were seen dancing were thought to be insane by those who could not hear the music.”

2. The other part where The Economist could have ventured a little more boldly is in how it (social networking or social media) impacts business. Of the 8 or so articles, they have only one that starts to speak to this topic a bit..... and only scratches the surface with the unappealing title: "Yammering away at the office".

... internet and the ultimate expression of what its founding father, Sir Tim Berners-Lee, wanted it to be. In his book “Weaving the Web” Sir Tim explained that the internet was always meant to be more of a social creation than a technical one. The ultimate goal, he wrote, was to come up with something that, first and foremost, would make it easier for people to collaborate with one another.

This special report has argued that social networks have already done much to achieve that goal. They have created trusted online venues where people can meet up using their real identities. They have provided firms with new ways to reach their customers and those who influence them. They have reduced friction in the labour market by allowing employers and prospective employees to connect more easily than ever before. And they have speeded up the flow of information within companies. (highlights by me)

via www.economist.com

This is where the real meat of the discussion is! And yet, they put in the one of the last paragraphs of one of the last articles of the special report. To become a bit more specific:

• Better connections with customer
• Better cross-company distributed knowledge
• More cross-silo collaboration
• More attractive workplace for talent of the future
• Increased open/co-creative innovation

These are some of the very tangible benefits that companies can enjoy when applying social media technologies and social media mindsets to their enterprise. The technologies are rightfully mentioned by the article, a group of software tools collectively dubbed "enterprise 2.0".

But what the article does not say, and was highlighted in a November 2009 Gartner study - is that adopting these tools and technologies is only part of the answer - the systems side.....

But as anyone who has been part of an ERP or CRM installation project will know, that is only part of the picture. Leadership behavior, culture and organizational structure are the other side(s) to this equation.

And this is where it gets really interesting: how do the new rules of interaction, the new social media values impact the company's leadership style, organizational structure and culture? How do leaders need to change their style to get their companies to embrace these new ways of working, to enjoy the mentioned benefits, driven by the new rules and values? No successful cross-silo collaboration without more 'lateral network' thinking and less 'top-down hierarchy' behavior. No connected consumers in brand communities without more 'engagement' and less 'persuasion' mode. How do leaders explain to managers who were born and raised in a different era that they now need to start connecting and collaborating with co-workers many years their juniors, many ranks below them as if they were peers? How do they get R&D managers to break out of silo thinking and protecting their turf and their IP to now open up their thinking to the rest of the company to spur open innovation? In other words, to stay with Nietzsche, what can they do to turn up volume on the music and get the rest of the company to join the dance?

Gary Hamel has done some really good writing on this topic in his new book "The Future of Management" and his Wall Street Journal blog Management 2.0, both aimed at the innovation of management practices. Rosabeth Moss Kanter has recently written on this topic as well in her HBR blog. Summarizing (and somewhat simplifying) their message: leaders need to move away from the tried and true (for the very "linear" industrial age) "command-and-control" leadership styles and towards more relevant "connect-and-collaborate" approaches in order to adapt their organizations to the complex and connected world we live in today.

Some questions I would like to throw out for discussion: should social media get broader adoption in companies? in what areas should companies expect the biggest impact or the quickest wins? is it sufficient to apply these tools "skin deep" or is a change in leadership styles and company culture a pre-requisite for success? what defines "connect-and-collaborate" leadership style, how can leaders learn the new associated skills?

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Comments

[Berend Jan Hilberts]

Lee, good point on the tangible benefits. Yes, it does take courage for management to leap into the great unknown. However, for the skeptical manager, fortunately there is 'left brain', analytical research available from e.g. Inc.500/Dartmouth on how many others have already gone there to avoid looking foolish, or from McKinsey, spelling out the percentage uplift of marketing effectiveness or the savings achieved in communication costs. See my next post on this topic.

Tim, I think you are right. Most companies experimenting with Social Media (at what I call "level 1 - sampling", start with customer facing initiatives. Many companies that progress to the next levels - when experiments were successful - (level 2: "skin deep"; level 3: "in the bloodstream"; level 4: "in the DNA") experience a ripple effect and see social media values and mindsets spread into other parts of the company.

[Tim Gielens]

Hi

I fully agree with the critisism expressed on the article in the Economist, they have to broaden their approach.

This is really amazing! The 5 C's...This view is trembling for anyone's traditional framework.

Forget the 2D matrix-structured company, let's open source. Cross-silo collaboration, which in my view is an imperative for innovation and thus for sustainable organic growth, must be structurally built in within & between companies, and this at every 'hierarchical' level. That's exactly where cy's fail...

The new social media values must be applied equally in the strategy business (in doing so we covered all the factors of the 7 S model, Mc Kinsey)

Concerning " in what areas should companies expect the biggest impact or the quickest wins?" : customer side? Cy's are already doing this. Cultural change is hard to achieve rapidly; so my guess is the structure, as a consequent of reframing the strategy...

Regards,

Tim Gielens

[Lee]

Got the link from the Economist article comment you left... good post, good questions at the end. When you say: "Some of the very tangible benefits" I would disagree that these benefits are tangible - in fact they're quite intangible in that they are very hard to measure and therefore used to convince management to adopt these technologies. I think good things do happen and make for great success stories after the fact, but prior to implementing these things it can be difficult to demonstrate value. That being said, E2.0 is nonetheless marching forward.

In terms of leadership, I think it's absolutely crucial for the leadership to be on board and sponsoring these initiatives and lead by example. Organizations are hierarchical after all. This then ultimately necessitates leadership style change.

Good stuff, thanks for posting,
- Lee