Getting to Effective Social Business Results: Applying Culture Change

by Dion Hinchcliffe 03 May 2012 Blog Post

Let’s face it. Social media is something that most of us now use extensively in our personal lives but that most of us still use significantly less at work. A wide variety of data clearly shows that companies are bringing up the rear. Those currently engaged in social business initiatives today are well aware that it’s taking real time and effort for their organizations to make the transition to new way of engaging our customers, workers, and business partners. Certainly it’s not that it isn’t happening widely or that there isn’t sustained, real value in doing so. This debate — a typical example — has been taking place so long and so thoroughly that the conclusion is largely foregone in my opinion: The world, including some of the business world, has widely become much more open, connected, and participative.

Thus, as we laid out in considerable detail recently in Social Business By Design, the business case for the strategic application of social media to the enterprise is now quite strong across virtually all departments and functions. Organizations are reporting they feel increasingly surrounded by social, just as they also realize they must learn to function effectively in a social world. However, they also face significant and inherent obstacles to adoption. These can make it genuinely challenging to truly adapt social in a manner that will successfully tap into what makes it so powerful and effective at creating value.

One of these obstacles is getting social technology to the right place in the business. We’ve learned that it’s actually fairly easy to drop a social network into an enterprise alongside other systems or add a bit of social engagement to a marketing campaign. But it’s quite another to meaningfully integrate them. The former has some value, but it’s not game-changing. The latter is where the rubber meets the road.

The Stages of Social Business Culture Change

In reality, the technology of social business isn’t much of an obstacle, at least once you get beyond the internecine platform battles that are common in many large organizations. No, the problem is a human one, which is ironic because social is all about people. Yet businesses are also a kind of organism in their own way. And like a living organism, they have a defense mechanism in place that acts like an immune system to anything that would disrupt the status quo.

This corporate immune system, as you might have guessed, is known as company culture. It’s a shared set of norms, practices, customs, expectations, and habits that have formed around and perpetuate how a company works and operates. While company culture is great at making the business function as expected and helps foster continuity and order, it’s also astonishingly good at killing off attempted changes to the system; undesirable and desirable both. It’s one reason why the entire industry of change management has emerged, so that companies can keep up with the our era’s ever increasing rate of change, of which technology itself is the most disruptive and high-velocity example.

Adapting Company Culture For Social Business

My colleague Dave Gray notes that we are now aware of much better ways of structuring and managing our businesses in a post-industrial era. We can move from hierarchical to networked models (what he calls podular) that are far more dynamic, efficient, and productive ways of working. Another of my industry colleagues, the always insightful Rawn Shah, has been suggesting that for companies to modernize, they will have to reinvent the company model, throw away the current (and broken) advertising model, and move away from the outdated industrial company model.

The Culture Change Processes of Social Business Transformation (Social Media, Enterprise 2.0)All of these are just ways of saying that the company cultures we’ve built up in the 20th century often don’t serve us very well today. Not in the era of social media, pervasive connectedness, and virtually free access to high-scale, world-changing networked tools. And change we must. Our company cultures must adapt and evolve to their times. Beyond the simple need to survive, failure to adapt means we can’t access the benefits of next generation business models, the most important of which are now creating new companies worth hundreds of billions today in historically very short periods of time.

In short, digital and social natives are dethroning the old guard. Dave Gray also likes to point out that the lifespan of an S&P 500 companies has plummeted dramatically in the last couple of decades. The upshot: The conditions under which our companies were created, thrived, and led their industries have changed. The good news is that our organizations certainly can change how they work. The bad news: If we don’t change ourselves as workers, managers, and executives, there’s little point in structural and process changes we can’t possibly enable, lead, or make successful.

So how do we get there? How do we make social business transformation effective? We can change our business processes, switch out our IT solutions, update our intranets, overhaul our marketing, sales, and customer care. But if we resist it, if we can’t think about it in its own terms, if we cannot act in a way that enables it, then we lose access to the promise. The promise itself is clear as I’ve covered many times in the past: More productivity, efficiency, innovation, customer satisfaction, and more. Superficial tacking on of social media to what we already do today isn’t the answer. As Brian Solis pointed out this week, building a social business must be treated as an investment, and one that will pay off handsomely.

Culture Change for Social Business: Stages and Process

In our work with clients, we’ve learned many hard lessons about how to situate social business. Even the need for culture change unfortunately is still not widely understood. The issue is, social business is a different way of working than we did in the industrial age or the post-industrial interlude. If it wasn’t different, we wouldn’t need to work hard at learning the methods and adapting our organizations. No, the networked age is now upon us and it means that the very notion of where value comes from, who creates it, and how it’s achieved at all is up for grabs. This perspective can be somewhat disturbing even while it also unleashes all new possibilities. Just understanding the concept of emergence alone, successfully grappling with the concepts, and then aiming at business problems is a long journey for some. Fortunately, the process of culture change, what the steps are and what the process looks like in general for the typical company is increasingly well documented. As are the issues around social business ROI and maturity.

In the first visualization above, I’ve depict the general stages of culture change across the major areas of an organization: supply chain, customer experience, and workforce experience.

Social Business Stages

  1. Augmentation. Partial and non-strategic addition of social to non-critical business functions.
  2. Adaptation. More effective use of social in the business. Movement of social business to core functions.
  3. Transformation. Remaking in place of business functions using social business concepts.
  4. Reinvention. Complete renewal of how the business operates around social business.
  5. Singularity. The core operation of the business as a fundamentally social set of constituents with little discernible boundary between them.
  6. The last is one that only a few companies have reached and is possibly controversial, but in my research it’s the inevitable destination of social business. I’ll explore each of these stages in more detail in future posts as I can. For those who currently have a hard time visualizing these changes, sometimes it’s good to look at a more holistic view of digital strategy as a cross-check.

    The stages of social business culture change describe the changes in the business in key operating areas, but it doesn’t describe how to get there. That’s in the second diagram on the left. This shows the key activities that drive culture change including executive and community leadership, strategic goals, business process redesign, education and training, risk management, and governance. Note that there is a shift from centralized culture change activities to community-based ones over time. This is an essential part of the process that can only start once vibrant communities and social constituencies have been created. Obviously there is more to each of these and I’ll cover those as soon as I’m able as well.

    Social Business Results

    I’m hoping this provides a broad and high-level picture of many of the moving parts of the real changes that organizations must make to quickly adapt to a business environment that is very, very different than it was even five years ago. Can most organizations change their DNA quickly enough to survive intact? That’s an open question that more and more business leaders are asking. But at least we have a clear sense of what we have to do. Now we’ll find out if most of us can indeed make the journey.

    Culture change for social business and other related topics are treated in detail in our new best-selling new book, Social Business By Design, now available on Amazon and in bookstores near you.

  • Dennis Pearce

    I always enjoy your graphics, Dion. I think there are two angles with regard to social business and culture change. One, which you outline above, is how the adoption of social business will (or at least should) generate culture change. The other is how social business, once adopted, can be a tool to make other ongoing culture changes much easier.

    In my company over the last year or so, the CEO has emphasized the need to shift business models and become more innovative, and we now have a number of initiatives starting up across the comapny to effect that change. We introduced a social business platform enterprise-wide at the start of this year and packaged it as part of that overall larger initiative (in fact, it is internally branded as ‘Innovate’). So far, acceptance has been very positive and my hope is that with a little guidance, we can pick up the kinds of culture change you describe above ‘for free’ along the way as we work to adopt the culture change we are specifically articulating.

  • Jem Janik

    Culture change is definitely the biggest piece of a social business adoption and one thing that makes it challenging is it’s a chicken & the egg type problem. You need a network of people working in new ways to build the successes and use cases in order to convince more people to try the new way. My experience has been that it is a iterative cycle of adoption and value with individuals that eventually elevate the current organizational plateau of where the culture is with respect to social business.

  • Rawn Shah

    Nice piece. Finally had an opportunity to read this while in China.

    I have to ask two basic questions which have befuddled me for the culture change angle from the years we have worked on the issue:

    1. If the nature of social business is emergent, fluid and adaptive, why would we imagine that a fixed predetermined process will apply?

    2. Does this mean that we are heading towards some common cultural traits for any organization? Isn’t the fact that we currently have that variety in organizational cultures that makes work appealing in different environments, and create that necessary economic and innovation-driving movement of people? I think the model you have can create different cultures but I’d like to understand what that means.

    Thanks again Dion


  • Jon Husband

    Very nicely synthesized and summarized.

    1. If the nature of social business is emergent, fluid and adaptive, why would we imagine that a fixed predetermined process will apply?

    Very good question. I have often used the analogy of a master tailor. Used to be that there was one basic model of org design and general management principles that over time have become somewhat standardized (I’m referring to period 50′s to roughly 2000). From hereon out, I think much more ‘customization’ .. each biz / org has it’s own context and make-up, and a clear and comprehensive understanding of that uniqueness will fold into whatever ‘social’ becomes in that given org. It will impact work design, pay philosophy and practices, degree of contractual versus ‘permanent’ employment, leadership style(s), governance dynamics, etc. But ‘predetermined’ ? I have my doubts.

    2. Does this mean that we are heading towards some common cultural traits for any organization?

    I think so, but again not prescriptive. An organization’s cultural traits and attributes will all stem from some combination of knowledge, trust, credibility, and a continual focus on results that results in satisfied customers, employees who want to work at that organization and a brand that has demonstrated its ability to listen and respond in effective and tangible ways.

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