Chapter 4
The Global Business Transition to Social Media
The widespread adoption of social media in most of the developed world is a familiar story to most of us and integral to widespread change in society and global culture. To fully understand why, it's necessary to examine the confluence of complex but deeply connected factors that are driving the move to social business:
1. The growth of the knowledge-based economy (
Figure 4.1). The lion's share of the U.S. labor force has transitioned to service and knowledge work from industry and agriculture. And only knowledge has been growing strongly, with the service sector seeing much slower, although, steady, increases in share as well. As of 2011, over half of the work in developed countries is knowledge work, with some industries, like financial services, having nearly three-quarters of its workforce dedicated to creating and managing high value information. Information is now at the heart of the world economy. Most of this information is kept in computer systems, and a growing amount of it comes from or is kept online.
2. The widespread availability of free global platforms for self-expression. As explored in Chapter One, social media are the primary form of communication online, eclipsing e-mail since mid-2009. Other than the cost to access a computer and the Internet, social media are available for free to the world's population, costing nothing to create and share information within social media that is then immediately accessible around the world. This alone makes it one of the most significant communications revolutions for a number of reasons, including the speed of adoption and the breadth of those affected, currently estimated to be between about half of all Americans and approximately 1 billion people globally.
1 It's also one of the largest single improvements in human history in terms of the ability of people to express themselves and self-organize.
3. The shift in the bottom-line power of institutions compared to online communities of people. A curious feature of social networks and online communities is their sheer productive power. At the same time, while businesses are growing larger than ever before, they can't begin to match the scale and creative capability of millions of members of social networks around the globe. Crowdsourcing, the ability to collectively organize a large number of loosely connected people around the world for a common purpose, is just one of the more disruptive possibilities made possible by social media.
4. Peer production is becoming the primary motivating force for knowledge creation. Facilitating creation and management of knowledge in its myriad forms, from movies and stock quotes to software and financial reports, is now a primary activity of the global economy. Social media have removed almost all geographical, economic, and collaborative barriers to creating knowledge. And online communities collectively have more productive capacity than central production processes typically conducted by businesses that hire and pay employees and business partners. Instead, communities of people are able to self-organize and achieve outsized results compared to what companies can achieve on their own.
One particularly potent example of peer production comes from the emerging field of gamification, the use of game mechanics to solve real-life problems. An online community of gamers formed around a new game site created by the University of Washington with the hope that the community could solve a long-standing AIDS protein folding problem that had eluded immunologists for over a decade. Scientists had used the most powerful X-ray crystallography techniques available in order to discern the structure of a particularly difficult protein that was key to unlocking how it evades the body's immune system, but to no avail. The game site, FoldIt, was a last-ditch effort to solve the problem. The results astounded the project's sponsor: a correct resolution to the protein modeling problem in just three weeks. Peer production by amateurs won the day over the dedicated yet small-scale and isolated efforts of teams of experts.2
Peer production, both deliberate and unintentional, occurs around the world every day in open source software projects, crowdsourced marketing research, Wikipedia entries, reviews and ratings on countless e-commerce sites, and, increasingly, highly structured and reusable “off-the-shelf” communities, such as Amazon's Mechanical Turk and Innocentive, commercial services that enable rapid access to already established and thriving communities of people. The former enlists hundreds of thousands of people in simple tasks, and the latter can mobilize communities of scientific and engineering experts to solve esoteric problems in technical fields. Both are successful services designed as reusable peer production that can be employed easily by virtually any organization. Perhaps most telling of all, most of the Web today is now peer produced, with perhaps the majority being created with social media. (See Figure 4.2.)
In close combination, these four interrelated factors—the growth of the knowledge-based economy, widespread availability of free global platforms, the shift in the bottom-line power of institutions, and peer production as the primary motivating force for knowledge creation—explain at a conceptual level that social media can be transformed into a force for business. This is invaluable for focusing on the major, strategic trends and changes taking place in society and business.
A few key questions should be asked at this point: Does all of the information creation happening in social media result in increases in knowledge? If peer production is suddenly so much easier to engage in than was possible before, is it a repeatable and reliable way to achieve business objectives?
The answers to these questions are critical and go to the heart of the social business hypothesis. While social media have as many motivations for why participants engage, social business is slightly different. A famous piece of research by Bradley Horowitz, a Google executive and vice president for the Google+ social network, shows that creation is a much less common activity in social media than consumption is.3 In fact, it breaks down into the interesting pyramid on the left in Figure 4.3, which says that only about 1 percent of a group will be producers, with another 10 percent recombining and synthesizing the resulting work. On the right is well-known intranet researcher Jakob Nielsen's equivalent for participation levels inside businesses for the creation of information.
What all this means is that in any typical social group only a “remarkable 1 percent” will actually create. There are several implications to this. For one, it means that the communities must be very large indeed to outproduce traditional business methods or they must be atypical in their behavior (for example, much more than 1 percent of the community would contribute). In fact, one or both of these can be the case when engaging in social business. Often the engagement process is a broad net across the Internet to gather interesting participants. Or organizations can go directly to communities that specialize in peer production, such as the services like Amazon Mechanical Turk or other special interest communities, many of them noncommercial.
This doesn't answer the question of whether user contributions directly translate into usable knowledge and therefore productive output. As anyone who has used Facebook or Twitter can attest, there's a lot of noise inherent in most social conversation, even when directed at a specific objective. Like the Intuit example of Live Community in Chapter Three, often a general-purpose social media environment is not focused enough. Sometimes it's better to limit the axes of participation enough to constrain output without hindering participation.
Almost all social business efforts that access a focused, reasonably sized community create more usable input than required to meet business needs. This evidence gives us another two tenets of social business that are not quite as core as the first three but deeply inform professionals in applying social business methods:
Social Business Tenet #4
Enlist a large enough community to derive the desired result.
Most social business efforts either engage with an existing community or build their own. The first approach is much easier but may not suffice for the effort. Engaging with an existing community has its own challenges, given that businesses must follow the rules of that community, whereas building a new community around a specific purpose can ensure amenable rules. However, creating a community is much more work and usually requires a large—and typically expensive—funnel to pull in large enough groups of participants and interlocutors. Either way, businesses must have a good means for calculating the size of the community they need to accomplish the business objective, whether it's internal collaboration or external engagement. One counterintuitive outcome of opening up a business activity to anyone, however, is that occasionally participation can far exceed what's needed or expected. Because open processes are far less predictable, they can exceed expectations without warning. Be just as ready for too much as too little participation in planning any social business effort.
Social Business Tenet #5
Engage the right community for the business purpose.
Countless online communities and subcommunities exist in social networks and other platforms. Most are poorly defined or exist in niches surprisingly difficult to locate, connect with, or establish trust within. While tenet 4 is critical for sizing the volume of participation, tenet 5 establishes the need to have alignment with communities being engaged with or created. Alignment comes in many forms and is a demographic and social psychology challenge. To a fairly amazing extent, communities based on social media are very self-selecting. Business activities truly open to participation will attract a surprisingly wide variety of interested stakeholders. Put simply, the community one wants is the community that can deliver on what both the community and the business need.
With five tenets in hand, we have almost enough of a palette to begin designing social businesses. But in order to deliver high-impact results, we have to look at a few more key aspects of the changes taking place in society, business, and technology.
