I’m concerned that the social transformation we keep hearing about has a couple of glitches.
First, our collective understanding of what it means to be a social enterprise needs to be re-defined. What does it mean to be social? The second issue is that if we continue to act in a socially uninformed and uninspired manner, some of our new social enterprises may suffer the same fate that took down so many e-businesses at the beginning of this century.
The problem begins with how we’re defining “social enterprise.” The conventional wisdom suggests that we can flip a switch (i.e., implement social media capabilities) and our employees will magically collaborate and innovate in meaningful and profitable ways with an ever-expanding network of global stakeholders.
This is not the case.
We can’t automatically make employees interact in deep and sustainable ways simply by hitting the ‘On’ button, creating a Facebook page, launching internal social communication or real-time performance feedback platforms and replacing e-mail addresses with hash tags any more than we could generate long-term shareholder value by slapping an ‘e’ in front of our business name. We can’t order an employee to have a great idea or mandate rich, creative collaborations any more than we can order a doctor to become more humane or a teacher to be more inspirational in the classroom.
I heard a compelling speaker talk about flipping the switch on social enterprises at a dinner I attended recently. When my fellow diners asked me what I thought about this transformation, I replied that we would be wise to focus on our behavior as opposed to our new technology. If one of us tweeted about the delicious steak dinner, for example, we might offend people in our networks for whom cows are sacred.
Don’t get me wrong; social technology and social enterprises can deliver great benefits to global citizens and stakeholders, as we’ve recently witnessed. When I speak and attend events at next month’s SXSW Interactive — a conference renowned for exploring the future of technological innovation — I expect social to be a dominant theme. It is inevitable that technology will continue to reveal and connect us in unimaginable ways with implications we will have yet to fully understand. I embrace this “mega trend” and celebrate one of its undeniable implications: the increased democratization of organizations and participation of individuals in how they are led, governed, and operated.
Yet, I also want to ensure that our social enterprise narrative and vision is complete. The companies that thrive and win as social enterprises will be those that do the most with their social connections. Winning in this environment requires more than new technology; it calls for a deep understanding of the following steps to become truly social in a connected world:
1) Do away with one-way conversations. The days of leading countries or companies via a one-way conversation are over, as Netflix’s one-way conversation with customers on prices, Bank of America’s one-way conversation on debit fees and Verizon’s one-way conversation on an e-billing surcharge recently demonstrated. If enterprises are to become truly social, they need to participate in conversations with their stakeholders rather than simply talking at them. Truly social enterprises don’t just post, tweet or chatter; they listen and engage in collaborative dialogue.
2) Connect and collaborate. Just because all companies now possess the technological capability to hold social conversations with employees, customers and stakeholders, this does not mean we can automatically make these conversations valuable. The companies that develop the deepest connections will generate more value for their customers and employees (and shareholders). Mozilla, for example, seeks to deepen its connections to customers, who have an open invitation to shape the company’s Internet browser and other product offerings, by publishing its financial results (something it does not need to do as a private company), opening its business meetings to the public and posting its strategic plans online.
3) Don’t let “freedom from” obstruct “freedom to.” Social media can help liberate employees from traditional hierarchies and structures that stifle collaboration and innovation but only if new frameworks replace what previously existed. The ongoing unrest and power vacuum in Egypt illustrates what happens when the old “freedom from” system is not followed by a sustained effort to introduce institutional frameworks that gives citizens the freedom to live (or work) in a better, more fulfilling manner. Employees want freedom from command and control bosses and task-based jobs and freedom to contribute their character and creativity and collaborative spirit at work in pursuit of a values-based mission worthy of their dedication. What will employees rely on to guide their interactions with customers now that they can communicate with them 24/7? The answer is for organizations to develop the institutional frameworks to replace traditional structures and forms of governance and establish a more human operating system in which governance, culture and leadership systems are harmonized and synchronized.
4) Seek to inspire, not just motivate. As social media helps shift power to individual citizens and employees, leadership itself must shift with it. That requires moving from coercive or motivational leadership that uses sticks or carrots to extract performance and allegiance out of people to inspirational leadership that inspires commitment and innovation and hope in people. The most effective 21st-century leaders — those in the C-suite, on the football field and in other realms — understand the value of leaving behind a command-and-control leadership style in favor of a connect-and-collaborate approach. New York Giants coach Tom Coughlin now has two Super Bowl rings to show for his leadership transformation; leaders of truly social enterprises will adopt a similar game plan.
5) Invest in culture rather than governance. A system of governance via rules and policies only tells employees what they can and cannot do; think of a restrictive social media policy that dictates what employees can and cannot type or tweet. A more human operating system puts humanity, rather than rules, at its core and trusts employees to act, inspired by values, mission and purpose, as opposed to being coerced. Consider how Southwest Airlines flight attendants are free to flex their creativity and sense of humor when walking passengers through safety procedures; their individual personalities bring an uplifting jolt to a mundane process. Southwest’s culture and values — rather than any policies or procedures — gives rise to this type of employee connection-forging. Not surprisingly, Southwest’s culture has also helped make it a leading social enterprise.
6) Give trust away. Sticking with Southwest Airlines, why do their flight attendants entertain their passengers? Because the company trusts them to devise their own ways to connect with customers in meaningful and innovative ways. Leaders of truly social enterprises understand the importance, and value, of inspiring their employees to go on a TRIP. (TRIP is an acronym for how Trust enables Risk, which propels Innovation and, ultimately, leads to Progress.) Becoming a truly social enterprise requires leaders to trust each employee to interact on behalf of the company in the social realm. This applies to one-man donut vendors as well as the world’s largest companies. By trusting his customers to create their own change from a pile of coins near the cash register, Ralph, a New York City donut maker, engendered greater customer loyalty and boosted his productivity. (Manning his cash register limited his precious donut-making time).
7) Scale your values. Despite the catastrophic failure of the “too big to fail” mindset, many companies continue to focus solely on how they are scaling their businesses; instead they should be focusing more fundamentally on how they are going to scale their values. By focusing on scaling their values, companies can generate more valuable and profitable connections with employees, suppliers and customers. Size is no match for social media; companies can no longer exert their will — or even price hikes or new fees — on customers without enduring hits to their reputation delivered via social channels. The right values, principles and behaviors offer resilience in a socially networked world. By scaling the right values, truly social enterprises have the resiliency necessary to withstand criticism and the innovation necessary to thrive in the long term.
8) Measure HOW, not ‘How much.’ Companies have been extraordinarily successful at measuring “how much,” as in “how much” revenue, profit, market share and debt and how many page views their website generates and how many followers they attract via social media. Organizations reward employees who produce the most tweets or attract the most followers with badges and other rewards. While this approach no doubt increases the volume of an enterprise’s social chatter it neglects what matters most: the quality of their social interactions — how their employees do what they do and relate to others. Just as companies and countries are realizing that “how much” measures like GDP, quarterly revenue growth and market share are insufficient indicators of long-term success and sustainability, so too should social mavens relinquish the “how much” mindset in favor of measuring HOW genuine, creative, loyal, innovative and valuable are their social interactions.
9) Treat business as inseparable from life. If our enterprises are to become truly social we should stop treating them, the rules they impose in employees, the impacts they deliver to our communities and the behavior they foster, as separate from the rest of life. Business and life are no longer different spheres that are governed by different rules. Think about that scene in The Godfather where Michael Corleone tells Sonny, “It’s not personal. It’s strictly business.” That code of the Corleone family no longer applies in a world where everything is personal because everyone’s behavior affects everyone else. In a world where we are now all connected, social enterprises ask employees to represent the values of the company 24/7 in all of their social interactions. Truly social enterprises give employees the right culture, values, support and trust to guide their interactions.
10) Compete on behavior. In a highly connected, social world, technological innovation advantages last for weeks rather than decades or years. Product innovation, process mastery and other traditional forms of competitive differentiation can easily and quickly be identified, replicated and brought to market today. The only form of differentiation left is behavior: not what we do (e.g., hold social conversations with customers), but how we do it (hold meaningful conversations with our customers.) Truly social enterprises reward employees for the right behaviors. Not surprisingly, customers, pundits and other stakeholders punish companies for exhibiting the wrong behaviors, as Best Buy’s recent reputational challenges demonstrated.
Embracing these approaches, of course, requires more than the flip of a switch. It requires leaders to commit to a journey to create organizations rooted in values and the pursuit of significance. Their undertakings are less like the linear trajectory many businesses try to follow quarter-to-quarter and more like the curvilinear journeys we pursue in life. That’s something we should not forget as we create the freedom and frameworks necessary for our enterprises to evolve to a more social, and sustainable, existence.
This article was previously published on Wired Opinion.