Originally published at Weblogsky.

Austin’s Dachis Group talks about social business design, defined as “the intentional creation of dynamic and socially calibrated systems, process, and culture. The goal: improving value exchange among constituents.” I find the Dachis overview (pdf) interesting, if a bit scattered. David Armistead and I at Social Web Strategies had been having conceptually similar conversations for the last couple of years, looking at the potential culture change associated with social technology and new media (with Craig Clark), the need for business process re-engineering (with Charles Knickerbocker), and the power of value networks. This morning while sitting on my zafu, I had a flash of insight that I quickly wrote down as five thoughts that came to me pretty much at once…

1. Organizations are already using software internally and have been for some time – email lists, groupware and internal forums, various Sharepoint constructions, aspects of Basecamp, internal wikis and blogs, etc. What’s changed? I think a key difference is high adoption outside work – more and more of the employees of a company or nonprofit are having lifestyle experiences with Facebook Twitter, YouTube, Flickr et al. The way we’re using social media changes as more of us use it (network effect) and our uses become more diverse.
2. Organizations see knowledge management as storage, basically, but we can see the potential to capture and use knowledge in new and innovative ways, e.g. using multimodal systems (Google Wave, for example) to capture and sort knowledge as it’s created, with annotations and some sense of the creative process stored with its product – knowing more about how knowledge is produced improves our sense of its applicability. (It’s exciting to be a librarian/information specialist these days.)
3. Organizations will increasingly have to consider the balance of competition and cooperation with internal teams. I’ve seen firsthand how a culture of competition can stifle creativity by creating a disincentive to share knowledge. I’m thinking we’ll see more “coopetition.”
4. Who are the internal champions within an organization? There will be more interest at the C-level as social technology is better understood and success stories emerge from early adopters. It would be interesting to know what current champions of social media are seeing and what they’re saying. Also – how much of the move toward “social” will come from the bottom up, and how will that flow of new thinking occur?
5. How does the new world of social business (design) relate to marketing? Operations? Human resources? To what extent to the lines between departments blur? How will the blurring of the lines and potential cross pollination transform business disciplines?

A final thought: all the minds in your organization have a perspective on your business, and each perspective is potentially valuable. How do you capture that value? Do you have a culture that can support a real alignment of minds/perspectives/intentions?

Much of our work on the social business side focuses on a key question: how do we collaborate online, or more simply how do we talk to each other with online tools to get things done? Part of the solution is in finding the right tools, or combination of tools, to be effective. Some tools just won’t work in many contexts.

Wiki, for instance, is a tool (or a set of like patterns implemented in various tools) designed to support collaboration, but a wiki often fails to support successful collaboration because one or more essential members of the group don’t (or can’t) use it. This is often because wiki is so undesigned – which can be a strength in making it adaptable, but turns out to be a weakness for those who need more structure, more of an imposed information architecture. Just one essential member’s failure to adopt can produce failure, so the wiki format has succeeded only where it’s been modified (as in the SocialText “wikiblog,” which became less of a wiki as it became more of an enterprise application).

I’ve seen resistance to pretty much any collaborative tool. We tend to use Basecamp, which combines several communication patterns (messaging, wiki, shared to-do lists, file sharing), and we find that among those who have used Basecamp before, there can be a small but significant percentage who push back – who are looking for an effective alternative for whatever reason.

A few years ago I was involved in multimodal “happenings” to create collaboratively a paper published by Joi Ito, called “Emergent Democracy.” We initially combined audio teleconference with a form of realtime chat that included color-coded flags and a “hand” you could “raise” if you wanted to talk. The chat was partly used for these visual cues, and partly as a backchannel that added more depth to the conversation. We took notes on a wiki. The draft of the paper was intially shared as a Word document with change tracking, then dropped into QuickTopic where it could be collaboratively edited. It was finally dropped into a wiki for more collaborative editing. The collaboration was very successful. Today we have reasonably inexpensive tools, like GoToMeeting, that incorporate voice, chat, and shared presentation – very similar to the combination of patterns in the happenings.

More tools are emerging for collaboration, and one that we’ve been studying with keen interest is Google Wave. It’s still very beta, with limited adoption, so our experiments have been limited so far. However it’s promising: in Wave you can create a conversation, add participants at any point after the conversation starts, and play back the conversation as needed to keep track. Wave accommodates collaborative editing as well as conversation. It’s not an application that Google is developing, but a protocol that is being developed with Google in the lead, but with many external developers participating. The intention is to have a far more robust communication protocol that will replace email.

Finding the right tool set is key, but another crucial challenge is social: how do you keep a conversation on track and focused on decision and action? This is especially challenging with flatter hierarchies and headless organizations. In the emergent democracy discussions, we talked about a concept of emergent leadership, which was an acknowledgement that you must have leaders to make decisions and get things done, and in a context where no one is elected or appointed to lead, we look for one or more leaders to emerge. There are questions around how that leadership emerges, how it’s identified, acknowledged, accepted by the group, etc.

In companies and organizations where leadership is based on assignment or election, the questions about leadership are more traditional: how to get buy-in from the group, consensus on decisions, agreement on action items. This is partly about leadership quality (is the leader acknowledged and accepted by the group?), but also about organization (how well is group input and ultimate consensus orchestrated and managed?)

Bijoy Goswami of Bootstrap Austin and I recently worked together on a presentation called, an earlier version of which can be found on Slideshare. In defining how to create effective communities – communities that get things done – we considered Bijoy’s “human fabric” of three personality types: maven (knowledge-oriented), relater (relationship-oriented), and evangelist (action-oriented). We suggested that communities, like individuals, can be characterized on a scale between any two of the three personality types. For instance, a community might fall on the axis between maven and relater – i.e. be focused on knowledge and relationships. This is where we would place an online community like the WELL, where members “hang out” and have casual conversations that are not focused on any action or deliverable. We went on to say that action-oriented communities would have a strong evangelist flavor, and would include one or more evangelist types who push for specific results.

This is probably true for any collaborative environment, including a small meeting. An evangelist or action-focused leader could be more effective in getting specific actions accomplished. This person might fall naturally into the leadership role. However a strong evangelist should be sensitive to the relevance of the other personality types: it’s important to have enough of the right knowledge to move forward, and getting things done can require attention to relationship.

In summary, effective online collaborations (meetings, projects, organizations) depend on tools that work for all stakeholders, or at least on a shared commitment to adopt and use the same tool set and patterns for communication/collaboration. Social considerations and leadership are as important as adoption of and commitment to the right tool set. It may be effective to include evangelists in action-oriented workgroups, and to have them lead, but sensitivity to the balance of personality types and strengths is important. And, of course, the reality is far more complex than we’ve taken time to capture here.

At Social Web Strategies, we’ve been saying that the future of the social web includes data portability. An April Forrester report drew the same conclusion.

Today’s social experience is disjointed because consumers have separate identities in each social network they visit. A simple set of technologies that enable a portable identity will soon empower consumers to bring their identities with them — transforming marketing, eCommerce, CRM, and advertising. IDs are just the beginning of this transformation, in which the Web will evolve step by step from separate social sites into a shared social experience.

Brian Solis at Social Media Today writes about Forrester’s report, saying that social networks are evolving into a social operating system, and that “social networks and sites will recognize the preferences of users, but more significantly, they will also recognize personal identities and relationships to customize the experience based on preference and behavior….I believe that the combination of semantic and collective intelligence systems will improve the content and overall interaction within sites and social networks over time.”

None of this is really news, maybe clarification. I was in conversations with Tim O’Reilly and others in the early 2000s that acknowledged that the Internet/Web was an operating system and inherently social. Those conversations led to the paper Tim and Dale Daugherty wrote that loosely defined concepts labeled “Web 2.0.” The Data Portability Project kicked off in 2007, and we’ve been trying to get our heads around individual data management since the 1990s (thinking of P3P). Thinking about the semantic web has been brewing since the turn of the century. Various data interchange formats and semantic web projects have emerged since then.

What’s interesting in Solis’ piece is the concept of SRM – Social Relationship Management – vs Customer Relationship Management and Doc Searls’ idea of Vendor Relationship Management. CRM and VRM combined make a whole greater than the sum of its parts. We get to a point where customers and vendors are transparent to each other, and are part of a larger social ecosystem that can facilitate authentic and symmetrical relationships. Solis says

The biggest opportunity for the expansion of social networks is to build bridges between these isolated islands to deliver a more fulfilling, meaningful and productive experience. As I see it, we will start to see a the social web not as a collection of distributed islands, but as one greater collective better known as a human network – a contextual and relationship-based network that consists of like-minded individuals no matter where their profile resides.

Those of you who are following Social Web Strategies, especially those that have met with us, have heard us say for the last two years that <em>business is moving to the web.</em> We’ve discussed how the internal uses and implications of social media will have more impact and be more interesting than the marketing applications that have been evolving (with some difficulty and controversy, I should add). Since Dave Evans joined our company almost a year ago, we’ve had many conversations about how the social web is more than a marketing channel or awareness platform. We’ve also discussed how social technology can disintermediate the space between operations and the customer (which was mediated by marketing and PR, lacking scalable tools for more direct communication). There’s also the idea of marketing within the company, and facilitating a mashup of marketing and operations, an alignment that requires robust communication between the two usually siloed parts of the business.

What we’ve been talking about is <em>social business,</em> and others are starting to pick up the conversation. The Dachis Group here in Austin has been talking about these points, prompting the Neville Hobson post “Is ’social business’ the new black,” and a response from Dave in his ClickZ column. I posted a link to Dave’s column in our LinkedIn Group and on our Facebook page. We invite you to comment either place, and join the conversation.

My review if Doug Rushkoff’s <i>Life, Inc</i> is currently featured at Worldchanging.com.

Are corporations monolithic, opaque, sinister and all-powerful? While corporations are abstract systems, they are also people, and the cultures and values of corporations can be aligned with the values of the individuals who commit so much of their time and energy to work there. Culture change consultants (like Barrett Values Centre or Momentum Consulting) have systems for aligning corporate and human values. And there are other promising models (e.g. bootstrapping, coworking) for business organization and development, and corporate information flows and hierarchies are being transformed by internal uses of social media (with or without C-level acknowledgement and assent). The corporation of tomorrow may be quite different from today’s corporation, and certainly different from yesterday’s.

According to an article in the Miami Herald, PR and advertising are at a crossroads, challenged by changes in the mediasphere and a belt-tightening economy. According to the article, some are finding ways to embrace new media, while others are still using traditional media, though in a way that’s more targeted or niche.

Despite uncertainty about new media, the article says it’s the “one area where firms are hiring…. Despite the uncertainty over whether views or tweets will pay off, few feel they can afford to miss this boat — wherever it’s headed.”

by David Armistead

[Note – The ‘old economy’ is the world economy, now shrinking and transforming, that produced the global consumer society.  The ‘new economy’ is the world economy emerging now that is producing a global sustainable society. The old economy created wealth by resource consumption, leading to resource overuse and depletion. The new economy produces wealth by resource amplification – doing more with less by continually substituting knowledge for energy, material, labor, finance and time. This new strategy is leading to wealth creation that lives always lighter on the Earth.]

Continuing our ride on the Clue Train down the rail to the global sustainable society…

Last week major media finally broke a story, following lively blogspace coverage, about Dave Carroll’s fun youtube song release, “United Breaks Guitars.” (Song: http://bit.ly/z2GU5; full story: http://bit.ly/mch2A)

The short version of the story is that Dave Carroll, another one of those great Canadian singer songwriters (in Austin, we love singer songwriters) wrote and produced a YouTube music video for $150 that told the tale of how United Airlines broke his guitar in luggage handling as he flew out of Chicago to a gig, and how a 9 month saga ensued in which he sought compensation, ending with United just saying ‘no.’ At the end, Dave told the United rep handling his claim that he intended to make a music video telling the whole sad tale if they refused to take responsibility for the damage. They declined. He made the video. And he posted it to youtube.

As of this morning (07/21/09, 5:40am) the video has been viewed 3.5 million times in about ten weeks.

Unsurprisingly, various follow up news stories indicate United has had a major change in attitude around all this since the YouTube video went ballistic. And the incident has apparently also resulted in a lot of well-deserved attention for Dave and his music (which I like). There have apparently been offers by equipment makers to give Dave new stuff, and offers by other air carriers to give him free rides, etc.

BUT HERE IS THE BIG POINT –

After 9 months of engaging United’s ‘customer service’ process with no result, for a cost of $150 Dave Carroll, a lone voice, self-published to the open web a message that immediately cut completely through all of United’s many layered, inaccessible, murky, confusing, difficult, complex, well funded, ‘customer service’ process – and established direct connection for Dave to the tip top layer of real control over the whole airline, with United’s top executives and board tracking the relationship minute by minute. Dave got, and has retained, very senior, very top level attention at United – for $150.

Consider Dave Carroll’s own words on this point: “…it occurred to me that I had been fighting a losing battle all this time and that fighting over this at all was a waste of time. The system is designed to frustrate customers into giving up their claims, and United is very good at it. However I realized that as a songwriter I wasn’t without options. In my final reply… I told her that I would be writing three songs about United Airlines and my experience in the whole matter. I would then make videos for these songs and share them on YouTube…. My goal: to get one million hits in one year.” (http://bit.ly/mch2A)

In the old economy, which is opaque and favors finance capital over everything else, it paid to push the costs for damaging passengers’ luggage back onto the customer. This is a profit-enhancing strategy called ‘cost externalization.’ It’s an old economy strategy that only works in a world of top-down hierarchical relationships.  In the new network world, where everyone has equal access at almost no cost to the ears of everyone interested to listen, the ‘cost externalization’ strategy is gradually falling apart. And in this case it failed badly.

Perhaps because he is a communicator and artist, Dave Carroll understood what the United senior executives did not.  Transparency can be forced onto any organization now for almost nothing. And there was nothing United could do to hold the consequences of Dave Carroll’s music videos back.

United failed to keep pace with reality, and continued playing the old economy strategy of cost externalization wrapped in opacity and layers of hierarchy, even though the value of that approach has now turned into a nest of liabilities. Consequently, in a moment when airline revenues have declined 20%+ each month for the last six months, United executives, by failing to adapt to the changing reality, have cost their firm massive amounts of critical social capital, in the consumer market and the equity market, at exactly at the wrong competitive moment for such a mistake. So for the United the change is not coming.

Executives – listen up.  In a world in which 3.5 million views can be gained through YouTube by anyone in a few days at a cost of $150 – you must embrace some serious change.  Adapt now. Don’t be United. The lesson does not have to come the hard way.

In case the point is not getting across, let me remind you of the Virgin Air social media disaster that happened earlier this year. It could have been anybody. It happened to be the most social media hip of all airlines, but they still tried to play by the old economy rules. Virgin had established an external blog for air passenger, i.e. customer, comments. Eighteen Virgin employees, stymied by an old economy-style internal run around processes to ‘handle’ employee complaints and suggestions, jumped out to the open and public passenger blog site and posted comments about Virgin’s engine maintenance and rat infestations on planes. Virgin responded, in old economy fashion, by firing all eighteen.

A blogspace fire storm followed, with significant loss of opacity, increase of transparency, to Virgin’s internal affairs. Virgin capitulated and rehired the employees, with apologies, and opened up an internal employee blog for uncensored and protected communications from employees about internal conditions. Since then Virgin has been racing headlong into the new economy and the new strategies.

We are already deeply into a real sea change, a transformation of the way we organize and coordinate and relate. It affects all our social capital, all our stakeholder relationships. This sea change is technologically based and cost driven, and it is being profoundly accelerated by the emergence of the new social media technologies which are deeply socially enabling. Adoption of these transforming technologies is not optional. Your competitors are doing it right now, along with your customers and employees and investors and lenders and suppliers. And this sea change affects every level of every organization, every moment of the day.

Don’t be United.

Embrace the change and use it to help your organization. Get on with developing a comprehensive, integrated social media strategy for your whole organization now.

Mike Gotta has a very interesting post about the need within the enterprise to consider construction and represenation of identity by employees in the context of online social networking tools and applications increasingly prevalent, and see identity management within the enterprise as a shared responsibility between the company and its employees. [Link]

Finding the optimal balance between the social needs of employees and management needs of the enterprise must be a core design assumption for identity management strategies. As employees redefine, extend, or contradict these formal identity assignments, there may be unintended consequences to identity management practices of the organization at-large unless action is taken to view identity as a shared responsibility. Increased use of social tools and applications that span internal and external environments will only compound the situation unless organizations begin to act now.

Forrester forecasts significant increases in social media/interactive spending by 2014, per Shar VonBoskirk. Not surprising: “This growth is due to marketers seeking lower cost, more accountable channels which are also widely used by their customers. This year, we are also finding that marketers are migrating dollars away from traditional channels and into interactive ones.” (Thanks to Jeremiah Owyang for the pointer – via Twitter, natch.)

From Business Week: “Researchers at IBM and MIT have found that certain e-mail connections and patterns at work correlate with higher revenue production….Researchers at IBM Research and MIT’s Sloan School of Management found that the average e-mail contact was worth $948 in revenue.” [Link]

This is exactly what Social Web Strategies has been talking about and where we focus. Effective use of social media in and related to the workplace builds social capital and value networks, and this can have a significant positive impact on profitability.

For IBM, research into the networked behavior of its employees promises insights about teamwork, innovation, and the transmission of knowledge and ideas within the company. This is especially important for global companies—say, where experts in New York might be unaware that colleagues in Singapore are untangling a similar problem. IBM researchers fine-tuned management of industrial supply chains a half-century ago; now their challenge is promoting the flow of knowledge throughout the workforce.