Social Business is a recent but very transformational trend revolutionizing the way companies function and generate value for all the constituents (stakeholders, employees, customers, partners, suppliers).
What is a Social Business?
Reconciling some of the most interesting business, organizational and technological phenomena of the last five years, a Social Business is
“An organization that has put in place the strategies, technologies and processes to systematically engage all the individuals of its ecosystem (employees, customers, partners, suppliers) to maximize the co-created value”
This definition tries to underline that:
- The historical Manichaean separation between the inside and the outside environments of a company is loosing importance and with it the privileged role for those ideas and decisions that the organization pushes to the market (inside-out) compared to the reversed flow of indications that from the market reach into the company (outside-in). The flow is now effectively becoming realtime and two-way
- The decision making and change management responsibilities are no longer restricted to managers (traditional organization) or to customers (as prescribed by Social CRM). Other than managers, organizational change can be driven equally by customers, employees, partners and suppliers. All these categories are moving from supporting actors to partners and protagonists
- It’s engagement not communication that makes the internal/external flow possibile. Getting individuals engaged means accepting a variety of needs and using those needs to inform the organizational growth and evolution
- The ultimate reason of existence for the corporation is no longer to generate value for its traditional stakeholders but the maximize the exchanged value between the company and the entire ecosystem. It’s a bit like the group of stakeholders had suddenly expanded including external actors. Even with this new twist, It should be noted how this exchange is intended to amplify, within a network perspective and thanks to the ecosystem, also the value generated for the old stakeholders.The Social Business is thus an organizational construct aimed to make the company more efficient under mutated market dynamics and consumer behaviors.
In a nutshell then, a Social Business is like a sensing organism that consciously decides to develop an osmotic relationship with its environment and that is able to constantly re-calibrate itself and the experience provided to its constituents based on the stimuli intercepted:
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Why is Social Business so relevant to my company?
In the last few years, an extensive set of studies has shown how Social Business can accelerate organizational efficiency and increase the potential of your business in a number of areas. For example:
Inside your organization:
- Better business performance (profit, productivity, margins, etc)
- Increased operational efficiency
- Getting stronger outcomes from knowledge intensive work
- Capturing and retaining institutional knowledge
- Better awareness about business opportunities and colleagues needing help
- Richer cross-department contamination and collaboration
- Reduced email traffic and information overload
- Cheaper and quicker mechanisms to connect colleagues, find and reuse knowledge
- Improved cross-departmental communication
- Smaller travel expenses
- Facilitating the emergence of collective social capital and limiting duplication of effort
- Stronger employee engagement and motivation
- Increased satisfaction of partners and suppliers
- Reduced supply chain costs
- Lower on-boarding, training and talent retention costs
- New levels of business agility and reactivity
- Improved internal processes through customer insights
Outside your organization:
- Reduced customer care costs
- Improved client satisfaction and loyalty
- Increased number of leads generated and deal closed
- Shorter sell cycles
- Lower marketing costs
- Augmented qualified brand reputation and visibility through advocates
- Higher sales and conversion rates through ambassadors and online communities
- Reduced customer churn and deflection
- Increased customer lifetime value
- Ability to attract better talents
- Improved cross-channels customer
Across the organization:
- Improved product development process and reduced time to market
- Smaller product development costs
- Access to an unlimited source of ideas and feedbacks for product improvement
- Better risk mitigation and increased number of successful ideas when launching a new product
- Easier development of new business models
What does it take to become a Social Business?
There is no social business if the organization is not able to:
- Serve the individual. Consider individuals (inside and outside the company) at the same level as traditional stakeholders.
- Listen. The company break down silos and boundaries to constantly intercept signals coming from the people (inside and outside it).
- Respond. The company engages all the constituents to produce an effective, reactive, coordinated, transparent, appropriate response to the stimuli received, regardless of the channel of origin.
- Learn and evolve. The company extracts meaning from the captured signals (coming both from inside and outside) in order to continuously improve the working mechanisms and thereby maximizing the benefits for all parties involved
- Become social. All the processes are dynamically and organically optimized based on collected feedbacks and in line with the experience of all the individuals in the ecosystem.
While at early stages of approaching social media most organizations simply juxtaposed them on top of what is a traditional enterprise, a mature social business goes well beyond simply reacting to online conversations and converts all the signals (from employees, customers and partners) into actionable insights, i.e operational guidelines for a continuous culture and process improvement:
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Where is my company along the Social Business Journey?
As more companies begin to be interested or in some cases to effectively launch new initiatives for involving customers and employees to improve their business, a possible sequence of cultural, technological, organizational maturity stages starts to show up. Each stage is characterized by a certain level of understanding of the role that social media play in creating value, by different organizational schemes and by specific degrees of integration between internal systems and online conversations.
The evolution from one stage to the next often requires a major mindset shift in one or more stakeholders and with times that vary by the industry sector, propensity to change and the results of people-affecting initiatives (eg knowledge management, customer relationship management, etc.) run in the past.
To understand in which position your company is and which are the next steps in the development of your strategy towards Social Business, consider the following path.
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