Whether you embrace the Hyper-Social shift or not, it will ultimately have an impact on all aspects of your business. Since people are social by nature, and since social media is giving them the ability to behave Hyper-Socially again in business, it is likely that some parts of your business have already gone social—think of the customer’s buying process as an example. If you want to be proactive, you need to evaluate which parts of your business would benefit the most from becoming Hyper-Social. In doing this exercise, you will quickly realize that you can reduce transaction costs and improve efficiency by making most business processes Hyper-Social.
Scary? Yes. Inevitable? You bet!
While we will be reviewing the impact of Hyper-Sociality on the various parts of your business in detail in later chapters, it is important to highlight the scope of this impact in an overview. We should stress again that our research indicates that Hyper-Sociality is not a fad that will pass, as so many other fads have done. Indeed, Hyper-Sociality is the reverse of a fad in some ways. It’s not something new, as humans have always behaved socially, but their ability to behave socially in the business world has long been suppressed by distance and lack of communication tools. Now that social media and the Internet have arrived, we are returning to the preindustrial social status quo, albeit on a much larger scale.
Companies that proactively tap into the Hyper-Social shift will find themselves conducting business with people whose job it is not to work on the things they work on—customers helping them design better products, nonmarketing employees helping them amplify launch activities, or noncustomer service employees and other customers helping resolve customer issues. They will be able to scale those business processes to levels not possible with traditional management techniques and budgets. Like Christa Carone, the CMO at Xerox, they will find that tapping into the social contract that people have with your company, as employees as well as customers, can be much more powerful than tapping into the market contract that they have with you. When we spoke with her, she described how Xerox was able to unleash virality never seen before during a recent product launch—simply by tapping into existing social media enthusiasts across the company. “So as a result we were seeing posts from employees who would typically blog about a hobby that they have—about antique cars or something—who said, ‘Hey. I rarely talk about what I do at work, but I am really proud of what the company launched today,’ and then shared information about the product. So we had this very unique viral effect of our employees feeling empowered to communicate on behalf of the company... it’s amazing what you can do when you empower people with information...”1
Deloitte’s 2009 State of the Media Democracy Survey indicates that 63 percent of American consumers learned of a new product for the first time online, and 51 percent say that they purchased a product because of an online review.2 A study from McKinsey3 found similar results: more than 50 percent of U.S. electronics consumers now rely on Web-based research to narrow the choice of brands rather than following advice from sales staff when choosing among products in stores. In a Hyper-Social world, the most important conversations are no longer the ones that you have with your customers, prospects, and detractors—the critical conversations are the ones that are taking place among your customers. Now, if people are increasingly making buying decisions based on information that comes not from you, but from other people within their tribes, you will have to change the way you create and distribute branded content. You will also need to change the way you get people’s attention and the way you sell to them. Out are “interruption marketing,” corporate-speak-laden sales materials, and “the hard sell,” to name just a few now-antiquated tactics. While those strategies are out, what is “in” is reciprocity-based actions, helping people, affiliating with others, and delivering true value to everyone—friend or foe. In other words, Hyper-Sociality can completely transform your sales and marketing approaches, including lead generation, PR, communications, and product positioning. We will go into the details of how Hyper-Sociality is poised to fundamentally transform all those practices in later chapters.
Table 3-1 Examples of Hyper-Sociality in Various Corporate Functions
Next, let’s consider Hyper-Sociality’s impact on product innovation and product development. Although these departments are the heartbeat of most companies, they consistently suffer from an 80 percent failure rate. The companies that leverage Hyper-Sociality as part of their new product development are highly likely to experience higher product success ratios—and that is money that goes straight down to the bottom line that their competitors will not have. As part of our yearly Tribalization of Business Study, we have seen the early signs of tribe-based product development and the impact they have on overall business success.
The bottom line is that if someone in your industry starts leveraging tribe-informed product development, you have no choice but to follow suit, or be ready for severe margin pressure and market share loss. Getting customers involved in the creation of new offerings not only will result in better offerings, but will result in higher levels of customer engagement. Innovation cycle times may also be reduced, as outside experts can be used to accelerate problem solving.
Given the networked nature of Hyper-Social product developers, many organizations will also develop new ideas of when a product is finished or complete. We have heard companies refer to the concept of “constant beta” when describing their product development processes: Since creation is so collaborative with customers, it is an ongoing process that does not seem to have a middle or an end. And the phenomenon of Hyper-Socialized innovation is not limited to a few business sectors. Companies that have turned product innovation into a social process can be found in every industry—Pfizer, Fiskars, Intuit, Procter & Gamble (P&G), and Dell, for example.
Customer service may be the part of your business that is first and most dramatically affected by the Hyper-Social shift. Customer service is a perfect place for companies to use social media and to leverage Hyper-Sociality—people love helping others. In fact, you won’t be able to stop it—the drive for people to help one another is just too powerful a social force to stop. Not only that, but customer service and support conversations may be the last market conversations in which people want companies to engage, calling for a much tighter integration between marketing and customer service. And again, the benefits of leveraging Hyper-Sociality in customer service will change the competitive dynamics within your industry, with those that do it right not only reducing their costs, but also increasing their customer loyalty and market share at the expense of those that don’t.
Interestingly enough, an informal poll that we conducted among 50 companies revealed that almost none of them were making social media investments in customer service. For most companies, customer service remains a cost center, not the potentially rewarding and profitable customer interface point that companies like Zappos and TiVo have been able to tap.
Recruiting won’t escape the Hyper-Social shift either. As tribes begin to alter company products and marketing, Hyper-Social companies will need to adapt in order to better interact with their customers, employees, and business partners. Organizations will suddenly find themselves ill equipped on the talent front, lacking individuals who can manage frequent, multichannel discussions in real time with important constituents. Former star employees will find themselves in unfamiliar territory and possibly in need of retraining, and management will need new employees who can operate in a messy Hyper-Social environment.
Management will also have to become comfortable with employees crossing over former organizational boundaries in search of information, and being privy to information and knowledge flows that formerly were off-limits. Initially, recruiters are likely to wrestle with job descriptions, pay scales, and career paths for these new Hyper-Social-savvy workers, as the organization has never had to identify or recruit these people previously.
Organizations will need to rethink how to train and reward these new employees, as their ability to create a more Hyper-Social organization will at first seem difficult to quantify or to assign monetary value to. For instance, today, customer service reps may be rewarded for resolving a customer question in the shortest possible time; a Hyper-Social company may well be more concerned with gleaning meaningful product development or marketing information during a customer service interaction.
Another change driven by the Hyper-Social shift is the increased opportunity for companies to work with volunteers in a fashion that is almost identical to actually employing them. Although this might not be recruiting in the classical sense, it presents a new opportunity for organizations to attract and profit from passionate volunteers who wish to help, but not necessarily to become employees.
Companies such as IBM are already using social media to permit their employees to communicate better within the company and to locate needed expertise. Other companies are enabling employees to reach outside of the organization, and to communicate with non-employees who can add value. Yet other organizations are providing employees with social tools that allow them to find mentors and career advice among colleagues. Vast improvements over the corporate newsletter or lunchroom memo board, these systems facilitate the flow of information up, down, and across organizations.
Increasing Hyper-Sociality will have a profound impact on how organizations capture and communicate knowledge. As with the other corporate functions we’ve just considered, Hyper-Socializing knowledge management within companies will greatly improve the generation, sharing, and locating of knowledge. Capturing knowledge and then sharing it effectively has typically been a tough process for organizations to optimize because of a number of obstacles. For instance, knowledge management systems typically are created without consulting users, and do not provide demonstrable value to contributors. Progressive and visionary knowledge managers are developing tools and systems that tap into Human 1.0 behaviors such as reciprocity and status seeking among peers, so that people are given incentives to create and share more information. And as we discuss later, knowledge may well start flowing from the organization to the customer, providing a significant new value.
While we have pointed to the inevitability of the Hyper-Social shift in Chapter 1 and in parts of this chapter, it is critically important that you understand what that means for your business. In order to continue keeping Hyper-Sociality out of your business, you would need to turn your company into a North Korea–like fortress—not exactly a wise move in this hypercompetitive age. In a recent interview that we conducted with leading business thinker John Hagel,4 he talked about the intensification of competition and how this has led the mean length of company survival to come down to 10 years, compared to 75 years in the 1930s. One of the best ways to cope with this situation, according to Hagel, is to shift from a knowledge stock mentality, where you aggressively hoard proprietary knowledge and extract value from it for as long as possible, to a knowledge flow mentality, where you refresh your current knowledge stocks, which have rapidly diminishing value, by participating in knowledge flows. Of course, one of the big challenges for companies is that, unlike information or data, knowledge does not flow easily, as it relies on long-term trust-based relationships. Indeed, data and information are facts that describe a situation and can be generated by machines, whereas knowledge consists of truths, beliefs, methods, solutions, ideas, and other elements that are created by humans and shared among people who trust one another. So one of the keys to success in this new economic reality is to move from a transactional world to a long-term trust-based world. Examples of taking on a knowledge flow approach include letting your key customers participate in product innovation and turning them into affiliates to allow them to help one another. In other words, the best way to prepare your company for the intensification of competition is by embracing Hyper-Sociality instead of keeping it at bay!
And even if you think that you can keep Hyper-Sociality at bay, those competitors who do embrace it will gain benefits that are game-changing and that will cost you significant market share and lead to profitability pressure.
In reality, however, you won’t be able to stop the Hyper-Social shift from taking hold in your environment. You can try to block your employees from accessing Twitter, Facebook, MySpace, and other social networks from work, but they will bring their own tools to gain access. In addition, they can and will access these services from home, whether you like it or not. You can set up Soviet-era-style policies to block people from engaging in social media, but unless you are willing to burden yourself with the repercussions of having a Soviet-era-style policing department, that too won’t work. And even if you could stop all your employees from being social, your customers, prospects, and detractors will behave Hyper-Socially and dislike the fact that you are dealing with them as a corporate entity instead of as a set of human voices. Besides the increased competitive pressure, you could also face a severe brain drain once the economy picks up and your top talent flocks to other companies.
As we saw earlier in the book, many companies are merely looking at leveraging social media as part of their business, with a heavy emphasis on the media part of social media. They set up corporate Twitter accounts to disseminate their press announcements, they set up Facebook fan pages that offer coupons, or they set up corporate blogs full of anonymous company and product blurbs. Clearly, that is the wrong way of looking at this latest wave of change.
Unlike e-mail, social media is not simply a new channel of communication with customers. Social media, and the Hyper-Social shift that it has helped usher in, is completely transforming the rules of business—from marketing to customer service to product innovation to internal collaboration. By providing a platform for participation to your employees, customers, and prospects, social media has changed the fundamental pillars of the business game. Not only have the rules of the game changed, but so have the players, the scope, the tactics, and what’s at stake.
Let’s take a quick look at the different elements of the business game and how they have changed.
People do not want to hear from companies anymore.
People want to hear from other people.
Some people will argue that it has always been like this, and they are right. The problem is that prior to social media becoming commonplace, you could not hear from other people in a scalable way, and so you had to listen to what companies were telling you.
Customers
Employees
Prospects
Except for competitors not being on the list, it sounds like the old players, doesn’t it?
The difference is what Clay Shirky calls “here comes everybody” in his latest book,5 which explains many of the changes that are afoot. It is not just the employees that are in your direct line of command who are playing key roles in your decision-making processes; it is all your employees. And it is not just your largest customers, or those whom you pay to advise you, who will participate in your decisions—it is all of them, including people who have not yet bought from you.
The scope of business for many old-school executives was primarily focused on presales activities and new product innovation. The new scope of business is across the complete customer life cycle and involves understanding the holistic context in which humans make decisions.
Tapping into business communities
Harnessing social media and social networks
Using people-speak and authenticity
Faster speed of response
Those are big changes in how companies will have to think and work in order to create new customers. No more corporate-speak, no more interruption-based marketing programs, and no more targeting. It is now all about attracting humans, building relationships and trust by helping them and letting them help one another, and leveraging the tribal nature of people.
Is this how business tactics should have been all along? Absolutely! But how many companies were doing that when they did not have to? Almost none. Now they will have no choice if they are to survive.
People’s attention
People’s trust
Talent in employees and customer champions
Externalized business processes that include employees, customers, and prospects
Retellable stories to market with your customers instead of at them
So as you can see, gone are the switching costs, the better mousetraps, the big advertising budgets, market share, and other added values that determined your competitive value in the marketplace before social media shifted the power away from companies and into individuals’ hands.
The business of identifying, developing, educating, and supporting customers has become a new game because of social media. Social media is not just a new channel for reaching and interacting with customers. Failing to realize that distinction will result in companies not being able to achieve their business objectives. And as we have seen earlier, your end goal has not changed—it is still to create a customer. It is everything in between to get to that goal that has changed! The only way you will get there is if you understand the new rules, the new players, and all the other elements of the marketing game.
Still not convinced? Fiskars, a $1 billion North European scissors and garden tool manufacturer, was able to create a passionate community of 5,000 scrapbookers, who call themselves “Fiskateers.” It’s a real movement that the company probably could not shut down if it wanted to. But why would it want to? The Fiskateers increased the company’s online chatter by 600 percent and its scissors sales by 300 percent, and it now derives most of its new product innovations from the community.
Another well-documented case study is eBay. When it created customer support forums for its buyers and sellers, where they can exchange tips and tricks on how to buy and sell with other people, eBay discovered that those who were active in the customer support forums were bringing in 50 percent more revenue and profits to the company.
Surely those are not level-setting figures. They are, by any definition, game-changing.
Of course, when a tidal wave of this magnitude hits your business, it will inevitably transform all aspects of that business. In Part Two of this book, we will take you through the various changes that you can expect and how you can prepare for them. We will review how Hyper-Sociality will affect your human capital needs; how it will force you to think differently about organization charts, management skills, and the informal networks through which information really flows; and how you may actually have to change or adjust your values in order to capitalize on the power of the emerging social behavior.
By now we hope you realize that Hyper-Sociality will affect all parts of your business. You can get ahead of it and make a proactive strategy for how Hyper-Sociality will change your business, you can let it happen to you, or you can resist it (not recommended).
While we will go into much more detail about how to leverage Hyper-Sociality as part of all of your business processes in Part Four of this book, at this stage there are some questions that you should already start asking yourself and your teams.
How good are you at engaging your employees and your customers as part of your most critical business processes, like product innovation or customer support? How good are you at engaging your detractors? How much of a “perpetual beta” culture do you have in your company? Do you consider your customer service department a cost center, or something more? Have you seen signs of leaders within your company who resist Hyper-Sociality or feel threatened by it? Are there signs that your competitors are embracing it at a faster pace than you are?