by Bob Zukis, Senior Fellow, Governance Center, The Conference Board; Author, Social Inc. – Why Business is the Next Social Opportunity Worth Trillions
You can’t turn around without running into news about social media, networking, or technology. But the strategic implications around what social is truly about for businesses have not been well articulated or understood. Marketing has so far dominated the conversation, but something much more strategic is occurring with this technology that has major strategic business ramifications.
Is social just a channel, like Facebook that you need to advertise into? Is a site and service like Twitter a new way to communicate with the market, your employees, and a broader stakeholder community? The answer is yes to both of these questions but the bigger strategic underpinnings of social technology are much more important than this.
There are some staggering data points emerging around social that illustrate the importance of this technology for companies everywhere.
- Over 121 billion minutes of time is spent on social media sites monthly—that’s over one million man-years of time a month.
- There will be over 9 billion wireless subscriptions in place by 2017, far exceeding the population of the world.
- McKinsey estimates that well over $1 trillion dollars in value can be released by social technology in business.
While Facebook and Twitter have captured their fair share of press and mindset of what social is about, the bigger picture for business surrounds these tools and many others as workforce and intellectual productivity enhancers. Or in other words, competitive weapons for companies.
Social technology includes both of these tools and services, but it also encompasses the internet, the cloud, smartphones and the many other derivative innovations that make “social” possible. Humans have been exploiting other social technologies for centuries, like the printing press and the telephone. Each time there has been a major leap forward in social technology, like the one that is occurring now, business and society have changed and advanced in dramatic fashion.
The reason for these developments relate to the simple fact that human behaviors change with these tools. How people engage, interact and experience the world around them evolves with these new tools. Changing behaviors mean your markets, employees and stakeholders start to act and do things differently. The reasons why they buy, how they buy, their knowledge and impression of your brand and business practices, your employee engagement levels all are impacted by major leaps forward in social technology.
Today’s social technology is a competitive weapon for business because it literally makes us smarter and more productive. The tools and techniques of social engagement that Facebook and Twitter have taught billions offer new ways of engaging, working and organizing for companies of all sizes. The improved quality and velocity of information exchanges that take place with these tools and the ability to collectively be smarter as a group, are game changers for businesses that understand this.
The development of the social technology of the mass produced written word enabled by the printing press, drove economic growth levels in the economies that adopted this technology that were 4 times faster than those that didn’t. So far, social has been about people-people connections and engagement. But interactions between machines and between people and machines will create an entirely new social dynamic.
Social technology creates new levels of mass-market empowerment that changes the competitive interplay between companies and their markets, and their industries. Information asymmetries are collapsing everywhere, and markets have a new and efficient ability to collectively organize and act. Famed Harvard Professor and business strategist Michael Porter has always espoused the concept of being “unique” as the path to superior profitability for any business. As products and services have become increasingly commoditized in our highly efficient production focused world, being unique is now a business necessity.
Fortunately, social technology offers some powerful new tools for businesses to work with that deliver precisely upon this opportunity. Through social technology, companies now have new ways to connect, communicate, collaborate and create and sustain their communities that can be uniquely their own. Price based competition through incessant cost cutting, is a race to the bottom. The companies that reinvent their value propositions by delivering more real time intimacy and relevancy with their products and services through today’s social technology will increase both their top and bottom lines.
Billions have voted, social technology works and is a powerful new tool that presents new competitive opportunities and risks to your company. Here are three things that Boards and CEO’s should be doing now to move forward with social:
- Add social and information technology skills to the board (a recent survey from Heidrick & Struggles indicated that this was the #1 missing boardroom competency).
- Add to the board calendar a comprehensive set of oversight activities that cover the strategic and tactical issues around this technology.
- Review the crisis management plan and ensure that management can respond quickly and effectively to any social emergency that occurs.
Less than a decade ago, social came out of nowhere and seemingly caught the world by surprise. It’s already played a role in civil uprisings and reshaped the future in real time. It’s true potential as a disruptive technology and competitive tool for business is still to be fully realized, but the leaders and early adopters who understand the business and economic benefits behind this technology are setting themselves up for outsized gains at their socially challenged competitors expense.
About the Guest Blogger:
Bob Zukis is a senior fellow with The Conference Board Governance Center. Zukis retired on July 1, 2012, from PwC as a Senior Partner and has just published “Social Inc. – Why Business is the Next Social Opportunity Worth Trillions”, available on his website at www.bobzukis.com or on Amazon.com.
Zukis is the co-founder, Chairman and CEO of Saaskwatch Systems. He is also an investor at Hyde Park Angels where he invests in start-ups in the Midwest, USA. Bob is also active across the Board community where he brings a deep understanding of the intersection between business and information technology in the creation and protection of corporate value.
Zukis is a sought after speaker, author and thought leader who is regularly quoted and published in a variety of press.