Beyond Social Media, Creating Social Capital

Rich conversation and insights flowed on Friday morning when the Booth Strategy Discussion group happily pondered four key questions on the topic of Social Media, Not just for Marketing.

This month, David Friedman of Bridgewell Partners offered to facilitate and he began inviting us to consider four key questions:

  1. Do social media supported interaction practices represent a fundamental change in how people work?
  2. What barriers exist to adopting these practices and are the practices optional?
  3. How many, and what kind of resources does converting existing social media activities into successful practices require?
  4. What kind of governance and rules makes social media work and how do you find and manage the advocates?

As usual, the conversation flowed from topic to topic, not chaotically, just indicative of authentic interactive thinking. In hindsight, the face to face conversation and personal value participants derive from ongoing, live exchange of perspectives offers a contrast to the online tools we had met to discuss.  I’ll do my best to share some of the key learning and insights. As usual, I took  time to extend, document sources and supplement my notes, so please do add your thoughts.

People are social animals

Learning is a social endeavor. Knowledge sharing, collaboration and innovation processes succeed when they leverage the subtleties of social interactions. Today’s social media tools facilitate social engagement and may solidify associations that typically erode over time and as geographic distance increases. Today, it is easier than ever to stay actively in touch with associates—neighbors, classmates, friends or colleagues that we no longer see regularly. Their value however comes in creating opportunities that go behind the real world encounter.

Business requires connection and by design, social tools enable people to connect to others for every possible purpose. Want to grow your expertise, make new acquaintances, qualify and connect with experts on specific or general problem or topic areas?  The social tools are a two –way street.  The same behaviors gain new understanding and win support for specific activities and perspectives.

Google changed the way we look for ideas, people, places and things. Twitter  compact messages unleash conversations, debates and ongoing thoughts.  The messages are easy to find and monitor. Content once shared in exclusive forums once closed become public. The virtual location and use of links expands the audience once limited to insiders. Dedicated communities of practice consistently create value for participants, and switching up technology choices amplify the reach of these conversations, e.g. threaded topic discussions used by groups on Linked in.

Closed, restricted conversations however too have their place and have been the domain of  membership restricted list-serves such as those used by MENG—the Marketing Executives Network email list serve, or SERMO (http://www.crunchbase.com/company/sermo) for surgeons.  Some individuals have always been keen to share best practices, or seek out the specialized knowledge of admired colleagues.

Social Capital

Businesses don’t make decisions, people do.  In Bowling Alone, Robert Putnam described the growing isolation that technology promotes. Leveraging  work by Gary Becker and others the book opened new conversations.

Social Capital, embedded in the social realm, is not based on assets or individuals.  Social Capital resides in the fabric of relationships between individuals and in individuals’ connections with their communities (Putnam 1995c)

The emphasis to calculate ROI from Social media misses this point.  No wonder many organizations fail to capture value from socially shared knowledge to improve the way people work? Among the articles we reviewed were some promising signs some companies are making the leap, changing the way they work and incorporating social media practices.

How are some companies succeeding? 

“Organizations operate more like machines, their structure a legacy of the industrial age, taking comfort and finding security in maintaining bureaucratic control.”   In 2006, Chris Anderson published The Long Tail: Why the Future of Business is Selling Less of More.  Transitioning from a command control operating model to deliver unlimited variety to meet specific, personalized needs demands a complete upheaval of management practices, organization charts that operate according to very different rules, beliefs and values.

The industrial age made power free. Many industries gained advantage harnessing that power. Similarly, the present social age, enables communications to spread freely. Success flows to those who manage to find and amplify freely exchanged messages, support their business proposition and gain competitive advantage.

The social paradigm’s counter-intuitive approach contrasts sharply to old push process, where a company worked hard to choose the message and then spent ample budget to promote messages designed to attract the interest of buyers. Today, businesses who listen and move to position themselves within the ongoing conversations that match their product or service set, stand to gain.

Examples of social media transformations of work

Edelman’s business is public relations. They turned their entire recruitment process around by pursuing and inviting those people who demonstrate ability to build an active following.

Intuit’s TurboTax built customer comment threads directly  into their interactive software   allowing people using the platform to learn practices and see examples from other users.

Ernst & Young  created mobile applications on ITunes giving customers insights , tax guides, legal tips etc.   They also created EYE, Ernst and Young Executive, an IPAD based magazine .

Two books, Smart customers, Stupid companies  and Opting In, by IBM Lotus Notes Executive and social business thought leader Ed Brill, admirably illustrate how knowledge IS social, the more interactions the smarter each of us get.

Likewise, peer-to-peer interactions occur within a pertinent context. Customer to customer interactions share very different information than when customers are sharing with company representatives.  The relevance of the exchange to the participants by itself offers  insights around customer perceptions and suggest alternatives to address and resolve their pain points.  This is the very stuff companies once paid researchers to find.  Brill describes the process unleashed by social media as “Thou Shall advocacy,” vs. the traditional company approach of thou shalt not employee governance.

The results?  Resources freed from “finding” should be put to use listening and gravitating to where their customers are actively engaged, communities created to talk about a company rarely happen to be the place the company created for its customers.

Changing the way we work

We all believe that change and changing behavior and processes at work continues to prove hard for several reasons.

Legacy workflows with established internal processes supporting hierarchical, command control organizations clash with the general ease people collaborate and bond outside of work.  Monsanto exemplifies a company who learned quickly how to use social media to build and strengthen what were formerly weak relationships.

Communications become conversations, as illustrated by their 2012 letter to shareholders proclaiming “the ways in which we are all interconnected…” Monsanto continues to evolve their communications beginning  with a move beyond stylistic changes to their communications as  this 2009 St. Louis Biz Journal story illustrates. Communications redesigned their department to listen and engage in honest dialogues with a wider audience of stakeholders. The corporate stakeholders no longer bequeath the controversial issues to the opposition. Instead of releasing official stances,  their communications team speaks directly to specific concerns and in so doing taps expertise inside the organization to share and engage employees as well as externally with consumers.

Value above replacement

At the core, social network mechanics leverage an individual’s ability to influence the behavior of others in their circles or network. The CEO of Klout wants everyone to believe that influence is the currency of the social web. Those companies who understand how to leverage their players may very well gain advantage.

 Ron Burt’s work calculates the “value of social capital, showing how in the business world reputation has come to replace authority and …. from other researchers’ studies, provide robust evidence of the value of brokerage.”  If you consider, as Burt does, that social capital is a metaphor for advantage then it’s not that hard to see how the sports world has put this to work.

Value over Replacement, aka VORP, may have begun with baseball but has since infiltrated the fan base of many other sports.  I even found the concept used to evaluate Rock and Roll band members. The adoption of  this concept by other domains illustrates word of mouth at work, and also the nature of social capital flows.  Studies and metrics rarely explain why some words travel and others remain where they were first spoken.

Is the problem workflow design?  The landscape of successful migration to enterprise2.0 practices remains checkered. In part, connected enterprises and successful adoption and implementation of social media platforms and tools require behavior shifts beyond adoption of new tools.  Successful organizations, who do the heavy lifting and restructure their organization, amplify the effects of influencers who in turn, encourage and promote informal collaboration.

The landscape however is littered with numerous unsuccessful change initiatives because they overlook how to put influencers to work. For example, Knowledge management systems, another extension of VORP, sought to capture the tacit as well as explicit understandings and intelligence of workers about to retire. What made them successful also brought success to the organization and it made sense to create the means to keep that knowledge around as people left.  The capture process however proved challenging and few organizations made conscious use of network analysis. This latter tool infiltrated strategic planning activities, but the record of deployment and use remains spotty.

Kraft’s KM initiative in 2000, shows the consequences of missing the opportunity to leverage individual players skills and influence.  The idea was to capture learnings from Consumer Intelligence and Research and Development. In theory, there would be an expert directory, discussion board and an electronic library.  Tagging information properly makes it possible for others to search and find relevant information.  AT Kraft, suppliers were asked to tag their own research, not good for their business model.  But this also diminished the value of the researchers and librarians whose knowledge and tagging skills were never acknowledged as added value.

In contrast, Stack Overflow, illustrates a very different knowledge sharing resource that isn’t dependendent on tagging.  It’s a give and take resource.  The value available depends on people providing good answers and asking good questions.  Participants with high stack overflow scores are deemed experts.

To Be Continued…More on this topic to follow shortly.

If you care to review the articles that were the basis of this discussion, links follow.  So much more to say and so little time, care to share your reaction?  or contribute some new inspirations?  Please do!

ARTICLES

1. Keynote: Invest in Scalable Social Business Programs

by Jeremiah Owyang on Apr 05, 2011

http://www.slideshare.net/jeremiah_owyang/keynote-invest-in-scalable-social-business-programs

2. Large Scale Transformation–how social lies at the core of your strategy
by Dion Hinchcliffe

http://www.informationweek.com/thebrainyard/news/strategy/how-smart-businesses-reorganize-for-soci/240006107

3. The Collaborative Organization: How to Make Employee Networks Really Work
MIT Sloan Management Review Magazine: Fall 2010Research Feature

October 01, 2010 Rob Cross, Peter Gray, Shirley Cunningham, Mark Showers and Robert J. Thomashttp://sloanreview.mit.edu/article/the-collaborative-organization-how-to-make-employee-networks-really-work/

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Management 2.0–new learning requirements

Learning – requirement or a pre-requisite?

Yes, this is the right place. The notes from the May discussion on  Management 2.0  are indeed here. In my work as an independent strategy consultant, my first rule is to listen and observe.  I need to transform what I’m being told and reconcile it with what I’m observing.  The norms or environmental conditions within an organization often give the first clues about what holds them back.  It’s rare that I meet people within the organization who haven’t figured out what’s wrong, or maybe even what needs to be done.  Often the monthly strategy discussions take o the same paradox.  The articles are sensible or seem to suggest the obvious but doing is much harder than it looks.

The process of writing up the notes from the monthly strategy discussion struck me as a classic exercise in management 1.0. The summary of what happened, the points discussed, conclusions reached and the infamous next steps are generally recorded and distributed. The minutes function primarily to keep everyone’s focus on the same play book, and put into wider distribution clear summaries of collective thinking. Given the strategic management practices and issues group discussion’s intention, I’m skeptical that collective thinking is the sensible approach.  

As the frequent facilitator of the discussion, I seek to elicit deeper connections to the articles.  Volunteering to  simultaneously take and write-up the discussion is an interesting challenge. So I’ve opted to skip the  loyal regurgitation of the bulk or the gist of the ideas that flow. Besides, it’s  impossible to capture the real flow of ideas, as they filter though my own thoughts and conceptions of the material and equally impossible to note comment and the questioning , outrage, delight or even surety of a comment’s inflection. In blogging, the scribbled notes come to life but also unconsciously reconnect the circling back conversation in a different sequence. For example, when the conversation on one sub topic takes a twist only to later come back to that sub topic, I naturally try to connect the book-ended remarks and extract the distraction.

 Why does all this process talk matter? It relates to how we, as humans naturally work.  Reflection, when actively invoked, naturally evokes new thoughts and new learning. These blog posts try to share the self-reported learning captured in my notes, but they also do something else. They are my attempt to capture the continued learning on the topic that happens in my ongoing interactions. In these posts I take the opportunity to try to share my new understanding of the topic, or insights into a given position’s advocacy.  For example, this past month I wonder why a group, primarily comprising mid to late-career Chicago trained MBAs, find solace in the verity of finance while the idea of management 2.0 remains a bit fuzzy?

Thoughts on Management 2.0

That said, time to share the discussion notes that I have indeed struggled to bring alive. (Find additional learning  in the next post  entitled Management 2.0–can you shift)
Notes or recorded observations and reactions from discussion participants to the articles and topic entitled Management 2.0.

Adaptable , innovation style cultures, aka management 2.0 have long been advocated and these principles characterized by three key academics who study Leadership*. Largely prescriptive,  discussion participants had no question that managers should follow this advice. The paradox however lies in reconciling a culture bent on innovation with obligations to support the existing business model—, the one generating returns and is the source, if not majority basis of compensation. In a lean environment, it becomes more challenging to find the time and energy to innovate. Cost cutting for many firms in the recent downturn led to the innovation group being sacked and outsourced. In some cases, operating strategy groups followed the same route.

Regardless of whether the firm chooses situational strategy or an adaptive strategy, an inherent conflict in the self-preservation of the organization naturally ensues. The management philosophy and tone of the CEO generally dictates the culture but does not necessarily lead to pervasive behavior. After all if the average lifespan of a CEO is a few years, it’s hard for the organization to have fully integrated a particular CEO’s philosophy within their culture.

Effectively communicating  financial goals makes it easier to balance the respective balcony and dance floor perspectives. Numbers make things tangible, and connect actions to overall changes in the balance sheet. Connecting people, their responsibilities as well as opportunities, to the components that deliver EBITDA the better chance at achieving overall performance

Adaptive management means adapting your customers too, helping them to understand the changes being tried and the positive impact on them. In a manufacturing firm, making changes that tweak the system or fine tune the results are easier than in a service firm where the resources are primarily labor

Management 2.0 conceptually still a little fuzzy. Sounds like and may even look a little like an innovation culture, but is it? Can one create a culture that values innovation and risk-taking that doesn’t cost you your career?

Easy to understand preponderance of management 2.0 in small start-up companies. Being nimble, fewer layers of management also mean fewer chances to mix-up signals. Turnaround specialists typically find that small companies have a larger disconnect with finance.. letting ideas get ahead of prudent financial management.   All investments need to generate payback and understanding the firm’s cash flow parameters is critical.

Finance often has a second role, facilitating a strategy’s execution.  If day-to-day operations and management face the disconnect between ideas and cashflow, where can they get the clear support needed?  Is it only executive management’s responsibility to reconcile the balcony perspectives and incentives around a culture of innovation and the realities of the positions of dance floor management or dancer  struggling to meet a variety of standards and goals? Understanding the timing and relationship of unbounded customer service handle times with future customer receipts due to customer satisfaction is challenging for everyone. In a small business, there’s more transparency, as in everyone knows the good customers by name.
Measured latitude is the language used by 3M’s historic approach that requires everyone to spend and account for a small proportion of their time to learn something new. Rather than hiring clones, even in the face of the current environment where fewer resources do more, adaptive organizations  hire alternative experiences to broaden their internal learning. Innovation, when under-financed, can bring a well-managed company to its knees; EBITDA is real and important contributor to your business survival.

Inspiration doesn’t happen predictably on a timeline ; but the culture 3M instilled ties innovation to compensation.  Don’t underestimate the power of a good story to inspire and in grain experimental cultures.. The failed glue  gave rise to the Post-It Note encourages people to experiment,  and learn from failures. It also helps get everyone from top to bottom in an organization to pull the same way.

Getting the commitment from the top down, in larger organizations differentiate successful transmission of this innovation or looser adaptive culture that works well in smaller organizations. A CEO’s daily voice mail is inspiring, but a collaborative commitment in which staff concerns and worries are both heard and effort concerted  to work them through goes that much farther. . This is the suggestion that Ron Heifetz describes in adaptive leadership.

Alternatively, an organization can step their way up to change by giving staff assignments outside their normal duty. Having the tools and putting out the thinking is not the same as the heavy workout of the issues or obstacles. How much do client comments impact an employee’s compensation? When training, the indirect rewards are insufficient, the short-term pressures means it may delay getting long-term results.In the end, management still has to be serious, committed and clearly express what results they want and when.
An organization’s culture bred on innovation are willing to experiment, routinely challenge norms, share knowledge and use measurement and scorecards to track progress.

The existence of an innovation culture, not clear evidence of management 2.0?

More learnings will follow, and I invite all readers to challenge those listed or add their own.  This is a great place to test and try out ideas.  I hope you will continue the conversation.

*If you are looking for the articles and references that were the basis of the May discussion see the next post for a complete listing and links.