Social Business Manifesto

July 25, 2012 — Leave a comment

Emanuele Scotti, Rosario Sica, Emanuele Quintarelli

“Markets are conversations”
Cluetrain Manifesto, March 1999

Collaborative mechanisms are radically changing the way in which markets function and the way in which organizations create value. Consumer behaviour is becoming ever more conditioned by the reputation of companies among consumers and influence among peers, often leaving businesses themselves out of the conversation. How does marketing, advertising or CRM re-establish itself in the new millennium?

The method previously relied upon to organize work – born during the manufacturing industry era in order to segment and control industrial production, a method which has reached the present day almost intact – appears inadequate and clumsy in managing the need for reactivity, innovation and agility in today’s organizations. How can we regain efficiency and speed? How can we free the great potential of intelligence, creativity and energy that is exploding onto the business network but which is still trapped in the bureaucracy of modern organizations? These questions go beyond popular phenomena or trends and critically examine business and management practices and convictions in today’s society.

This is a reflection that dates far back and that has re-emerged over recent years in a devastating manner, taking the name of Social Business. Social Business is how a business operates in the era of interconnectivity. Social Business is a new way of organizing work and relationships with a business ecosystem.

Management disciplines have developed great capacities to make stable and repetitive processes efficient over time. Businesses are now being asked to be more agile, to continually redefine themselves, to provide a relevance to service and customer experience, and more. This makes those capacities no longer sufficient and, in some cases, even dangerous.

In this context, the emerging models of Social Business, both inside and outside an organization, are starting to show their value.

If we really want to create something entirely new, we need to start looking around in a new way, otherwise we will continue to behave as we always have. To create new things, we need to look at creating a newer version of ourselves. Let’s consider another period of great transformation, that of the transition from the medieval era to the modern day. The person who best represents this change is Christopher Columbus. Discovering America is in itself an intriguing story for those who study innovation. When we look at great moments of change, we often risk making the mistake of seeing things in a linear manner: some have thought that to do a certain thing, you need to plan the journey and then you will arrive at the destination. However, when you are on the journey of change it is nothing like this. It wasn’t like this in 1492. The story behind the discovery of America is full of errors; Christopher Columbus was convinced up until his death that he had shown the way to the West Indies and not that he had discovered a new continent. It took twenty years to correct this mistake. In order for people to understand that an unknown continent had indeed been discovered, Western Europeans had to change their own opinions and create new maps.

In times of great change things like this happen: you discover things which you never expected to discover. And in turn your convictions, identity, and cognitive processes change.

So why this introduction? Because today we find ourselves in a time very similar to the end of the medieval era, a time of great confusion. And for those of us who work in the world of organizations, it’s easy to see that in all of this confusion, traditional values and managerial models are heavily involved.

The first point to consider is that we need to change some of our convictions. The current management models for our companies no longer work. We have made management a science; we have tried to transform people into machines; we have divided work tasks into segments, taking significance away from the things we do whilst we work; we have depersonalized things in order to try to control the work place; we have tried to standardize work to guarantee the possibility of repeating services without unforeseen events.

This type of organization worked well when the theme of the business was repetition. It becomes a model that works far less well when the nature of the business is knowledge-based, striving for constant innovation, within an intangible environment.

We don’t have the organization and the appropriate technology for the era that we are living in.

Just as at the time of Christopher Columbus, even we need new maps, especially because it is very difficult to manage things that we are not capable of seeing. These new maps are obliged to work with a technological infrastructure that has only been created in the last few years – the Web, more specifically, Social Media – which is interesting not only in itself, but also for the social behaviour it allows.

The dynamic that emerges by collaborating with other people online can be represented by a curve showing increasing marginal returns (Fig. 1): the overall growth corresponds to overall input. If we learn to harness the power of patrimonial intelligence and the energy of group work the value that is generated grows exponentially. For a long time we have been used to performance curves which in general have decreasing marginal returns, such as the typical curve of experience. (Fig. 2)

This comparison is very interesting, as it opens up possibilities for us of radical innovation which we don’t even know how to see using our current cognitive processes. We are in a time of great changes, but we think of change in an old way, as something linear, where we have to say where we should go, what the expected ROI is, what the benchmark of reference is, and what the plan of action is in order to reach the goal. But we will never get anywhere if we do not change our way of observing things. We could discover, for example, that – as happens on the internet – if organisations also moved their attention from codifying content (archiving documents, procedures, rules) to protecting connections they would have improved efficiency spaces in front of them. Controlling communication flows among individuals is becoming more important today than controlling the content of the communication itself.

This adjustment must be made quickly, because the world is moving faster than ever. As the Queen of Hearts says in Alice in Wonderland, we must run, but we must run just to stay in the same place. There are emerging countries that are running much more than us; the phenomena that we have already mentioned are creating markets with different rules. The customer is now social (“social customer”) and much more efficient in making the most of the information on companies and products than the companies are themselves. The same thing is happening in some way within companies, with the birth and self-organization of communities and spontaneous networks favoured by technologies, often operating consistently with the organization’s project, but sometimes not.

This tendency has grown from a new generation of young people, who bring with them a completely different culture from that of the organisations that we have created. In this generation, there are completely new
concepts of belonging, of boundaries, of mine and yours, and of collaboration. Businesses must therefore act and act fast. Many of them are already doing so, while others are trying.

Many of them are aware that they have lost control of their own brand, which is passing into the hands of the people who are online – people who discuss their experiences, leave comments, and give criticism in more far-reaching, and more appreciated ways than traditional communication initiatives and campaigns. As Chris Anderson says, we are no longer what we say we are but what Google says we are. The voice of the consumer has gradually become more important in the creation of the image and the reputation of the brand.

A lot needs to be done to create an organisation and infrastructure which are more in line with today’s economy and social context.

First and foremost, we must create infrastructures of emerging collaboration, i.e. infrastructures which have increasing returns. People have to be able to build trust and resources, they have to be able to organize themselves, they have to be able to solve their problems collaboratively (Fig. 3). This must be done through the integration of two worlds: that of traditional organization (which nevertheless remains necessary for defining responsibilities, plans and tasks) and that of new forms of organization and the emerging collaborative network, which are necessary for dealing with unforeseen circumstances. There is also a lot to be done on the external front – engaging with the client (fig 4).

We need to talk to clients. We need to stop shouting; we have to listen and understand how they use products and what they want. Companies can carry out “social marketing” activities, letting enthusiastic clients “infect” others. They can use social networks to generate sales, and provide customer care and innovation together with clients. There are also plenty of examples of this.

We have to look at innovation from a new perspective, a less linear, less planned and exploratory perspective (Fig. 5). Networks are much more efficient at this than hierarchically organised groups, because when we explore something new we need to believe it, we need to have different points of view, we need to organize ourselves each time in line with the task at hand, and networks are much more efficient at this. Today is no longer about evangelization; that was the case years ago, when we started our project and launched the Enterprise 2.0 Forum in 2008. Today this has become mainstream. So what kind of company do we imagine? It’s an open, emerging and collaborative organisation, in which we need to talk to people outside the company with feedback flows precisely because we are organised inside the company with similar flows. The organisation can therefore do social media marketing, innovation/crowdsourcing, collaborative support with clients, and more.

We need courage, energy and faith in order to make this journey. But above all, we need to wear the right glasses, and look at new phenomena with new eyes. Only at that point will we discover that we have reached a new land of opportunities.

Chaos is simplicity that we cannot see yet
Organisations are conversations
Entropy is born from trying to use new tools to do old things, or from using old tools to do new things
E-mail has been overtaken by more open and emerging exchange platforms. Organizations should abolish their internal use of e-mail
When faced with ever more complex and inter-connected problems, decision-making architecture – represented by modern business and governance models anchored in a hierarchical command-control principle – shows all its inadequacy
The road must be the culture of risk: new perspectives do not open up without risks
Clients know the products much better than the companies that produce them
Those who work expect in some way to be able to participate in the organizational project; malaise is generated by the impossibility of this participation
In order to see new phenomena we need to build new tools of analysis and measurement
Organisations are living organisms. Even before generating products they generate and transform knowledge
The ability to generate and transform knowledge makes organizations emerge or decline in the knowledge economy
Knowledge is generated and transformed in conversations among employees, among clients and between clients and employees
Conversations go beyond walls and roles and favour relationships of trust that are difficult to condition
The weak point of knowledge management is the management
Collaboration is the challenge for modern organizations. We have only just begun to deal with this; the management tools currently available are inadequate for the purpose, as they were born in another era and for opposite objectives.
Collaboration does not (only) mean coordination, planning, and role management. Collaboration means putting collective intelligence to good use
Today we need to come together, create stories and common meanings, involve personal feelings, find ways to engage with people
Organizations that are inflexible risk extinction
High-performance organizations have disorganization and weak links as their strong point
There is much more intelligence in our organizations than management is willing to recognize
The intelligence in organizations today is trapped in procedures, customs and roles
It is difficult to direct a conversation; it is easier to feed it or silence it for good
An economic crisis is also a crisis of management models and work organization models
Today, man’s great works are born from conversations, and often they don’t need governance
The knowledge of organizations today lies more in connections than in company databases
Teamwork, integration, collaboration: organizations are cramming themselves full of concepts that are ever further from their own practices
The market today has a faster and more articulate intelligence than the intelligence of organizations
Organizations react to stimuli in their market with a speed that is inversely
proportional to their size
HR’s plans hide the fear of freeing the energy and intelligence found within the organization
Clients, like employees, are looking for a contact and a dialogue but instead find rubber walls with high-sounding names: call centres, customer care, direct lines
Consultants strengthen the status quo: they try to bring complexity to the pre-established order but by doing this they increase entropy as they simply move the disorder to another level
Disruptive innovation does not occur in R&D departments: it occurs by mixing points of view and knowledge in new and open connections
One-way intranets are useless; Social Intranets can today become the nervous system that allows an organism to feel and act as a unit: they allow the exchange of stimuli, the accumulation of memory, the formation of identity and the coordination of actions
Today there is a need to come together: to connect the dots (vision) but also to connect people and create autopoietic (self-creation) systems
Reputation is the key
Centre and outskirts are concepts of the last century. Online, centrality is a function of authority and visibility
Listen, listen, listen: it’s the client who tells you who you are
In the knowledge economy you don’t have to know everything but you do have to be well connected
From the knowledge economy to the gift economy…
The business process emerges bottom up, learns constantly and adapts itself according to feedback from employees and clients
Think in a new way: abandon slideshows and restructure work spaces.
Listening to conversations is not enough. We need to draw meaning from them and direct change
Your employees come first. Without their involvement your Marketing department will never be able to engage customers
Consulting firms are not needed to build new organisations.
Ideas from clients, employees and suppliers are just as good as those from management
Social Business is not a new technology, it’s a new type of company
Looking at the market through the eyes of the product and socio-demographic segments has lost its value. Let’s seek out passions, needs, tribes
A company is centred on the client when it is able to look at itself from the outside, knocking down barriers both internally and externally
Bottom-up innovation does not mean carrying out everything that the clients ask for. It means understanding the problem that the clients want solved and helping them to solve it
Socializing processes does not mean creating new silos, even if they are social. It means breaking down traditional and social silos.
Only working for a wage never makes the difference. People today are looking for a common mission
Opening a Facebook page is easy. Opening the doors of a company and welcoming clients is difficult
Companies hardly ever know what the client wants because they have always been afraid to listen
Communities of people are not created and managed. Communities attract members and are cultivated by them
The new management model is closer to cultivating a community than to leading a flock
Change starts from the early adopters, but sustainable change reaches everyone else
Customer service is the new marketing
The only way to balance the excess of information in which we are drowning is by adding more information that acts as a filter
A group of kids has created more innovation in the last 15 years than IBM, Microsoft and Oracle put together