The definition of social business

by Peter Kim 25 Jun 2012 Blog Post

“Social business” is a term you can’t escape these days—even if your work just remotely touches on social media platforms, such as Facebook and Twitter, or collaborative technologies, such as IBM Connections or Yammer.

But what does “social business” mean? And why should you care?

After months of discussion and debate with my Dachis Group colleagues Jeff Dachis, Kate Niederhoffer, and Ellen Westcott, in January 2009, I was the first person to publish and use the phrase “social business” in a blog post. That post, titled “It’s Time To Transform,” touched on the fundamental need for a new concept—something that would get us past incremental changes in marketing and technology, and would unlock much greater value creation for businesses.

(Note: The phrase “social business” was in use prior to January 2009 in reference to the work of Professor Muhammad Yunus. That definition is quite different than our use of the term as applied to evolutionary marketing and technology strategies.)

Later that year, with David Armano and Jevon MacDonald on board, we wrote about the concept of Social Business Design, which explained what social business is, why it matters, and where to apply it in the organization.

In brief: Social business draws on trends in technology (e.g., powerful mobile devices, widespread availability of high-speed Internet access, low cost of data storage), work (e.g., always-on culture, globalization), and society (e.g., propensity to share). Companies should care about social business because they can improve business outcomes (i.e., increase revenue or decrease costs). The core principles touch on all areas of a business, whether for business-to-customer engagement, employee-to-employee collaboration, or supply chain optimization. Making social business work requires focus on a company’s culture, connections, content exchanges, and measurement and analytics.

Let’s pause for a second. As you can see, the definition of “social business” is already unwieldy.

Why You Should Care About the Definition of Social Business

Here’s where we get to the part that explains why you should care about the definition of social business.

The thing about social business—and what is true to its original definition—is that it’s a BIG IDEA. Again, go back to that original blog post, and see that social business intends to transform marketing and technology. Companies have always listened to customers and have empowered employees. Companies have also been exploring new media and implementing new technology for decades.

But here’s the difference: Social business harnesses the trends in market today, helping us change business models of yesterday and driving brands forward into the operating modes of tomorrow.

Dion Hinchcliffe and I wrote a book called Social Business By Design to explain how to make social business work. A graphic model for thinking about the concepts in this post is included below.

Social Business Design
Social business is huge, and it’s not going away. Three years after the phrase “social business” was coined, at least 101 examples of social business ROI exist. Momentum is building. Companies are using the core social business principles to create competitive advantage and drive business results.

I cringe a little bit every time I read a post that tries to “define” social business but ends up marginalizing the concept. Social business stands for what companies need to become—not a description of an incremental feature or business function. And now that you know what “social business” really means and why it matters, you need to preserve the integrity and expansiveness of the definition.

If you can stay true to the big idea, you’ll have the blueprint to transformative success that others clearly have a tough time grasping.

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  • Romero Cavalcanti

    Thanks for sharing Peter Kim. Very interesting.

    Companies often try to make their social media presence more about, “Let me tell you how great my company is.”

    Becoming social and how understand that a broader spectrum internal and external has a direct impact on their innovative relationship in terms of improving customer satisfaction and brand loyalty.

    If you give great product or service, you might not have a relationship if you don’t take care of that relationship, internal and externally.

    To me, the return on investment (ROI) in social media is not only the information that’s there, but actually bringing about real change based on this information. The ROI in social media is all this information, all this discussion and actually bringing about change in the organization. That’s a great way to measure it.

    Greetings from Brazil.

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  • Marc Binkley

    Thanks for this Peter. Your post is very useful to help properly define the term Social Business. I’ve discovered that when Big Ideas such as this, or small ideas such as Marketing, are poorly defined, it’s difficult to have a meaningful conversation about the concepts.

    I really appreciate your effort to keep us on track with a clear picture of what Social Business is all about.



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