The Social Organization

The Inextricable Link Between Social Media and Enterprise 2.0

Social media and enterprise 2.0 are largely thought of separately these days, in large part because social media primarily affects communications and relationships with constituent groups outside of the organization and enterprise 2.0 addresses collaboration and innovation behind the firewall. In reality, organizations will find that by doing one they must address the other. Why? Social technologies significantly reduce the cost of content creation, distribution and discovery, thereby significantly increasing the speed of information and value transfer. If implemented on one side of the corporate firewall but not the other, it creates an imbalance that grows quickly, increasing tension and strain felt in other parts of the organization.

In most cases, the information environment outside the organization is changing far more rapidly than the information environment internally. Customers, partners, prospects, and employees can find, access, and share information in a way that corporate infrastructure, security, culture, and policies inhibit. Organizations are having a hard time keeping up with - never mind responding to or taking advantage of - these new environments. As organization do adapt, the external environment is continuing to speed up and become more efficient at arbitraging information and value. In a particular market that means the advantages go to people and organizations that are first to see the opportunity.

If as an organization, you have built a robust social media ecosystem for marketing and customer support, but have ignored applying social and networked communications technology internally, new opportunities will be found quickly in the market only to hit a brick wall once introduced internally. On the flip side, if you've applied internal social technologies that enable rapid innovation and collaboration, but you have no external channels by which to inform your market and gather feedback rapidly, that innovation will have limited value to the organization.

Those companies that have been at this a little longer than others realize this and we are starting to see how radically it is affecting their entire enterprise - Dell, SAP, EMC, CSC and many others now understand that this is not about a Facebook or blogging strategy, it's about increasing the speed of business and increasing their competitive advantage.

It's no longer a question of if, but when. Is your organization the one hitting the gas pedal or are you still riding the brakes?

This post is cross-posted from The Community Roundtable blog.

Social Media ROI - Seeing the Forest for the Trees

There has been a lot of discussion about social media ROI lately - everyone is pushing very hard to figure out how it can be used to make money or reduce costs. Fundamentally we need to start any investment initiative with the goal of making more or spending less so the ROI conversation is very important. However, as an analyst I often had to chuckle because we hear very little from the companies making a lot of money (with high margins) off of social media and online communitities - companies like The Knot, Match.com, and UTest. Why? Those who have figured out the puzzle have no particular need to share their secrets and in most of the examples I know of they are market disruptors, not established brands.

The other reason I shake my head is that the ROI discussion doesn't include the discussion of time frame often enough and that is where the real challenge for companies lie.  In most business use cases that social tools are applied to, the revenue or cost impact is not returned directly. Instead social initiatives require constant investment for a period of time before the returns accumulate.  When they do they can grow quite quickly but if the organization does not understand the investment period required, they can easily cause themselves to fail by being too anxious for the returns to manifest. And this aspect of social media is really, really hard for large organizations to manage, particularly in the marketing and customer support functions. In large part, the business processes, infrastructure, and resources of marketing and support are not set up to support initiatives that have off-set returns. To get around that hurdle, outsourcing seems to be a good choice but that often means a time-bound project where both companies and their vendors push for returns in a relatively short period of time which can result in a long-term negative impact on building a community of advocates.

ROI is important but if the dynamics of social initiatives and how they produce results are not well understood it is quite easy to force failure before you give projects the space and time they need to succeed.

As an analyst who is now running my own business I have been fascinated by how large the marketing ROI really is when social media tools are used effectively but it has also reinforced the fact that the returns are slow to ramp at first and accelerate over time. Judging the results too early would have definitely made the investment look like a failure.