Big companies have to cede control of the business ecosystem to the customer
At the keynote session on Feb 1, Mike Rhodin, SVP, IBM Software Solutions Group, made a critical distinction about social businesses. He said, “consumers have unprecedented power over your brand. Social businesses embrace this.” This is the key to the culture change necessary in a company that wants to be a social business. They have to cede control of the business ecosystem to the customer.
It means that the customer can impact your brand and even, at times, directly impact your revenue, whether or not you want them to or not. AND that they do it in channels that you don’t control.
There is empirical value that a social business provides. IBM via Alistair Rennie and Mike Rhodin identified three entry points where value can be derived:
IBM is looking at this social business entry point in terms of operational effectiveness. That means that they see that products can be invented, created, and brought to market in record time and at lower cost than ever before if the internal resources of a company are marshaled in a “hive-like” (my term) fashion via use of the collaboration environments, tools, and allowances that a social business company has to make.
For example, its not just having the wikis up and running for collaboration around a project, but also
- having the activity streams that can be responded to in real time or nearly so;
- having the intellectual property exposed so that project success can be enhanced - rather than having it the property of a virtual lockbox;
- having the social and HR profiles interconnected so that not only can you find the right resources at the right time, but will also know who in the chain of command that likely still exists - social business or not, an SVP will still be an SVP - can free up that resource for the project;
- getting the legal department’s acquiescence to the collaboration within and potentially, outside, the company.
Social business has a cultural impact, and impact on morale; an effect not as much on how people generally interact, but more specifically, on how they work. It also brings the outside world into the space behind the firewall to the extent that the company becoming a social business empowers its employees to be part of their corporate business efforts.
- Why not Sales?
Sales isn’t focused on customer outreach or customer input which both marketing and customer service are. Simply put, its focused on closing deals. That means that the customer is in an ordinary sense the object of the sale and the sale itself is the focal point of the relationship.
But reality is that marketing people get compensated by how actual customers respond to their efforts;
- customer service people directly interact with customers and are compensated according to the outcomes of those interactions.
- Sales people interact with customers all the time but they are compensated on the closing of the deal and the financial value of the deal.Not the interactions with customers.
So sales efforts are based on the most effective way to close that deal. What THAT means is that the optimal “social” activity for a sales person is to draw on the collective intelligence of his fellow employees to help him figure out what needs to be done to close the deal.
- So sales is much more focused on internal/enterprise collaboration.
- I have to presume that this is why sales isn’t listed as a part of the entry point that marketing and customer service are - because IBM is defining them as the customer-facing components of Social Business.
IBM emphasized its focus on this core concept - trust is foundation for the types of relationships that you build with customers and social business is the means you have to engage those customers and build that trusted relationship through the new forms of communication available for their and your use.
- They understood marketing as the first line of this conversation with their customers. A big plus 1 for IBM.
Mike Rhodin made the point that the transition to social business means greater integration between sales and marketing among other disciplines.
In order to truly understand what is most important here, its not that IBM is turning Lotus from a development platform to a collaboration development platform to a social business vendor. You HAVE to get out of that head. This is IBM as a Fortune 500 company making a transformation from a traditional business to a social business - and with that goes all the difficulties of a company that made roughly $100 billion in revenue on its 100th birthday (hope I can do that on my 100th) attempting to make this change will engender.
IBM’s messaging justifies their move in technological terms with three Is:
- Instrumented: Smartphone shipments will outpace PCs by 2012.
- Interconnected: Social networking now accounts for 22% of all online time.
- Intelligent: The age of the zettabyte is upon us.
They see this in terms of what it means for workplace performance, customer interaction (yes even here) and product/service delivery. They see that these numbers - all supplied by IDC by the way - mean that the world is moving to an untethered form of social connectedness that is not only a revolution in how we communicate but also is unleashing a vast amount of “natural” (unstructured) data in the form of conversations among other things into the ecosphere - so much that we have to figure out not just how to store it but how to use it in ways that are productive in business. Thus the need for transformation of the company to figure out how to make each of its 400,000 employees a useful part of the efforts to drive business for and at IBM.