Tuesday, August 26, 2008

Becoming a Social Organization: Social Media Discovery and Adoption

In the past two days, I've tried to draw parallels between the business changes caused by the Internet in the mid 90s and the upcoming changes that will be precipitated by Social Media. We began to explore the ways in which organizations adopt change and what this means to Social Media in the coming years.

In the Security Phase, companies are shaken out of complacency and denial by a loss of control. In the 90s, it was cybersquatters and the success of startups that forced larger organizations to recognize the need for rapid change. Today it is brandjackers, viral criticisms and PR crises, and extensive customer participation in third-party sites that are making companies consider greater Social Media engagement.

Next is the Anxiety Phase, when those within organizations react with anger, stress, and confusion as the system mobilizes for change. It was in the Anxiety Phase during the dot-com era that organizations learned the Internet was more than just a tactic or marketing channel; the breadth of change that was coming throughout the organization was soon apparent.

I believe we'll see a similar recognition of Social Media's impact in the next year or two. Currently, many perceive Social Media as a tool for marketing and PR, but it will soon be evident that Social Media will effect other business processes (Human Resources, Customer Service, etc) and even long-held practices and standards (ethics, privacy, communication standards, etc.)

The last two phases of organizational change are Discovery and Adoption. Predicting the future of marketing and technology is a dicey proposition, but using dot-com-era experiences as a guide, here is what we might expect in the next several years:

Discovery Phase

Discovery is a period of chaos and exploration that can often be stressful as different ideas and strategies compete for attention and resources. This stage is more about the "how" than the "what;" less about what will be accomplished than about how objectives will be established, who will be responsible, how the organization will collaborate, where funding will be derived, and how success will be measured.

Once companies came to understand that every department and business unit would be affected by the Internet, a wide portion of the organization was drawn into the Discovery Phase. Whereas the first versions of most organizations' Web sites typically fell within a single department's purview, subsequent versions were cooperative efforts with professionals from throughout the organization contributing and managing their portion of sites and Internet strategies.

This company-wide collaboration was not without its pain. A common point of contention was the enterprise's Internet strategy--what were the objectives and who would be targeted. Within many organizations, cross-functional committees struggled and battled to gain consensus because every party came to the table with a different goal: Marketing wanted to increase awareness and consideration throughout the market; Sales wanted to move prospects closer to transactions; Customer Service wanted to decrease costs and increase the satisfaction of existing customers; Human Resources wanted to promote the company as a desirable employer to candidates; the list went on and on.

It quickly became evident that everyone was right, and this meant that a single, encompassing strategy was not attainable or appropriate. The cross-functional team shifted attention away from debating strategy and into setting standards, rules, and responsibilities. Strategies for how to best exploit the Internet for service, recruiting, sales, and marketing were left to the business units (where, it might be pointed out, that responsibility had always rested for business in the real world).

Another understanding gained in the Discovery Phase was that the organization was not equipped to plan and execute every aspect of Internet programs. No organization had the same set of skills, so each organization developed its own distinct plan for what they could do best (content development, maintenance, etc.) and what tasks were best left to specialists outside the organization (commonly things like hosting, media planning, design, etc.)

What this means for the future: I anticipate that Social Media will proceed through a very similar Discovery Phase, but the process can be shortened and an advantage gained by learning from the past. A great deal of stress, political infighting, and wasted time can be avoided by using the dot-com Discovery experience as a model.

Before your enterprise can enter the Discovery Phase, it must first reach an understanding that Social Media is not just for PR or Marketing. Just as the Internet did a decade ago, the Discovery Phase requires the participation of a wide variety of departments.

A valuable lesson for organizations grappling with the impact of Social Media is to avoid the temptation to attempt to define a single Social Media Strategy. As was learned during the Internet's Discovery Phase, the needs of the organization are too diverse to fashion a single sensible and achievable plan. Instead, focus on defining the standards, rules and procedures for independence and collaboration.

While many business units will deploy their own Social Media tactics to achieve their unique objectives, it is likely Social Media will blur the lines between business functions and demand a great degree of collaboration. For example, a community of customers may be created with a marketing objective, but it also would be a natural place for those customers to turn when they have problems or questions, creating opportunities for Customer Service to respond; those problems might then become valuable information for the product development group, which could tap the same community for feedback and ideation.

The Social Media Discovery Phase can be kept short and productive by avoiding squabbles over ownership and focusing instead on collaboration, guidelines, processes, responsibilities, and a consensus on what can be accomplished with existing resources and when an external partner's expertise is required.

Adoption Phase

The Adoption Phase is a consistent and ongoing effort that results in implementation, monitoring, and constant improvement. It is in this phase that actions are taken, failures are experienced, and successes are enjoyed.

During the dot-com Adoption Phase, Internet activity occurred throughout the organization. Human Resources tested different sites and methods for promoting openings and collecting applicant data; Customer Service tested a variety of available support tools and concepts such as live chat, wikis, knowledge bases, and email management applications; Public Relations created new forms of digital press kits with multimedia content; and Marketing's sandbox became exponentially larger with a dizzying array of options including ad networks, rich media ads, search engine optimization, search engine marketing, affiliate marketing, microsites, content partnerships, behavioral targeting, email marketing, CRM, viral campaigns, and site personalization.

Tactics were considered, tested, tweaked, improved, or rejected. Organizations came to realize that no single set of Internet strategies was right for every audience, every brand, or every need. A slew of best practices emerged, but every site, strategy, and campaign was as unique as the brands, objectives and audiences.

Of course, the most notable worldwide event of the Internet Adoption Phase was the dot-com crash. A speculative bubble had been created with large amounts of capital chasing a huge number of unproven and competitive strategies and businesses. In March 2000, the tech-heavy NASDAQ average briefly broke the 5,000 mark, but then the bottom fell out. Companies disappeared, venture capitalists lost huge sums of money, and many folks employed in the Internet lost their jobs. The NASDAQ fell to below 2,000 and in the eight years since has never crept above 3,000.

Of course, the crash was hardly the end of the Internet. Spending on online advertising dipped for two years before soaring to new heights; in 2007 the total revenue for online advertisers was 150% more than in 2000. Spurred by even greater consumer online participation and armed with new strategies and tools, the Internet has become indispensable to virtually every organization of any size in every industry. The Internet Adoption Phase is entering its second decade and shows no sign of weakening.

What this means for the future: The primary lesson we can draw from the dot-com Adoption experience is that Social Media won't come with an easy set of instructions, nor will it be "one size fits all." Every brand and every business unit will need to test, adjust, measure and explore to find which Social Media strategies deliver and which do not.

Will there be a Social Media bubble followed by a crash? My guess is that in the coming years enthusiasm for Social Media will grow, investments will be made in startups in search of business models, and competing tools and sites will proliferate. At some point, there is likely to be a pull back because the market won't sustain dozens (hundreds?) of different microblogs, blogging platforms, social document sites, and the like. I do not expect the investments to be as large or the decline to be as sharp, but we will eventually see a convergence with some tools merging or failing.

Social Media presents some of the most exciting business opportunities seen since the Internet went public in the mid 90s. It also presents some of the greatest challenges to brand management, public relations, and customer service in that same period.

In the early 90s, no organization was an online organization; ten years later, every organization was. Today, few companies are truly social organizations; within a decade every organization will be.

By learning from the past and concentrating on change management, companies can navigate the evolution efficiently. All it takes is creativity, leadership, collaboration, an appetite for iterative learning, and--more than anything--a healthy recognition that Social Media is giving consumers more power, influence, options, and visibility into your enterprise.

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