Why the impact of social media on business is over-stated

Social networking's effect on business has been over-emphasised but firms are looking to change all that

I lost count of the number of articles I read at the turn of the year promoting the case for 'social CRM' and its bastard child 'social business.'

For those not familiar with my position on this topic, I first said that the grandfather of these terms 'enterprise 2.0' is a crock in August 2009. I returned to the theme in November 2010, declaring that Enterprise 2.0 is dead.

These were not meant to be sensationalist trolling pieces. Instead they represented a genuine sense of frustration at the earnest talking heads, some of which come from esteemed academic backgrounds, pimping a topic that was poorly defined but which had instant appeal to otherwise under employed PR types.

In essence, these well meaning but thoroughly misguided folk think the answer to business ills lays in deploying social tools like blogs and wikis. Or at least they did. When that didn't work they started talking about the central place of people in the enterprise as though this was some sort of revelation to management.

Fast forward to 2011 and we're not much better off. We seem to have drifted away from the original arguments about what social tools could bring to an enterprise. Instead we seem to be concentrating on recreating business around the notion of the so-called social customer. There are many ways to look at this but the idea seems to be (very simply) that customers are empowered to directly interact and influence business and, as a result, business needs to respond. That is horse crap of the steaming pile variety.

While I am prepared to concede that individuals can have direct influence, experience suggests it only happens in very exceptional circumstances or at the periphery of business activity. There are some cases where crowd behaviour impacts corporate actions but again, this is very, very rare. I'd say that Greenpeace is more likely to have an impact than a bunch of Twitterers.

When the BP oil disaster blew up, the interwebs went crazy, Twitter was flooded with outrage calling for everything from the destruction of the company to the stringing up of Tony Hayward, its then CEO. Hayward eventually resigned but I'd be hard pressed to make a direct link between the baying crowd's outrage and his departure.

Instead, I'd argue that BP made a series of appalling gaffes that would have been amplified anyway and for which Hayward had no choice but to fall on his corporate sword. Since that time, the disaster and its consequences have all but disappeared from the public consciousness.

Truth be known, we live in a world of instant gratification and 140 character attention spans. In those circumstances, does the notion of the social customer mean anything? Companies will point to examples of campaign success. But how often are they replicated? Not that often as far as I can tell. And to what extent do those successes represent the driving out of marketing inefficiencies as opposed to a fundamentally new way of driving business?

What worries me more than anything is that this notion of the all powerful customer fosters a climate of corporate fear that forces business to attempt adoption of tools that are often ill fitted to the modus of most business today.

Why is it like this?

Right now, the most common explanation for failure (and there are way more failures than successes) is 'cultural' issues.

This only makes partial sense. The last 80-100 years have been dominated by a set of management theories that have stablished hierarchies of command and control. That was a construct based upon ideas around what it takes to run an efficient, productive business. That has worked very well for a long period of time.

It has been ably supported by business processes designed to wring out every ounce of efficiency that can be found, often through automation. In the area of CRM, such efforts have largely failed. How many of us hate the call centre? How many of us believe that our large institutions and utilities have become monstrous faceless organisations that do not care about us as citizens? How may of us tolerate a corporate culture of being progressively ripped off on our rail, airline and bus services? And on it goes.

The systems currently in place do not foster the notion that the individual is that important in the scale of things. Does adding some sort of social layer make any difference? Social business - when viewed from the inside - attempts to address this by encouraging collaboration but is faced with many hurdles.

Here is an example. Last week I participated in a conference call where the client said that in implementing social tools, they found that people had suddenly become uncomfortable. Why? The crutch of email had been eliminated which resulted in people being faced with the requirement to become accountable in naked fashion.

This is an organisation where it is better to ask forgiveness. How much more difficult is the adjustment for organisations with much more rigid structures? In a call for the development of standards around social business, my colleague Oliver Marks expresses the technical complexity very well when he says:

While everyone and their brother has now baked an activity stream into their software, there are large, complicated operational activities enabled by our new interconnectedness and associated technologies which are not well defined and which vary enormously in value depending on industry vertical. Interoperability with previous generations of technologies and deeply ingrained ways of working make the task of defining the opportunities for greater efficiency all the more challenging.

Turning to social CRM, I believe the problems in making those Facebook initiatives not only truly valuable but sustainable as a way of creating customer intimacy are a direct by product of the internal difficulties that companies face, even when senior management wishes to make change. The ingrained business practices which are so common represent the biggest hurdle for long term and sustained success. Why?

If you want to sell an inclusive message to customers that stresses care and value then surely that has to start inside and not just as an external facing set of marketing activities dressed up as 'social.' Intellectually and psychologically, there is a massive disconnect between what happens internally with social tools and the expectations of management attempting to foster social business to the outside world. You only have to look at the way some people warn about the use of social tools at the individual level to understand the paradox.

During 2012 you can expect to hear more of messages designed to separate your business from cash going to the social players. Check this 12 point set of statistics designed to create the illusion that you have to engage in a certain way. Check this collection of social business success stories - but note the caveats. Look at how Forrester is predicting a massive market for social enterprise applications. Then check out how Forrester is now a regular contributor to Gillmor Gang.

Having said all that I see hope for for the removal of the contradictions that currently exist. IBM is full square behind social tools and collaboration. SAP is working assiduously in the same direction.

The difference is that both IBM and SAP are embedding social functions inside broader reach applications. On what I have seen, these represent a significant step forward because they become part of the flow of work and not as an adjunct activity. If they are successful in moving the social needle then perhaps the implied promise of social business and social enterprise will become a reality. Check in again this time next year.

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