CHAPTER 3
Mindshift: from ‘so what’ to ‘social’
Exposing the myths about social media is helpful but we also have to look at how factors in the broader environment contribute to an anti-social mindset. These factors include:
- traditional business practices
- the unprecedented, accelerating speed of change
- high uncertainty and ambiguity
- fear.
Traditional business practices
Executives make data-driven investment decisions and manage risk. Ironically these qualities, vital for success, are the same ones that have kept them out of social media.
The way we do business
An example is data-driven strategy. While traditionally this approach has given companies a strategic edge, the kind of business intelligence required to back moves into social media was simply not available when social media first erupted. It was a place where people went to talk to other people. Who needed to measure that? Of course, we forgot that people speaking to people pretty much underpins everything that happens in life. And social media grew fast. By the time business had recognised this, the horse had already bolted.
First movers took leaps in the dark and learned as they went along; some soared and at times some crashed. We all learned from the early adopters. Not all organisations, however, are suited or open to experimenting. The location, size, infrastructure, risk appetite, culture and leadership of a company all influence how willingly it will embrace change and how quickly it is capable of adjusting.
What well-established, large and often effective business systems deliver in strength can be offset by a lack of agility. Often we see assets become liabilities when business dynamics change.
Timing
Although there is no evidence specifically examining the link between post-GFC conditions and the uptake of social media, the economic climate must have had an impact. Social media experienced burgeoning growth at a time when many businesses were treading water to stay afloat. For many the possible benefits of new technologies were not adequately offset by its unknown risks in an environment that had become suddenly and strongly risk adverse. Instead of finding ways to innovate out of the doldrums, many retreated to the tried and true.
Traditional structures
In the past the many different areas of a business were able to operate in relative isolation. This was never ideal. One big leadership challenge has always been to ensure different areas of the business are talking to one another. But it was possible for a chief information officer (CIO) to run out a computer refresh without needing the approval of the chief marketing officer (CMO). Nowadays where marketing is automated and IT-dependent such a move would be a disaster.
Senior leaders failed to understand the difference between IT, digital and social media influences. Many businesses did not (and still do not) understand that social media platforms are not $100 million IT investments. Indeed, many are free. They do, however, require people to manage them, and online engagement is human resource intense.
Having said that, social media efforts cannot work long term in isolation from deeper business and market transformation. Adopting social media at the enterprise level requires technical analysis and investment and also a deep rethink on how business areas are structured.
However, change does not have to follow an all-or-nothing approach. Organisations can experiment with pilot projects and learn from their users what works. Consultancies are right in pointing out that a deep digital transformation creates the best results, but this idea can put off small or medium-sized businesses who desperately need to get into the space. They think, wrongly, that it means either a multi-million-dollar investment or nothing, whereas mostly it’s a continuum.
The old guard
The difference in the level of awareness among senior decision-makers also influences how willing organisations are to become social. This is at every level across the C-suite and includes legal, customer service and sales officers. Organisations that moved early to adopt digital and social technologies often claim to have had passionate internal champions who were able to socialise new ideas. A culture has to be open to change or the old guard becomes entrenched. There’s nothing wrong with the old guard, but we need to be willing to extend our ideas.
CIOs are a case in point, although I do not want to limit my observations to them. Leading CIOs foresaw the potential of social media years ago and have been instrumental in raising awareness about its impacts. They also recognise their skills will increasingly converge with those of marketers who rely heavily on IT systems. Others, possibly out of fear of diminishing authority or just a lack of awareness, actively spoke against it, not because they understood the risks or opportunities of social business but because they did not understand what it was. This is like the initial reaction to cloud computing. Leaders need to acknowledge these reactions and not be limited by them. Seek out alternative views. Go beyond the boundaries of your organisation.
One way they did this was to use (some might say ‘abuse’) their technological expertise to scare executives. Using jargon and tightly held expert knowledge to control business direction is nothing new and is certainly not restricted to technology. But I know many innovators who have been thwarted by internal processes, for example where IT demands the same business case (complete with Project Governance Boards) for an online consultation pilot as for a $100 million IT project. While absolutely appropriate in some cases, when misapplied this kind of oversight kills new ideas. Applying a one-size-fits-all governance approach to a project because it mentions technology is rigidity, not good governance. Leaders have to weigh up risk, including the risks of absence, and apply the right governance model. The same could be said for change management, where calls for detailed change management plans and teams derail opportunities to get started in social. Social technologies can be a real threat to that because they give people the power to manage change themselves.
It’s no different in marketing, though, where old-school executives are still bidding for traditional branding and advertising campaign money, and believe that because the media spend includes online advertising they have ticked the social box.
Traditionally executives relied on internal subject matter experts to bring credible research and new ideas to the executive table. But if these subject matter experts are themselves afraid and out of touch, how does it get there?
I think executives in the current environment would be mad to assume even their most trusted colleagues understand what is happening. They should be challenging their direct reports by asking these questions:
- What game-changing technologies could blow our business out of the water?
- Who is lurking on the perimeter of our business and capable of shaving two or three per cent off our revenue for themselves?
- What impact could technology have on our business area?
- What are we doing to leverage the opportunities new technologies could deliver to our business area?
- What are we doing to manage the risk?
Only by embedding performance outcomes will the tide of laziness shift.
Analysis paralysis
The idea that social technologies are an entertainment craze for the young has died. Instead, research is continuing to point to online connectivity as a business advantage.
However, despite hundreds of studies by highly reputable research and advisory firms that point to the benefits of social business, the needle for executive engagement has barely moved. Executives frequently cite a lack of research or proven business case as a reason for not engaging. But when you ask if they’ve read any reports on the value of social media, the more honest among them will admit that they have not.
Although there are probably millions of anecdotes about the transformative impact of social media, there is a growing foundation of solid research too.
For example, in 2013 an MIT, Sloan Management Review and Deloitte social business study of 2545 respondents from 25 industries and 99 countries found that not only had awareness of the importance of social business for today and tomorrow risen steeply, but it had done so across every industry. The report found that companies deliberately nurturing a more social culture understood the importance of executive involvement. Even though social ROI measures are still evolving, these companies are already investing in quality content marketing and refining their business approach as they go along and as more business intelligence becomes available.
This does not mean social technologies are a business panacea. Businesses have to deal with massive complexities, including many outside their control such as the political environment and other factors that impact productivity.
Furthermore, technology creates solutions but in doing so reveals new problems. This is evident in the decline of the number of unskilled roles compared with those in emerging digital industries. But this cyclical process of adapting and innovating in response to change in the internal and external environment is not new. What has changed is the speed at which it is happening. And that is a key challenge.
The unprecedented, accelerating speed of change
Few could have predicted the speed at which new technologies would take hold or how pervasive their impact would be. We are living in a time when more information is created in a day than a village of people once acquired over a lifetime, when the lead of a new product is snatched away even while it waits for a patent to be approved, and when we leap towards a technology that takes us to the edge of our comfort zone only to discover it’s already obsolete.
We respond somewhere on the continuum of:
- feeling overwhelmed and freezing, doing nothing, which comes at a high cost (likely to become apparent later rather than now); or
- chasing our tails by trying to keep up, which is impossible and keeps us distracted rather than focused on developing the right strategy using the right technologies for our particular business.
We had better get used to it, though, because the speed of change is not going to slow. Rather, because (to use Toffler’s phrase) ‘technology makes more technology possible’, it will speed up.
According to futurists such as Ray Kurzweil, in the next hundred years we will experience the equivalent of 20 000 years’ worth of change. Change used to be linear, or even evolutionary, one shift enabling the next. But if Kurzweil and others are correct, we are moving towards a time when we will be in a state of almost constant paradigmatic shift. The nature of change has itself changed. It has become exponential.
What does this mean for business? It has to be structured to respond to immediacy.
Snapchat is a great example of a company that was able to identify and respond to an issue that is touching a nerve for people around the world — privacy.
From revelations that security organisations are spying on citizens to suggestions that social media companies are scanning people’s private conversations, people feel exposed, even betrayed. They want to be social but they also want to be private. Some argue that if you have nothing to hide, privacy is not an issue. That’s like suggesting there’s no need for doors on public bathrooms or that we should be willing to share every part of our lives. This is not true. Segmenting what we share is appropriate. That we have survived cancer may not be something we want a future employer to know. It might bias them (even unconsciously) in ways that disadvantage us. If we’re a trauma coach, however, it might be a message we want widely shared. Or we might want to work through a fight we had with our spouse by talking it over with a close friend, but not the general public.
In December 2012 the photo-sharing giant Instagram changed its terms and conditions. People interpreted the change to mean that their content could be used in advertising and other ways they hadn’t anticipated. ‘Instascam’, as it was labelled, created so much outrage that Instagram was forced to clarify its position. The company gave people a stark choice: take it or leave it, because they could. The doggedness that comes from being a virtual monopoly power doesn’t change because a company is in social media rather than consumer goods. People weren’t happy and many left, but the user base is so large that it hardly made a dent. At least, that day.
Things have since changed. Understanding many people’s preference for privacy, Snapchat allows users to exchange photos but deletes them as soon as they’re viewed, including off the Snapchat server. There has been an exodus, particularly among teens, from Facebook and Instagram. In December 2012 Snapchat had 50 million users; now it has 200 million. And as the social media environment continues to evolve, there will be no shortage of alternatives going forward.
Immediacy, immediacy, immediacy. A business that can evolve quickly can leverage opportunity.
Business has to reconsider everything from IT infrastructure (making sure it’s accessible to the increasing number of people wanting to transact on mobile while they’re on the move) to migrating customer service to social media platforms or even crowdsourcing their business intelligence. These are significant issues but not ones that can be avoided by pretending they do not or will not pose a threat to the way we now do business.
High uncertainty and ambiguity
The accelerating speed of change is creating high uncertainty in every area, with an inevitable flow-on to business. For example, before a business can crowdsource recommendations from avid fans, it has to know that is acceptable under the laws and regulations that govern its business. What’s a go in consumer goods may, for example, be illegal in finance.
Unfortunately, many regulators are no more progressed in knowing how to respond to this unprecedented change than business. Many dismissed social technologies as a flash in the pan and failed to plan proactively for the massive consequences of their growth. A good example of the impact of online conversations on the buying cycle can be found in the area of consumer law.
Many of the searches made every day on browsers like Google are by consumers researching and comparing products. Consumers also seek the recommendations of friends both in real life and on virtual networks. These recommendations are more important than traditional marketing because we tend to trust the opinions of friends above those of companies, which we expect to feed us spin. Not surprisingly, some companies have tried to exploit this trend and are paying people, either directly or by using incentives, to write product reviews. Depending on where you live, this is often illegal.
Spam is another legal minefield. More than 100 billion spam emails are sent daily. It’s one thing to send spam on purpose, another to do it without even realising you are breaking the law. In Australia, for example, you need the express consent of someone to contact them using their email. That means if they subscribe to your company site for safety information you can’t send them an offer for cosmetics, even though they have willingly given you their contact details. Many marketers think they can use the names in their database however they like, which is not the case.
The impact of technology on business goes way beyond social media and can be seen in the explosion of issues relating to copyright, defamation and media law, privacy and security, technology, telecommunications, trademark and brand protection, and social media law.
Interestingly as I was writing this book, the first Australian Twitter defamation battle proceeded to a full trial and a teacher made legal history after a former student was ordered to pay AU$105 000 for defaming her on Twitter and Facebook.
Fear
We have to tell it like it is: a key reason executives stay away from social media is fear. And that’s also why a lot of them denigrate it. This continues an age-old tradition of diminishing the importance of something because we don’t understand it. Fortunately, being adaptable is also an age-old strength that underpins our success as a species. Which is why very soon we will let that fear go.
But the fear is real. In a study of nearly 1800 CEOs and senior executives, IBM found that many leaders feel out of their depth with respect to technology. There are many reasons for this including that many executives did not grow up with technology. They may have used computers for the first time at university or even at work.
Compare that with digital natives or those who were born in the digital era, for whom using technology is as natural as throwing a ball (come to think of it, often more natural). Executives see digital natives come into a business as graduates and think they are a whole internet generation ahead of them.
But just because you feel comfortable with technology does not mean that you know anything about business strategy, or how to deal with a complex stakeholder relationship or manage a crisis.
I’ve often thought that the generation gap (and let’s face it, this is nothing new) provides an excellent opportunity for reverse mentoring. Digital natives can take the sting out of technology by showing digital migrants how easy it is, just as migrants (most of us) can share the enormously valuable things that we’ve learned over a lifetime at work.
There is also a responsibility for all of us to become more digitally literate.
One reason that executives have been so slow to adopt technology is that we simply do not know enough about it, and this is something that can be easily addressed by education. Just as leaders must be able to read P&Ls and cash flows without being accountants, so too should they be able to assess the opportunities and risks of digital on the shape of business without an expectation that they are technocrats.
Having said that, given the importance of digital literacy for the future of business, should it be a prerequisite for taking a leadership role? We have to ask the question.
The key thing to remember here is that digital literacy is a skill, and like any skill it can be learned. But it’s also a mindset and developing a pro-social approach is entirely in your hands.
Chapter summary
Leaders can develop a social leadership mindset by:
- educating themselves on the value of digital and social media for their industry
- evolving business models that respond to the speed of change
- skilling themselves and their people to deal with uncertainties
- developing digital and social media literacies.