Emerging Social Business Strategies 2010

Emerging Social Business
Strategies in 2010

What Works And Why
Dion Hinchcliffe

Thursday, March 11, 2010

Introduction
Dion Hinchcliffe
• ZDNet’s Enterprise Web 2.0
• http://blogs.zdnet.com/Hinchcliffe
• Social Computing Journal – Editor-in-Chief
• http://socialcomputingjournal.com
• ebizQ’s Next-Generation Enterprises
•
http://www.ebizq.net/blogs/enterprise

• Hinchcliffe & Company
• http://hinchcliffeandco.com
• mailto:dion@hinchcliffeandco.com
• Web 2.0 University
• http://web20university.com
• : @dhinchcliffe


Opening the
SBS to the Web
http://bit.ly/97hfp4


The vision
• How we run our businesses is changing more quickly
than ever before

• New technology and expectations have led to results not
possible -- or expected -- before

• New economic, social, governmental, and cultural models
emerging globally

• Largely driven by the Web, but changes in us too

• A pragmatic exploration of how they promote resilient,
sustainable new business models

• Using what’s happened recently as a guide, what will this
transformation look like?


The network is a
big place today
• All your customers
• All your competitors
• All the ideas and
innovation
• Only a few proven
strategies for long-term
competitive advantage


The major shifts
• In who creates value (the network does)
• How much control we have over our
businesses
• How intellectual property works
• Great increases in transparency and
openness
• Open supply chains, community-based
processes and relationships

The motive forces of
21st century business
^
tha t we
now of so
• Network effectsk
• Peer production far
• Self-service
• Open business models
• New social power
structures


The Social Business Landscape

Uniﬁed Comm 2.0

Public Social Networks
Interaction and Social Business

Worker Us
Online
Community Trust, Engagement, Reputation

Customer
Microblogs Communities

Community Mgmt Social Web Tech &
Standards
E2.0 Workﬂow The Social Web 1-2 billion
B2C
E2.0 Compliance
B2B
people
Trading World Wide Web
Business
Partners Customers + Public


The Big Questions
• How do we build and sustain a
connection with a fundamentally new
marketplace?
• What are the rules for success?
• What do social businesses look like?
• Are we starting to understand best
practices?
• Where is this going? Is it part of a
larger story?


Edge Businesses:
A Larger Context?

Always involve people,
but may not necessarily
be social


The Story of KatrinaList & XM Radio
• Hurricane Katrina
– Survivors emerged and announced
where they were on their blogs
– People watching the Web’s syndication
“ecosystem” noticed the reports
– A small group collected the reports out
of the blogosphere and centralized the
listing
– Over 50,000 survivor reports in the first
3 days after the disaster
– Emergent phenomenon
– A critical example for how to rethink
solutions to traditional problems in a 2.0
world in which we can actually tap
collective intelligence
• XM Radio
• Community for Customer
Service


A Few Edge
Business Stories
• Open Source Software (OSS)
•
• The Search for Steve Fossett
• Innocentive
• One Billion Minds
•

The Map of Opportunity
Innovation Growth
Creating new rapid
Leveraging Innovation growth public services
• Product Incubators powered by:
• Open Supply Chains • Peer Production
• Product Development 2.0 • Jakob’s Law
• Some Rights Reserved • The Long Tail
• Blue Ocean
• Network Reinventing the
Fostering Effects
public relationship
Innovation to drive mission:
• Internal Innovation Markets • Customer Communities
• Open innovation •Customer Self-Service
• Database of Intentions
• Marketing 2.0
Current
Change State Driving costs down through
Management less expensive, better 2.0
• Transformation
Communities solutions:
• 2.0 Education • Lightweight IT/SOA
• Capability • Enterprise mashups
Acquisition • Expertise Location
Improving • Knowledge Retention
Business Remodeling productivity and
and Restructuring access to value:
• BPM 2.0 • Enterprise 2.0
• Open APIs
• Employee • Crowdsourcing
Communities • Prediction Markets
• Cloudsourcing
• Pull Systems
Transformation Cost Reduction


The challenges
• Cultural “chasms”
• Disruption
• Cost
• Risk
• Difﬁculty (“Digital DNA”)
• Repeatability

However, it’s usually a
people problem:

The biggest challenge is in
changing our thinking

Rating social business
strategies
Challenges Repeatability

Questionable Ready for Wide
Value Adoption

Ideal for Early
Adopters

Suitable for Strategic
Experimentation Industry Play

Uncertain Results Proven Beneﬁt


Where Social
Business Applies (social me
in the
dia

enterprise
)
Enterprise 2.0 &
Product Development 2.0 Social Business Models

Product Development

Marketing

Sales crowdsourcing

online Customer Service cloud computing
mashups
community open APIs
Line of Business SaaS

new
development
paradigms
Operations | IT | Back Ofﬁce


No small system can withstand
sustained contact with a much
larger system without being
fundamentally changed.


The Implications of
Social Business
• The fundamental re-orienting of the supply chain inputs
of most organizations

• Network structured organizations instead of hierarchical

• New value exchange mechanisms that involve direct value
(ideas, work) transfer instead of ﬁnancial transactions

• Dramatically collapsed resource models for
accomplishing previously very difﬁcult and/or large scale
business problems

• A steady recasting of the very notion of what a business
consists of


Social Business
For Collaboration
(aka Enterprise 2.0)


Applying the
“Web 2.0 effect” at work
• Enterprise 2.0
Enterprise 2.0 systems adapt
– Globally visible, persistent collaboration to the environment, rather
• Employees, partners, and even customers than requiring the
environment to adapt to it.
• Leaves behind highly reusable knowledge

– Uses wikis, blogs, social networks, and other Web 2.0
applications to enable low-barrier collaboration across
the enterprise
– Puts workers into central focus as contributors
– Case studies of early adoption consistently verifying
signiﬁcant levels of productivity and innovation


Potential E2.0
Beneﬁts
Productivity Competitive Advantage

Knowledge Retention Modern Workplace

Information Discovery More Transparency

Business Agility Less Duplication

Cross-Pollination Better Communication

Fostering Innovation Cost Reduction


Challenge:
The enterprise is not the Web

Enterprise
• We want to replicate the positive
aspects of Web 2.0 platforms in
the enterprise
• But our infrastructure is usually
not very Web-like, creating
signiﬁcant impedance and diluted
results
• Requires augmentation and
adaptation to reproduce the same
or similar results


Enterprise 2.0 Beneﬁts


Enterprise 2.0:
The bottom line
• Repeatable
• Low Risk
• Proven Beneﬁt Ready for Wide
Adoption

• Rapid ROI
• Transunion Enterprise 2.0 case
study: $3.5M recoup in 5
months with $50K
investment: http://bit.ly/O74W


Open Supply Chains
& Open Data
al so kn own
as APIs


Open Supply Chains
with partner
communities
and open APIs

Key Point:
New online products simply aren’t released today
without building a partner community


vs. :
The Platform Overtakes the Web Site


“Platforming” Your
Business
• Requires opening the server-side to 3rd party
developers
• Allowing the construction of widgets and Web apps
offering some or of all of your functionality by
external partners
• Harnessing the innovation on the network
• Generating the greatest potential reach, competitive
lock-out, market share, and revenue
• This is live, not data ﬁles like at http://data.gov


Open Supply Chains:
The bottom line

• Good repeatability
• Can be costly Strategic

• Unproven in Industry Play

certain industries
• Proven ROI


Online Community


What do online
communities do?
• Customers and workers ﬁnd and connect with
each other based on a common, shared idea

• Socialize, communicate, and collaborate on
topics that they care about

• Share ideas, experiences, stories, suggestions, etc.

• Draw others in by word of mouth

• Becomes an ideal vehicle for collective
intelligence and peer production


Marketplace Partner Customer
Community
Community Community
Community Management
support participation
Social Business
direction business
models
resources Enterprise 2.0 & Inter
net
Social Media ente
r prise
crossover crossover

Worker Community


Online Community Management:
A Core Social Business Function
Brand Support
Brand Management Situation Management
Upgrades and Improvements
Capture Brand Feedback
Software Know-How
Advertising & Listen/Join Conversation
Feature Selection Platform Management
Marketing Marketing Analysis
Priority & Schedule Impact Reporting
Management Ad Rotation
Documentation Project Management
Staff Development Recruiting
Incorporation of Team Building
Experience
Product Management Staff Training
Product Selection
Business Planning Budgeting
Outreach
Goal Deﬁnition
Events
Customer Management Business Alignment
Incentives Community
Control/Management
Issue Management Management
Moderation & Rule
Networking Enforcement
Professional Development Elicit Participation
Identiﬁcation of Best
Content
Practices Rewards & Incentives
Management
Attend Trade Events Content Plan
Research & Insight
Content “Gardening”


Online Community:
The bottom line
• Medium repeatability

• Can be costly

• Proven ROI

• Dramatically lower
customer support
Ready for Wide
Adoption
costs (10-30%)

• Better Customer
Satisfaction

• New customer
relationship


Open Business
Models


Network-Driven
Open Collaboration
Breeding New
Business Strategies
Methods:

Open Source
Open
network effects
Business
Methods
Open Data peer production
• Richest, most up-to-date, and
dynamic products & services
pull instead of
push
• Lowest cost of production
UGC & Open • Greatest degree of innovation
and diversity
Content self-service • Ownership, control, and
monetization challenges

Enterprise 2.0
Online Community


Product
Development 2.0


Crowdsourcing

Text


Open business models are
transforming the market

• Product Development
• Marketing and Advertising
• Operations
• Customer Service


Examples
• Android
• Gold Corp.
• Crowdspring
• http://netﬂixprize.com
• Doritos UGC advertising
• http://OpenStreetMap.org


Sourcing Models

internally open
outsourced
sourced sourced

direct peer production,
Methods assignment
subcontracting,
crowdsourcing,
consortiums
open platforms

Participants staff contractors,
anyone
partners

Central Control high
medium to high medium to low

Predictability best good lowest

Richness
adequate medium high
of Outcome
corporation, open source
Legal structure contracts,
copyrights, licenses, Creative
& IP protection charters, etc.
patents, etc. Commons, etc.


Open Business Models:
The bottom line

• Medium repeatability

• Medium costs

• Signiﬁcant cultural
changes required
Ideal for Early
Adopters

• ROI and control
challenges

• Major strategic beneﬁts


How do we
re-imagine our
organizations for
the 21st century?


What Works And Why
• Network Effects By Default
• Turning Business Processes Social
• Partnering with the Network
• Giving Up Non-Essential Control
• Growing Cumulative Social Capital
• Building on the Shoulders of Giants


Challenges to Transitioning to
New Social Business Models
• Innovator’s Dilemma
• “How do we disrupt ourselves
before our competition does?”

• Not-Invented Here
• Overly fearful of failure
• Deeply ingrained classical business culture
• Low level of 2.0 literacy

Key Lesson:
We now have a
fundamentally new and
better set of lenses through
which to look at creating
business value...


It’s time to change
our DNA
• Moving from the 20th century towards
21st century businesses
• Deeply understanding the network and its
profound potential for creating growth and
building value
• Putting 2.0 into the core of our modern
government design


The rewards are
considerable
• A business world that is sustainable
• Successful transition to a rapid evolving
new business landscape
• Attaining of better and new type
relationships with citizens and workers
• Resilience to future change and ongoing
evolution of business, culture, and society


Discussion
Slides:
dion@hinchcliffeandco.com


Emerging Social Business Strategies 2010

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